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Enerflex is an ethical and safety-oriented company guided by commitments to provide value to customers and shareholders, a safe and interesting work environment for its employees, and a positive impact on the communities in which it operates.
It has been well over three decades since our beginnings as a small shop supplying compression equipment in western Canada. But our customer focus and commitment to innovation, quality and safety has not changed.
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Enerflex’s people and projects are at work around the world, 24/7.
Extensive reciprocating and rotary screw experience. Wide horsepower range, with gas-fuelled and electric drives.
Thoroughly designed, well-built and efficiently delivered modules from our state-of-the-art facilities in Calgary, Alberta and Houston, Texas.
Enerflex offers complete global customer service. 24/7. Year-round.
Electric-drive generators up to 50 Mw, for independent and alternative power producers and anywhere stand-alone generation is needed.
Focus your capital outlays on drilling and completing wells by choosing from our broad lineup of rental packages.
We will help extend your equipment’s service life, upgrade system capacities or optimize the load on your compression horsepower.
We have the big-picture vision, talented people and industry-leading capabilities to fulfil requirements from design through long-term maintenance.
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Our extensive capabilities have been assembled and are being continually fine-tuned and strengthened specifically to meet our customer promise: being your single source supplier of innovative solutions.
Ongoing innovations serving the industry's focus on liquids extraction and LNG exports.
Enerflex's Houston manufacturing facility feeds global and domestic markets, with large-scale assembly capacity and comprehensive capabilities including high-capacity refrigeration, liquids fractionation and deep-cut processing.
Compression and processing rental equipment, after-market services, electric power opportunities and new equipment offerings serve a wide customer base.
Serving an array of customer requirements, from coal seam gas to LNG and high-pressure storage compression.
Our locally based design and engineering team serves this large region with specialized offshore and onshore compression, processing, refrigeration, rental equipment and FPSO topsides.
Integrated delivery of large turnkey facilities, including the 90 MMSCF per day processing facility with 6,000 barrels per day of condensate extraction for Oman Oil Company Exploration and Production.
Industry-leading capability and experience serving specialized needs across a culturally diverse and geographically broad region.
When you join Enerflex, you're on a team of exceptional people and you're in a place of opportunity to do exceptional things.
Enerflex people are problem-solvers, risk-takers and team players, passionate about translating skills into solutions that meet or exceed the needs and expectations of our customers.
Virtually everything we do involves collaboration. That is a key feature of our culture, and it strengthens the Company.
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June 01, 2014 08:17:06 pm
Enerflex Announces Strategic Acquisition of International Contract Compression, Processing and After-Market Services Business for US$430 Million
CALGARY, ALBERTA--(Marketwired - June 1, 2014) - Enerflex Ltd. (TSX:EFX) ("Enerflex" or the "Company"), announced today that it has entered into a definitive agreement to acquire the international contract compression and processing business, as well as the after-market services business of Axip Energy Services, LP ("Axip") for US$430 million in cash, subject to certain purchase price adjustments ("Acquisition").
The transaction is consistent with Enerflex's objective of increasing recurring revenue streams and expanding geographic markets while supporting the Company's strategy of being a global supplier of turnkey energy solutions through compression, processing and electric power equipment sales, after-market service and contract operations.
"This acquisition provides Enerflex with an established platform to expand into growing geographies in a business with attractive margins and recurring revenue. It accelerates our ability to deliver full cycle contract services and cross-sell fabrication product offerings into high-growth international markets," stated J. Blair Goertzen, Enerflex's President and Chief Executive Officer.
Axip's international contract compression and processing business and after-market service is a leading provider of global energy services. Headquartered in Houston, Texas, Axip's international business has 173 employees with operations in Mexico, South America, Southeast Asia and the Middle East. Key energy infrastructure assets to be acquired include a 448 unit compression fleet totaling approximately 285,000 horsepower, running at utilization levels above 90% and having an average fleet age of approximately 5.5 years. As well, the assets to be acquired include gas treating facilities in Mexico, Argentina and Peru. All members of the current Axip international senior management team will stay with the business following the closing of the Acquisition. For the year ended December 31, 2013, combined revenue and EBITDA from compression, processing and after-market services were US$128 million and US$57 million respectively, after adjusting for certain non-recurring revenues and costs, representing an EBITDA margin of 45%. The Acquisition does not include Axip's U.S. assets.
