PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements and notes thereto appearing
elsewhere in this prospectus. This summary highlights key aspects of our
company, but does not contain all of the information that you should consider
before making an investment decision. You should read the entire prospectus
carefully, especially the risks of investing in our common stock discussed under
"Risk Factors" and our financial statements and the related notes included
elsewhere in this prospectus, before making an investment decision. Unless the
context indicates or otherwise requires, references in this prospectus to
(i) the term "Brand Energy" is to Brand Energy & Infrastructure Services, Inc.,
which is the direct parent of Brand Services, Inc., (ii) the term "Brand
Services" is to Brand Services, Inc. and its subsidiaries, (iii) the terms
"Brand," "our company," "we," "us" or "our" are to Brand Energy and its
subsidiaries, and (iv) the term "Brand LLC" is to Brand Holdings, LLC, which is
the direct parent of Brand Energy.
Our Company
We are a leading industrial services company. We believe we are the largest
North American provider of scaffolding work access services, which include
design engineering, project management, labor for the erection and dismantlement
of complex scaffolding systems and the associated equipment rental.
Additionally, we provide concrete forming and shoring and specialty craft labor
services. We primarily service North American energy-related markets, with
clients in the refining, chemical, power generation, offshore oil production and
other industries. In energy-related markets, our services support the ongoing
maintenance, inspection and periodic overhauls ("turnarounds") of our customers'
facilities. We also provide work access services associated with the
construction of new facilities and the expansion or upgrading of existing sites.
In the commercial and infrastructure markets, we support new construction and
renovation projects, including for high-rise buildings, hospitals, airports,
churches, bridges, dams and other construction and renovation projects
throughout North America and in select international regions.
Our work access service offerings facilitate access to our customers' tall
and complex structures. The core of our work access business is comprised of
work access services for ongoing maintenance at our customers' facilities, many
of which we have serviced for over 20 years. In our forming and shoring
business, we provide customized applications that support our customers concrete
formwork needs. The modular formwork systems we provide enable our customers to
shorten construction times and reduce labor costs. We also provide our customers
with specialty craft labor services, including insulation, carpentry and safety
services. We believe that providing these services strengthens our relationships
with our core customer base and provides us with a source of revenues that
requires no additional capital investment.
In 2005 we acquired the operations of Aluma Enterprises, a leading provider
of work access and forming and shoring services in Canada. Approximately 60% of
Aluma's business serves the Canadian refining market, including the Alberta Oil
Sands. Through this acquisition we also acquired a concrete forming and shoring
business which has a strong presence in select North American regions and
international markets.
We deliver our services through an extensive field service organization
consisting of 6,000 to 7,000 skilled craftspeople (depending on seasonal needs),
88 field offices and an additional 74 facilities located at customer sites
throughout the United States, Canada and selected international locations.
Industry Dynamics
The Work Access Industry
The scaffolding industry provides work access services to the industrial and
the commercial markets, each of which requires different types of equipment and
services. Services we provide to our industrial customers generally require
"system" scaffolding capable of conforming to irregularly shaped
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structures. These structures require specially engineered designs and equipment
as well as a highly skilled workforce to erect and dismantle the scaffolding.
Services we provide our commercial customers generally require "frame and brace"
scaffolding, which is less versatile than system scaffolding but which is
broadly used in the construction and renovation markets. We estimate that the
total North American market for work access services is approximately
$2.6 billion.
Industrial customers require work access services for ongoing maintenance,
periodic turnarounds and capital projects related to their facilities.
Turnarounds and capital projects commonly require the partial or complete
shutdown of a facility, which results in the loss of substantial revenue per
day; as a result, speed and reliability in the execution of this work are key
customer considerations. Safety is another important consideration for
industrial customers, as work access contractor accidents may be counted against
a customer's safety record and may result in project delays, increases in
insurance premiums and additional regulatory oversight and related costs.
Commercial work access services are provided primarily to the high-rise
commercial, residential and institutional construction and renovation markets.
Building construction companies use work access services to provide their
construction and maintenance personnel with safe and efficient platforms to
perform masonry work, apply stucco, drywall and paint and conduct a wide range
of other construction and renovation activities.
Industrial companies, engineering and construction firms and commercial
construction companies are increasingly outsourcing work access services
primarily due to increased safety regulations, limited availability of skilled
labor, the greater expertise of work access providers and a general trend for
these firms to focus on their core competencies. These companies have generally
outsourced work access projects to providers with large equipment fleets and
strong project management services. Concurrent with this ongoing trend is an
increasing desire by industrial work access customers to consolidate their
service providers and reduce the number of suppliers that have access to their
facilities. This trend creates opportunities for providers which have existing
relationships with such customers.
Maintenance and capital spending by companies in the refining,
petrochemical, chemical, utility, pulp and paper and building construction and
renovation industries drives demand for work access services. These companies'
spending decisions are, in turn, influenced by the strength of the markets for
their products and, in many cases, regulatory, macroeconomic and geopolitical
factors. For example, in the refining industry, strong overall demand for
refined petroleum products, a trend toward refining a wider range of crude oil
grades, the need to de-bottleneck production capacity as refinery utilization
rates reach more than 90% and increased investment to achieve compliance with
environmental regulations are driving increased spending by refineries on
maintenance and capital projects.
