Black Diamond Group (TSX: BDI) Research Report

Rational Capital Investment Fund

October 22, 2021
 TABLE OF CONTENTS

1. INVESTMENT THESIS
2. COMPANY HISTORY
3. BUSINESS
3.1 Workforce Solutions (WFS)
3.2 Modular Space Solutions (MSS)
3.3 LodgeLink
3.4 Industry

4. MANAGEMENT
5. RISKS
6. VALUATION
7. CATALYSTS
8. CONCLUSION
9. APPENDIX
9.1 DCF Valuation
9.2 Management Compensation
9.3 BDI Growth Since IPO
9.4 LodgeLink Cost Savings
9.5 WFS Valuation Sensitivity
9.6 MSS Valuation Sensitivity

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 RCIF may purchase or sell shares without notice. This research report represents RCIF's
personal opinions and is not a recommendation to buy or sell securities. No information
presented in this research report is designed to be timely or accurate and should be used for
informational purposes only. Readers of this research report should perform their due
diligence before making investment decisions.

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 1. INVESTMENT THESIS
Black Diamond Group (TSX: BDI)
Price: $4.35 | Market Cap: $257m | EV: $456m | Date: 22/10/21
All figures in CAD unless otherwise noted. USD = 1.25CAD exchange rate is used.
Black Diamond Group is an attractive, high return on capital modular space business trading
at a significant discount to peers. BDI operates a workforce accommodation business trading
at trough multiples on trough earnings, which will benefit from increased infrastructure
spending and elevated commodity prices. The company also operates LodgeLink, a fast-
growing digital marketplace that the market has entirely ignored. RCIF values BDI at $5.65
per share with conservative assumptions, implying a 30% upside. LodgeLink offers free
optionality with an additional $0.5 of value per share but could be worth more than the whole
company is today.

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 2. COMPANY HISTORY
Black Diamond Group (TSX: BDI)
$40
WCS between $60-$90 (US/bbl)
$35

$30

$25
WCS Peak
$20
of $115
(US/bbl) WCS Low
$15 of $4
(US/bbl)
$10

$5

$0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: Capital IQ, Alberta Economic Dashboard

Figure I: Annotated stock price chart

Black Diamond Group was founded in 2003 by current CEO Trevor Haynes, with 12 rental
units focused on remote work camps in Western Canada. In 2005, it introduced Boxx
modular, the base of its current Modular Storage Space business, expanding to a more diverse
client base. With 250 rental units in 2006, BDI went public. It expanded into oilfield surface
rentals in 2007 and bought its first lodge in the Albertan Oil Sands in 2009. Off the back of a
robust western Canadian energy market in the early 2010s, BDI increased revenue fivefold
between 2009 and 2013. In turn, its share price went from a low of $3.5 in 2009 to $35 in
2014. Since then, the underlying fundamentals and share price have seen material
deterioration. The decline in financial performance is in large part due to total oil sands
CapEx declining since 2014.
In response, the company has attempted to diversify by both end market and geography,
utilizing M&A and international growth in Australia and the United States. In 2014, 90% of
revenue came from Canada, primarily Alberta. Additionally, 70% of revenue came from
energy services and lodging, whereas only 24% came from its modular space business. In the
first six months of 2021, the portion of revenue from Canada had decreased to 66%, with
more exposure to Ontario and British Columbia. Revenue from workforce accommodation
and the modular space business has shifted to 54% and 46%, respectively. This shift
represents a significant improvement in the quality and diversity of revenue.

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Black Diamond Group’s financial performance has been historically correlated with oil sands
CapEx. As a provider of modular storage and remote camps for crews working on O&G-
related projects, the company benefited significantly from capacity expansion and record
CapEx in 2012-2014. After oil prices crashed in 2014, demand for ancillary O&G services
was nonexistent. Revenue decreased by close to half between 2014 and 2016. Due to the
fixed cost associated with running these lodges, the company’s EBITDA margins contracted
by 10% in that same period. Finally, the company’s EBITDA multiple fell by 50%. The
combination of these factors led to poor outcomes for anybody who invested in BDI in 2014.
RCIF believes that the picture is different today. The company is trading on near trough
multiples on trough earnings, has improved its cost structure while diversifying revenue, and
minimizing the associated cyclicality risk.
Figure II: Canadian oil sands capex 2011-2019 vs BDI stock price

Canadian Oil Sands Capex ($b) BDI Stock Price

40 $35
35 $30
30 $25
25
$20
20
$15
15
10 $10

5 $5
0 $0
2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: Canadian Association of Petroleum Producers (CAPP), Capital IQ

Figure III: Canadian oil sands capex 2011-2019 vs BDI Revenue and EBITDA

Canadian Oil Sands Capex ($b) Revenue (m) EBITDA (m)

40 $450
35 $400
30 $350
$300
25
$250
20
$200
15
$150
10 $100
5 $50
0 $0
2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: Canadian Association of Petroleum Producers (CAPP), Capital IQ

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 3. BUSINESS
3.1 Workforce Solutions (WFS) – 46% of 2021 H1 Revenue
WFS provides flexible accommodation for its customers, which typically operate large
infrastructure or energy projects and require many temporary workers. WFS include lodging,
energy services, and wellsite accommodations.
Lodging:
The company owns and operates six lodges across Western Canada (4 in BC and 2 in
Alberta). These are a mix between hotels and dormitories—most of these lodges are close to
key work sites. For example, BDI’s Smoky River Lodge (pinned in red) is near Cenovus’
Christina Lake oil sands facility (pinned in black).

Source: Black Diamond Group

Similar to hotels, the main drivers of this business are average room rental rates (which have
historically ranged between $150 and $200), utilization, and total rooms available. As oil
sands investments have lagged, this business has struggled, especially during the pandemic.
BDI's lodges had an average utilization of approximately 85% before 2014, which declined
to 30% over the past five years. Some lodges had 0% utilization during the pandemic. BDI’s
room count has declined by ~20% in the past five years due to the industry overbuilding in
the early 2010s. As a portion of total revenue, Lodging has decreased from 40% in 2015 to
9% in 2021 H1.
Energy Services:
BDI rents oilfield equipment to support drilling and production operations, including barrel
tanks, shale bins, and fluid management equipment. The company counts 2,859 equipment
units. Energy services is a generally commoditized business, with utilization running at 15%-
35% over the past five years. RCIF does not expect it to be a large contributor to growth.
Wellsite Accommodations:
BDI rents out modular accommodation structures, which include single-unit, multi-unit, and
large format camps. BDI typically works with customers to design workforce
accommodation solutions to their specific needs. The company has won major contracts the
company has won over the past three years (see figure IV).

