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Enterprise Group, Inc. (TSX - E) is a growing consolidator of profitable businesses providing services to the utility, energy and infrastructure construction sectors of Canada's robust economy. With office headquarters in St. Albert, Alberta, Canada, and construction offices in Slave Lake, Innisfail, Morinville and Sherwood Park, Alberta, Enterprise is strategically located near our customers.
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Investing in Tomorrow’s Energy & InfrastructureEnterpriseGRP.ca
FORWARD LOOKING STATEMENTSStatements in this presentation that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading “Risk Factors” and elsewhere in the Corporation’s periodic filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Corporation does not assume the obligation to update any forward-looking statement.
PAGE TWO
• Enterprise Group Inc. (“Enterprise” or “Company” – Ticker – TSX:E) is a consolidator of construction services companies operating in the energy, utility and transportation infrastructure industries. The Company's focus is primarily construction services and specialized equipment rental. The Company's strategy is to acquire complementary service companies in Western Canada, consolidating capital, management and human resources to support continued growth. Enterprise became a Western Canadian leader in flameless heat technology in September 2012 with its acquisition of Artic Therm International Ltd. and has now become a technological leader in underground infrastructure construction by the closing of Calgary Tunnelling & Horizontal Augering Ltd. June 14, 2013.
• Enterprise currently operates 4 business units: – TC Backhoe & Directional Drilling (service provider to mid-stream and infrastructure/utility companies), – Calgary Tunnelling & Horizontal Augering Ltd (highly specialized tunnelling for pipeline, utility and infrastructure)– Artic Therm International (specialized equipment rental provider) and – E-One Limited (construction class heavy equipment rental provider).
• The Company was incorporated on 2004 and is headquartered in St. Albert, Alberta.• Enterprise currently employs between 125 - 200 employees depending on the season, and has a world class customer
base.• Enterprise's typical customers are:
– Integrated O&G– Multinational Mid-Stream– Cross Country pipeline Constructors– Telecommunications– Cable Television– Electricity and Natural Gas Services– North American Rail Companies
COMPANY OVERVIEW
PAGE THREE
• Acquire complementary businesses at accretive valuations
• Ideal Targets:– Unique Western Canada focused private companies with limited access to capital for
growth– Businesses that service the energy, utility and transportation infrastructure industries– Successful track record with high quality, top tier clients– Profitable– Possess the market ability to double within 2 – 3 years
• Typical Acquisition Structure– Purchase price of < 3.0x EBITDA– Acquisition price paid with a combination of cash, equity, debt & VTB– Key personnel retained via 5 year employment contracts and incentives
• Enterprise Group will leverage its expertise, strong client relationships and access to capital to accelerate organic growth
ACQUISITION STRATEGY
PAGE FOUR
DEBT REFINANCING
SEPTEMBER 2O12 - Enterprise completes a refinancing with PNC Canada Branch. Implementing a $12.5 million operating line at prime + 2% for a three year term.
MAY 2O13 – Operating line increases to $20 million
PNC is currently the seventh largest bank by deposits in the United States, as well as the sixth largest by total assets, fifth in total branches, and is the third largest bank off-premise ATM provider. PNC is based in Pittsburgh, USA.
PAGE FIVE
SEGMENTS OVERVIEW
The company has a growing equipment asset base of nearly $30 million including a fleet of over 300 trucks, heavy equipment and specialized heating units.
Renting the most advanced flameless
heaters rangingin heat output
from 500,000 to 3,000,000 BTU’s.
Pioneers of pipeline thermal expansion
A first call for heavy equipment rentals in the
oilfield & civil construction sectors and operating
project crews constructing pipelines & facilities for
the prolific oil & gas fields of Western Canadian Sedimentary Basin.
Enterprise Group’s four business units deliver utility & infrastructure construction services, and heavy equipment & flameless heating rentals
Serving the premierutility providers in Alberta installing and maintaining
utility services both underground and
above ground.
UTILITY/INFRASTRUCTURECONST. & MAINT. EQUIPMENT RENTAL
PAGE SIX
North American leader in the highly specialized tunnelling field. CTHA
utilizes a number of tunnelling disciplines laser guided boring & augering,
pipe ramming, pipe jacking/tunnel boring (TBM), among others.
Calgary Tunnelling & Horizontal Augering Ltd.• Founded in 1984, Calgary Tunnelling
& Horizontal Augering Ltd., ("CTHA") is a North American leader in the highly specialized tunnelling field.
• CTHA utilizes a number of tunnelling disciplines to get the job done efficiently and safely such as laser guided boring & augering, pipe ramming, pipe jacking/tunnel boring (TBM), among others.
• CTHA performs its services from the west coast through to central Canada across the energy, utility and infrastructure segments. Its clients range from Canada's largest rail companies and premier utility providers to leading infrastructure contractors and some of North America's largest pipeline companies.
PAGE SEVEN
Calgary Tunnelling Acquisition Highlights
• Highly successful specialized underground infrastructure construction company with operations based in Alberta deploying its services from the West Coast to Central Canada.
