Columbus Acquisition Corp · NASDAQ:COLA
Columbus Acquisition — SPAC Merger (December 2008)
31 slides from Columbus Acquisition's SPAC merger presentation, Dec 15, 2008
Slide 1: Columbus Acquisition Corp. Acquisition of Integrated Drilling Equipment Company
Columbus Acquisition Corp. Acquisition of Integrated Drilling Equipment Company December 2008
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements about Columbus Acquisition Corp. ("Columbus"), Integrated Drilling Equipment Company. ("IDE") and their combined business after completion of Columbus' proposed acquisition of IDE, including statements relating to manag
Slide 3: Additional Securities Law Information
Additional Securities Law Information Columbus intends to file with the U.S. Securities and Exchange Commission (the "SEC") a preliminary proxy statement in connection with the proposed acquisition of IDE and to mail a definitive proxy statement and other relevant documents to Columbus stockholders.
Slide 4: Today's Speakers
Stephen Goodland - Chief Financial Officer and Director of the Board Integrated Drilling Equipment Company Stephen Cope - Chief Executive Officer and Chairman of the Board Integrated Drilling Equipment Company Today's Speakers Andrew Intrater - Chairman of the Board and Chief Executive Officer Colum
Slide 5: Delivering on our IPO Promise
Solid business in an attractive and growing industry Platform for significant growth Identify growth companies in US, Europe, or Russia Flexible and scaleable business model Unique and differentiated market position Experienced and seasoned management team Delivering on our IPO Promise Columbus Obje
Slide 6: Investment Highlights: Right Growth Story at a Compelling Valuation
Vertically integrated manufacturer benefiting from growing energy demand Leading rig refurbisher; core operations critical to sector given aging rig fleet worldwide Global customer base focusing on international markets and national oil companies (NOCs); leverage Columbus international relationships
Slide 7: Transaction Structure
Transaction Structure Upfront Consideration at closing: $93 million $43 million cash $50 million in stock (6.2 million shares) Assumption of debt and cash Earn-out Consideration $156 million earn-out (~60% of total consideration over 2-years) Transaction Highlights Over $70 million in cash for strat
Slide 8: Business Overview
Business Overview Providing services and products to the land drilling industry since 1991 Leading reconfiguration and refurbishment services provider Broad array of mechanical and electrical components Fully integrated rig manufacturing with customized designs Focus on fast-growing international ma
Slide 9: Relentless Increase in Demand for Oil
....in the Face of Production Decline Source: Energy Information Administration (EIA), October 2008 International Petroleum Monthly; Douglas Westwood, Energyfiles Ltd. Relentless Increase in Demand for Oil... Future demand exceeds supply New reserves are harder and more expensive to find Oil majors
Slide 10: International Market Growth Unaffected
NOC and IOC drilling plans are less sensitive to short-term oil prices "We don't see a need to make any cuts at this point. We don't pay attention to the day-to-day price of oil because it's somewhat unimportant to us." - Rex Tillerson, CEO (12/11/2008) Jan-14 International Market Growth Unaffected
Slide 11: Strong and Growing International Market
Source: Spears. International Land Rig Count Expected to Grow CAGR '00 - '14 = 5.2% Fastest Growing Drilling Markets (2008 - 2014 % Increase in Land Rigs) Strong and Growing International Market
Slide 12: Driving International New Rig Demand
Source: Spears. (1) Assumes yearly projected rig retirement off of 2008 global land rig count base. International demand for new land rigs will total over 435 in 2009, almost tripling since '05 Driving International New Rig Demand Natural Retirement of Rigs Will Diminish Fleet (1) Recurring Need for
Slide 13: IDE Business Overview
IDE Business Overview
Slide 14: Uniquely Positioned To Benefit from Industry Trends
Uniquely Positioned To Benefit from Industry Trends International focus insulates IDE Rig manufacturing leverages long-term growth Stability through refurbishment business Consolidation platform via strong balance sheet Balanced mix of products and services Exclusive China-based supplier Industry la
Slide 15: Integration is a Competitive Advantage
Land Rig Components and Suppliers Rotary Rig and Its Components Integration is a Competitive Advantage Note: Chart represents company estimates. Source: Spears Vertically Integrated Players Projected to Capture 64% of Global Market
Slide 16: Balanced Business Mix
Balanced Business Mix Components / Equipment Products Services Integrated Diversified product offering Vertical integration provides leverage to long-term growth Refurbishment business as buffer to dynamic market Customized and flexible solutions Key gateway for rigs moving to international markets
Slide 17: Growth Strategy
Growth Strategy Broaden IDE's Drilling Rig Refurbishment and Reconfiguration Capabilities Expectation of 60 rigs per year requiring refurbishment Strengthen IDE's International Sales and Marketing Efforts Estimated 38 new rigs per year in Latin America and 28 per year in North Africa and Middle East
Slide 18: Innovative Product Offering - Sparta Series Drilling System
Highly efficient, fast-moving rig design Targets shallow oil & gas plays where spud-to-spud cycle times are critical Shorter drilling times Multiple moves Self-erecting Mast and Sub-structure design Extremely efficient move sequence No cranes or dedicated rig-up equipment required for rig moves All
Slide 19: Blue Chip Customer Base
Blue Chip Customer Base 84% of IDE Sales are International San Antonio International Ltd.