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 Figure IV: Black Diamond Group’s recent major contracts
Date Announced Customer Value ($m) Duration Location Type
Apr 2018 Sunset Prairie Lodge 11.2 N/A Fort St John, BC 658 room lodge
Jul 2018 Coastal GasLink 42.5 27 months BC 908-bed camp
Jan 2019 Coastal GasLink N/A 12+ months Kitimat, BC 304-bed rental
Apr 2019 N/A 20 9+ months California, US 1,584 bed rental
Oct 2020 Goldsboro LNG 720 4 years Goldsboro, NS N/A
Feb 2021 Infrastructure 16 26 months Queensland, AUS 250 worker housing
Nov 2020 Pipeline Project 6.4 30 months N/A N/A
Mar 2021 Mining project 15 31 months Eastern Canada 610 worker housing
Source: BDI Filings
Wellsite accommodation units house both temporary and permanent workers. It is important
to note that there has been no material capacity expansion within Canadian Oil Sands over
the past three years, implying that WFS has been able to sustain Adjusted EBITDA of ~$25
million tied to just industry maintenance CapEx.
The workforce accommodation business is reasonably competitive. According to publicly
traded peer Civeo (NYSE: CVEO), the Canadian oil sands market consists of roughly 75,000
beds, of which 38% are operator-owned (see figure V).

Figure V: Canadian oil sands wellsite accommodation market share

Total Market Share Third-Party Market Share

Competitor 1
Competitors Other
Competitor 2
33% 12%
26% 9%
6% Competitor 3
29%
38%
47%
Operator-Owned Civeo Civeo
Source: Civeo 2021 Investor Presentation
RCIF estimates align with BDI being “Competitor 1” with 12% of third-party market share.
ATCO, which is a conglomerate of infrastructure-related assets, operates roughly ~2,700
workforce housing units.
BDI has been diversifying away from its oil sands exposure, having signed over $50 million
of contracts in 2021. WFS will now count 2,000 rooms on rent in Eastern Canada and its
existing contracts in Australia and Western Canada to support the Coastal GasLink project.
Canada represents approximately 66% of the segment’s revenue, down from 95% in 2015.

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 Figure VI: WFS revenue breakdown
2015 2016 2017 2018 2019 2020 2021 H1
Revenue by Geography (m)
Canada 180.0 80.7 72.3 68.1 59.9 57.8 41.2
United States 7.1 10.6 26.0 14.7 7.2
Australia 7.3 6.7 8.9 14.1 13.3 13.6 13.9
Total 187.3 87.4 88.3 92.8 99.2 86.1 62.3

Room Count by Geography

Canada 13,424 12,591 9,783 10,167 9,662
United States 865 876 2,406 1,575 1,575
Australia 1,768 1,776 1,589 1,231 1,010 1,164 1,164
Total 12,778 12,831 15,878 14,698 13,199 12,906 12,401

Revenue per Room by Geography

Canada 5,386 5,409 6,123 5,685 4,264
United States 8,208 12,100 10,806 9,333 4,571
Australia 5,601 11,454 13,168 11,684 11,942
Total 5,561 6,314 7,516 6,671 5,024

Average Asset Utilization (%)

Rental Workforce Housing 63 49 40 25 41 36 47
Wellsite Accomdoations 47 21 69 76 70 22
Surface Equipment 25 13 17 18 25 36 38
Consolidated (WFS) 63 49
Consolidated (BDI Total) 52 43 49 49 62 57 69
Return on Assets 19 10 18 12 15 14 17

Fleet Count
Rental Workforce Housing 3,775 3,429 3,173 3,311 3,903
Wellsite Accomdoations 703 677 618 619 479
Surface Equipment 2,246 2,153 2442 2995 2,859

Canada Revenue as a % of total 96 92 82 73 60 67 66

Source: BDI Filings, RCIF Analysis

Black Diamond Group has shifted its operations away from Canadian O&G to a more
geographically diverse and industry-independent business (see figure VI). The share of
revenue from Canada has declined from 96% in 2015 to 66% in 2021 H1 with the United
States and Australia comprising 12% and 22%, respectively. The over-supply of units post-
2014 led to a decrease in asset utilization over the following years. However, the average
asset utilization across modular housing, lodging, and surface equipment has trended
upwards from 52% in 2015 to 69% in the 2021 H1. BDI has sold underperforming lodges and
reduced its capacity of modular units to better match demand.

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3.2 Modular Space Solutions (MSS) – 54% of 2021 H1 Revenue
MSS provides modular buildings that serve as office units, bathrooms, storage units,
classrooms, or health care facilities. The end customer, typically manufacturing, education,
government, and medical companies, can customize individual units to suit its needs. As of
June 2021, the company owned ~8800 units, evenly split between the US and Canada.

Source: blackdiamondgroup.com

Modular buildings are constructed in a factory and typically transported to the end site of the
customer. Pre-fabricated buildings provide several advantages over traditional construction:
the ability to build 12 months out of the year, scale in raw material purchasing and deliveries,
and greater worker safety. BDI, unlike its publicly traded peers such as Dexterra (TSX:
DXT), does not build modular units, which is a reasonably low-margin business. Dexterra has
guided towards 8% long-term EBITDA margins given the high capital intensity. Instead, BDI
owns and rents the units, providing end customers with customized or sourced units that
match its needs. BDI designs, transports, installs, and maintains its units.
Historically, the modular space industry has a reputation for offering low-quality and
temporary structures. However, as the market developed and technology improved,
prefabricated construction has been adopted across more clients in more end markets. For
example, almost all new Marriott hotels in the United States are constructed using modular,
prefabricated materials, including a recently opened $65 million, 26 story hotel in New York.
Although modular units can be considered a commoditized asset, greater scale allows BDI to
offer customers better flexibility, depth, and breadth of units. Due to the variety of customers
and end uses for modular space assets, significant competitive advantages arise from offering
the right units at the right time and the right price points. Independent small small businesses
cannot meet the unit variety, transportation options, and competitive pricing of BDI.
Customers with subscale exist but typically do not achieve high returns on capital, which is
why Willscot Mobile Mini (NASDAQ: WSC) has been consolidating the industry over the
past five years through its acquisition of its two largest peers, Mobile Mini and Modspace.
Scale through industry consolidation allows Willscot to increase prices organically and
through increased penetration of value-added products & services. Greater scale allows for
the costs of service, delivery and G&A to be spread out over a larger number of units.

