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Stonegate Capital Partners Updates Coverage on Black Diamond Group Limited (TSX:BDI)

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DALLAS, TX / ACCESSWIRE / September 7, 2021 / Black Diamond Group Limited (TSX:BDI): The full report can be accessed by clicking on the following link: http://stonegateinc.com/reports/BDI.TO Q221.pdf.

COMPANY DESCRIPTION

Black Diamond Group Limited is a specialty rental company that rents and sells modular workspace and remote workforce accommodations solutions from 27 strategic locations across Canada, the United States, and Australia. The Company operates in two segments: Modular Space Solutions, which provides office units, lavatories, storage units, multi-unit office complexes, and classroom facilities and Workforce Solutions, which provides temporary and intermediate-stay workforce housing and lodging equipment. The Company provides services to a wide array of industries including construction, mining, power, oil, natural gas, engineering, military, government, and education. The Company was founded in 2003 and is headquartered in Calgary, Alberta.

SUMMARY

  • Improving profitability through scale - Black Diamond will continue expanding its Modular Space Solutions (MSS) rental fleet through investment into new units and acquisitions of existing fleets. The Company is targeting net fleet growth in MSS of 10% per year and is targeting to double the fleet from 2019 to 2023.

  • Significant operating leverage - The Company has a significant amount of underutilized assets in the workforce segment and the ability to mobilize them quickly and deploy the assets to areas in need.

  • Value added products & services - The Company is planning to continue to increase revenue and margins by offering customers additional onsite services, hospitality services and auxiliary rental options. The Company has seen a greater than 20% growth in Value Added Products & Services (VAPS) from 2019 to 2020.

  • LodgeLink market traction - BDI has developed an online digital marketplace for matching available rooms with workforces and companies in need of rooms for work crews in the U.S. and Canada. The Company has been scaling the platform and most recently reported 580 unique customers and approximately 5,300 properties which represented approximately 498,000 rooms of capacity. Q221 LodgeLink room bookings grew 400% y/y to 43,330.

  • Disciplined capital expenditure approach- Black Diamond is focused on growing its current fleet and services using cash from current operations and the sale of underutilized assets as opposed to growing capex. This strategy should help maximize efficiency and increase cash flow over time.

  • Geographic & customer diversification - The Company currently conducts business throughout 27 strategic locations in Canada, United States and Australia with plans to continue expanding through establishment of additional branches and growth of existing fleets. The Company's revenue mix is diverse with the largest concentration coming from the construction sector at roughly 27%, followed by infrastructure and government each in the 15% to 20% range. The MSS segment alone, rents to over 1,000 different customers.

  • Valuation - Using a sum of the parts EBITDA multiple framework we arrive at a valuation range of $3.25 - $5.25. Additional details can be found on pages 7.

About Stonegate Capital Partners

Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.

CONTACT:
Stonegate Capital Partners
info@stonegateinc.com
(214) 987-4121

SOURCE: Stonegate Capital Partners



View source version on accesswire.com:
https://www.accesswire.com/663022/Stonegate-Capital-Partners-Updates-Coverage-on-Black-Diamond-Group-Limited-TSXBDI

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