Enerflex Ltd. · TSX:EFX
Enerflex — Merger or Acquisition (September 2022)
22 slides from Enerflex's merger presentation, Sep 8, 2022
Slide 1: Enerflex and Exterran to Combine, Creating a Premier Integrated Global Provider
Enerflex Ltd. and Exterran Corporation to Combine, Creating a Premier Integrated Global Provider of Energy Infrastructure and Energy Transition Solutions September 8, 2022 ALL FIGURES HEREIN PRESENTED IN US DOLLARS UNLESS OTHERWISE NOTED
Slide 2: Strategic and Transformational Transaction
Strategic and Transformational Transaction… Enerflex to acquire Exterran, creating a premier integrated global provider of energy infrastructure and energy transition solutions1 PREMIER GLOBAL BALANCED & OPTIMIZED EFFICIENCY & PLATFORM PREDICTABLE EARNINGS LOWER COST OF BUSINESS >70% of combined ent
Slide 3: Designed to Capitalize on Macro Trends
…Designed to Capitalize on Macro Trends Combined company better positioned to meet growing need for low-emission natural gas to support the energy transition and global decarbonization efforts Global natural gas consumption is projected to grow by 1 over 30% by 2050 , with production expected to be
Slide 4: Including the Emerging Energy Transition
…Including the Emerging Energy Transition Enerflex has proven expertise in delivering modular solutions for global decarbonization efforts Market Potential of Carbon Capture, Utilization, and Storage High Capital Expenditures = Relative Enerflex Total Addressable Market • To meet Sustainable Develop
Slide 5: Outlook for Combined Company Has Improved Considerably since Transaction Announcement
Outlook for Combined Company Has Improved Considerably since Transaction Announcement 1 Resilient and diversified business Strong business performance and robust bookings and backlog across combined portfolio 2 Significant synergy capture ~US$60MM in annual run-rate synergies identified through rigo
Slide 6: Enhanced Diversification across Key Growth Regions
Enhanced Diversification across Key Growth Regions Diversification achieved through highly complementary business lines and expanded offerings to a broader base of customers Pro Forma Revenue Mix by Geography, LTM Q2 20222 22% Latin America 34% Asia Pacific ~$1,800MM 6% Middle East Canada 11% 27% Un
Slide 7: Operationally Advantaged
Operationally Advantaged Transaction will enhance Enerflex's scale and expand its depth of technical expertise Product Lines Energy Infrastructure Critical energy infrastructure that Enerflex owns, operates, and manages under contract to enable its customers' operations Engineered Systems Sale of cu
Slide 8: Transaction Overview
Transaction Overview ENERFLEX ERRAN.
Slide 9: Exterran Acquisition Overview
Exterran Acquisition Overview Creates a Premier Integrated Global Significantly Improves Long-term Stable Capital Structure Provider of Energy Infrastructure Efficiencies • Fully committed debt capital structure of • Geographic balance with ~25-35% of revenues • Consolidation drives significant oper
Slide 10: Accelerated Growth in Recurring Gross Margin
Accelerated Growth in Recurring Gross Margin Increased contribution from recurring sources enhances business resiliency 2022e Pro Forma Gross Margin 2022e Pro Forma Gross Margin before Depreciation and Amortization1 before Depreciation and Amortization1 US$540MM - US$600MM Gross Key Business Drivers
Slide 11: Synergies Accelerate Cash Flow Generation
Synergies Accelerate Cash Flow Generation Expect to capture at least US$60MM annual run-rate synergies from operational efficiencies and reductions in overhead Overhead • Optimized structuring of management and corporate support teams At least $8MM US$60MM Operating Efficiencies $50MM Annualized Syn
Slide 12: Engineered Systems Backlog Provides Earnings Visibility
Engineered Systems Backlog Provides Earnings Visibility Strong market fundamentals are driving solid Engineered Systems bookings and a growing backlog • Backlog is monitored as an indicator of Combined Engineered Systems Backlog2 (US$MM) future revenue and business activity levels for Engineered Sys
Slide 13: 2022 Capital Spending Overview
1 2022 Capital Spending Overview Large 2022 capital program is expected to deliver several high-quality projects, which are underpinned by long-term contracts Total capital expenditures and work-in-progress Committed Capital Expenditures and Work-in-progress ($US MM) spending of US$420MM to US$470MM
Slide 14: Pro Forma Outlook
Pro Forma Outlook Funding of in-flight growth projects will result in near-term call on cash before meaningful excess cash flow generation in 2023+ Adjusted EBITDA ($US MM) Committed Capital Expenditures and Work-in-progress1 ($US MM) 476 380-420 388 355-405 286 200-220 259 176 86 180-200 40-50 40-5
Slide 15: Capital Structure
Capital Structure Long-term, stable capital structure with ample liquidity June 30, 2022 Capital Structure US$ millions Enerflex Exterran Pro Forma2 • US$700MM 3-year secured Revolving Credit Facility Total Secured Debt 21 336 1 − Favourable covenant structure Total Unsecured Debt 250 350 • US$925MM
Slide 16: Post-transaction Capital Allocation Priorities
Post-transaction Capital Allocation Priorities 1 2 3 4 Maintain strong balance Pay a sustainable Focus disciplined growth Accelerate the return of sheet and ample liquidity dividend investments on full-cycle capital to shareholders earnings and return of once leverage target is Targeting bank-adjust
Slide 17: Strategic and Transformational Transaction
Strategic and Transformational Transaction Enerflex to acquire Exterran, creating a premier integrated global provider of energy infrastructure and energy transition solutions1 PREMIER GLOBAL BALANCED & OPTIMIZED EFFICIENCY & PLATFORM PREDICTABLE EARNINGS LOWER COST OF BUSINESS >70% of combined enti
Slide 18: Advisory Statements
Advisory Statements ENERFLEX ERRAN.
Slide 19: Advisory Statements
Advisory Statements ADVISORY REGARDING FORWARD-LOOKING INFORMATION This presentation contains forward-looking information within the meaning of applicable Canadian securities laws and within the meaning of the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. These s
Slide 20: Advisory Statements: Future-Oriented Financial Information
Advisory Statements FUTURE-ORIENTED FINANCIAL INFORMATION This news release contains information that may constitute future-oriented financial information or financial outlook information ("FOFI") about Enerflex, Exterran, and the combined entity's prospective financial performance, financial positi
Slide 21: Advisory Statements: Non-IFRS and Other Financial Measures
Advisory Statements NON-IFRS AND OTHER FINANCIAL MEASURES Throughout this presentation and in other materials disclosed by the Company, Enerflex employs certain measures to analyze its financial performance, financial position, and cash flow. These non-IFRS measures are not standardized financial me
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