Vertex Resource Group Ltd. Investor Presentation - March 2019 www.vertex.ca | TSXV:VTX
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Vertex Resource Group Ltd.
Investor Presentation
March 2019
www.vertex.ca | TSXV:VTX
Click to edit&Master
Disclaimer Notice title
to Reader
style
This presentation is for discussion purposes only. The contents are not to be reproduced, summarized or distributed.
These materials have been prepared for information purposes only in relation to Vertex and are not, under any circumstances, to be
construed as an offering of any securities for sale directly or indirectly in any province or territory in Canada, in the United States of
America or in the territories or possessions thereof or to any U.S. person. No prospectus has been or will be filed in connection with an
offering in Canada and the units have not been registered under the United States Securities Act of 1993, the securities law of any state
thereof or the securities of any other jurisdiction, nor is such registration contemplated, and this presentation is not and under no
circumstances is to be construed as a prospectus or other offering document. No securities commission or similar regulatory authority has
passed on the merits of the units reviewed these informational materials any representation to the contrary is an offence.
The information presented in this document is considered to be accurate, however there is no expressed or implied representation or
warranty as to the accuracy or completeness of any such information and does not constitute investment advice.
This presentation may contain forward-looking statements, including forward-looking statements regarding management’s assessment of
future plans and operations, business and investment strategies, exceptions of returns, cash-flow and earnings. Forward-looking
statements are based on current assumptions, beliefs, internal exceptions, estimates and projections of management relating to, among
other things, the ability of the funds to raise capital and locate desirable investments, the performance of the funds’ underlying investments,
the funds’ ability to effectively time dispositions, prevailing commodity prices and exchange rates, applicable royalty rates and tax laws.
Such forward-looking statements are based on information currently available to management. No persons should rely on these forward-
looking statements because they involve known and unknown risks, uncertainties and other factors which are, in many cases, beyond the
control of management and may cause the funds’ actual results, performance or achievements to differ materially from anticipated future
results, performance or achievements expressed or implied by the forward-looking statements.
The market and industry data contained in this presentation are based upon information from independent sources and other publications.
While management believes this data to be reliable, market and industry data is subject to variations and cannot be verified with complete
certainty. Management has not independently verified any of the data from third party sources referred to in this presentation or ascertained
the underlying assumptions relied upon such sources.
2
Click
A Leading
to edit
Environmental
Master title style
Service Company
BEST-IN-CLASS Initial Site Selection
INTEGRATED (Planning & Estimating)
ENVIRONMENTAL
SOLUTIONS Consultation &
Decommissioning
Vertex Offers Solutions Regulatory
& Reclamation
at all stages of Approval
Since 1962, Vertex has been a
leading North American a Client Project
environmental service company
We proudly serve clients in the “Cradle to Grave”
oil & gas, oil sands, petrochemical,
renewable energy, utilities,
agriculture, forestry, midstream,
mining, aggregate
and municipal sectors
Operation &
Vertex employs a staff of Maintenance
Development
approximately 650 employees and
lease operators
We assemble, integrate and develop businesses that address the environmental needs of clients,
Proven Strategy through organic growth and strategic acquisitions with the goal of capturing efficiencies and
enhancing service offerings that best anticipate customer needs.
3
Click to editProfile
Corporate Master title style
Market Summary Locations
Current Stock Price $0.38 (Mar 2019)
Common Shares Outstanding 93.4 Million
Market Capitalization: $35 Million
Enterprise Value: $121 Million
2019 Backlog $121 Million
EBITDA:
2017 (1) $15.5 Million
2018 (2) $20.6 Million
CAGR (EBITDA 2006 - Present) 28.69%
Highlights
• Became a publicly traded entity on the TSX Venture
Exchange on Oct. 16, 2017
• 6 Complementary Acquisitions in 2017 & 3 in 2018 Including:
• An Environmental Services Company in SK & MB
• A Hydro-Vac Company Operating in Edmonton, AB
• A Fluid Logistics Company Operating throughout AB,
SK & USA
1. F17 EBITDA adjustments would have included $3.2M of TTM EBITDA from acquisitions or $18.7M in total adjusted EBTIDA for FY17.
