Black Diamond Group Limited Announces Strategic Acquisition of Ontario Based Modular Rental Company
October 31 2022 - 5:00PM
Black Diamond Group Limited (“Black Diamond or the “Company” or
“Management”) (TSX: BDI), a leading provider of space rental and
workforce accommodation, today announced the closing of a strategic
acquisition (“Acquisition” or “Target”) within its Modular Space
Solutions (“MSS”) segment. The Target is a modular building rental
company in Ontario with 1,851 units primarily focused on the
education and government sector. The purchase price for the Target
was $54.5 million, including the assumption of debt. Black Diamond
is also funding approximately $4 million of the Target’s remaining
2022 growth capex for customers that have signed long term
contracts. Adjusted EBITDA for the Target over the last twelve
months was approximately $7.8 million. Based on recently added
assets and corresponding rental contracts, Management expects
growth in Target’s Adjusted EBITDA in 2023.
“This strategic Acquisition further accelerates
our growth and diversification within the MSS business by adding
roughly 1,850 units primarily in the education sector, to our
rental fleet in Central Canada. This brings our MSS rental fleet to
over 11,000 units (or ~6 million square feet of rentable space)
across North America. Also included in the Acquisition is
approximately $33 million of contracted revenue, of which the
majority is rental.” Added Trevor Haynes, Black Diamond’s Chairman
& CEO, “We view the Target as a leader in this market and
believe there are attractive opportunities for ongoing growth,
while continuing to offer the exceptional service levels and
operational excellence that the Target and its customers are
accustomed to.”
The Target’s rental assets will be qualified as
eligible inventory for the Company’s Asset Based Lending (“ABL”)
facility, which will be drawn upon to fund most of the purchase
price. In conjunction with the acquisition, Black Diamond’s lenders
are expected to increase the size of the Company’s ABL facility
from $300 million to $325 million to accommodate the purchase,
while allowing significant available liquidity for future growth.
Pro-forma the acquisition, Black Diamond will remain at the
mid-point of its targeted Net Debt to trailing twelve month (“TTM”)
Adjusted Leveraged EBITDA range of 2 to 3 times.
Over the last several years, Black Diamond has
shown consistent growth in core, recurring rental revenue and
believes the Acquisition aligns with the Company’s stated long-term
vision of profitably growing its diversified MSS business.
Alongside growth of MSS, the Company will look to continue to
capitalize on operating leverage inherent in its Workforce
Solutions segment, expand international operations in Australia,
and focus on the continued and rapid scaling of its digital
crew-travel platform in LodgeLink.
About Black
Diamond
Black Diamond is a specialty rentals and
industrial services Company with two operating business units -
Modular Space Solutions (MSS) and Workforce Solutions (WFS). We
operate in Canada, the United States, and Australia. MSS through
its principal brands, BOXX Modular, Britco, MPA, and Schiavi, owns
a large rental fleet of modular buildings of various types and
sizes. Its network of local branches rent, sell, service, and
provide ancillary products and services to a diverse customer base
in the construction, industrial, education, financial, and
government sectors. WFS owns a large rental fleet of modular
accommodation assets of all types and sizes and a fleet of liquid
and solid containment assets. Its regional operating terminals
rent, sell, service, and provide ancillary products and services
including turn-key operated camps to a wide array of customers in
the resource, infrastructure, construction, disaster recovery, and
education sectors. The WFS business unit also includes the
Company’s wholly owned subsidiary, LodgeLink, which operates a
digital marketplace for business-to-business crew accommodation,
travel, and logistics in North America.
Learn more at www.blackdiamondgroup.com.
Investor and Media
InquiriesJason Zhang at 403-206-4739
or investor@blackdiamondgroup.com
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Cautionary Note
Regarding Forward-Looking Statements
Certain information set forth in this news
release contains forward-looking statements. Although Black Diamond
believes that the expectations reflected in the forward-looking
statements contained in this news release, and the assumptions on
which such forward-looking statements are made are reasonable,
there can be no assurances that such expectations or assumptions
will prove to be correct. Readers are cautioned that assumptions
used in the preparation of such statements may prove to be
incorrect. Events or circumstances may cause actual results to
differ materially from those predicted, as a result of numerous
known and unknown risks, uncertainties and other factors, many of
which are beyond the control of Black Diamond. These risks include,
but are not limited to: the impact of general economic conditions,
industry conditions, fluctuation of commodity prices, the impact of
the COVID-19 pandemic, the Company's ability to attract new
customers, failure of counterparties to perform on contracts,
industry competition, availability of qualified personnel and
management, timely and cost effective access to sufficient capital
from internal and external sources, political conditions,
dependence on suppliers and stock market volatility. The risks
outlined above should not be construed as exhaustive. Additional
information on these and other factors that could affect Black
Diamond's operations and financial results are included in Black
Diamond's annual information form for the year ended December 31,
2021 and other reports on file with the Canadian Securities
Regulatory Authorities which can be accessed on SEDAR. Readers are
cautioned not to place undue reliance on these forward-looking
statements. Furthermore, the forward-looking statements contained
in this news release are made as at the date of this news release
and Black Diamond does not undertake any obligation to update or
revise any of the forward-looking statements, except as may be
required by applicable securities laws.
Non-GAAP Measure
In this news release, the following specified
financial measure and non-GAAP ratio have been disclosed: Adjusted
EBITDA; Net Debt to TTM Adjusted Levered EBITDA. This non-GAAP
measure and ratio does not have any standardized meaning prescribed
under International Financial Reporting Standards ("IFRS") and
therefore may not be comparable to similar measures presented by
other entities. Readers are cautioned that this non-GAAP measure
and ratio are not alternatives to measures under IFRS and should
not, on their own, be construed as an indicator of the Company's
performance or cash flows, a measure of liquidity or as a measure
of actual return on the common shares of the Company. This non-GAAP
measure should only be used in conjunction with the consolidated
financial statements of the Company. The most directly comparable
financial measures that are disclosed in the financial statements
of the Company is consolidated profit and long-term debt.
For further information and discussion on
Non-GAAP financial measures, as well as a reconciliation to the
most comparable GAAP measure, please refer to the Company’s
Management Discussion and Analysis for the three and six months
ended June 30, 2022 which is available on the Company’s website at
www.blackdiamondgroup.com, or on the SEDAR website at
www.sedar.com.
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