Infrastructure and Energy Alternatives, Inc. Announces $50 Million Equity Commitment
May 14 2019 - 8:00AM
Infrastructure and Energy Alternatives, Inc. (NASDAQ: IEA) (“IEA”
or the “Company”), a leading infrastructure construction company
with specialized energy and heavy civil expertise, today announced
that it has entered into a $50 million equity commitment agreement
with a fund managed by the Private Equity Group of Ares Management
Corporation (NYSE: ARES), a leading global alternative asset
manager, and funds managed by Oaktree Capital Management, L.P.
("Oaktree"). Under the terms of the commitment, the funds have
agreed to purchase $50 million of newly created Series B Preferred
Stock from the Company, subject to certain terms and conditions,
including making certain amendments to the Company’s credit
agreement and approval of the issuances by NASDAQ. Ares and Oaktree
will receive warrants with an exercise price of $.01 per share for
the purchase of up to 10% of the Company’s common stock on a fully
diluted basis with the opportunity to obtain warrants for up to an
additional 6% of the Company’s outstanding fully diluted common
stock based on the Company’s failure to meet certain performance
targets. The proceeds from the sale of the Series B Preferred
Stock will be used for working capital and to reduce outstanding
borrowings under the Company’s revolving credit facility. The
transaction is expected to close on or before May 20, 2019, subject
to satisfaction of applicable closing conditions. Following
the closing of the transaction, Ares will be entitled to appoint
one director to the Company’s Board of Directors. A special
committee of the Company’s Board of Directors consisting solely of
independent disinterested directors reviewed and approved the terms
of the preferred stock issuance.
JP Roehm, Chief Executive Officer of IEA
commented, “We are honored to have Ares as an investor in our
company. Their commitment, as well as Oaktree’s continued
support, underscore the strength of our larger, more diversified
platform. This capital will further strengthen our balance
sheet and provide us the financial flexibility we need to execute
our 2019 business plan and drive value creation for our
shareholders.”
“IEA is a market leader across multiple
specialty end markets and we are pleased to support management’s
business objectives and help recapitalize the company for continued
growth,” said Scott Graves, Partner and Co-Head of North American
Private Equity at Ares Management.
Guggenheim Securities, LLC acted as the
Company’s sole placement agent and Jefferies acted as a
financial advisor in connection with the transaction.
The Company will provide additional details on
the transaction on its previously announced earnings call scheduled
for Thursday, May 16, 2019 at 11:00 a.m. EDT.
About IEA
Infrastructure and Energy Alternatives, Inc.
(IEA) is a leading infrastructure construction company with
specialized energy and heavy civil expertise. Headquartered in
Indianapolis, Indiana, with operations throughout the country,
IEA’s service offering spans the entire construction process. The
Company offers a full spectrum of delivery models including full
engineering, procurement, and construction, turnkey, design-build,
balance of plant, and subcontracting services. IEA is one of three
Tier 1 wind energy contractors in the United States and has
completed more than 200 wind and solar projects across North
America. In the heavy civil space, IEA offers a number of specialty
services including environmental remediation, industrial
maintenance, specialty transportation infrastructure and other site
development for public and private projects. For more information,
please visit IEA’s website at www.iea.net or follow IEA on
Facebook, LinkedIn and Twitter for the latest company news and
events.
About Ares Management
Corporation
Ares Management Corporation is a publicly
traded, leading global alternative asset manager with approximately
$137 billion of assets under management as of March 31, 2019 and 18
offices in the United States, Europe, Asia and Australia. Since its
inception in 1997, Ares has adhered to a disciplined investment
philosophy that focuses on delivering strong risk-adjusted
investment returns throughout market cycles. Ares believes each of
its three distinct but complementary investment groups in Credit,
Private Equity and Real Estate is a market leader based on assets
under management and investment performance. Ares was built upon
the fundamental principle that each group benefits from being part
of the greater whole. For more information, visit
www.aresmgmt.com.
Forward Looking Statements
This release contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”) and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). The
forward-looking statements can be identified by the use of
forward-looking terminology including “may,” “should,” “likely,”
“will,” “believe,” “expect,” “anticipate,” “estimate,” “forecast,”
“seek,” “target,” “continue,” “plan,” “intend,” “project,” or other
similar words. All statements, other than statements of historical
fact included in this press release, regarding expectations for
executing the transactions described herein, our use of proceeds,
future financial performance, business strategies, expectations for
our business, future operations, financial position, estimated
revenues and losses, projected costs, prospects, plans, objectives
and beliefs of management are forward-looking statements.
These forward-looking statements are based on information available
as of the date of this release and our management’s current
expectations, forecasts and assumptions, and involve a number of
judgments, risks and uncertainties. Although we believe that the
expectations reflected in such forward-looking statements are
reasonable, we cannot give any assurance that such expectations
will prove correct. Forward-looking statements should not be relied
upon as representing our views as of any subsequent date. As a
result of a number of known and unknown risks and uncertainties,
our actual results or performance may be materially different from
those expressed or implied by these forward-looking statements.
Some factors that could cause actual results to differ include:
- our ability to execute the
transactions described herein;
- availability of commercially
reasonable and accessible sources of liquidity;
- our ability to generate cash flow
and liquidity to fund operations;
- the timing and extent of
fluctuations in geographic, weather and operational factors
affecting our customers, projects and the industries in which we
operate;
- our ability to identify acquisition
candidates, integrate acquired businesses and realize upon the
expected benefits of the acquisition of CCS and William
Charles;
- consumer demand;
- our ability to grow and manage
growth profitably;
- the possibility that we may be
adversely affected by economic, business, and/or competitive
factors;
- market conditions, technological
developments, regulatory changes or other governmental policy
uncertainty that affects us or our customers;
- our ability to manage projects
effectively and in accordance with management estimates, as well as
the ability to accurately estimate the costs associated with our
fixed price and other contracts, including any material changes in
estimates for completion of projects;
- the effect on demand for our
services and changes in the amount of capital expenditures by
customers due to, among other things, economic conditions,
commodity price fluctuations, the availability and cost of
financing, and customer consolidation;
- the ability of customers to
terminate or reduce the amount of work, or in some cases, the
prices paid for services, on short or no notice;
- customer disputes related to the
performance of services;
- disputes with, or failures of,
subcontractors to deliver agreed-upon supplies or services in a
timely fashion;
- our ability to replace
non-recurring projects with new projects;
- the impact of U.S. federal, local,
state, foreign or tax legislation and other regulations affecting
the renewable energy industry and related projects and
expenditures;
- the effect of state and federal
regulatory initiatives, including costs of compliance with existing
and future safety and environmental requirements;
- fluctuations in maintenance,
materials, labor and other costs;
- our beliefs regarding the state of
the renewable wind energy market generally; and
- the “Risk Factors” described in our
Annual Report on Form 10-K for the year ended December 31, 2018,
and in our quarterly reports, other public filings and press
releases.
We do not undertake any obligation to update
forward-looking statements to reflect events or circumstances after
the date they were made, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws.
Contact
Andrew LaymanChief Financial
OfficerAndrew.Layman@iea.net765-828-2580
Financial Profiles, Inc.Larry Clark, Senior Vice
Presidentlclark@finprofiles.com310-622-8223
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