4 2. F18 EBITDA adjustments would have included $4.9M of TTM EBITDA from acquisitions or $25.5M in total adjusted EBTIDA for FY18.
Click to editSolutions
Integrated Master title
fromstyle
Planning to Reclamation
Environmental Consulting & Engineering Rental Equipment
➢ Abandonment, Drilling & Completion ➢ Specialized tanks, spill prevention, site accommodations,
Engineering enviro bins and rental equipment to support development,
➢ Pre-Development, Monitoring & Remediation / operational and maintenance projects
Reclamation Services
➢ Land & Regulatory Services Insulation Blankets & Buildings
➢ Wildlife Management ➢ Custom Manufactured Insulation Blankets to
➢ Emergency Spill Response ensure thermal efficiency and the protection of
workers and equipment
➢ Geotechnical & Civil Engineering
➢ Manufacturing, Installation and Repair of Self-
Environmental Services & Industrial Cleaning Frame, Rigid Frame and Acoustical Enclosure
Metal Buildings
➢ Hydro-Vac, Pressure, Vacuum, Hot Oiler,
Steam Truck & Stable Foam Services
➢ Utilizing Specialty Tools to Clean Tanks, Lines,
Exchangers & Other Equipment
Fluid Logistics & Management
➢ Fluid Logistics Including: Crude, Emulsion,
Water Chemicals, Fuel, NGL, Butane & Propane
➢ Fluid Storage (water, oil and chemicals) &
Secondary Containment
➢ Fluid & Chemical Sales
Environmental Services Industrial Services
5 Visit vertex.ca for additional details on Vertex’s service offering
Click to edit
Solutions At Master
All Stages
title
ofstyle
a Project Life Cycle
Vertex Provides an Integrated Environmental Service Offering That Supports Project Development Throughout the
Life Cycle of our Clients’ Projects Across All Industries
“Cradle to Grave Service Offering”
6 Visit vertex.ca for additional details on Vertex’s service offering
Click to edit
Revenue Earned
Master
at Each
title style
Stage of a Project’s Life Cycle
Revenue By Division
From 45% to 83%,
Environmental Services
now comprises the
majority of Vertex’s
revenue stream and drives
revenue at each stage of a
Project’s Life Cycle % of Vertex’s Revenue Earned by Project Stage
30% 70%
1. Total Revenue is in C$ 000’s
7
Click to editEnvironmental
Diversified Master title style
Service Offering
Vertex continues to focus on growing across multiple industries.
This strategy has resulted in several project awards enabling us to continue to expand our geographic footprint outside of Western
Canada while increasing the utilization of our two primary assets: People & Equipment.
Growth Opportunities % of Revenue by Industry
Utilities, Telecommunication & Government: Vertex
continues to provide services to these sectors and is 2014
working to grow/adapt our service offering to attract new
project awards. Vertex is active on obtaining contracts 92% Oil & Gas
associated with expanding Canadian 5G network.
Mining: Vertex continues to be involved in coal and potash 8% utilities, agriculture,
mine, processing, and power plant shut-downs including municipalities, government and
the management of peat, vegetation and wildlife telecommunications industries
throughout the life of these projects.
Oil & Gas and Mining Abandonment: AB and BC are
developing regulations to impose timeline on the clean-up
of dormant well sites while other jurisdictions are imposing 53% Oil & Gas
higher security deposits to achieve clean up efforts. Vertex
continues to be involved in coal and potash mine
abandonments and reclamation projects.
Operation & Maintenance Projects: Continual maintenance
is required to ensure optimal production capabilities. This is
2019E
47% utilities, agriculture,
a more stable stream of revenue and typically represents a municipalities, government and
greater proportion of E&P companies’ spending than capital telecommunications industries
expenditure.
