Hill International — Arpeggio Acquisition — SPAC Merger (April 2006)
36 slides from Hill International's SPAC merger presentation, Apr 13, 2006
Slide 1: Road Show Presentation
Exhibit 99.7 Road Show Presentation The attached slide show was filed with the Securities and Exchange Commission on December 5, 2005 as part of the Form 8-K filed by Arpeggio Acquisition Corporation with the Securities and Exchange Commission on December 5, 2005 and amended on January 4, 2006 and A
Slide 2: Merger of Arpeggio Acquisition Corporation & Hill International, Inc.
MERGER OF ARPEGGIO ACQUISITION CORPORATION (APGO, APGOW, APGOU) & HILL INTERNATIONAL, INC.
Slide 3: Safe Harbor
Safe Harbor This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, about Arpeggio, Hill and their combined business after completion of the proposed acquisition. Forward looking statements are statements that are not histo
Slide 4: Hill International Overview
Hill International Overview Business: One of the worldwide leaders in construction project management and claims consulting Construction project management (82% of revenue) Construction claims consulting (18% of revenue) Founded: 1976 by current CEO Irvin Richter Locations: Marlton, NJ (HQ) & 23 oth
Slide 5: The Transaction
The Transaction Arpeggio will issue 14.5 million shares to Hill shareholders, representing 63.6% ownership in the combined entity Over the next 4 years, Hill shareholders may earn an additional 6.6 million shares (for a total consideration of 21.1 million shares) if certain EBIT targets are met Fisc
Slide 6: Attractive Valuation
Attractive Valuation Lower EBITDA & EBIT multiples than peer group average (1) (2) Higher growth profile Better quality business (higher return on capital) Lower risk profile (fee-based model vs. GMP model) Larger backlog relative to revenue (1) Peers included in this analysis are Jacobs Engineering
Slide 7: Project Management Group
Project Management Group Approximately 82% of net revenue in 2005 th 18 ranked overall and largest independent construction management-for-fee firm in the U.S. (per ENR –Engineering News Record) Managed more than 1,000 projects worth $100+ billion Manages all phases of the construction process from
Slide 8: Project Management Highlights
Project Management Highlights Project Name: The Palm Jumeirah Location: Dubai, UAE Client Nakheel Corporation Service: Program Management Project Value: $1,500,000,000 Hill managed the reclamation of The Palm Jumeirah, one of three artificial islands planned in the Arabian Gulf off the coast of Duba
Slide 9: Project Management Highlights
Project Management Highlights Project Name: Comcast Center Location: Philadelphia, PA, USA Client Liberty Property Trust Service: Project Management Project Value: $220,000,000 Hill is providing management services on this 57-story skyscraper, designed by Robert A.M. Stern which will include 1.3 mil
Slide 10: Construction Claims Group
Construction Claims Group Approximately 18% of net revenue in 2005 One of the largest and best known construction claims consulting firms in the world, having helped resolve over 5,000 disputes valued in excess of $50 billion Full spectrum of construction dispute resolution services: claims consulti
Slide 11: Revenue Breakdown
Revenue Breakdown Wide Base of Clients Corporate, Government, Non-Profits Geographic Diversity • U.S. • Middle East • Europe 2005 Net Revenues by Location 9.8% 30.8% 59.3% 11
Slide 12: Investment Considerations
Investment Considerations Significant growth in sales, backlog and profitability Accelerating revenue growth Backlog growth Operating margin expansion Limited geographic presence creates high opportunity for growth Revenue visibility High barriers to entry create sustainable competitive advantage /
Slide 13: Accelerating Net Revenue Growth
Accelerating Net Revenue Growth Numbers in US$ millions 90 80 21% 70 60 50 80.1 40 63.0 30 56.1 48.1 20 37.8 10 0 2001 2002 2003 2004 2005 Backlog points to sustainable future growth Recent growth achieved in poor construction market Fragmented market with many small players Limited geographic prese
Slide 14: Total Backlog Increased at 49% CAGR Over the Last 4 Years
Total Backlog Increased at 49% CAGR Numbers in US$ millions Over the Last 4 Years 300 281 250 256 200 201 150 100 117 50 57 0 EOY 2001 EOY 2002 EOY 2003 EOY 2004 EOY 2005 As of December 31, 2005, the expected next 12-month net revenue just from existing backlog is $95 million. 14
Slide 15: Revenue Visibility
Revenue Visibility 12 Month Backlog at the Beginning of Period Net Revenue for following 12 Month 100 90 Numbers in US$ millions 80 70 60 50 40 30 20 10 0 2001 2002 2003 2004 2005 2006 Much of the company’s revenue is tied to contracts that generally have terms of 3-5 years, with some as long as 7-1
Slide 16: Margin Expansion
Margin Expansion (Adjusted EBIT margins - % of Net Revenues) 10% 9% 9.8% 8% 7% 6% 5% 4% 4.4% 4.5% 3% 2% 1% 0% 2003 2004 2005 Lower margins until 2004 due to significant expenses to develop international infrastructure Few investments required going forward Margin increase in 2005 reflects this opera
Slide 17: High Barriers to Entry
High Barriers to Entry Compete on reputation and past experience Long lasting relationships lead to repeat business Complex projects require specialized expertise Snowball effect (success on high profile projects attracts higher profile work) High ROIC business Hill is well positioned because of 30
Slide 18: Favorable Industry Dynamics
Favorable Industry Dynamics Positive long-term capital spending trends Energy, power, chemicals, civil infrastructure, government service Growing demand for construction services Trend towards outsourcing by non-specialist building owners Owners can reduce costs/risk/delays Program/Construction mana