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Modular space assets have an attractive return profile. Typically, they are rented for contracts
of 24-60 months, with 80% renewal rates. The company can generate 25%+ IRRs over useful
lives of 15-20 years, as the associated units typically require minimal CapEx. Customers are
price-sensitive, as modular storage rentals are critical for completion but represent only
~50bps of the total project cost. They are typically the first piece of equipment installed on a
site and the last to be dismantled. BDI can consistently raise rental rates by 5-10% annually.
Modular units can also be connected to form complexes and sold to large enterprise
customers, although the unit economics and margins of sales vs rentals are less attractive.
The company also earns non-rental revenue tied to the delivery, installation, pickup,
dismantling, and maintenance of these assets.

Figure VII: MSS revenue breakdown

2015 2016 2017 2018 2019 2020 2021 H1

Rental Revenue 90.3 57.3 61.9 52.8 65.5 65.6 44.6
Lodging Revenue 112.4 41.6 16.9 28.3 23.9 17.8 11.9
Sales Revenue 0.0 0.0 29.0 33.1 27.5 27.0 30.4
Non-Rental Revenue 79.4 53.6 45.6 51.6 69.0 69.5 47.8
Total 282.1 152.5 153.4 165.8 185.9 179.9 134.7

Rental Revenue 32% 38% 40% 32% 35% 36% 33%

Lodging Revenue 40% 27% 11% 17% 13% 10% 9%
Sales Revenue 0% 0% 19% 20% 15% 15% 23%
Non-Rental Revenue 28% 35% 30% 31% 37% 39% 35%
Total 100% 100% 100% 100% 100% 100% 100%
Source: BDI Company Filings, RCIF Analysis

Rental revenue, sales revenue, and non-rental revenue have grown as a percentage of total
revenue. Lodging revenue as a percentage of total revenue has declined from 40% in 2015 to
9% in 2021 H1. The company has grown its MSS segment inorganically through several
M&A transactions which have expanded its fleet (see figure VII). Average utilization and rent
rates have contributed to an increase in the MSS revenue portion. Sales revenue is more
variable and varies based on the needs of the company's largest customers.

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 Figure VIII: Modular space rental unit economics

Source: Willscot Mobile Mini, 2021 Investor Presentation

WSC highlight its modular space rental unit economics, which are similar to BDI's in figure
VIII. The average modular unit has a book value of $25,000 - $27,000. As of Q2 2021, BDI
rents these units for $660 per month, which translates to a three-year payback period (~3.5-4
years, accounting for average asset utilization of 80%). Returns within MSS are a function of
3 factors: asset utilization, average rental rates, and fleet units, all of which have seen
meaningful improvements over the past three years (see figure IX).

Figure IX: MSS return factors

$1,000.0 80%

$800.0 75%
Rental Revenue (000s)
$600.0 70%
Average Rental Rate
$400.0 65% Unit Count (00s)

$200.0 60% MSS Utilization

$0.0 55%
2015 2016 2017 2018 2019 2020
Source: BDI Filings, RCIF Analysis

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 In November 2020, the company acquired Vanguard Modular Building Systems for ~US$62
million, adding roughly 1.7 million square feet of rentable space and ~2200 new units (~35%
increase). The acquisition allowed BDI to expand beyond its historically concentrated
position in Canadian Energy (which the market awarded with a lower multiple), to the United
States, as well as to the education market, which represented 72% of Vanguard’s 2019 lease
revenue (see figure X).
Figure X: Vanguard Modular Building Systems

Lease Revenue by End-Market Service Area Headquarters

Top 4 States by Revenue
Government
1%
Healthcare
6%
Specialty 5%
72%
16%
General
Office/Industrial Education
Source: BDI November 2020 Investor Presentation

The acquisition of Vanguard added high-quality assets, which increased the company’s
average contract duration from 30 to 40 months. In a recent interview, Vanguard Modular
CEO explained that its average unit is rented for ~7 years and that many newly built assets
stay on rent their entire useful lives.

The company also acquired BRITCO in 2017 from WesternOne for $41 million (~6.5x
Adjusted EBITDA), $29 million of which was financed in equity. This acquisition expanded
BDI's dominant competitive position within British Columbia (where BDI now has an
estimated market share of 50%) and added ~1900 rental units rented to over 1000 customers.

Due to the fragmented nature of the industry, the company can consistently grow its rental
fleet both organically and inorganically. BDI cites a 10% go-forward annual fleet growth
target and planning to double the total fleet between 2019 and 2023 (see figure XI).

A key growth and margin expansion lever for MSS will come from the increased penetration
of Value Added Products and Services (VAPS). VAPS consist of furniture, appliances, and
technology that are included with the unit. This allows customers to use its modular space
directly after receiving it from BDI, as opposed to having to purchase these items themselves.
VAPS requires minimal capital investments, as the company will typically invest additional
costs equating to <10% of the initial modular unit but allows it to increase rents by 30% per
year.

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 Figure XI: Acquisitions increase unit count

MSS Fleet Unit Count

10000 Spectrum Acquisition
Jan 2020
9000
Vanguard Acquisition
8000 Nov 2020

7000
Britco Acquisition
6000 Mar 2017
5000
4000
3000
2000
1000
0
2013 2014 2015 2016 2017 2018 2019 2020
Source: BDI December 2020 Investor Presentation

VAPS as a percentage of MSS revenue increased from 10% in 2017 to 16% in 2021 H1.
WSC has a similar portion of VAPS at roughly 25% of total revenue. WSC has grown its
VAPS revenue at an 11% 5-year CAGR. Additionally, Vanguard had very minimal assets
integrated with VAPS, offering opportunity for increased penetration. Accounting for
Vanguard assets, VAPS penetration goes down from 17% to 12% as of Q2 2021. We expect
VAPS penetration to be gradual, given that when a unit is already on rent, it is challenging to
add VAPS. However, as legacy units in the fleet are returned (typically within 40 months) and
new units are rented out, there is an opportunity to upsell VAPS. MSS generates adjusted
EBITDA margins of roughly 25% (accounting for corporate costs) compared to 35% pre-
2015 and 40% for WSC. RCIF expects gradual margin expansion over the next few years.
Figure XII: MSS growth 2015-2021 H1

