Strategic Acquisition of Axip International June 2, 2014
Advisories This presentation is for information purposes only and is not intended to, and should not be construed to, constitute an offer to sell or the solicitation of an offer to buy securities of Enerflex. Forward Looking Statements In the interest of providing readers with information regarding Enerflex, including management's assessment of the future plans and operations of Enerflex Ltd. ("Enerflex" or the "Company"), certain statements contained in this presentation constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target" and similar words suggesting future events or future performance. In particular, this presentation contains, without limitation, forward-looking statements pertaining to the following: certain anticipated strategic benefits of the acquisition ("Acquisition") of the international contract compression and processing as well as after-market services business conducted by Valerus Compression Services, LP (doing business as Axip Energy Services LP) ("Axip"), including the anticipated effects of the Acquisition on Enerflex's recurring revenues, gross margins, international growth,profitability and reduction of debt as a result of cash flow; that the Acquisition will be accretive to the Company's earnings per share; the final purchase price to be paid for the Acquisition; that the Acquisition will provide access to new markets; that Enerflex will be able to cross-sell its current products; the likelihood of contract renewal; the possible advantages of being "first mover" in the Mexican market; expected additions to Enerflex's management team post-Acquisition; the sources of capital to fund the anticipated purchase price of the Acquisition, including the expectation that the new revolving credit facility will be available for use by Enerflex to fund a portion of the purchase price; certain of the assets expected to be acquired by Enerflex as a result of the Acquisition; and Enerflex's expected pro-forma net debt and last twelve month earnings before interest, tax, depreciation and amortization ("EBITDA") ratios after the completion of the Acquisition. With respect to forward-looking statements contained in this presentation, Enerflex has made assumptions regarding, among other things: the ability of Enerflex to execute and realize on the anticipated benefits of the Acquisition; the value and benefits of the Acquisition; that Enerflex's lenders will not amend, terminate or otherwise fail to provide the credit facilities described herein; that the acquired business will perform in a manner consistent with past periods; the quality of the Axip equipment; the expected growth of the South American markets; that no contractual or other arrangements in respect of the acquired business will be amended, modified or terminated as a result of the Acquisition, or otherwise; that all conditions to closing of the Acquisition, including receiving all required third party and regulatory approvals, will be provided in a timely manner and without unforeseen or onerous conditions; that the Company's presence in Mexico prior to the arrival of certain other competitors will prove advantageous; that the current commitments by certain Axip managers to continue with the business will remain accurate; expectations and assumptions concerning prevailing usage rates, exchange rates, interest rates, applicable tax laws; estimates of operating costs; anticipated timing and results of capital expenditures; the sufficiency of budgeted capital expenditures in carrying out planned activities; the state of the economy and the financial conditions of Enerflex's and Axip's customers; results of operations; business prospects and opportunities; the availability and cost of financing, labor and services; the impact of increasing competition; the effect of seasonality fluctuations; the risk of violations of law, breaches of policies or unethical behavior; property and casualty risks; injuries at the workplace or health issues; the risk of material adverse effects arising as a result of litigation; and events or series of events may cause business interruptions. Although Enerflex believes that the expectations reflected in the forward looking statements contained in this presentation, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this presentation, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause Enerflex's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, the following: that the Acquisition may not close when planned (or at all) or on the terms and conditions set forth herein; the failure of Enerflex and/or Axip to obtain the necessary regulatory and other third party approvals required in order to proceed with the Acquisition; the risk that the proposed Acquisition could be modified, restructured or terminated; the failure of Enerflex to secure its new credit facility on terms satisfactory to it, or at all; volatility in market prices for oil and natural gas; incorrect assessment of the value of the Acquisition; risks inherent in operating in foreign and emerging markets; failure to realize the anticipated benefits and synergies of the Acquisition; the impact of general economic conditions; industry conditions, including the adoption of new laws and regulations and changes in how they are interpreted and enforced; volatility of oil and gas prices; oil and gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations, including future dividends to shareholders of the Company; increased competition; the lack of availability of qualified personnel or management (including those that are expected to continue with the acquired business); labour unrest; political unrest; fluctuations in foreign exchange or interest rates; stock market volatility; opportunities available to, or pursued by, the Company; obtaining financing; and the other factors described under "Risk Factors" in Enerflex's most recently filed Annual Information Form available in Canada at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive. The forward-looking statements contained in this presentation speak only as of the date of this presentation. Except as expressly required by applicable securities laws, Enerflex does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement. 2
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