• ~30 years as an operating company and +60 years of cumulative field experience
• Provides multiple services to top tier clients
• Accretive acquisition that is complementary to Enterprise Group’s existing businesses
• For the year ended 2012, the private company generated $14.9 million of revenue and $5.85 million of EBITDA
• Acquisition price is $12 million (just over 2 X EBITDA)- Acquisition being funded by debt, cash and a $1.0 million vendor take-back financing to be repaid over two years- Acquisition completed June 14, 2013
PAGE EIGHT
TC Backhoe – Utility/ Infrastructure• Industry leader in utility and pipeline
construction working throughout Alberta with over 35 years of industry experience
• Focused on the installation and repair of underground utility services in subdivisions
• Relationships with Alberta’s largest developers including Qualico, Genstar and Landrex
• Customers include Canada’s largest telecommunications, cable TV, electricity & natural gas service providers.
• Services provided by TC Backhoe include directional drilling, hydrovacing, trenching and plowing, backhoe and dozer work, as well as complete site clean-up
• Excellent revenue visibility as ~40% of revenues from long term contracts (12-18 mos.)
PAGE NINE
Artic Therm – Flameless Heat Rental• Founded in 1997 and acquired by
Enterprise Group in September 2012– Acquisition price of $6.5 mil (2.4x trailing
EBITDA )
• Provides efficient Flameless Heat and Green Air technology for multiple applications using portable equipment to remote locations for the extreme climate challenges
• Proprietary technology• Fleet of over 100 units with substantial
opportunity for expansion due to increasing demand
• 500,000 to 3.3 Million BTU output• Blower technology of up to 15,000
CFM at Peak• Applications
– Pipeline Thermal Expansion– De-Humidifying– Confined Space Entry– Plant & Facility Shut Downs– Vessel Coating Curing
PAGE TEN
ARTIC THERMFLAMELESS HEATING
Pioneers in Flameless Heating Technology
500,000 to 3.3 Million BTU OutputBlower Technology of up to 15,000 CFM at Peak
PAGE ELEVEN
ARTIC THERMFLAMELESS HEATING
Applications: Pipeline Thermal ExpansionDe-HumidifyingConfined Space EntryPlant & Facility Shut DownsVessel Coating Curing
Pipeline Thermal Expansion
Storage Tank Shut-Downs
Plant/Facility Shut-Downs
PAGE TWELVE
E One Limited – Heavy Equipment Rental• Located in Central and North Central
Alberta • Strategically located to serve the needs
of the demanding construction and energy services industries
• 40 pieces of heavy construction equipment including excavators, bulldozers and pipe-layers typically rent out at $5,500 to $19,500 per month
• E-One provides:– Late model equipment– Professionally serviced and maintained
fleet – less downtime, and more work time– Best-in-Class brands and models
• Historical utilization rate of 60-95% capacity
PAGE THIRTEEN
Blue ChipCLIENT BASE
PAGE FOURTEEN
Leonard D. Jaroszuk – President, CEO, ChairmanEntrepreneur with 27+ years experience managing public companies engaged in real estate, construction, natural resources and exploration. Serves as a Director on several oil & gas service and manufacturing companies
Desmond O’Kell – Vice President, Director and Corporate SecretaryHas been with Enterprise Group since its inception. 26+ years experience in corporate development, finance and business operations.
Doug Bachman – COO25+ years experience in corporate finance and management from a tier-one Canadian chartered bank
Warren Cabral – CFORecently served as CFO for AIMCo managing global investments for pensions, endowments and government funds in Alberta. Joined Enterprise group in January 2013
John Pinsent – DirectorManu K. Sekhri– Director
LEADERSHIP TEAM
PAGE FIFTEEN
Financial Summary
Capitalization Table Shareholders Summary
Major Shareholders
Management / Directors / Assoc’s 30.00% +
Float and Public ~66.40%
Total 100.00%
Shares Outstanding (Sept 2013) In MillionsBasic 84.5Options ~ 4.7Warrants ~ 1.2
Fully Diluted 90.452-Week High-Low $0.89-$0.20Market Capitalization 69.3Enterprise Value 89.3
PAGE SIXTEEN
Historical Performance
Source: Company Reports, TSX InfoSuite, Research Consensus Estimate
Analyst Coverage Liquidity
Brokerage Firm Analyst RatingDate of
InitiationCurrent Target
M Partners Tom Varesh Buy 27-Feb-13(2014)$2.05
Beacon Securities Michael Mills Buy 12-Oct-12(2013)$1.00
Total Trading
Period Average Daily Volume % of Float % of Total
Last 1 Month 578,007 0.97% 0.68%Last 3 Months 519,308 0.87% 0.61%Last 6 Months 475,718 0.80% 0.56%Last 12 Months 360,023 0.60% 0.42%
$15.6$17.9 $18.5
-$1.5
$1.6$4.4
-40%
-30%
-20%
-10%
0%
10%
20%
30%
-$4.0
$1.0
$6.0
$11.0
$16.0
$21.0
$26.0
$31.0
$36.0
2010 2011 2012Revenue EBITDA EBITDA Margin
PAGE SEVENTEEN
CORPORATE HEAD OFFICE#2, 64 Riel Drive, St. Albert
Alberta, Canada T8N 5B3
Phone: 780.418.4400Fax: 780.418.1941
Toll Free: 888.303.3361
INVESTOR RELATIONSDesmond O’Kell
Senior Vice President Phone:780.418.5377
CONTACT INFORMATION
PAGE EIGHTEEN