2015 2016 2017 2018 2019 2020 2021H1 CAGR/AVG

Book Value (millions) 121 120 151 145 149 238 235 11%
Avg. Utilization 68% 65% 69% 73% 75% 78% 83% 73%
Avg. Monthly Rental Rate 663 575 608 646 658
Modular Space Assets 3,712 3,946 5,882 5,813 6,151 8,784 8,767 14%
Book Value per Unit 32,597 30,385 25,655 24,996 24,142 27,129 26,794 27,385
VAPS as a % of Revenue 10 12 14 15 16 13%
Return on Assets 12% 8% 11% 11% 14% 16% 18% 13%
Source: BDI Filings, RCIF Analysis

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3.3 LodgeLink
BDI recognizes LodgeLink as non-rental WFS revenue, but RCIF separates it to highlight its
strategic importance. LodgeLink is a online, digital marketplace for B2B crew
accommodation, travel, and logistics in North America. It is a crew accommodation-specific
alternative to online travel agencies such as Expedia. LodgeLink aggregates half a million
rooms from ~5,300 properties, to facilitate accommodation booking for about 580 corporate
customers. LodgeLink originated from BDI’s lodging business, where customers would
manually call a booking agent or use legacy online travel agents (OTAs) to book
accommodation. A demand for an efficient, transparent, and affordable way to make large
bookings for crew travel was clear to BDI. LodgeLink launched commercially in October
2017 and has seen phenomenal growth since. The number of properties and rooms inside
those properties has multiplied by roughly seven times in the past two years alone. The
market opportunity here is immense, given that workforce travel is estimated to represent
20% of the $1.6 trillion business market travel.
LodgeLink tailors to the specific nature of crew accommodation, not met by traditional
OTAs. Crews often have high worker turnover due to the shorter nature of their projects.
Workers do not follow a consistent schedule, often coming and going based on completing
their specific roles and responsibilities. Additionally, companies typically book for dozens of
workers at a time, with varying needs and responsibilities. Variability causes logistical
headaches for billing and invoicing customers, a process that BDI automates. Scheduling
accommodation and travel online with LodgeLink is more straightforward than traditional
OTA (see figure XIV). One website with available housing and transportation is beneficial
for workers as remote areas of some projects have little information.

Figure XIII: LodgeLink Growth

Rooms Listed Properties Listed
700

600 580 497,942

500,000 5,000
500
500 5,312
400,000 4,000
Customers

400 380
Properties
Rooms

300,000 3,000
300
200,000 159,404 2,000
200
1,526
100,000 72,555 1,000
100
691

0 0 0
Q2 2019 Q2 2020 Q2 2021 Q2 2019 Q2 2020 Q2 2021
Source: BDI 2021 Q2 MD&A

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 Source: LodgeLink.com

Figure XIV: LodgeLink user interface

Travel crews require lodging, camp, and property information that traditional OTAs often do
not have. OTAs are generally consumer-oriented without information on worker-specific
requirements such as parking for semi-trucks or 24-hour meal service for overnight workers.
There are several advantages that LodgeLink has compared to legacy OTAs (see figure XV).
Figure XV: LodgeLink advantages
Demographic Criteria Corporate Travel Crew Travel
Nature of job White-collar Blue-collar, tradespeople
Primary places traveled to Major urban areas Secondary/tertiary markets
Reason to travel Meetings, conferences Projects away from home
Frequency of travel 1-5 days per month 15-20 days per month
Length of stay 1-2 nights 5-45 nights, with days on/off
Number of people traveling together 1-2 people 5-45 peopl
Source: BDI 2020 Investor Presentation

In addition to making the process more transparent, simple, and efficient for customers,
LodgeLink dramatically decreases costs (see appendix 9.4 for a detailed breakdown of
savings by line item).In December 2020, BDI announced that LodgeLink received a $3
million grant from the City of Calgary to support economic growth and create 600 new jobs.
Compared to the reported 42 employees LodgeLink had in 2020, the expected growth is
monstrous. LodgeLink handled ~$28 million in TTM bookings as of Q2 2021, despite record
low travel and energy spending.

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Source: LodgeLink.com

Figure XVI: Advertised LodgeLink cost savings

LodgeLink is currently not profitable and burning ~$1m in cash per year, but RCIF believes
it will be an asset of key strategic importance for BDI going forward. The company
announced the appointment of Leilani Latimer as a director, who has 25 years of experience
in growing B2B SaaS business with Sabre Inc, in March 2021.
CEO Trevor Haynes from the Q4 2020 earnings call:
We've been adding business development resources in various parts of the U.S. and Eastern
Canada. We are very focused on the growth of booking volumes. So near term, we're
looking for fairly simple benchmarks like consistently being over 1,000 rooms per day
sold and then moving upwards through the year to 1,500 as a rough target, seeing the
margin expansion which comes with scale and seeing that compounded growth. I think
we've got all the ingredients. We've been held back a little bit by COVID restrictions, global
business travel. According to the GBTA, it is down about 90% in 2020.
MSS Industry:
Within North America, the dominant company is WSC, which has an estimated 45% market
share in modular space and 25% share in public storage. WSC estimates that it has five times
the market share of its next largest competitor. A large tail of small independents own fleets
of 10-500 units. WSC will generate ~$485 million in FCF in 2021, translating to a ~7.5%
forward FCF yield.

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3.4 Industry
In 2018, WSC purchased its largest competitor, ModSpace, for $1.2 billion, almost doubling
its market share by adding 64k modular units and 36 million square feet of leasable space,
primarily within the construction and industrial end markets. Modspace’s Adjusted EBITDA
at close was roughly 6.6x. However, this was inclusive of the forecasted cost synergies and
tax benefits. Backing out the forecasted $60 million in annual cost synergies, the transaction
was conducted at 2.4x revenue, 11x adjusted EBITDA, and 60x Net Income (MSS businesses
tend to have heavy accelerated depreciation that far exceeds maintenance CapEx needs).
In March 2020, WSC completed an all-stock merger with Mobile Mini, the second-largest
MSS business globally at the time. WSC now serves 85,000 customers across 275 locations
and counts 365k units that will generate roughly $1.9 billion in revenue in FY 2021.
In April 2021, General Finance, which had a fleet of roughly 100,000 units, primarily in
Australia and New Zealand, was acquired for ~$1B by United Rentals (NYSE: URI) for 10x
Adjusted EBITDA (inclusive of General Finance’s energy services business, under which the
company sold liquid tank units to US O&G customers). This acquisition implies a multiple
for the pure-play modular storage business of roughly 13x EBITDA.
ATCO is the other dominant MSS company in Canada, whose ‘Structures’ segment is
comparable to BDI and represents ~15% of consolidated ATCO earnings. Roughly 50% of
ATCO structures revenue came from workforce housing, 25% from storage and modular
space rentals, and 25% from permanent modular construction. ATCO counted 18,800 units at
the end of 2020, roughly double that of BDI. These assets share similar characteristics (75%
utilization, $650 monthly rental rate) to BDI.
Other major modular space M&A transactions include:
• Brookfield announced its acquisition of European giant Modulaire Group, previously
owned by TDR, for $5 Billion, or 14.5x EBITDA and 4.2 revenue. Modulaire runs
260,000 modular units across 25 countries.
Figure XVII: WSC 2021 MSS fleet count and NBV