In the Alberta Oil Sands, one of the largest oil reserves in the world, high
levels of demand for crude oil and declining extraction costs are driving
significant capital investment. According to the Oil and Gas Journal and the
Canadian Association of Petroleum Producers, the Alberta Oil Sands contain the
second-largest deposits of oil in the world, representing approximately 50% of
Canada's total crude oil output and approximately 10% of total North American
production. One industry source estimates that $85.0 to $90.0 billion of
additional capital could be spent in the Alberta Oil Sands by 2015 to triple the
current output capacity to three million barrels per day. This investment
represents an attractive growth opportunity for work access service providers.
In the utility industry, high natural gas prices have led to increasing reliance
on coal-fired and combined-cycle power plants which, in turn, has resulted in
increased maintenance costs for utility companies. In addition, growing
electricity demand and emissions regulations have driven capital investment as
utilities expand capacity and make improvements required to comply with
environmental regulations.
The Concrete Forming and Shoring Industry
Concrete forming and shoring is a major sector within the construction
industry. Forming and shoring equipment consists of steel and aluminum
interlocking horizontal, vertical and platform pieces.
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"Forming" is a term used to describe the assembly of these pieces into forms
that allow the pouring of vertical concrete structures like walls, cores, piers
and columns. "Shoring" is a term used to describe an assembly of these pieces
into table-like structures that allow the pouring of horizontal slabs or floors.
Shoring is also used to support recently poured horizontal surfaces or loaded
horizontal surfaces. Forming and shoring companies offer a spectrum of services,
from pre-engineered systems to custom-designed formwork and shoring services
that meet specific construction needs. Pre-engineered formwork and shoring
systems are typically rented to customers on a project-by-project basis, whereas
custom designed formwork and shoring systems are typically sold to owners or
project managers for use on complex or non-standard concrete structures. These
services are typically provided to build structures, including high-rise
buildings, dams and locks, tunnels, bridges and overpasses, airports, stadiums
and power plants.
The forming and shoring industry is currently benefiting from strong demand
for large scale capital projects driven by strong economic growth, particularly
in the Southern and Western United States, and federal government investment in
aging transportation infrastructure. The forming and shoring industry has also
benefited from the increased desirability of concrete as a building material
over steel construction due to the increased design flexibility, lower cost and
abundant supply of concrete. These factors are driving construction contractors
and managers to favor pre-engineered forming and shoring equipment to further
shorten construction times and lower labor costs.
Our Strengths
Our company benefits from a number of competitive strengths, including the
following:
º •
º Work Access Market Leader. We believe we are the largest provider of
work access services in North America and as such our scale allows us
to provide customized services on a wide variety of projects, while
our geographic scope allows us to efficiently deploy our fixed assets
across the regions we serve.
º •
º Blue Chip Customers. We have longstanding relationships with large
multi-national corporations such as Shell, ExxonMobil, Kiewit, Fluor
and ConocoPhilips, customers that are leaders in their respective
fields, which provide us with a competitive advantage when bidding for
work from other potential customers.
º •
º Long-Term Business Relationships. Our long-term customer
relationships, the high quality work we perform and the high costs
that our customers would incur in changing their service providers
provide us with a strongly entrenched position with our existing
customers, positioning us to bid on additional projects with our
existing customers and providing us with a consistent base of
revenues.
º •
º Strong Operating Systems. We manage an inventory of over 14 million
pieces of equipment, 6,000 to 7,000 employees and 88 field offices
through strong operational systems that enhance our ability to provide
mission-critical services to our customers and maximize our asset
utilization.
º •
º Strong Safety Record. Our comprehensive safety programs, safety-first
culture and strong safety record enhances our ability to win new
business, helps us reduce insurance costs and accident-related
expenses and helps us retain our employees.
º •
º Experienced Management Team. We have assembled a strong and
experienced management team across all principal areas of our
organization including sales, finance, operations, marketing and
customer service.
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Our Strategy
We intend to leverage our strong position with existing customers in our
current market segments, while maintaining an entrepreneurial culture that
encourages our employees to identify and capitalize on new opportunities. In
order to accomplish these goals, we are focused on the following strategies:
º •
º Maintain Our Current Market Leadership Position. We intend to
continue to focus on North American energy-related markets while
leveraging our strong customer relationships to secure additional
maintenance projects, which have historically led to opportunities to
support capital projects by these customers.
º •
º Continue to Focus on Our Alberta Oil Sands Business. We are focused
on maintaining our existing business and winning new contracts in the
fast-growing market for oil extraction and refining in the Alberta Oil
Sands region, which is believed to contain the second-largest deposit
of oil in the world.
º •
º Increase Our Focus on the Utility Sector. We intend to increase our
focus on clients in the utility sector, where we expect that the
combination of higher energy prices, reliance on coal-fired generating
facilities and the need to comply with new environmental regulations
presents a significant opportunity for us to expand our business.
º •
º Enhance Our Business through Acquisitions. We intend to focus on
enhancing our business through selected acquisitions, which represent
an opportunity to extend our geographic reach and to increase our
service offerings while achieving cost and revenue synergies.
º •
º Continue to Develop Innovative Proprietary Engineering
Capabilities. We intend to continue to develop innovative proprietary
engineering capabilities that help us both retain existing customers
and successfully bid for new business.
º •
º Leverage Our Existing Customer Base to Add Complementary Services. We
intend to continue to leverage our existing customer base to add
complementary services that will help us deepen our existing customer
relationships, generate an incremental source of revenue without
additional capital investment and enhance our ability to offer our
craft laborers consistent and steady work.
º •
º Optimize Business Performance with Focused Initiatives. Our Six Sigma
training and certification process, an upgraded server-based
application IT platform and the operational experience of our
management enable us to manage our business and expand our margins
through operational leverage and efficiency while providing superior
customer reporting on project management and job costs.
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