Slide 20: Global Footprint - A Platform For Growth
Global Footprint- A Platform For Growth China Russia Existing Strategy Reconfiguration and refurbishment services Manufacture, assemble & sale of new rigs & parts Rig component & equipment sales Electrical System sales and services Sales of rig power packages Sales of rig hydraulic systems North Ame
Slide 21: Well Balanced Geographical Exposure
Total Revenue (9-Months Ended 9/30/08) Well Balanced Geographical Exposure
Slide 22: Experienced Management
Experienced Management Stephen Cope - Chairman of the Board and Chief Executive Officer Former President and CEO of Electrical Power Systems Inc. (EPS) Founded IEC predecessor company, International Electric Co., former President and CEO Founder and CEO, Advanced Rig Services LLC Stephen Goodland -
Slide 23: IDE Financial Information
IDE Financial Information
Slide 24: Proven Growth and Earn-Out Targets
CAGR: 95% Revenue Source: Company financials. ($ in millions) ($ in millions) EBITDA Annual Earn-Out Targets CAGR: 74% CAGR: 82% Proven Growth and Earn-Out Targets
Slide 25: Summary Financials
Summary Financials (1) (2) (1) Excludes one-time loss of $12.6 million on modification of debt during 9-months ended 9/30/08 and LTM 9/30/08 period. For 9/30/08, IDE subsidiaries were non- tax paying entities; IDE will be a tax paying entity going forward. (2) Pro Forma assuming no conversion. (3) C
Slide 26: Attractive Post-Transaction Valuation
Attractive Post-Transaction Valuation Note: Analysis assumes no conversion. Note: IDE's existing shareholders will be bound by a one-year lock-up. (1) Assumes $6.00 warrant price on warrants. (2) Analysis assumes $156 million earn-out paid in the form of 20% cash, 80% stock.
Slide 27: Pro Forma Ownership
Pro Forma Ownership Note: Analysis excludes the out-of-the-money IPO Underwriters' Unit Purchase Options, Placement Agent Warrants and Employee Option Pool. Note: IDE's existing shareholders will be bound by a one-year lock-up. (1) Earn-out shares based on a stock price of $8.02/share. (2) Analysis
Slide 28: Investment Highlights: Right Growth Story at a Compelling Valuation
Vertically integrated manufacturer benefiting from growing energy demand Leading rig refurbisher; core operations critical to sector given aging rig fleet worldwide Global customer base focusing on international markets and national oil companies (NOCs); leverage Columbus international relationships
Slide 29: Appendix
Appendix
Slide 30: Growth Analysis
Growth Analysis Revenues (% Growth) EBITDA (% Growth) Note: Unaudited IDE figures used for 2005 growth metrics. IDE 2008 sales and EBITDA of $167.8 million and $28.7 million respectively based on LTM 9/30/08 amounts. Source: NOV figures from FactSet and SEC filings.
Slide 31: EBITDA Reconciliation
EBITDA Reconciliation EBITDA excludes certain financial information that would be included in net income (loss), the most directly comparable GAAP financial measure, users of this financial information should consider the type of material events and transactions that are excluded from EBITDA, and th