Custom Truck One Source, Inc. · NYSE:CTOS
Custom Truck One Source — Merger or Acquisition (December 2020)
21 slides from Custom Truck One Source's merger presentation, Dec 3, 2020
Slide 1: Nesco and Custom Truck One Source to Combine
Nesco and Custom Truck One Source to Combine December 3, 2020 CONFIDENTIAL DRAFT1
Slide 2: Disclaimer
Disclaimer Some of the financial information and data of Nesco Holdings, Inc. (“Nesco”) contained herein does not conform to Securities and Exchange Commission (“SEC”) Regulation S-X in that it includes certain financial information not prepared in accordance with united states generally accepted ac
Slide 3: Presenters
Mark Ein Louis Samson Presenters Chairman & CEO, Capitol Investment Partner, Platinum Equity Vice Chairman, Nesco Lee Jacobson Fred Ross Josh Boone Ryan McMonagle CEO, Nesco CEO, Custom Truck CFO, Nesco COO, Custom Truck One Source One Source 3
Slide 4: Combination of Two Leading Specialty Rental Equipment Companies
Combination of Two Leading Specialty Rental Equipment Companies Highly Complementary Companies • Customers, end markets, fleets and operations well-aligned • ~$50M in run-rate annual cost synergies expected to be achieved within two years of closing $297M $1.3B LTM Revenue1 PF LTM Revenue1 Business
Slide 5: Transaction Summary
Transaction Summary • Nesco to acquire Custom Truck One Source (“CTOS”) for $1.475B • An affiliate of Platinum Equity, LLC (“Platinum”) has committed to invest over $850M into Nesco in exchange for newly issued common stock at a price of $5.00 per share • The Blackstone Group, Inc. (“Blackstone”), i
Slide 6: Transformed Company Well-Positioned for Growth
Transformed Company Well-Positioned for Growth Integrated “one-stop-shop” platform with a differentiated customer value proposition and enhanced operational flexibility National footprint and broadened product and service offering to tailor solutions to customers’ unique needs Serving resilient end-
Slide 7: Platinum Equity Overview
Platinum Equity Overview Financial Sponsor with a Strong Track Record and Deep Operational Capabilities Overview Operationally-focused investment strategy Founded in Portfolio includes $23B • Operationally-focused investment firm with deep capabilities 1995 ~40 companies Under management (~70 dedica
Slide 8: Platinum Equity Investment Thesis
Platinum Equity Investment Thesis Create value operationally by extracting highly achievable Invest in businesses / sector we know and have had success in synergies • Leverage proven operational playbook in specialty rental • ~$50M of carefully identified run-rate annual cost synergies expected to b
Slide 9: Nesco at a Glance
Fort Wayne, IN HQ $297M $122M Nesco at a Glance LTM Revenue1 LTM Adj. EBITDA1 ~365 ~4,500 20 Employees1 Fleet Units1 Locations3 Leading Provider of Specialty Equipment Rental to T&D, Telecom $638M 3.9-year and Rail End-Markets Fleet OEC1 Average Age1 Operated ERS Facilities PTA Facilities • Differen
Slide 10: CTOS at a Glance
$994M $166M CTOS at a Glance Kansas City, MO HQ LTM Revenue1 LTM Adj. EBITDA1 ~1,460 ~4,300 Leading Integrated Provider of Employees1 Fleet Units1 26 Locations3 Specialty Equipment $705M 2.9-year Fleet OEC1 Average Age1 • Differentiated business model combining full-service specialty equipment offer
Slide 11: Highly Complementary Platforms
