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 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.
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:
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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.
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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.
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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.
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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.
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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.
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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:
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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.
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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.
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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.
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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.
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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.
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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.
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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.