8
Click Growth
GDP to edit Master
Led by title
Infrastructure
style Projects
Provincial GDP Growth 1
2017 2018E 2019E 2020E
AB QUE BC BC
BC BC NL AB
PEI AB ONT SASK
QUE ONT QUE ONT
MAN PEI AB MAN
ONT MAN SASK QUE
NB SASK MAN PEI
SASK NS PEI NS
NS NB NS NB
NL NL NB NL
0.0% 2.0% 4.0% -1.0% 0.0% 1.0% 2.0% 3.0% 0.0% 1.0% 2.0% 3.0% 0.0% 1.0% 2.0% 3.0%
Opportunity For Vertex
• Vertex has continued operational focus in the provinces of BC, AB, SK and MN. These provinces are expected to be
among the leaders in the nation in growth in GDP into 2020. Vertex continues to expand into Ontario and select
States in the United States.
• Augmenting Vertex’s exposure to the oil and gas industry, is the increased infrastructure spending municipally,
provincially and federally, as well as the rise in potash mining and agricultural spending in Saskatchewan. Vertex’s
diverse range of services continues to meet the needs of these growth areas
9 1. Average of the Statistics from National Bank of Canada, TD Bank, Bank of Montreal, Scotia Bank and Royal Bank of Canada
Click to edit Master
Infrastructure Project
title
Development
style
Budget 2017 Investments – Canada’s
Infrastructure Plan
Industry Details 1
LNG Canada Site / Kitimat LNG Site
Trans Mountain • Telecomm 5G Network Upgrade– the deployment of 5G will require numerous
small-cell hubs as the network utilizes frequencies with limited travelling ability.
Coastal Gas Link
This network will need to be constructed and is estimated to cost roughly $20
Line 3 Enbridge Replacement Project billion in Canada. Overall telecom infrastructure upgrades are expected to cost
approximately $100 billion. Vertex’s customers will be poised to capitalize on
Vertex Canadian Project our environmental consulting expertise.
Expertise and Geographic
Reach • Line 3 Enbridge Replacement Project – a $8.2-billion project which includes fully
replacing 1,031 miles (1,660 kilometers) of Line 3 with new pipeline and
associated facilities on either side of the border. Includes decommissioning old
line by removing the pipeline, cleaning the pipeline, and physically
disconnecting and segmenting the line. Vertex is very prominent in this area
given recent acquisitions. Set to be in service in the second half of 2020
following state and U.S. federal permits.
• Trans Mountain and Coastal Gas Link – a $7.4-billion project, although delayed
pending legal challenges, Trans Mountain is now controlled by the Federal
Government to ensure completion including approximately 980 km of new
pipeline carrying heavy oils, 12 new pump stations and 19 new tanks. Vertex is
has secured significant contracts once work restarts on this project. Consultation
with Indigenous groups is to concluded by late May 2019. Costal Gas Link is a
$6.2 billion project and Vertex has secured significant contracts for 2019 and
beyond.
• BC LNG Projects – Following the first three months of construction, LNG Canada
has approved over $937 million in contracts and subcontracts including $330
million to First Nation businesses . The project includes the construction of 670
Opportunity for Vertex km of pipeline and a $40-billion LNG facility. Vertex has an long standing JV with
the Haisla nation and is actively working with the aboriginal band to secure
additional work. Kitimat LNG is expected to be a $23-billion project once
• As markets stabilize and become more attractive for completed
new infrastructure projects, there will be an increased
• Canada’s Infrastructure Plan – a $180 billion Infrastructure Plan over 12 years
demand for Vertex’s service offerings and the which will continue to be a predictable source of funding for municipal and
continued maintenance of these assets provincial infrastructure projects in which Vertex currently services.
