Enterprise Group Closes $12.5 Million Loan Agreement to Fund Growth and Upcoming Acquisitions

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Enterprise Group entered into a $12.5 million finance facility with the Canadian branch of PNC Bank, one of the largest banking groups in the United States, to help fund its growth and acquisitions.

Enterprise Group (E – $0.21) entered into a $12.5 million finance facility with the Canadian branch of PNC Bank, one of the largest banking groups in the United States.

The interest rate of the new three-year revolving loan wasn’t disclosed, but the Company did mention that about $4 million will immediately be used to pay down existing bank and other long-term debt. Knowing that these borrowings bear interest rates between lender prime + 1.5% (about 4.75%) and 5.585%, we’re convinced the rate of this loan is lower.

Next to repaying current debt, the loan will also be used to fund the Company’s planned acquisitions. Although Enterprise’s management had already indicated it wouldn’t dilute existing shareholders, it’s reassuring to see that the money is available to finance potential takeovers.

06/30/12
06/30/11
Cash and Cash Equivalents
541,739
235,563
Accounts Receivable
3,153,190
2,162,535
Inventories
512,601
735,627
Total Current Assets
5,062,621
3,755,282
Property, Plant and Equipment
9,415,366
8,924,533
Total Assets
15,193,112
13,562,440
 
 
 
Bank Indebtedness
614,671
731,862
Trade and Other Liabilities
881,542
978,201
Term Loan Facility
1,465,275
Bank Loan Facility
1,440,000
1,800,000
Other Loans Payable
726,367
425,000
Total Current Liabilities
4,268,485
6,025,659
Long Term Loans
1,346,807
287,430
Total Liabilities
5,615,292
6,313,089
Total Stockholder Equity
9,577,820
7,249,351
Most important balance sheet data for the quarters ending June 30, 2012 and June 30, 2011. Source: Company Press Release

Conclusion

Enterprise Group has been profitable for four consecutive quarters. Strong organic growth and a couple of acquisitions are expected for the remainder of the year.

The Company already signed a Letter Of Intent (LOI) to acquire a utility services & maintenance company, which would be accretive and very complimentary with its T.C. Backhoe & Directional Drilling subsidiary. This acquisition is expected to close any day.

Many investors are starting to take note of the Company. The stock has gone up 40% since our initial recommendation late May, but because the Company’s potential is high it isn’t too late. So, if you haven’t bought any shares of Enterprise Group yet, make sure to do so now.


For important disclosures, please read our disclaimer.

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