Case Study

Banister Pipelines Corp. $19 Million Senior-Secured Credit Facility. Here's what we saw.
Industry cyclicality and customer concentrations have historically resulted in unpredictable revenues and volatile margins for pipeline contractors. Banister’s capacity and experienced team made it a preferred supplier for Canada’s largest transporters of crude, which eventually led to the firm’s acquisition. Others didn’t see it. We did.

Transaction Overview

Third Eye Capital provided Banister with financing for working capital, in order to cover costs of multiple project phases aimed at tying-in new oil sand developments to mainline pipelines. Well secured by a master services contract in excess of $500 Million, we provided Banister with a transitional debt facility that would bridge the contract payment cycle and be repaid as project milestones were met.

Opportunity

Headquartered in Mississauga, Ontario, and with offices in Alberta and New Brunswick, Banister is one of Canada’s leading pipeline contractors with specialized expertise in large and complex projects, particularly harsh terrains and difficult crossings. The company has its own fleet of drill barges, draglines, and dredging systems, and talented technical personnel with lengthy experience in underwater blasting and crossings. In order to meet customary performance bonding requirements for mobilization of its workforce and to bridge progress billings, Banister needed a financing partner that could recognize the value of its major contracts. We saw a company with a proven management team that were also the owners of the business. We saw a pipeline contractor with preferred supplier status, excellent labour relations, and a large backlog of contracts scheduled for completion. Banister was on the verge of capturing a greater share of new large pipeline construction across Canada, and we saw it.

Approach & Outcome

Banister’s complex collateral, concentrated customer base, cyclical business activity, and relatively small and short term financing needs, deterred other lenders, who failed to see the opportunity and value in the company’s assets. We took a hands-on approach to understanding the company’s needs, and developed a financing solution that was customized to Banister’s unique circumstances. We help good companies like Banister, which cannot access conventional credit due to perceived risk, size, complexity, or timing, reach their business goals. We assess transactions from the perspective of the business owner, and match our capital to not just business need but also asset value potential.

We aligned ourselves with Banister by providing an interim financing solution that enabled the company to execute on its strong backlog of contracts. Banister was eventually acquired in a transaction that created significant value for its stakeholders. We saw so Banister could succeed.

"Arif, I wanted to thank you and your team for your professional approach to our financing requirements. By taking the time to understand our business, our industry and our unique capital requirements, your team helped us achieve unprecedented growth in a short period of time."

Kevin O’Donnell, CFO, Banister Pipelines Corp.