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Prospect Provides Acquisition Financing to C&J Cladding
| Source: Prospect Energy Corporation
NEW YORK, NY -- (MARKET WIRE) -- April 2, 2007 -- Prospect Energy Corporation (NASDAQ : PSEC )
("Prospect") announced today that it has provided acquisition financing of
$6 million to support the purchase of C&J Cladding, LLC ("C&J"), located in
Houston, Texas.
C&J specializes in cladding onshore and offshore drilling production
components. Cladding is a process of welding a bonding material onto a base
metal, where the bonding material then acts as a shield to protect the
metal from erosion as highly corrosive fluids pass through the wellhead. A
typical wellhead component without cladding will last approximately five
years in a highly corrosive environment, while cladding extends the life to
approximately twenty years. C&J owns one of the largest arrays of automated
cladding machines in the industry, selling its services to machine shops
and oilfield equipment manufacturers. C&J is led by Jeff Hoye, Bill
Lawrence, and company founder Jim Gray, who are experienced managers of
metals and other businesses.
Prospect's investment is in the form of a senior secured debt instrument
with a first lien on all assets of C&J. Prospect also received a
significant equity ownership in C&J as part of its investment.
"Prospect has a deep understanding of industrial businesses, and we
appreciate both the responsiveness of their team and the broad energy
sector knowledge base brought together through this partnership," said Bill
Lawrence of C&J.
"We are excited about the strategic opportunities to capitalize on the
growth of deep water drilling with the value-added cladding process, which
is so vital to the production companies we serve," added Jeff Hoye of C&J.
"We are always looking for experienced managers and strong, growing
companies to support with our capital, and the C&J team has the track
record to continue building significant value," said Mark Hull, an
investment professional with Prospect Capital Management.
ABOUT PROSPECT ENERGY CORPORATION
Prospect Energy Corporation (www.prospectenergy.com) is a closed-end
investment company that lends to and invests in energy-related businesses.
Prospect Energy's investment objective is to generate both current income
and capital appreciation through debt and equity investments.
Prospect Energy has elected to be treated as a business development company
under the Investment Company Act of 1940 ("1940 Act"). We are required to
comply with a series of regulatory requirements under the 1940 Act as well
as applicable NASDAQ, federal and state laws and regulations. We have
elected to be treated as a regulated investment company under the Internal
Revenue Code of 1986. Failure to comply with any of the laws and
regulations that apply to Prospect Energy could have a material adverse
effect on Prospect Energy and its shareholders.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Any such
statements, other than statements of historical fact, are likely to be
affected by other unknowable future events and conditions, including
elements of the future that are or are not under the Company's control, and
that the Company may or may not have considered; accordingly, such
statements cannot be guarantees or assurances of any aspect of future
performance. Actual developments and results are highly likely to vary
materially from these estimates and projections of the future. Such
statements speak only as of the time when made, and the Company undertakes
no obligation to update any such statement now or in the future.