Investor Group Acquires Bonnett's Energy

Bonnett's Energy Corp. announced the acquisition of all of the issued and outstanding common shares of Bonnett's by BEC Acquisition Ltd., a corporation controlled by Mill City Capital, L.P. and capitalized by an investor group led by Mill City which included, among other, certain Bonnett's shareholders and members of the Bonnett's management team. 

The acquisition was completed pursuant to a plan of arrangement under the Business Corporations Act (Alberta).  Under the terms of arrangement, Bonnett's and BEC amalgamated to continue as a corporation with the corporate name of Bonnett's Energy Corp.  Pursuant to the arrangement, Bonnett's shareholders (other than certain on-going shareholders) received $7.08 in cash for each Bonnett's share held and the on-going shareholders received either 0.0708 of a common share of BEC or a combination of cash consideration and BEC shares for each Bonnett's share held.

Bonnett's and BEC entered into an arrangement agreement on September 23, 2013, announced Sept. 24, 2013.  The total value of the transaction was estimated at approximately $130 million (including the assumption of net debt, liabilities, and other obligations, and inclusive of the value of approximately 20 per cent of the outstanding shares of Bonnett's held by the on-going shareholders prior to the arrangement). The arrangement was approved by the shareholders of Bonnett's at a meeting held on October 31, 2013.  The common shares in the capital of Bonnett's were delisted from the Toronto Stock Exchange at the close of market on Nov. 8, 2013.

Funding for the arrangement was provided in the form of equity investments in BEC by four private equity firms and roll-over of shares, as well as in the form of a senior credit facility provided by a syndicate of lenders led by RBC and a mezzanine debt credit facility provided by a syndicate of lenders led by RBC Capital Partners.

Bonnett's is a diversified corporation, headquartered in Grande Prairie, Alberta, which provides wireline, frac-flowback and testing, fishing, and swabbing services in the western Canadian sedimentary basin.

Mill City is a private equity firm based out ofMinnesota.

Mill City Capital, L.P. was represented by Bennett Jones LLP with a team of Darrell Peterson, Matt Olson, John Lawless, Elyse van Spronsen and Eric Chernin (corporate/securities); Murray Coleman and Patrick Trumpy (banking); Alan Rautenberg (tax), Tony Friend (litigation), Beth Riley (competition) and John Gilmore (employment).

Bonnett's Energy Corp. was represented by Borden Ladner Gervais LLP with a team of Kent Kufeldt, Michael Waters, Sonia Molodecky and Peter Newman (securities/capital markets); Randy Morphy and Kim Maguire (tax) and John Blair (litigation).

RBC was represented by Burnet, Duckworth & Palmer LLP with a team that of Kathy Pybus and Robert Carleton (banking).

RBC Capital Partners was represented by McMillan LLP with a team of Pat Forgione and Andrea St. Bernard (banking).

Certain of the management shareholders were represented by Norton Rose Fulbright Canada LLP with a team of Robert Rakochey (employment), Kathy Krug (corporate/securities) and Dion Legge (tax).