Financing of the Transaction
The Acquisition will be financed with at least C$125 million from cash-on-hand, with the balance funded through new C$675 million committed revolving and operating facilities led by The Toronto-Dominion Bank and Scotiabank. At closing, Enerflex's expected pro forma Net Debt/Trailing Twelve Month EBITDA ("TTM EBITDA") ratio will be approximately 2.0x. As at March 31, 2014, Enerflex had cash-on-hand of approximately C$219 million.
Closing of the Acquisition and Other Information
Closing of the Acquisition is subject to certain conditions, including receipt of several regulatory and third party approvals and is not expected to occur before June 30, 2014. These conditions are described in the definitive agreement for the Acquisition which will be available on SEDAR at www.sedar.com.
Scotiabank is acting as financial advisor to Enerflex.
Conference Call and Webcast
Analysts, investors, members of the media and other interested parties are invited to participate in a teleconference and audio webcast on Monday, June 2, 2014 at 7:00 a.m. MDT to discuss the Acquisition.
To participate, please call 1.800.734.4208 (North America) or 1.416.981.9000 (Outside North America). Please dial in 10 minutes prior to the start of the call. No passcode is required. The live audio webcast of the teleconference will be available on the Enerflex website at www.enerflex.com* under the Investors section on June 2, 2014 at 7:00 a.m. MDT.
Presentation slides for the conference call will be made available on the Enerflex website located at www.enerflex.com*.
A replay of the teleconference will be available one hour after the conclusion of the call until midnight, June 9, 2014. Please call 1.800.558.5253 or 1.416.626.4100 and enter passcode 21718651.
Enerflex Ltd. is a single source supplier of natural gas compression, oil and gas processing, refrigeration systems and electric power equipment - plus in-house engineering and mechanical service expertise. The Company's broad in-house resources provide the capability to engineer, design, manufacture, construct, commission and service hydrocarbon handling systems. Enerflex's expertise encompasses field production facilities, compression and natural gas processing plants, CO2 processing plants, refrigeration systems and electric power equipment servicing the natural gas production industry.
Headquartered in Calgary, Canada, Enerflex has approximately 3,100 employees worldwide. Enerflex, its subsidiaries, interests in associates and joint-ventures operate in Canada, the United States, Colombia, Australia, the United Kingdom, Russia, the United Arab Emirates, Oman, Bahrain, Indonesia, Malaysia and Singapore. Enerflex's shares trade on the Toronto Stock Exchange under the symbol "EFX". For more information about Enerflex, go to www.enerflex.com*.
Advisory Regarding 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, certain statements contained in this news release 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 news release contains, without limitation, forward-looking statements pertaining to the following: certain anticipated strategic benefits of the Acquisition, including the anticipated effects of the Acquisition on Enerflex's recurring revenues, gross margins, international growth, and profitability; that the Acquisition will be accretive to the Company's earnings per share; that the Acquisition will provide access to new markets; that Enerflex will be able to cross-sell its current products; 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; Enerflex's expected pro-forma net debt and LTM (last twelve month) EBITDA ratios after the completion of the Acquisition; and the expected closing date of the Acquisition.
With respect to forward-looking statements contained in this news release, 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; 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 news release, 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 news release, 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 news release speak only as of the date of this news release. 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 news release are expressly qualified by this cautionary statement.
This news release contains the term "Net Debt" and "EBITDA" (earnings before interest, tax, depreciation and amortization) which do not have a standardized meaning prescribed by Canadian generally accepted accounting principles ("GAAP") and therefore may not be comparable with the calculation of similar measures by other companies. "Net Debt" and "TTM EBITDA" in this news release are calculated in accordance with Enerflex's syncidated credit facility covenant calculation requirements. EBITDA provides the results generated by the Company's primary business activities prior to consideration of how those activities are financed, assets are amortized or how the results are taxed in various jurisdictions. EBITDA as presented is not intended to represent cash provided by operating activities, net earnings or other measures of financial performance calculated in accordance with GAAP. These measures have been described and presented in this news release in order to provide readers with additional information regarding the Company's liquidity and its ability to generate funds to finance its operations and dividends.
Note on Certain Financial Information
Certain financial and other information provided herein in respect of Axip's international business that is subject to the Acquisition has been prepared by management of Axip on a "carve-out" basis in accordance with US generally accepted accounting principles which differ in certain respects from those principles that would have been followed had such financial information been prepared in accordance with Canadian GAAP. As at the date hereof, such "carve-out" financial information has not been audited and, as a result, may be subject to change. All historical financial information in respect of Axip and the International Business as the case may be, is based on information supplied by Axip. The Company has not independently verified such financial information and as such does not guarantee the accuracy and completeness of the information.
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