Slide 1: Moving forward...together
movin g fo r wa rd …to gethe r.
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements that are based on current expectations, and are subject to a number of uncertainties and risks, and actual results may differ materially. These uncertainties and risks include, but are not limited to: industry cyclicality; competition;
Slide 3: Transaction Summary
TRANSACTION SUMMARY › Bird to acquire all outstanding shares of H.J. O’Connell, Limited (HJO) & subsidiaries › Transaction value of $77.5M plus $1.0M in costs for a total of $78.5M, subject to closing adjustments › Earn-out payments possible for 5 years above certain earnings thresholds › Financed b
Slide 4: Transaction Summary continued
TRANSACTION SUMMARY continued › Bird’s strong balance sheet will have sufficient working capital available post transaction to fund ongoing operations and has full support of surety › Key conditions will be the requirement for regulatory approvals and other closing conditions typical for a transacti
Slide 5: H.J. O'Connell, Limited Description
H.J. O’CONNELL, LIMITED DESCRIPTION › Founded in 1931 H.J. O’CONNELL › H.J. O’Connell, Limited operates in the heavy MARKET SECTORS construction, civil construction & contract Three Year Average surface mining sectors › Expertise in remote and northern geographic operations › Corporate head office i
Slide 6: H.J. O'Connell, Limited Description continued
H.J. O’CONNELL, LIMITED DESCRIPTION continued › Client base includes- Manitoba Hydro, Iron Ore Company of Canada, ArcelorMittal, Cliffs Resources, Vale Inco › Sample projects include: Wuskwatim Dam, Thompson MB; Long Harbour Processing Facility, St. Johns, NF; Surface Mining, Wabush/Labrador City/Fe
Slide 7: Wuskwatim Dam, Thompson Manitoba
WUSKWATIM DAM, THOMPSON MANITOBA 7
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Slide 10: Long Harbour, St. Johns NF
LONG HARBOUR, ST. JOHNS NF 10
Slide 11: Bird
BIRD 11
Slide 12: Surface Mining, Mt. Wright, QB
SURFACE MINING, MT. WRIGHT, QB 12
Slide 13: Surface Mining, Fire Lake, QB
SURFACE MINING, FIRE LAKE, QB 13
Slide 14: The Rationale for the Transaction
THE RATIONALE FOR THE TRANSACTION › Prime rationale is DIVERSIFICATION & GROWTH › Instant access for Bird through its new HJO division to the heavy civil & mining markets rather than to attempt access through slow organic growth which is beneficial due to the nature of the work and expertise require
Slide 15: The Rationale for the Transaction continued
THE RATIONALE FOR THE TRANSACTION CONTINUED › Focused on opportunities in central & eastern Canada because it’s not yet in as much demand by competition (others are focused on oil sands where Bird already has a presence) › HJO was targeted by Bird as we see them as a good fit with Bird, best in clas
Slide 16: The Rationale for the Transaction continued
THE RATIONALE FOR THE TRANSACTION CONTINUED › Bird and HJO scopes of business complement each other › Opportunities for Bird to use their building expertise on HJO projects and with HJO clients › Opportunities for HJO to apply their expertise in earth moving on Bird projects and with Bird clients ›
Slide 17: The Rationale for the Transaction continued
THE RATIONALE FOR THE TRANSACTION CONTINUED › This is NOT about cost synergies...no reductions in either company staff or overhead costs › No geographic market sector overlap › Diversification of revenues for Bird into another sector of the construction industry › Resource & power industry is poised
Slide 18: Pro Forma Financials
PRO FORMA FINANCIALS BIRD H.J. O’CONNELL PRO FORMA H.J. O’CONNELL (C$ millions) (TTM Mar 31, 2011) (Y/E May 31, 2011) NEW BIRD 5 YEAR GROWTH Construction Revenue 831.6 186.7 1,018.6 EBITDA 48.1 25.0 73.1 EBITDA Margin 5.78% 13.40% 7.18% Net Income 31.9 13.8 41.7* Net Income Margin 3.83% 7.39% 4.09%
Slide 19: Operational Strategy for HJO Moving Forward
OPERATIONAL STRATEGY FOR HJO MOVING FORWARD › Theme is “BUSINESS AS USUAL” › HJO will continue to operate as is, as a subsidiary of Bird › HJO name will remain in its traditional operating markets to take advantage of its strong brand › Senior executive management have signed employment contracts to
Slide 20: Operational Strategy for HJO Moving Forward continued
OPERATIONAL STRATEGY FOR HJO MOVING FORWARD CONTINUED › Senior management have agreed to terms to support the ongoing growth of HJO › Reporting structure within HJO subsidiary will remain as is › Bird’s access to capital as a public company will provide foundation for HJO’s continued growth and exec
Slide 21: Bird & H.J. O'Connell - Summary
BIRD & H.J. O’CONNELL - SUMMARY › No geographic market sector or scope overlap › Potential for revenue synergies › Opportunity to capitalize on growing resource sector to the benefit of both organizations › Instant access to heavy civil and surface mining markets › Similar cultures › HJO’s strong ma
Slide 22: Bird Construction Company
BIRD CONSTRUCTION COMPANY 416-620-7122 www.bird.ca Tim Talbott, President & CEO