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QE2 Acquisition Corp. Provides Corporate Update

Posted by AGORACOM-JC at 10:51 AM on Friday, January 16th, 2015

CALGARY, ALBERTA / January 16 2015 / QE2 Acquisition Corp. (“QE2” or the “Corporation”) (TSX VENTURE:QE) is pleased to provide an update on the operational activities of the Corporation and announce the resignation of a member of the Board of Directors.

Corporate Update

Acquisitions

In 2014 QE2 completed its second acquisition, Candesto Enterprises Ltd. (“Candesto”), a Calgary based owner-operated leader in highway signage, guardrail installation products and services for a purchase price of approximately $2.68 Million. This was QE2’s second acquisition, the first being Pillar Contracting Ltd. (“Pillar”) which was acquired in late 2013 for a purchase price of $1.4 Million.

Pillar is an industry leader in specialized utilities services: maintenance of light post and street light standards, condition surveys, flagging and traffic management. Pillar’s customers primarily consist of municipalities and utility companies.

Both companies are established, have a history of profitability and proven management, we are very excited to have them under the QE2 corporate umbrella.

Financings and RTO (Reverse Takeover)

On November 4, 2014 QE2 commenced trading on the TSX Venture Exchange under the symbol QE. This was by way of Reverse Takeover (“RTO”) when QE2 acquired Crowsnest Acquisition Corp. (“Crowsnest”). At RTO closing, 21,912,766 shares of QE2 were exchanged on a one-for-one basis for shares of Crowsnest for a current outstanding share count of 28,812,766.

In addition, we completed a convertible debenture financing for gross proceeds of $1,298,000. Canaccord Genuity Corp. was the leading agent. The financing was completed in conjunction with the RTO. Canaccord acted as QE2’s exclusive financial advisor for the entire process and will continue to support QE2 moving forward.

2015 and Beyond

The current landscape of the Canadian junior capital markets has been very challenging. The TSX Venture Exchange is at all-time lows amidst plunging oil and commodity prices. Access to capital has been dire and challenging to say the least, but we believe capital is available to companies and management teams who show a solid business plan backed by companies with tangible assets, strong revenue streams and are profitable.

We believe our strategy of acquiring profitable infrastructure and utilities service companies is an approach the market will embrace as we show accretive value by buying companies between 2-3X EBITDA. Our first two acquisitions were purchased at 2.4X (Candesto) and 1.8X (Pillar) EBITDA, respectively.

Alberta in particular will provide ample opportunities in our target sector as the economy softens and capital dries up due to falling oil prices. However, management believes that infrastructure services companies will not be impacted nearly to the same degree as oil services companies, due to the fact that infrastructure companies are not directly tied to the energy sector. Our partner companies are well established entities doing business with cities, municipalities and construction companies throughout Alberta.

Our focus will be to continue targeting Alberta-based companies but also to expand our reach across Canada.

Management and Board of Directors

For most of 2014, QE2 was heavily involved in completing its RTO process which required a certain skill set from both the management team and the Board of Directors. As QE2 transitions back to acquisition and operations mode the company expects to make changes to better facilitate the objectives, for 2015 and beyond. At present QE2 is having discussions with several potential new Board members.

QE2 announces that for personal reasons Doug Bachman has tendered his resignation from the Board of Directors of QE2 effective January 13, 2015. However, Mr. Bachman will continue to be involved in an advisory capacity to the management and Board of Directors.

We are pleased that Mr. Bachman will remain with QE2 in an advisory capacity. He has been and will continue to provide value to QE2 going forward.

QE2 has been in the process of locating additional board members and will likely be announcing the appointment of an independent director in the near term.

Summary

QE2 is very excited about the future prospects for the company and the company will continue to prudently execute on its growth strategy, which will translate into strong returns for QE2 shareholders.

Mike Belantis

CEO and Director

QE2 Acquisition Corp.

About QE2 Acquisition Corp.:

QE2 is a forward thinking, Alberta-founded Corporation involved in the acquisition and growth of well-managed, profitable, asset-backed, Western Canada based businesses in the infrastructure and utility sectors. QE2’s growth strategy is a merger and acquisition program which leverages the synergies that can be achieved by vertical and horizontal integration.

For further information please contact,

Mike Belantis, CEO and Director

QE2 Acquisition Corp.,

Tel: (403) 478-0055

Fax: (403) 770-8468

Email: [email protected]

Cautionary Statements

Statements in this press release may contain forward-looking. The words “will,” “anticipate,” believe,” “estimate,” “expect,” “intent,” “may,” “project,” “should,” and similar expressions are intended to be among the statements that identify forward-looking statements. The forward-looking statements are founded on the basis of expectations and assumptions made by the Corporation. Readers are cautioned that assumption used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Corporation. The Corporation does not have any obligation to update or revise any forward-looking statements except as expressly required by applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The securities of QE2 have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Not for distribution to U.S. Newswire Services or for dissemination in the United States of America. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.

MEDIA: QE2 Acquisition is more than the sum of its parts

Posted by AGORACOM-JC at 12:48 PM on Thursday, January 8th, 2015

We’re happy to announce that QE2 Acquisition Corp. has been featured in the December 26, 2014 edition of Investors Digest of Canada. Click on image below to read article in its entirety.

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Why Invest in QE2 Acquisition Corp.?

