Enservco gets private-equity backing to finalize Buckshot acquisition

LONGMONT — Enservco Corp. (NYSE American: ENSV), which has traditionally provided specialized well-site services to the domestic oil and gas industries, has closed on its acquisition of transportation company Buckshot Trucking LLC, thanks in part to a new investment and loan for Star Equity Holdings Inc. (Nasdaq: STRR; STRRP).

Finalization of the $5 million Buckshot deal came just days after Enservco offloaded Heat Waves Hot Oil Service LLC, its hydraulic fracturing water heating subsidiary, to Platteville-based HP Oilfield Services LLC for almost $1.7 million.

Combined, the Buckshot and Heat Waves deals represent a corporate-strategy shift away from the more seasonal aspects of Enservco’s energy-services business and toward transportation and logistics. 

“We are pleased to close on these strategic transactions. Over the past week, we exited the seasonal frac water heating business in Colorado, acquired an immediately accretive energy logistics business that transforms Enservco through increased operational and financial visibility, and entered a new strategic relationship with the team at Star Equity Holdings,” Enservco CEO Rich Murphy said in a prepared statement. “Driving our optimism for the future is Buckshot’s impact on the Company with operations in our key markets, promoting a year-round service offering that is not weather dependent. We look forward to executing on the significant growth prospects provided by the combination of Buckshot and Enservco’s strong customer relationships in the energy sector.”

In a stock deal that netted the Connecticut-based private equity firm about 20% of Enservco’s shares, Connecticut-based Star Equity Holdings invested about $2.5 million in the Longmont company. 

Additionally, Star Equity provided a $1 million short-term loan at a 20% annualized interest rate “to facilitate the acquisition of Buckshot,” the company said.

“We are excited to partner with Enservco on this investment, which advances Star’s expansion strategy by further diversifying its portfolio beyond (the) building solutions (sector), marking our initial entry into the energy services and transportation and logistics sectors,” Star Equity executive chairman Jeff Eberwein said in a prepared statement. “We believe the strength of Enservco’s management team and its ongoing reorganization position it well for long-term growth.”