Enerflex Ltd. · TSX:EFX
Enerflex — Merger or Acquisition (January 2022)
22 slides from Enerflex's merger presentation, Jan 24, 2022
Slide 1: Enerflex and Exterran to Combine, Creating a Premier Integrated Global Provider of Energy Infrastructure
Enerflex and Exterran to Combine, Creating a Premier Integrated Global Provider of Energy Infrastructure ALL FIGURES HEREIN PRESENTED IN US DOLLARS UNLESS OTHERWISE NOTED January 24, 2022
Slide 2: Advisories
Advisories This presentation contains forward-looking information within the meaning of applicable Canadian securities laws and within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements relate to the respective management expectat
Slide 3: Advisories
Advisories The forward-looking information contained herein is expressly qualified in its entirety by the above cautionary statement. The forward-looking information included in this presentation is made as of the date of this presentation and, other than as required by law, Enerflex disclaims any i
Slide 4: Advisories (Cont’d)
Advisories (Cont’d) Non-IFRS Measures: Financial measures in this presentation do not have a standardized meaning as prescribed by generally accepted accounting principles in Canada, which are International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Boar
Slide 5: Strategic Rationale
Strategic Rationale Creates a Premier Integrated Global Provider of Energy Infrastructure • Geographic balance with ~25-35% of revenues from each of North America, the Middle East, and Latin America • Accesses a larger, more diverse opportunity set for global energy infrastructure and energy transit
Slide 6: Transaction Overview
Transaction Overview • Enerflex to combine with Exterran in an all-share transaction • Each outstanding share of common stock of Exterran to be exchanged for 1.021 common shares of Enerflex • The transaction value for Exterran is ~US$735 million, representing an 18% premium to Exterran’s enterprise
Slide 7: Enhanced Presence in Key Growth Regions
Enhanced Presence in Key Growth Regions Highly complementary business lines and expanded offerings across key growth regions • Focused on four key geographies: North America, Middle East/Africa, Asia Pacific, and Latin America. Each region expected to present opportunities for growth in coming years
Slide 8: Pro Forma Business Lines
Operationally Advantaged Pro forma Enerflex has expanded depth and technical expertise in both natural gas and energy transition solutions Pro Forma Business Lines Energy Infrastructure Any solution on a leased basis, including water treatment and energy transition solutions Engineered Systems Modul
Slide 9: Expanded Product Lines Target Multiple End Markets
Expanded Product Lines Target Multiple End Markets Combined entity’s deep expertise in modular equipment benefits three distinct markets each with significant growth prospects Natural Gas Energy Transition Water All produced gas requires compression and Modular solutions will benefit the energy
Slide 10: Accelerated Growth of Recurring Margin
Accelerated Growth of Recurring Margin Balanced contribution across recurring segments and manufacturing enhances resiliency Gross Margin % Business Drivers US$500 - $600 million Demand for new natural ~20-30% Engineered Systems / 10 – 20% gas, water, and energy Product Sales transition infrastructu
Slide 11: Synergies Accelerate Free Cash Flow Generation
Synergies Accelerate Free Cash Flow Generation At least US$40 million annual run rate synergies from reductions in overhead and operational efficiencies Overhead • Optimized structuring of management and corporate support teams At least $3.5 Operating Efficiencies US$40 MM • Economies of scale in I.
Slide 12: Enhanced Scale and Improved Capital Markets Relevance
Enhanced Scale and Improved Capital Markets Relevance The combined entity benefits from improved size and scale, increasing its relevance to capital markets All Values in US$MM Enterprise Value (1) Enterprise Value(1) vs. LTM Adjusted EBITDA(2) $5,000 $4,000 $3,000 $4,000 $2,000 GEI USAC $1,000 $3,0
Slide 13: Capital Structure
Capital Structure Long-term, stable capital structure with ample liquidity Capital Structure 09/30/2021 (1) In USD millions Enerflex Exterran Pro Forma • US$600 million 3-year secured Revolving Secured Debt ABL 33 - - Credit Facility Credit Facility Committed - 650 600 • Favourable covenant structur
Slide 14: Pro Forma Outlook
Pro Forma Outlook Funding of in-flight growth projects will result in near-term call on cash before meaningful excess free cash flow generation in 2023+ All Values in US$MM Adjusted EBITDA Committed Capex and Work-in-Progress(1) 600 600 500 476 500 360 - 400 383 400 400 320 - 370 200-220 286 300 300
Slide 15: Go Forward Capital Allocation Philosophy
Go Forward Capital Allocation Philosophy Following 2022’s capital project commitments, capital allocation in 2023+ will prioritize: balance sheet strength, sustainable shareholder returns, and growth Maintain ample liquidity, targeting Net Debt / EBITDA of 2.5x - 3.0x Capital Allocation Principles w
Slide 16: Committed to Sustainability
Committed to Sustainability Enerflex’s pro forma business lines together with its environmental, social, and governance processes reinforce its commitments to corporate sustainability Environmental Social Governance Core products support a global transition toward lower carbon Track record of le
Slide 17: Positioned for Success
Positioned for Success Combination enhances shareholder value PREMIER GLOBAL BALANCED & PREDICTABLE OPTIMIZED EFFICIENCY & PLATFORM EARNINGS LOWER COST OF BUSINESS Focused on four key ~70/30 split of Expect ~US$40 million growth regions, expanded recurring vs. of annual run-rate product lines, excel
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Slide 19: Appendix: Non-IFRS Financial Measures
Appendix Non-IFRS Financial Measures 19
Slide 20: Enerflex – Gross Margin Profile by Product Line
Enerflex – Gross Margin Profile by Product Line 20
Slide 21: Enerflex – Historical Free Cash Flow Reconciliation
Enerflex – Historical Free Cash Flow Reconciliation TTM Q3 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Cash provided by operating activities 134,795 134,208 69,024 64,611 104,173 91,792 179,251 242,868 54,169 220,248 157,546 Net change in non-cash working capital and other 48,243 15,531 (
Slide 22: Investor Relations Contacts
Investor Relations Contacts For Enerflex inquiries: Stefan Ali Vice President, Strategy and Investor Relations Enerflex Ltd. sali@enerflex.com +1-403-717-4953 For Exterran inquiries: Blake Hancock Vice President of Finance – FP&A, Investor Relations, and Corporate Development Exterran Corporation bl