Adams Resources & Energy Has Repurchased 1,942,433 Common Shares From KSA Industries and Affiliates
HOUSTON, November 10, 2022 – GulfStar Group ("GulfStar") is pleased to announce that Adams Resources & Energy, Inc. (NYSE AMERICAN: AE) (“Adams” or the “Company”) has repurchased all the shares of Adams common stock owned by KSA Industries, Inc. ("KSA"), the Company's largest stockholder, and members of the family of the late Kenneth Stanley Adams, Jr., the Company's founder, who are affiliated with KSA. The total purchase price was approximately $70 million for 1,942,433 shares. This represents approximately 44.2% of the total shares outstanding, reflecting an effective control position. Following the transaction, the Company will have 2,452,404 shares of common stock outstanding. The purchase will be funded by a combination of existing cash on hand and a new term loan. GulfStar served as the exclusive financial advisor to Adams throughout the transaction, which closed on October 31, 2022.
Additionally, GulfStar advised the Company on the placement of a five-year $85 million credit facility with a group of banks led by Cadence Bank. This new agreement replaces the Company's existing $60 million facility and includes a $25 million term loan and a $60 million revolving credit facility.
"We believe that by repurchasing the KSA and associated shares, along with the recent acquisition of Firebird and Phoenix, we have enhanced the value for all remaining shareholders. This transaction will eliminate the perceived stock overhang, and given the fewer shares outstanding, will proportionally increase earnings per share," said Kevin Roycraft, CEO of Adams. "The Company will also see an immediate annual savings of roughly $1.9 million in dividend payments at the current dividend rate."
Roycraft added, “Adams Board of Directors and Management greatly appreciate the professional advice provided by GulfStar in evaluating our strategic alternatives, negotiating the repurchase of shares and the placement of new debt. We look forward to continuing to increase shareholder value.”
“GulfStar enjoyed working with the Adams Board of Directors and Management, having been retained several months ago to provide strategic financial advice on alternative ways to maximize shareholder value. These transactions are the initial result of our recommendations,” said Kent Kahle, managing director of GulfStar.
The GulfStar team was led by Kent Kahle with support from Senior Vice President Charles Craig and Analysts Jack Brady and Alan Sheppard.
For more information, please contact Kent Kahle at firstname.lastname@example.org or call 713-300-2025.
About Adams Resources & Energy
Adams is engaged in crude oil marketing, transportation, terminalling and storage tank truck transportation of liquid chemicals and dry bulk and recycling and repurposing of off-spec fuels, lubricants, crude oil and other chemicals through its subsidiaries, GulfMark Energy, Inc., Service Transport Company, Victoria Express Pipeline, L.L.C., GulfMark Terminals, LLC, Phoenix Oil, Inc., and Firebird Bulk Carriers, Inc. The Company is listed on the American Stock Exchange under the symbol “AE.”
About GulfStar Group
GulfStar is a leading middle market investment bank headquartered in Houston. GulfStar specializes in providing merger and acquisition advisory services, institutional private placements of equity and debt, and general corporate finance advisory services to companies with revenues or enterprise values generally ranging from $25 million to $350 million. Since its formation in 1990, GulfStar has completed approximately 750 transactions in 36 states and 17 foreign countries across a variety of industries.