1. https://calgaryherald-com.cdn.ampproject.org/v/s/calgaryherald.com/business/energy/lng-canadas-planned-40b-kitimat-project-moving-toward-
approval/amp?amp_js_v=0.1&usqp=mq331AQGCAEoATgA#origin=https%3A%2F%2Fwww.google.ca&prerenderSize=1&visibilityState=prerender&paddingTop=54&p2r=0&horizontalScrolling=0&csi=1&aoh=15355737163665&viewerUrl=https%3A%2F%2Fwww.google.ca%2Famp%2Fs%2Fcalgaryherald.com%2Fbusiness%2Fenergy%2Flng-canadas-planned-40b-kitimat-project-
moving-toward-approval%2Famp&history=1&storage=1&cid=1&cap=swipe%2CnavigateTo%2Ccid%2Cfragment%2CreplaceUrl.
https://www.jwnenergy.com/article/2018/7/goose-bumps-kitimat-shell-ramps-activity-towards-lng-canada/
https://www.transmountain.com/project-overview
https://www.enbridge.com/projects-and-infrastructure/projects/line-3-replacement-program-canada
10 https://www.enbridge.com/projects-and-infrastructure/projects/line-3-replacement-program-us
https://www.infrastructure.gc.ca/alt-format/pdf/plan/2018-04-16-ICP-PIC-english-flat.pdf
https://www2.deloitte.com/us/en/pages/technology-media-and-telecommunications/articles/telecommunications-industry-outlook.html http://www.coastalgaslink.com/transcanada-to-construct-coastal-gaslink-pipeline-project/
Invest Canada & Digital Canada 150
https://boereport.com/2019/01/21/lng-canada-approves-937-million-in-contracts-and-subcontracts-to-first-nations-and-canadian-businesses/
https://www.dailyoilbulletin.com/article/2019/3/14/sohi-says-ottawa-making-good-progress-on-trans-mou/Click to edit
Growing Regulatory
Master title
& Environmental
style Requirements
Estimated Inactive Wells in Western Canada 1
Market Details 2,3,4,5,6
• Alberta and British Columbia are developing regulations to
impose cleanup timelines while other jurisdictions are set to
impose higher security deposits to ensure wells with major
cleanup liabilities will be dealt with despite being transferred
to other E&P entities.
• Costs for cleaning inactive wells by insolvent companies are
borne by industry partners. This has resulted in peer
monitoring to block deals in which the environmental liability is
unlikely to be properly dealt with.
• AER estimates total liability associated with the cleanup of oil
and natural gas well sites, pipelines, and facilities is
approximately $30.9 billion.
Number of Abandonments Completed by Vertex Opportunity For Vertex
2000
• The market for abandonments and reclamations is
1500 expected to continue to grow based on the
increased focus by governments, loans to the
1000 orphan well association to expedite reclamation,
deposits required by the AER for distressed
500
companies, industry peer monitoring and a growing
0 number of inactive wells.
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
1. The Globe and Mail: In Western Canada, surge of inactive wells a brewing ‘disaster’ November 27, 2018
2. AER, OGC
3. Orphan Well Association, http://business.financialpost.com/commodities/energy/oil-industry-to-get-235-million-government-loan-to-help-clean-up-abandoned-wells, https://www.ctvnews.ca/business/defunct-oil-firm-leaves-behind-thousands-of-orphan-wells-in-alberta-1.3834743
11 4. https://keepcanadaworking.ca/facts
5. The Globe and Mail: “Hustle in the oil patch: Inside a looing financial and environmental crisis” November 26, 2018
6. The Globe and Mail: “Alberta vows to impose oil, gas well cleanup timelines on energy companies” November 27, 2018Click Operation
E&P to edit Master
& Maintenance
title style Spending
E&P CAPEX and Maintenance Spending Trends in Canada 1 Industry Details 1,2
• Operating expenditures by upstream and
$45,000 $250,000 midstream companies are a continued requirement
Oil and Gas Industry Capital Total Expenditures
to support production and processing volumes.