Combined 2021 Fleet Count: 365k Combined 2021 NBV: $2.9B

Modular Space 53% 22%

Portable Storage 5%
Tank & Pump 3%
43% 70%
VAPS 4%

Source: WSC 2021 Investor Presentation

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• In May 2021, WSIP, a private investment partnership run by Goldman, acquired
Scandinavian modular player Adapteo for SEK 8.1 Billion (€800 million), or 10x trailing
and 12x forward EBITDA.
These European Assets have dominant market shares but operate within saturated markets
and thus have seen minimal growth.
Cyclicality:
The cyclicality of the Canadian oil sands is responsible for much of BDI’s historical discount.
BDI's geographic diversification of operations and the near-term strength of energy and
mining minimize this risk. The acquisition of Britco, Vanguard, and key contract wins in
Australia and Eastern Canada have translated to a diversified customer base (see figure
XVIII).
O&G linked projects contributed only 10% of 2021 H1 revenue, with less than 30% of
revenue linked to the oil sands. Keep in mind, in 2020, WFS Adjusted EBITDA was ~$22
million, down 14% from FY2019. This decline occurred with almost all O&G firms cutting
spending and removing all non-essential workers when Covid-19 arrived. In British
Columbia, Covid-19 regulations limited headcount at pipeline camps that support the
construction of the Coastal Gaslink pipelines. As these lift, BDI’s Kitimat lodges should
benefit.
Figure XVIII: YTD rental revenue breakdown

Q2 YTD 2020 Q2 YTD 2021

WFS Eastern Canada

WFS Western Canada

WFS USA

WFS Austrailia

MSS US Northeast

MSS US Southwest

MSS US Southeast

MSS Canada Pacific

MSS Canada Prairies

MSS Canada East

0% 5% 10% 15% 20% 25%

Source: BDI Q2 2021 MD&A

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Strength across Energy Markets:
Significant CapEx was delayed across the Energy industry in 2020, which RCIF believes will
translate to strength for WFS in 2021, particularly in the second half of the year. Unlike
preconceived notions, many Canadian O&G companies are growing production and have
increased their near-term CapEx guidance. For example, Chevron has doubled its CapEx
guidance until 2025, significantly increasing production estimates (see figure XIX).
Figure XIX: Chevron capex guidance

Source: BDI Q2 2021 MD&A

Tourmaline Oil has announced plans to double its production from 2020 levels to 550k boe/d
by 2025, spending $1.3 Billion in annual CapEx in that period. Estimates from the Canadian
Association of Petroleum Producers forecasted $7.8 Billion in CapEx within Albertan Oil
Sands in 2021, up 14% from 2020 levels, with upstream investment increasing 18%, albeit
still below 2019 levels.
RCIF believes the Chevron’s guidance is quite conservative, and data from Evaluate Energy
(see figure XX) provides a more representative picture. These forecasts are only accurate as
of March 2021. Many of the listed companies, such as CNRL, have since increased their
2021 capital budget by an additional 5-15%. For the first time in five years brent prices have
consistently been above $60, which will spur more investment.
Additionally, the company will see improved strength from BC and the Coastal Gaslink
project, where BDI operates two camps, that have seen increased activity in Q2 2021. The
company was also recently awarded an additional camp to support activity in the
Transmountain pipeline with revenue having started in Q1 2021. Moreover, BDI is set to
benefit from Capex spending tied to achieving net-zero greenhouse gas emissions.

20
In June 2021, a collection of Canada’s largest oil sands producers, (Cenovus, CNRL,
Imperial, MEG, and Suncor,) which control 90% of oil sands production announced a plan to
achieved net-zero greenhouse gas emissions by 2050, in collaboration with the Government
of Alberta. This includes building a CO2 trunkline linking Fort McMurray to CO2
sequestering facilities in the Cold Lake regions.
Figure XX: Top % increases over 2020 capex, senior NA O&G producers
Senior Producers (+100,000 boe/d) % Increase in 2021 Guidance over 2020 Actual CapEx
Cenovus Energy Inc. 197%
Devon Energy Corp. 60%
Pioneer Natural Resources Co. 57%
Imperial Oil Ltd. 37%
Cimarex Energy Co. 28%
SM Energy Co. 21%
Continental Resources Inc. 21%
Canadian Natural Resources Ltd. 20%
Tourmaline Oil Corp. 18%
ConocoPhilips 17%
Source: Evaluate Energy, March 2021

Although the official announcement did not include specific forecasts for Capital Spending, a
subsequent interview with leadership from CNRL and Cenovus estimates $75 Billion of
CapEx over 30 years, or $2.5 Billion per year, for the combined projects. They also mention
that in similar projects in Scandinavia and the UK, typically half to two-thirds of the capital
costs are government-funded, which implies that most of the spending will be largely
incremental to the company’s individual CapEx budgets.
It is unlikely oil sands CapEx returns to the $25-35 billion per year reached in 2010-2014.
The trend among major oil sands players has been pressure to return capital to shareholders
via buybacks and dividends. For Suncor, we see a clear increase in share buybacks, but we
note that maintenance CapEx is increasing consistently within the next 5 years.
The Australian WFS business will continue to see strength from mining tailwinds, given iron
ore and copper prices both at all-time highs. MSS on the other hand is a fairly recession
resilient business, given long average lease terms. Most of its CapEx is discretionary and
cash flow can be supported through asset sales. Although we do not have BDI data going
back to the GFC, the following chart from WSC highlights this discretionary nature of
modular storage CapEx:
BDI will further benefit from infrastructure spending from the $1 Trillion Bill recently passed
by the US Senate. These projects typically take 12-18 months to hit the ground, so the net
impact on BDI will be seen in late 2022.