Slide 19: Experienced Acquirer With Focused Strategy
Experienced Acquirer With Focused Strategy U.S. acquisitions to round out domestic presence Target smaller companies without access to other capital sources Limited infrastructure expenses required as the business grows organically and through acquisitions Recent acquisitions include: 1998: Gleason
Slide 20: Experienced Management Team
Experienced Management Team Irvin Richter, F.CMAA, Chairman & Chief Executive Officer (61) Founded Hill International in 1976. Expert in the field of construction contracts and claims. Involved in many complex, high-profile construction projects including the Channel Tunnel, EPCOT and Petronas Twin
Slide 21: Financial Highlights
7 | | | FINANCIAL HIGHLIGHTS
Slide 22: Income Statement
Income Statement Fiscal year ending on or about December 31 – Numbers in US$ Millions 2003 2004 2005 Revenue 78.7 84.1 112.2 Reimbursable Expenses 22.6 21.1 32.1 Net Revenue 56.1 63.0 80.1 Direct Expense 29.0 34.4 43.3 Gross Profit 27.1 28.7 36.8 Gross Profit Margin 48.3% 45.5% 46.0% Selling, Genera
Slide 23: Balance Sheet
Balance Sheet Fiscal year ending on or about December 31 – Numbers in US$ Millions 2003 2004 2005 ASSETS Cash & Cash Equivalents 1.4 0.8 3.8 Accounts Receivable, Net 19.5 22.4 28.2 Prepaid Expenses & Other Current Assets 0.5 1.6 1.4 Total Current Assets 21.4 24.9 33.4 Property & Equipment, net 2.6 2
Slide 24: Investment Conclusions
Investment Conclusions Significant growth in sales, backlog and profitability Accelerating revenue growth Backlog growth Operating margin expansion Limited geographic presence creates high opportunity for growth Revenue visibility Favorable industry dynamics Experienced acquirer with focused acquisi
Slide 25: Sample Projects
7 | | | SAMPLE PROJECTS
Slide 26: Commercial Office Buildings
Commercial Office Buildings Project Name: The Financial Centre, Bahrain Financial Harbour Location: Manama, Bahrain Client: Bahrain Financial Harbour Holding Company, B.S.C. Service: Project Management Oversight Project Value: $250,000,000 Hill is providing project management oversight services for
Slide 27: Commercial Office Buildings
Commercial Office Buildings Project Name: Navigation Tower Location: Doha, Qatar Client: Qatar Navigation (Q.S.C.) Service: Project Management Project Value: $90,000,000 Hill is providing Design Review and Project Management Services for the 52- story, 220-meter high-rise which will house the corpor
Slide 28: Residential Buildings
Residential Buildings Project Name: Al Durrah Tower Location: Dubai, UAE Client: H.E. Sheikh Mohamed bin Butti Al Hamid Service: Project Management Project Value: $140,000,000 Hill is providing project management services on the new 76-story, 360- meter tower located adjacent to the Fairmont Hotel o
Slide 29: Educational Facilities
Educational Facilities Project Name: Various School Construction and Renovation Projects Location: Mercer and Burlington Counties, NJ, USA Client: New Jersey School Construction Corp. Service: Program Management Project Value: $350,000,000 Hill is providing project and construction management servic
Slide 30: Transportation
Transportation Project Name: Dubai International Airport Location: Dubai, UAE Client: Dubai Department of Civil Aviation Service: Claims Analysis Project Value: $4,100,000,000 The DCA is engaged in an expansion program to accommodate the increases of passenger flows and airlines traffic at Dubai Int
Slide 31: Transportation
Transportation Project Name: Driscoll Bridge Location: Perth Amboy, NJ, USA Client: New Jersey Highway Authority Service: Construction Management, Project Labor Agreements Project Value: $150,000,000 Hill conducted a labor and cost analysis and also prepared a report concerning the feasibility and a
Slide 32: Courthouses & Criminal Justice Facilities
Courthouses & Criminal Justice Facilities Project Name: Putnam County Courthouse Location: Carmel, NY, USA Client: Putnam County Service: Construction Management Project Value: $27,800,000 Hill was chosen to be the construction manager during design and construction of the new Putnam County Courthou
Slide 33: Libraries & Museums
Libraries & Museums Project Name: National Constitution Center Location: Philadelphia, PA, USA Client: National Constitutional Center Service: Project Management Project Value: $185,000,000 Hill Provided comprehensive project management services for construction of the National Constitution Center (
Slide 34: Government Office Buildings
Government Office Buildings Project Name: ID/IQ Task Order Contract Location: Baltimore, MD Client: U.S. Army Corps of Engineers Service: Construction Management Project Value: N/A For more than 15 years, Hill has provided construction management support services to the U.S. Army Corps or Engineers,
Slide 35: Government Office Buildings and Religious Facilities
Government Office Buildings Project Name: ID/IQ Task Order Contract Location: Various Client: U.S. General Services Administration Service: Construction Management Project Value: N/A Hill is providing nationwide construction management services for a program that includes all 11 GSA Regional Offices
Slide 36: Hospitals & Healthcare Facilities
Hospitals & Healthcare Facilities Project Name: Hamad Medical City Location: Doha, Qatar Client: Qatar Ministry of Public Health Service: Project Management Project Value: $600,000,000 Hill is managing the design and construction of the largest comprehensive medical facility in the Middle East. It i