Oil and Gas Operations Total Expenditure
$40,000
$35,000 $200,000 • Oil & Gas industry capital spending is expected to
increase in a recovering and less volatile commodity
$30,000
environment.
(C$ in millions)
(C$ millions)
$150,000
$25,000
• Increased M&A activity is expected to result in
$20,000 increased upstream activity overall as active firms
$100,000
$15,000 have acquired assets from inactive owners
restarting exploration and production.
$10,000 $50,000
$5,000
• Alberta has committed $1.4 billion in innovation
funding for clean technologies and energy efficiency
$0 $0 initiatives to reduce emissions and eliminate coal
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
emissions by 2030. They plan to spend $70 million
Operations Total Alberta British Columbia Saskatchewan Manitoba to cut oil sands emissions and this will require
monitoring.
Opportunity For Vertex
• Inactive assets, turned active require significant spend on maintenance and operating activities to restart exploration and
production. Continual maintenance is required to ensure optimal production capabilities. This presents a more stable and
consistent stream of revenue for Vertex as the company continues to pursue maintenance, turnaround and industrial
cleaning opportunities.
• Due to oil production cuts in Alberta, it is likely that firms will undertake additional maintenance activities as production
units are forced to operate at reduced capacities. This presents additional maintenance project opportunities for Vertex in
2019.
• Extensive environmental monitoring, which Vertex provides clients, will be required to ensure emission standards are met
due to new regulations being adopted and implemented by the Alberta government.
1. Source: Analyst consensus, Capital IQ and Raymond James
12 2. https://keepcanadaworking.ca/factsClick to edit Master title style
Financials
Financial Summary Secured Backlog
2
(C$ 000’s) Years Ended Consensus
December 31, 2017 FY 2018 2018 2019
Revenue 118,419 150,385 146,050
Cost of Sales 86,113 109,892 106,550
Gross Profit 32,302 40,493 39,500
Gross Profit Margin 27% 27% 27%
SG&A1 16,776 19,884 18,950
Other - 194 -
Adjusted EBITDA 15,527 20,609 20,550
(before other expenses)
Adjusted EBITDA % 13% 14% 14%
Total Assets 144,156 184,821
Total Debt 62,160 87,605 83,300 2019 $121 Million
Total Equity 59,773 65,695
2020 $48 Million
Net Capex 2,401 3,994 2021 $17 Million
Acquisitions (net assets) 16,980 22,895
1. Adjustments relate to items that are not ongoing, are non-recurring, are exceptions to our normal operations and do not form part of our principal business. Overall adjustments relate to non-
recurring bonus interest, losses or gains on disposal of assets, acquisition costs, impairments, onerous leases and severance costs, SBC.
2. Based on average analyst consensus January 2019.
13Click to edit Master title style
Financials
Share Capital Analyst Coverage
(000’s) 12-month Target
Ticker TSXV:VTX Name Contact Price
Basic Common Shares Outstanding 93,413
Trevor Reynolds 403.410.6842 $0.95
Options @ $1.00 / share 4,875 Acumen Capital Partners
Warrants @ $1.20 / share 2,197
Fully Diluted Shares 100,485 Kirk Wilson 403.910.5379 $0.95
1 Beacon Securities Limited
FD Management & Directors Ownership 46.4%
Public Float 46,056 Average Analyst Target Price $0.95
Financial Metrics
Market Data Earnings Data Leverage Book Value
Enterprise EBITDA (2) EV/EBITDA Net Debt / 2018E Tangible
Company Symbol Close Price Market Cap
Value 2018E 2019E 2020E 2018E 2019E 2020E EBITDA P/B
Vertex Resource Group Ltd. TSXV:VTX $ 0.38 $ 35 $ 121 $ 21 $ 26 5.8x 4.5x 3.3x 0.5x
• Vertex’s strong working capital position is a result of management’s focus on improving billing and collections time
to reduce DSOs, and active inventory management.