21
 4. MANAGEMENT
CEO Trevor Haynes has led BDI since its founding in 2003. He owns ~7% of shares
outstanding, worth ~$18 million. Besides him, Edward Kernaghan, a director since March
2018, owns ~14.5% of shares outstanding, worth ~$37 million. Haynes, CFO Toby Labrie,
and MSS COO Tedd Redmond have made share purchases on the open market throughout
2021. Haynes oversaw the company through its monstrous growth in the early 2010s when it
paid a consistent dividend. RCIF believes that the business was overleveraged at this time,
which accelerated BDI’s demise when commodity prices crashed. Since then, the
management team has taken smart decisions to diversify away from its core energy lodging
business, grow a profitable business in Australia, and conduct the smart acquisitions of Britco
and Vanguard Modular.
The company acquired Spectrum Building Systems in January 2020 for US$5 million, adding
202 space rental assets in Georgia. During FY2020, BDI recognized revenue and profit of
$5.8m and $1.225 million respectively from Spectrum, implying a multiple of 6x on
operating profit.
Figure XXI: Capital allocation breakdown 2011-2020
2015 2016 2017 2018 2019 2020 Total 10 YR 3 YR

Sources of Cash

OCF 137.3 69.7 31.3 39.2 36.7 50.0 822.3 67.2% 62.5%

Net Debt Issuance 0.0 0.0 4.5 0.0 7.6 67.8 133.1 10.9% 37.5%

Share Issuance 0.3 25.6 31.9 0.0 0.0 0.1 197.3 16.1% 0.0%

Total 137.6 95.4 67.7 39.2 44.3 117.9 1,223.1 100% 100%

Uses of Cash

Capex -49.6 -15.2 -16.7 -15.0 -32.0 -35.0 -626.5 61.7% 51.9%

Cash Acquisition 0.0 -5.5 -42.0 0.0 0.0 -71.5 -158.1 15.6% 45.3%
Source:Repurchases
Share ?
-0.9 -1.5 0.0 -1.0 -0.5 -2.8 -48.0 4.7% 2.7%

Dividends -37.0 -15.2 -9.2 0.0 0.0 0.0 -182.3 18.0% 0.0%

Total -87.6 -37.3 -68.0 -15.9 -32.5 -109.3 -1,014.9 100% 100%
Source: BDI Filings, RCIF Analysis

22
BDI cut its dividend in FY 2018 to focus on the growth of MSS assets. As of Q2 2021, BDI
had net debt to EBITDA of ~3x, down from 4x at the Vanguard Modular acquisition. MSS
peers such as WSC typically run at 3-5x net debt to EBITDA due to the stability of modular
asset cash flows and the favourable impact of tax shields. BDI set a long-term goal of 2-3x
Net Debt to EBITDA, but given that BDI is paying ~2% on its debt, we are comfortable with
management increasing leverage to fund attractive acquisitions. BDI’s $300 million credit
facility is based on 85-90% of the net liquidation value of rental fleet and receivables.

23
 5. RISKS
Although at first glance, cyclicality can be considered too large a risk for the thesis, RCIF
believes that both geographical and industrial diversification and the strength of end markets
more than compensate for this. Execution and competition risk are a point of concern. As
infrastructure spending picks up, RCIF believes competition will arise from several peers,
particularly in WFS, where there has been overbuilding in Alberta. WFS players rushed to
increase capacity in 2012-14, only for the dramatic reduction in oil sands CapEx.
Within MSS, Vanguard and British Columbia-based assets are particularly strong. These
businesses operate under regional oligopolies, so competition from players like WSC is
weaker than it initially appears. RCIF believes that given its recent M&A run, as well as
guidance from WSC management that acquisitions will continue through 2021/2022, BDI is
a strong candidate to be acquired by Willscot at a substantial premium to the current price.
Acquiring BDI would expand Willscot’s market share in Canada and drive synergies post-
acquisition. We also believe that Civeo is an obvious candidate to buy out BDI’s WFS assets
to expand its #1 position in Canada, particularly once it’s done deleveraging its balance sheet.

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 6. VALUATION
Due to differences in asset quality and cyclicality, RCIF values WFS and MSS separately.
The primary MSS comparable is WSC, which trades at ~13x 2021 adjusted EBITDA and
~14.5x 2020 Pro-forma adjusted EBITDA, accounting for the acquisition of Mobile Mini.
Modspace was acquired for a little over 11x TTM Adjusted EBITDA, the high end of where
the company has historically traded.

McGrath Rent Corp operates a Modular storage rental business that is roughly double the size
of BDI. However, it also sells tankage and electronic equipment that is lower margin and
more cyclical. Assigning a multiple of roughly 6.5x on these businesses translates to an
implied multiple of 12x EBITDA for the modular business.

General Finance’s consolidated valuation implies a multiple for the pure-play modular
storage business of roughly 13x EBITDA. Considering the high return on capital and
recurring nature of the business, RCIF believes 12x EBITDA is a fair multiple for MSS.
However, BDI does not have the scale of some of its competitors, and thus RCIF believes it
should be assigned an appropriate discount and use 10x for our base valuation.

Stand-alone MSS generated ~$26 million in EBITDA in 2020, with Vanguard generating
another $10million. BDI guided for $0.5 million in synergies between the two companies.
Allocating $5 million in corporate costs to MSS and $3 million to WFS implies $31 million
in MSS 2020 EBITDA. In H1 2021, MSS generated $17 million in EBITDA, accounting for
corporate costs. Considering increased VAPS penetration, renewed demand across many of
its end markets leading to stronger utilization, $44 million in contracted future revenue, RCIF
arrived at a conservative full-year 2021 EBITDA estimate of $35 million.

WFS has a relatively close pure-play competitor in Civeo, which guided for US$90-100
million in 2021 adjusted EBITDA, implying a 7x forward EBITDA (5-year average of 8x)
multiple, which is appropriate for WFS. Additionally, Civeo's valuation may be unduly
depressed due to Torgerson Lance, who acquired his ownership in Civeo after his Lodge
Company Noralta Lodges was bought out by Civeo in 2018 for 6x peak EBITDA,
indiscriminately selling.

