Black Diamond Group Limited Announces Strategic Acquisition of Ontario Based Modular Rental Company

CALGARY, Alberta, Oct. 31, 2022 (GLOBE NEWSWIRE) -- 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.

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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 , or on the SEDAR website at