• Vertex is in a strong financial position to capitalize on growth opportunities including acquisitions and organic
growth initiatives.
• Current attractive valuation metrics below book value.
1. Includes 32 Degrees Capital ownership of 18.2%, in addition to, management and others within the company whom are subject to escrow provisions to 2020.
14 2. Information of Vertex Resource Group Ltd. Is based on analyst reports provided by Acumen Capital Finance Partners Limited and Beacon Securities Limited dated
January 21, and January 18, 2019 respectively.Click to edit Outlook 2019Master title style • Vertex is well positioned to withstand short term economic pains related to volatile commodity prices and negative investment sentiment in western Canada. This view is based on Vertex’s current financial position, strong backlog from diverse industries, longstanding customer relationships, and contributions of past, prudently purchased acquisitions which are performing well. Almost 50% of Vertex’s backlog is from outside the oil and gas industry • While production curtailments remain in effect within Alberta, opportunities will exist for additional maintenance related projects because of facilities operating at reduced capacities. • Current industry and environmental policy efforts present opportunities for its environmental services division. Specifically increased activity levels for abandonments and active environmental liability management, in addition to, new regulations for emissions testing and reporting 15
Click to edit Outlook 2019Master title style • Vertex intends to continue to integrate past acquisitions in order to reduce costs and drive increases in utilization (people & equipment) through cross-selling initiatives. • Vertex plans to continue to gain momentum in pursuing its customer diversity strategy whereby the number of Vertex customers continue to grow and provide stable opportunities within telecommunications, utilities, agriculture and government. • Vertex continues to focus on paying down debt, de-leveraging through acquisitions, reducing its overall cost of borrowing, and managing the company’s 2019 planned capital expenditures of $8.0 million to match industry activity. 16
Click Own
Why to edit
Vertex?
Master title style
Strategic Objectives
• Diverse Integrated Environmental Service Offering Throughout All Stages of a Project
Lifecycle That is Applicable Across Numerous Industries
• Disciplined Capital Allocation & Cost Reduction Practices
• Proven History of Purchasing Prudently & Successfully Integrating Acquisitions
• Geographic & Service Offering Footprint Expansion into Attractive Growth Markets across
North America (including BC, ON & USA)
• Continue to Cross-Sell & Increase Utilization (people & equipment)
Increased
Focused by Long Standing
Industry on Customer
Environmental Relationships
Liabilities
Integration and
Client Focused & Acquisition
Tailored Opportunities in
Solutions Fragmented
Market
Improving
Demonstrated Financial Results
and Experienced with attractive
Leadership Team valuation metrics
below book value
17Contact Information
161, 2055 Premier Way
Sherwood Park, AB T8H 0G2
(780) 464-3295
www.vertex.ca | TSXV:VTXClickJourney
Our to edit Master title style
Phase I Phase II Phase III & IV
Foundation Building Organic Growth Strategy Execution
Vertex Founded; acquired
TWT Vegetation
Management Ltd. and Acquired Three
Endrill Resource Acquired Pioneer Acquired Environmental Acquired Fluid Storage & Environmental Services
Consultants Inc. Land Services Ltd. Consulting Company Management Company Companies
1962 – 2003 2005 2007 2008 2011 2014 2015 2016 2017 2018 2019 +
Beginning in 1962 through to 2003,
several companies were founded Founded Westland Energy Named one of Acquired Fluid Became a publicly Acquired three
throughout Western Canada which Ltd. (Vertex Equipment Canada’s 50 Best Logistics Company traded entity on the consulting firms,
would each be acquired to become a Rental service line). Acquired Managed Private TSX Venture Exchange one chemical and
part of Vertex, including: Am-Con Insulation Services Companies, gold on Oct. 16, 2017 two environmental
• Three Star Trucking (1962) Ltd., Excel Insulation, Klinger standard, an honor services
• Klinger Building Systems (1976) Building Systems and Select the Company companies
• Pioneer Land Services Ltd (1978) Soft Covers, which became maintained every year
• Am-Con Insulation Services Ltd. Vertex’s Industrial Division from 2011 to 2017
(1982)
• TWT Vegetation Management Ltd.
