Attached files
 Description of
Quest Integrity Group Acquisition 1
November 2010
Exhibit 99.2 |
 2
Recent Purchase of Quest Integrity Group
Transaction Details
•
Team purchased 95% of Quest Integrity Group (“Quest Integrity”) for
$42.6
million
($
39.1
million
–
cash,
$3.5
million
in
TISI
restricted
stock,
approximately 186 thousand shares).
•
Team expects to purchase the remaining 5% ownership of Quest (with TISI
common shares) in 2015 with value tied to business performance.
•
Current management will continue to lead business which will operate as
separate business group within TCM Division.
–
Will seek joint business opportunities with Team’s inspection service
and other service offerings
–
Will continue to purse and develop independent business
opportunities
•
Estimated CY2010 revenues and EBITDA are $22 million and $5 million
respectively.
•
Acquisition is expected to be earnings neutral in first year. |
 3
Strategic Goals for Quest Integrity Acquisition
•
Expand the revenues and margins of Team’s inspection services
business
–
Enhance reputation to provide state-of-the-art, value-based solutions to
customers
–
Create growth opportunities in several new market segments and possibly
accelerate growth opportunities in existing market segments
–
Sustain strategic leadership in service segment via access to new and emerging
technologies over time
•
Capitalize on and accelerate, where appropriate, the future growth and
performance of Quest Integrity Group
–
Collaborate on North American market opportunities and increase market
access/penetration for Quest Integrity Group services
–
Provide appropriate corporate support and oversight for the high
growth
technology-enabled inspection services and capabilities |
 Quest
Integrity’s Capabilities Quantitative
Inspection
Services
Proprietary
technology-enabled
and specialized
inspection services
Engineering
Assessment
Specialized
knowledge and
operating experience
applied through
consultation services
Advanced NDT
& Software
Tools
Development
Proprietary data
collection, assessment
and assistance tools
Asset Integrity and Reliability
Management Solutions
4 |
 Engineering
Assessment Expertise and Applications Core Competencies
•
Fitness-for-Service (FFS)
Assessment
•
Fracture Mechanics
•
Finite Element Analysis
(FEA)
•
Computational Fluid
Dynamics (CFD)
•
Failure Analysis
•
Corrosion Engineering
•
Materials Performance -
Creep and High
Temperature
•
Risked-Based
Inspection/Assessment
•
Software Development
Key Industries Served
•
Process Plants
Refinery
Chemical &
petrochemical
Syngas, including
ammonia, methane,
and hydrogen plants
Pulp & paper
•
Pipeline
•
Electric Power
Fossil
Geothermal
Wind
Hydroelectric
•
Oil & Gas Production
Key Equipment Types
•
Heaters & Boilers
•
Pipelines
•
Process Piping
•
Reformers
•
Pressure Vessels
•
Storage Tanks
•
Turbines
•
Heat Exchangers
5 |
 Technology-Enabled Inspection Services
Example –
Inspection of non-piggable
pipeline using Quest
Integrity’s proprietary InVista
NDT inspection tools
High-Fidelity Ultrasonic ILI Survey
•Onsite technician certified NDT L II
or greater •Standard
condition reports provided within 7 days, customized final reports provided
within 30 days Fitness-for-Service Engineering Assessment
•Provides remaining strength and
maximum allowable operating pressure (MAOPr) for entire
length of pipe vs. limited locations only
•Follows API 579-1/ASME FFS-1 local thinning
assessment methodology (accepted Level 2
methodology in ASME B31G-2009)
LifeQuest™
Visualization and Analysis Software
•High resolution 2D and 3D views of
wall-thickness
and inner profile for 100% of data
•Synchronized data display windows for
rapid examination of inspection results
•Client configurable feature table
compatible with GIS systems and exportable to Microsoft Excel
®
InVista™
Example
6 |
 Automated
Assessment/Software Tools •
Tied to Quest Integrity’s proprietary inspection technology and
specific critical assets
•
Imports data from the corresponding inspection tool, and then
performs FFS and RLA
•
Used to visually inspect and present data and FFS results in a
operator-intuitive format
•
Asset Class Õ
Inspection Technology
Õ Software
Tool Fired Heaters
Õ FTIS™
Õ
LifeQuest™
Heater
Pipelines Õ
InVista™
Õ
LifeQuest™
Pipeline
Steam Reformers Õ
LOTIS®
+ External Crawler with EC
Õ
LifeQuest™
Reformer
7 |
 Quest
Integrity Group Business Mix 2010YTD Revenue by Office
2010YTD Revenue by Division
Inspection
56.4%
Engineering
Assessment
43.6%
USA
49.4%
New
Zealand
18.9%
Canada
17.6%
Europe
6.1%
Australia
6.0%
M. East 2.1%
8 |
 Quest
Integrity Group Profiles and Locations •
Engineering Assessment
Offices
–
Houston
–
Boulder
–
New Zealand
•
Inspection Services
Offices
–
Seattle
–
Houston
–
Calgary
–
The Netherlands
–
Australia
–
UAE
Key Locations
Backgrounds of Personnel
•
Educational Backgrounds
–
13 PhDs
–
13 Other Advanced Engineering
Degrees
•
Noteworthy Industry
Leadership
–
CTO is author of leading Fracture
Mechanics text book and one of
original architects of API 579 FFS
–
Active leadership and
participation in various industry
association committees
–
Only outside participant on two
major oil company mechanical
integrity committees
9 |
 10
Summary Balance Sheets
(in millions)
Quest
Team
May 31,
Team
Pro-forma
Pro-Forma
2010
Cash
17.1
$
1.2
$
18.3
$
12.6
$
Accounts Receivable
93.2
4.0
97.2
109.4
Other current assets
27.4
0.6
28.0
28.3
Tota
current assets
137.7
5.8
143.5
150.3
Non-current assets
114.1
45.1
159.2
114.7
Total assets
251.8
$
50.9
$
302.7
$
265.0
$
Current debt
0.3
0.3
0.3
Other current liabilities
36.5
$
2.4
$
38.9
$
42.8
$
Long-Term Debt
38.3
42.6
80.9
47.8
Other
8.5
8.5
8.9
Stockholders' equity
168.2
5.9
174.1
165.2
Total liabilities and equity
251.8
$
50.9
$
302.7
$
265.0
$
Net debt
21.5
$
41.4
$
62.9
$
35.5
$
Net debt to TTM EBITDA (1)
0.4
1.2
0.8
(1) excludes non routine charges
Aug. 31, 2010 unaudited, proforma |
 11
FY 2011 Guidance
(in millions, except per share amounts)
FY2011
Guidance (1)
FY2010 (2)
$
%
Revenue
$470-$500
454
$
$16-$46
4%-10%
Field operating income
$55-$60
48
$
$7-$12
15%-25%
Corporate expenses
($20)
(19)
$
($1)
EBIT
$35-$40
29
$
$6-$11
20%-35%
Net income
$20-$23
16
$
$4-$7
25%-40%
EPS
$1.00-$1.15
0.80
$
$0.20-$0.35
(1) FY2011 Guidance unchanged for Quest acquisition.
(2) excludes impact of non-routine charges
Change |