At the time of the acquisition, the Torgerson family trust owned ~15% of common stock and
was under an 18-month lock-up. Between December 2020 and June 2021, their ownership
has decreased to 11.65%, which does not seem to be linked to the underlying performance of
Civeo, but rather for personal liquidity concerns.

In 2020 WFS generated ~$22.1mm in Adjusted EBITDA (of which $2m in cost savings was
attributable to wage subsidies), despite wellsite accommodations utilization of 22%, an all-
time low. We believe this is trough earnings for WFS, and with peak commodity levels across
mining and O&G end markets, 2021 should comfortably revert above 2019 earnings, driven
by $32 million in contracted future revenue as of June 2021, up 76% y-o-y.

25
Keep in mind, WFS can substantially increase earnings without incremental investments in
capacity due to high operating leverage. Pre-2014 utilization levels would translate to $200
million in revenue and $60 million in EBITDA, more than the company generates today.
BDI is on track to spend roughly ~$25-30 million in net CapEx in FY2021, of which the
majority will go towards the organic expansion of the company’s MSS fleet. This compares
to $28 million in 2020 and $21 million in 2019. A 5-year DCF (see appendix 9.1) with
assumptions of low-mid single-digit revenue growth translates to an implied share price of
$5.3, in line with our multiple-based approach.
This valuation does not account for LodgeLink, which is currently burning roughly ~$1mm
of cash per year and generating roughly $28mm in TTM bookings, despite some of the
hardest knocks on travel in the past decade. Q2 2021 bookings were ~$8mm, up 400% y-o-y.
A take rate of 10% implies a minimal $2.8 million in revenue for the business currently. BDI
does not disclose specific take rate numbers, only that “LodgeLink revenue generated from
bookings is typically based on a variable margin over the cost of the room or transportation.”
However, room bookings for 2021H1 totaled 90,000 (almost equal to FY2020 levels).
Management’s estimates of ~1500 rooms booked per day (vs ~500 in H1 2021) would
translate to ~$98.5 million in gross bookings. The same 10% rake rate translates to roughly
$10 million in revenue. Note that legacy marketplace businesses trade at 10x revenue, even
when they are mature and slow-growing. Based on trailing bookings, LodgeLink can be
valued at $28 million, or $0.5 per share and ~$1.5 per share if management can meet their
near-term guidance.
Figure XXII: LodgeLink room bookings and revenue

Total Room Nights Booked Total Gross Revenue (000s)

50,000 12,000
43,330
45,000
48,756 10,000
40,000 35,945
Total Gross Revenue

35,000 32,318
Total Room Nights

8,000
30,000 7,783
23,330 7,462
25,000 6,575 6,000
20,000
8,674 4,000
15,000 5,108
4,987
10,000
2,000
5,000
1,346
0 0
Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021

26
 Figure XXIII: Summary financials
($m) 2016 2017 2018 2019 2020 2021H1

MSS Revenue 47.9 65.1 73.1 86.7 93.8 72.4

y-o-y Growth 36% 12% 19% 8% -23%
MSS Adj. EBITDA 14.1 18.9 18.5 24.9 29.4 21

MSS Adj. EBITDA Margin 29% 29% 25% 29% 31% 29%

WFS Revenue 102.8 88.2 92.8 99.2 86.1 62.3

y-o-y Growth -14% 5% 7% -13% -28%
WFS Adj. EBITDA 43.2 22.4 22.3 25.7 22.1 12.4

WFS Adj. EBITDA Margin 42% 25% 24% 26% 26% 20%

Total Administrative Costs -15 -12.7 -11.5 -10.9 -10.9 -6.6

Consolidated Revenue 150.7 153.3 165.9 185.9 179.9 134.7

Consolidated Adj. EBITDA 42.3 28.6 29.3 39.7 40.6 26.8
Consolidated Margin 28% 19% 18% 21% 23% 20%

Figure XXIV Summary financials

Bear Base Bull
WFS 2021 EBITDA $15 $21 $30
Multiple 6.5 x 7.5 x 8.5 x
Implied Enterprise Value $100.4 $160.9 $258.8

MSS 2021 EBITDA $27 $34 $40

Multiple 8.0 x 10.0 x 12.0 x
Implied Enterprise Value $212 $336 $451

Consolidated Enterprise Value $313 $496 $733

Less Debt ($164) ($164) ($164)
Less Preferred Shares ($11) ($11) ($11)
Plus Cash on Hand $3 $3 $3
Implied Equity Value $141 $324 $561
Value per Share $2.44 $5.61 $9.72
Upside -27% 68% 190%

27
 7. CATALYSTS
Pre-2014, BDI used to pay a substantial dividend, but the return of cash to shareholders has
been minimal over the past few years. The company has substantially deleveraged to 3x Net
Debt to Adjusted EBITDA, from 4x at the time of the Vanguard Acquisition. With the
company generating significant free cash flow and now being within its 2-3x leverage target,
RCIF believes it is very likely that the company either reintroduces a dividend or share
buybacks in the near term, which presents a catalyst for value recognition.
Regarding LodgeLink, it may be harder for the market to recognize its value within the BDI
umbrella, despite its phenomenal growth in a niche market in the face of clear market
headwinds. RCIF believes that bringing on a strategic partner in a subsequent capital raise
may help accelerate the existing growth and recognize value, and a spinout or IPO may
unlock substantial long-term value.

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 8. CONCLUSION
Black Diamond Group is currently trading at trough multiples on trough earnings. The first
half of 2021 demonstrated management's execution: utilization and rent for Modular Space
Solutions and Workforce Solutions increased, and value-added products and services realized
greater market penetration. The company has revenue stability with a 12-month backlog of
contracts. RCIF believes further multiple expansion to historical levels in the 10-12x range
combined with outsized earnings in the next 1-2 years as CapEx rises across its end markets
will produce an adequate return. An investment in BDI presents minimal downside risk with
multiple levers of potential upside, accelerated by the company's heavy operational leverage.

