Estepp Energy, LLC, Estepp Friendly Shell, Inc., and Estepp Land Paris, LLC

Service Type: Financing & Capital Advisory Services

Client: Estepp Energy, LLC, Estepp Friendly Shell, Inc., and Estepp Land Paris, LLC (the three entities are collectively referred to as the “Company” or “Estepp & Affiliates”).

Client Description: Founded in 2012, the Company operates more than 10 locations, operates bulk plant facilities, leases numerous locations to branded dealer operators, and will distribute more than 80 million gallons of Shell, Marathon, Sunoco, BP, 76, and unbranded petroleum products to over 130 dealer and commercial customers throughout Central Kentucky.

The Trigger:

  • The Client had recently purchased the dealer fuel supply, bulk plant/commercial fuels, and retail operations of a local competitor (Cumberland Lake Shell), significantly increasing the size and scale of the Company’s operations.
  • As part of this transaction, the Company negotiated purchase options on the underlying real estate for the store operations purchased in the Cumberland Lake Shell transaction. One of the main goals of this capital raise was to secure acquisition financing to exercise these purchase options.
  • Additionally, Estepp’s growth trajectory had surpassed their local bank’s ability to provide flexible and attractively priced debt capital. In short, the Company’s rapid growth required a larger commercial banking relationship with an institution that understood their business, could loan on cash flows/total enterprise value, and offered quick, flexible access to capital via a development line.

The Project:

  • Corner Capital was tasked with sourcing, structuring, and negotiating the following debt facilities:
  • Senior term debt to refinance substantially all of the Company’s existing debt, and finance the exercise of certain purchase options negotiated through Estepp’s acquisition of Cumberland Lake Shell.
  • Revolving credit facility for working capital needs, secured by inventory and receivables.
  • Development line of credit for new builds on existing properties, securing new real property for NTI builds, and smaller bolt-on acquisitions.

The Solution:

  • As Estepp had recently undergone a transformative acquisition, and was in the process of implementing PDI, Corner Capital performed intensive underwriting and financial modeling (using several legacy sources) to present the Company’s financials and cash flows on a consolidated basis.
  • Corner Capital analyzed collateral/cash flow from all the Company’s business segments to develop and propose a financing solution that accomplished Estepp’s goals.

The Result:

  • Corner Capital successfully marketed and executed the proposed financing solution, presenting the Client with multiple competitive proposals, increased financing flexibility, and a new banking relationship with a large institutional lender.
  • Estepp was able to refinance its existing debt, finance the exercise of certain purchase options negotiated through the acquisition of Cumberland Lake Shell, secure a revolving credit line for working capital needs, and negotiate a development line of credit to support future growth.
  • The Company closed on this transformative debt capital raise on December 13th, 2022.