(1991)
• Endrill Resource Consultants Inc.
(1993)
19Click to editTeam
Leadership Master title style
Management Senior management ownership – 18.1%
Terry Stephenson – President, Chief Executive Officer and Director
• Terry founded Vertex in 2005 and, as President and CEO, he is responsible for the Company’s day-to-day operations.
• Joined Flint Energy Services Ltd. as the Director of Finance, where he was responsible for M&A transaction structure, support and execution along with
public company compliance, tax planning and treasury management.
• Former accountant at KPMG LLP; worked in audit, due diligence, valuations and taxation, advancing to Manager with a focus on construction clients.
• Terry has a Bachelor of Commerce degree from the University of Alberta, is a Chartered Accountant and Chartered Professional Accountant.
Michael Zvonkovic – Chief Financial Officer
• Michael joined Vertex in 2017, previously held positions as an Executive VP and CFO of FIRMA Foreign Exchange Corporation from 2012 to 2016, and
VP Financial Reporting and Finance of The Cash Store Financial Services, a TSX and NYSE listed issuer, from 2007 to 2012.
• Michael began his career in 2002 with PwC LLP in Edmonton.
• Michael earned a Bachelor of Commerce degree with distinction in 2002 from the University of Alberta, is a Chartered Accountant since 2004 and a
Chartered Professional Accountant since 2015.
Paul Blenkhorn – Vice President, Consulting Services
• Paul is responsible for the day-to-day operation of the consulting division of Vertex.
• Joined Pioneer Land Services Ltd. in 2006, eventually leading their environmental division.
• Began his career with Hood Packaging Corporation gaining experience in process improvement, capital investment, technical sales support, product
development in a wide array of business efficiency and improving initiatives.
• Paul holds a Bachelor of Engineering Science degree from the University of Western Ontario and is a Professional Engineer (AB and SK).
Deon Walsh – Vice President, Environmental Services
• Deon is responsible for the day-to-day operations of the industrial cleaning, safety, and environmental services operations of Vertex.
• Over 25 years of industrial maintenance and fluid services experience; previously Senior VP Oilfield Services for North America with Flint Energy
Services Ltd., a global infrastructure firm where he served since 1993.
• Deon is a graduate of the Queen’s School of Business Executive Program and the University of Alberta Corporate Executive Program
Derek Ellsworth – Vice President, Energy Services
• Derek joined the company in 2018 and is responsible for the day-to-day operations of the rental equipment division of Vertex.
• Began his career in oilfield services in 2001 as a Financial Analyst in Calgary before moving into sales and then operations. Derek worked for
TechnipFMC and its predecessor companies, Canadian Subsurface, Pure Energy and FMC Technologies, starting with Canadian Subsurface Energy
Services as Vice President in 2007. He then relocated to Sherwood Park to oversee the company’s Northern Canada Operations in 2016.
• Derek holds a Bachelor of Commerce degree from the University of Alberta and a Master of Business Administration from Queen’s University
20 For additional information on Leadership team please visit our website, www.vertex.ca/about/leadership-team/Click to editTeam
Leadership Master title style
Board of Directors Board ownership – 28.3%
Brian Butlin, Chairman of the Board of Directors
• Chairman of the Board of Directors since February 6, 2007. Formerly, Mr. Butlin was Chairman and Chief Executive Officer of Flint Energy Services Ltd.
• In addition to his experience at Flint, Mr. Butlin is currently a Director of The Crossing Company and previous Director of Edmonton’s Eskimo Football
Club, Graham Construction Ltd, Derrick Golf and Winter Club, and past Chairman of the Northern Alberta Institute of Technology.