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 9. APPENDIX
9.1 DCF VALUATION
(millions) 2016 2017 2018 2019 2020 Average 2021 2022 2023 2024 2025 2026

Revenue 150.70 153.30 165.90 185.90 179.90 $262 275.01 288.76 303.19 318.35 334.27
% Growth 2% 8% 12% -3% 5% 46% 5% 5% 5% 5% 5%

Direct Costs (71.46) (86.52) (98.00) (115.61) (107.65) (157) (165) (173) (182) (191) (201)
% Revenue 47% 56% 59% 62% 60% 57% 60% 60% 60% 60% 60% 60%

Gross profits 79.24 66.78 67.90 70.29 72.26 $105 $110 $116 $121 $127 $134
% Revenue 53% 44% 41% 38% 40% 41% 40% 40% 40% 40% 40% 40%

D&A (52.51) (47.08) (36.87) (39.30) (33.02) (35.00) (41.25) (46.20) (45.48) (47.75) (50.14)
% Revenue 34.8% 30.7% 22.2% 21.1% 18.4% 23% 13.4% 15.0% 16.0% 15.0% 15.0% 15.0%
% of CapEx 1719% 348% 123% 94% 571% 267% 300% 320% 300% 300% 300%

Administrative Expenses (40.22) (41.49) (38.61) (34.08) (34.51) (36) (52) (55) (58) (61) (64) (67)
% Growth 3.2% -6.9% -11.7% 1.3% 5% 5% 5% 5% 5%
% of revenue 26.7% 27.1% 23.3% 18.3% 19.2% 23% 20% 20% 20% 20% 20% 20%

Stock Based
Compensation (1.33) (2.54) (1.86) (3.06) (2.94) (3) (3) (3) (3) (3) (3) (3)
% Growth #DIV/0! 91.0% -26.8% 64.6% -3.7% 43% 5% 5% 5% 5% 5%
% of Revenue 0.9% 1.7% 1.1% 1.6% 1.6% 1% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%

Non-recurring epxenses
(income) (59.06) (98.28) 0.38 (0.18) (1.87) - - - - - -
% Growth #DIV/0! 66.4% -100.4% -146.8% 957.6% 237% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
% of Revenue 39.2% 64.1% -0.2% 0.1% 1.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

EBITDA (21.37) (75.53) 27.81 32.97 32.93 49.76 52.25 54.86 57.61 60.49 63.51
% Revenue -14% -49% 17% 18% 18% 1% 19% 19% 19% 19% 19% 19%

EBIT (73.89) (122.61) (9.07) (6.33) (0.09) 14.76 11.00 8.66 12.13 12.73 13.37
% Revenue -49% -80% -5% -3% 0% -22% 6% 4% 3% 4% 4% 4%

Interest expense (6.54) (7.65) (6.31) (7.56) (5.66) (6.00) (6.00) (6.00) (6.00) (6.00) (6.00)
%EBIT -9% -6% -70% -120% -6284% -65% 41% 55% 69% 49% 47% 45%

EBT (80.43) (130.26) (15.38) (13.89) (5.75) 8.76 5.00 2.66 6.13 6.73 7.37

Taxes (14.09) (31.23) (3.73) (6.12) (0.46) (2.19) (1.25) (0.67) (1.53) (1.68) (1.84)
Tax % 18% 24% 24% 44% 8% 31% 25% 25% 25% 25% 25% 25%

Minority Intrest (1.03) 1.00 0.24 (0.44) (1.12) (0.77) (0.77) (0.77) (0.77) (0.77) (0.77)

Net income (95.55) (160.49) (18.87) (20.45) (7.32) 5.80 2.98 1.23 3.83 4.28 4.76
% Revenue -63% -105% -11% -11% -4% -33% 2.2% 1.1% 0.4% 1.3% 1.3% 1.4%

D&A 52.51 47.08 36.87 39.30 33.02 35.00 41.25 46.20 45.48 47.75 50.14

Non-Recurring Expenses 59.06 98.28 (0.38) 0.18 1.87 - - - - - -

30
NWC 19.31 (15.95) (3.17) (9.07) 6.22 - - - - - -
% Change in revenue 13% -613% -25% -45% -104% -197% -23% -23% -23% -23% -23% -23%
% Revenue 13% -10% -2% -5% 3% -6% 0% 0% 0% 0% 0% 0%

CapEx (15.18) (2.74) (10.61) (32.01) (34.98) (13.10) (13.75) (14.44) (15.16) (15.92) (16.71)
% Revenue 10% 2% 6% 17% 19% 8% 5% 5% 5% 5% 5% 5%
% of D&A 29% 6% 29% 81% 106% 55% 16% 37% 22% 22% 22% 22%

NOPAT (55.42) (91.95) (6.80) (4.75) (0.07) 11.07 8.25 6.50 9.10 9.55 10.03

UFCF 60.29 34.72 15.92 (6.34) 6.06 32.98 35.75 38.26 39.42 41.39 43.46
% Net income -63% -22% -84% 31% -83% -39% 568% 1199% 3117% 1030% 967% 913%
% EBIT -82% -28% -176% 100% -6735% -1710% 223% 325% 442% 325% 325% 325%
% EBITDA -282% -46% 57% -19% 18% 3% 66% 68% 70% 68% 68% 68%
% Revenue 40% 23% 10% -3% 3% 8% 13% 13% 13% 13% 13% 13%

31
9.2 Management Compensation
Compensation is based on a set base salary, as well as a cash bonus plan, that ranges from 0%
to 125% of annual salary. A complete breakdown of management compensation is on the
following page. The bonus is dependent on the following:

32
33
9.3 BDI Growth Since IPO

34
9.4 LodgeLink Cost Savings

35
9.5 WFS Valuation Sensitivity
WFS EBITDA
$161 $16 $17 $19 $22 $24 $26 $29
4.5x $71 $78 $87 $97 $106 $117 $129
5.5x $86 $96 $106 $118 $130 $143 $157
6.5x $102 $113 $126 $140 $154 $169 $186
EBITDA 7.5x $118 $131 $145 $161 $177 $195 $215
Multiple 8.5x $133 $148 $164 $183 $201 $221 $243
9.5x $149 $165 $184 $204 $225 $247 $272
10.5x $165 $183 $203 $226 $248 $273 $300
11.5x $180 $200 $223 $247 $272 $299 $329

9.6 MSS Valuation Sensitivity

MSS EBITDA
$336 $24 $27 $30 $34 $37 $41 $45
7.0x $171 $191 $212 $235 $259 $285 $313
8.0x $196 $218 $242 $269 $296 $325 $358
9.0x $220 $245 $272 $302 $333 $366 $402
EBITDA 10.0x $245 $272 $302 $336 $370 $407 $447
Multiple 11.0x $269 $299 $333 $370 $407 $447 $492
12.0x $294 $327 $363 $403 $444 $488 $537
13.0x $318 $354 $393 $437 $480 $529 $581
14.0x $343 $381 $423 $470 $517 $569 $626

36