Highly Complementary Platforms Complementary Business Models with a Common Core Focus Combined LTM Revenue $297M $994M $1,296M LTM Adj. EBITDA $122M $166M $338M1 Fleet OEC $638M $705M $1,343M Locations2 20 26 46 Employees ~365 ~1,460 ~1,825 Other3 Other3 Other3 9% 11% 17% Revenue Mix Rental & Rental
Slide 12: Enhances Rental Fleet Profile
Enhances Rental Fleet Profile Creates One of the Industry’s Largest and Most Diverse Specialty Equipment Fleets Combined Other2 6% Other2 15% Bucket Other2 Bucket Other T&D1 Trucks 24% Trucks 12% 34% 27% Bucket Other T&D1 $638M OEC Trucks $705M OEC 10% $1,343M OEC Cranes 42% 12% 3.9-Yr Avg. Age 2.9-
Slide 13: Favorable End-Market Growth Dynamics
Favorable End-Market ~$30B Total Addressable Market1 Growth Dynamics… Parts & Service ~$9B New 1.0% Market Sales Size ~$15B 3.5% Primary End-Markets All Experiencing Strong Secular Growth Rental & Est. Market Share Used Sales Key End Market Trends ~$5B CTOS Nesco • Grid unreliable and failure-prone
Slide 14: Integrated Business Model
Integrated Business Model CTOS’ Capabilities and Offering will Materially Enhance Nesco’s Platform Unit Economics Advantages Faster Speed to Market Higher Resale Values • Scale-enabled purchasing benefits • Ability to shift units from new inventory to • Well-established new & used sales rental fleet
Slide 15: Potential Synergies Expected to Drive Substantial Value Creation
Potential Synergies Expected to Drive Substantial Value Creation ~$50M of Anticipated Run-Rate Annual Cost Synergies with ~$50M of expected one-time costs to achieve Breakdown of Cost Synergy Opportunity Synergy Realization Timeline1 Procurement 28% 100% Other SG&A Opportunities 22% ~50% Service / P
Slide 16: Compelling Financial Profile
Compelling Financial Profile Expect to Deliver Pro Forma 2021 Adj. EBITDA of $380 to 400M 4 Pro Forma Revenue Pro Forma Adj. EBITDA ($ in millions) ($ in millions) $390 $1,390 $1,294 $1,291 $1,295 $338 $337 50 $325 $1,105 $293 50 50 264 297 $864 246 $221 127 122 122 204 99 340 1,030 994 287 859 198
Slide 17: Transaction Enhances Leverage & Liquidity Profile
Transaction Enhances Leverage & Liquidity Profile Improved Financial Profile Positions the Combined Company to Capitalize on Growth Opportunities Highlights Lower Net Leverage Improved Liquidity Profile4 • New capital structure provides a high ($ in millions) level of financial flexibility Over 2x o
Slide 18: Compelling Transaction for All Stakeholders
Compelling Transaction for All Stakeholders Combination of Two Leading Specialty Equipment Providers Focused on High-Growth End-Markets Integrated Platform with Scale and Differentiated Offering Expanded Fleet and Footprint Providing Greater Ability to Serve Customers Nationwide Combined Company Wel
Slide 19: Appendix
Appendix MELD (\) 2" SPECIALTY RENTALS re ose.
Slide 20: Adj. EBITDA Reconciliation – Nesco
Adj. EBITDA Reconciliation – Nesco Reconciliation of Net Income (Loss) to Adjusted EBITDA1 ($ in millions) Year E n ded 12/31 YTD 9/30 LTM Foot n ot e: 2017 2018 2019 2019 2020 9/30/20 Net In c ome ( Los s ) ($27.1) ($15.5) ($27.1) ($30.2) ($13.9) ($10.8) Interest expense 53.7 56.7 63.4 46.4 47.8 64
Slide 21: Adj. EBITDA Reconciliation – CTOS
Adj. EBITDA Reconciliation – CTOS Reconciliation of Net Income (Loss) to Adjusted EBITDA1 ($ in millions) Year E n ded 12/31 YTD 9/30 LTM 2017 2018 2019 2019 2020 9/30/20 Net In c ome ( Los s ) ($35.0) ($8.3) ($8.3) $11.6 ($8.6) ($28.5) Interest expense (excl. Floorplan Interest) 33.2 44.9 50.8 38.3
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