• Mr. Butlin holds a Bachelor of Science in Business Administration from the Michigan Technological University.
Trent Baker, Director
• Currently, a Managing Partner of 32 Degrees Capital and has been with the private equity firm since 2007. Prior to joining 32 Degrees Capital, Mr. Baker
worked in the audit department of KPMG LLP. He currently sits on the Board of Directors of CORE Linepipe Inc., Sphere Energy Corp. and HPC Energy
Services Ltd.
• Holds a B.Comm from Queens and is a member of the Chartered Professional Accountants of Alberta, as well as a CFA charter holder.
Terry Freeman, Director
• Currently, Head of Investments for ATB Capital and previous Managing Director of Northern Plains Capital, Mr. Freeman spent 15 years as the Chief
Financial Officer of Flint and its predecessors. He sits on the Boards of a number of private construction, energy services, private equity and real estate
ventures, as well as on the Board of Directors of McCoy Global Inc.
• Holds a B.Comm from the University of Alberta, the ICD.D designation from the Institute of Corporate Directors and is a fellow of the CPAs of Alberta.
Stuart O’Connor, Director
• Currently President of Timber Ridge Capital Ltd. Previously, he has served as a Director and Chairman of Flint, Director of IROC Energy Services Corp.,
President and Chief Executive Officer at Merak Projects Ltd, and as a Partner with Bennett Jones LLP. He currently sits on the boards of a number of
private construction, software services, and real estate ventures.
• Mr. O’Connor holds a Bachelor of Science in Chemical Engineering from the University of Alberta and a Bachelor of Laws from Queen’s University
Terry Stephenson, President, Chief Executive Officer and Director
• See Management Bio.
For additional information on Leadership team please visit our website, www.vertex.ca/about/leadership-team/
21Click to edit Master
Management Experience
title style
Prior to founding the Company, Vertex’s leadership team was responsible for growing Flint Energy Services, a private oilfield services
company with $60 million in revenue, to a public corporation with over 7,500 employees, 49 North American locations and $1 billion in
revenues.
Flint Energy Services Ltd. - Financial Highlights
• The Flint Energy Services platform began in 1998 with the roll up of HMW CAD $ millions (except share price)
Constructors founded by Brian Butlin. 1998 IPO1 2001 2002 2003 2004 2005
Revenue 60 637 697 651 744 1,031
• It continued to grow through major acquisitions until its IPO in 2001. EBITDA 8 83 76 68 70 115
Total assets 12 577 556 554 630 735
• Brian retired in January 2005 while Terry departed in May 2005 after
Closing share price 12.00 18.75 20.50 21.00 21.50 39.00
acquiring the first businesses that are now Vertex.
• Between 1998 and their departure in 2005, Brian and Terry completed 29 acquisitions and 3 divestitures that provided the platform for
Flint’s growth to a >$1 billion dollar business which employed over 7,500 employees across 49 North American facilities.
• Brian and Terry executed on a two pronged growth plan:
• Consolidation & Integration:
• a number of strategic acquisitions enabled Flint to provide a full spectrum of services, with a focus on project execution and
transition to on-going maintenance upon project completion.
• during the acquisition period management focused on integrating or rationalizing the cost structure through integrated business
processes, reorganizing management, and consolidating multiple offices into single office locations.
• Enhancement of the Flint Brand:
• by focusing on a commitment to safety training and successful project execution, Flint developed a recurring and very loyal
customer base.
• as the number of Flint built facilities increased, the level of maintenance revenue also increased as management successfully
captured long-term maintenance contracts providing a steady, recurring revenue stream.
At Vertex, the Leadership team has made inroads on executing a similar strategy and looks to continue industry consolidation while
maximizing value of the Company.
22 1. Flint IPO was November 2001You can also read
