TerraVest Industries, Inc. · TSX:TVK
TerraVest Industries — Sprott Securities Toronto Mid Cap Growth Conference 2006
16 slides from TerraVest Industries's conference presentation, May 11, 2006
Slide 1: Sprott Securities Toronto Mid Cap Growth Conference
Sprott Securities Inc. Toronto Mid Cap Growth Conference May 11, 2006
Slide 2: Forward-Looking Information
Forward-Looking Information Certain information provided in this presentation may be forward-looking. This information may be based on assumptions and anticipated results that are subject to uncertainties, including the general economy, the ability of TerraVest’s operating entities to obtain and com
Slide 3: Mission
Mission Provide unitholders with outstanding stability and growth in distributions by building a diversified portfolio of high quality, mid-sized companies 3
Slide 4: Accomplishments
Accomplishments • Established a multi-company income trust for Canadian-based mid market companies Untapped segment for public investors Six portfolio companies provide diversity and stability to Fund’s cash flow • Increased per unit distributions by 30% • Provided investor returns of 69% since
Slide 5: Diversification Enhances Stability of Unit Distributions
Diversification Enhances Stability of Unit Distributions Portfolio now comprises six investments Proforma annual revenue $280 million 2005 proforma EBITDA of $33 million* Diversified portfolio with proven record for cash generation Pro Forma Distributable Cash Stylus Diamond Ezee-On Beco RJV D
Slide 6: Investment Strategy Drives Per Unit Distribution Growth & Security
Investment Strategy Drives Per Unit Distribution Growth & Security Increased annual per unit distributions 30% Four accretive acquisitions Portfolio diversification reduces systemic volatility Distributions supported by diversification and investment structures $0.120 $0.115 $0.110 $0.105 $0.1
Slide 7: Demonstrated Access to Capital
Demonstrated Access to Capital Established institutional credibility Four equity financings – raised approximately $127 million Research coverage by seven investment analysts $110 million Bank credit facility – BMO, RBC & CIBC 7
Slide 8: Investment Structure
Investment Structure Existing key managers reinvest meaningful capital TerraVest secures preferred rights to distributable cash flow Fund monitors investments, and works with business to enhance performance Fund maintains liquidity preference on minority investor exits Tax leakage minimize
Slide 9: Preferred Return
Preferred Return • On the four post IPO investments TVIF has the right annually to receive all of the cash flow produced by the investment until preferred return is met • Approximately 50% of the Fund’s cash flow is covered by preference protection. Diamond example: TVIF owns 87.1% of Diamond and
Slide 10: Investor Protection
Investor Protection • Approximately 50% of the Fund’s cash flow is covered by preference protection • Fund Management’s equity investment is subordinated to Fund’s investment • Companies monitored and supported with external leadership providing mentoring, strategic input and strong financial contro
Slide 11: Beco Industries
recent acquisition Beco Industries Acquired 80% in December 2005 Established in 1946 and headquartered in Montreal LTM revenues of $54 million Operates internationally with offices in Montreal, New York, Shanghai (China) and Faisalabad (Pakistan) Solution provider – integrated design, sour
Slide 12: Diamond Energy Services
recent acquisition Diamond Energy Services Acquired 87% in October 2005 Established in 1996 and headquartered in Swift Current (Saskatchewan) with operations in Medicine Hat and Red Deer Company’s service rigs and coiled tubing units used for well completions, maintenance, work-overs and aband
Slide 13: 2006 Goals
2006 Goals • Add an additional 2-4 high quality, well-managed businesses Further diversify Fund’s sources of cash flow Distribution growth through accretive investments • Focus on growth and productivity opportunities in present portfolio • Obtain more internal efficiencies and cost savings • Cr
Slide 14: Portfolio Companies
Portfolio Companies Leader in natural gas wellhead equipment in Western Canada One of Canada’s largest manufacturers and suppliers of heating, ventilation and air conditioning (HVAC) products Custom upholstered furniture manufacturer and importer selling to independent retailers Manufactures heavy d
Slide 15: Key Investment Considerations
Key Investment Considerations • Diversification provides distribution stability • Accretive acquisition strategy • Demonstrated distribution growth potential • Key managers invested in business success 15
Slide 16: For further information
For further information: Tom Kileen Tim Zosel Chief Financial Officer Senior Vice President O: 612.215.6132 O: 612.215.6135 C: 612.868.0556 C: 612.867.3907 [email protected] [email protected] www.terravestindustries.com 16
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