 

  • Aggressive Growth by Acquisition
  • $100M 2018 Growth Objective
  • Experienced, Proven, Driven Management Team

 

  • Calgary founded firm that acquires, consolidates and grows well managed, profitable, asset backed, Alberta-based business in the Infrastructure and Utility Services sectors

  • Recruiting the best expertise in the industry to run day to day operations as well as drive strategic vision

Recent Highlights

  • Signed a letter of intent to acquire a privately-owned accredited electrical contractor located in the Edmonton area (Read Release)
  • Pillar Contracting Ltd. has successfully bid and been awarded a contract by the City Of Calgary to continue the installation phase of 1,000 new LED streetlight heads (Read Release).

Hub On AGORACOM

CLIENT FEATURE: QE2 Acquisition Corp. (QE: TSX-V) Revenue Generating Infrastructure Play Capitalizing on the Alberta Advantage

Posted by AGORACOM-JC at 4:11 PM on Wednesday, December 10th, 2014

Why Invest in QE2 Acquisition Corp.?

  • Aggressive Growth by Acquisition
  • $100M 2018 Growth Objective
  • $1.9M in 2013 Normalized EBITDA
  • Experienced, Proven, Driven Management Team

  • Calgary founded firm that acquires, consolidates and grows well managed, profitable, asset backed, Alberta-based businesse in the Infrastructure and Utility Services sectors

  • Recruiting the best expertise in the industry to run day to day operations as well as drive strategic vision

Recent Highlights

  • Signed a letter of intent to acquire a privately-owned accredited electrical contractor located in the Edmonton area (Read Release)
  • Pillar Contracting Ltd. has successfully bid and been awarded a contract by the City Of Calgary to continue the installation phase of 1,000 new LED streetlight heads (Read Release).

Company Portfolio

In April 2014, QE2 Acquisition Corp. completed the acquisition of key assets of Candesto Enterprises Inc.
 

CANDESTO ENTERPRISES LTD.

1450 Bearspaw Dam Rd NW, Calgary, AB T3L 0C3
p: 403-286-7922
About Candesto Enterprises Ltd.
Candesto is a leader in highway signage, guardrail installation services, and miscellaneous fencing with its services primarily engaged in the new construction of roads and highways. Candesto has operated for over 20 years and strategically concentrates its activities in southern Alberta, with the bulk of its customers acting as the project general contractor, working for 1 of the 4 levels of government.
 
Mihalis Belantis, CEO of QE2:
“This acquisition strengthens our portfolio and is aligned with QE2’s strategy: to buy and grow Alberta companies that keep Alberta growing.”
Chris Bokenfohr, GM of Candesto
“I’m excited that Candesto is now part of QE2, and I look forward to continuing to grow Candesto with the help and support of the QE2 team.”
Chris Bokenfohr, a civil engineer and owner of Candesto, will remain as General Manager of Candesto for 5 years and the existing staff is retained.
– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
 
In October 2013, QE2 Acquisition Corp. completed the acquisition of Pillar Contracting Ltd.
 

PILLAR CONTRACTING LTD.
103A, 11129-83 Avenue, AB T8L 3T9
w: www.pillarltd.com
About Pillar Contracting Ltd.:
Pillar is an industry leader in specialized utilities services: maintenance of light post and street light standards, condition surveys including metal fatigue testing, flagging and traffic management. Pillar’s customers primarily consist of municipalities and utility companies. Pillar is an Alberta grown, cash flow positive business with a proven track record and a strong management team.

Mark Lacoursiere, Founder of Pillar Contracting Ltd.:
“QE2 believes in Alberta and the hardworking people that keep this province humming”, states Mark Lacoursiere. “QE2 shares my growth vision for Pillar and my belief in people and relationships. I am excited to see where Pillar will be over the next 3 years with the help of QE2. The future looks bright!”

Mihalis Belantis, CEO of QE2:
“We are proud to welcome Pillar into the QE2 family,” explains Mihalis Belantis. “Pillar’s founder, Mark Lacoursiere, and all Pillar employees are a testament to the entrepreneurial spirit, work ethic and desire to succeed that is so prevalent in Alberta!”

Company History

Albertans created QE2 Acquisition Corp. with the true Alberta spirit of determination, and the desire to create opportunity within the local economy through innovative vision and hard work.

It was an idea six years in the making, formed while living and working within the province’s rural towns and urban centers.The relationships that were forged during this period would eventually culminate to form QE2 – from influential finance professionals to research analysts, salespeople and marketers, to business owners and families.

QE2 is a company forged by a group of organized, motivated and extraordinary people with a vision to do extraordinary things.

 

 

Capitalizing On Alberta’s Growth

QE2 Acquisition Corp. Announces Resignation of Director

Posted by AGORACOM-JC at 4:40 PM on Tuesday, December 9th, 2014

CALGARY, ALBERTA / December 9th, 2014 / QE2 Acquisition Corp. (“QE2” or the “Corporation”) (TSX VENTURE:QE) announces the resignation of Robb McNaughton, LLB, partner in law firm Borden Ladner Gervais LLP, Calgary, as a Director of the Corporation effective immediately.

Mike Belantis, QE2’s CEO, comments, “Robb was instrumental in helping QE2 complete the Qualifying Transaction with Crowsnest Acquisition Corp. and we sincerely thank him for that and wish him every success for the future. As QE2 continues to grow through its acquisitions program of infrastructure and utility service companies, it is going to be increasingly important that we strengthen our Board with operational and financial expertise and experience. We look forward to reporting our progress towards that goal in due course.”

About QE2 Acquisition Corp. (www.qe2corp.com):

QE2 is a forward thinking, Alberta-founded firm that acquires and grows well-managed, profitable, asset-backed, Alberta-based businesses in the infrastructure and utility service sectors. QE2’s growth strategy is a mergers and acquisitions program which leverages the synergies that can be achieved by vertical and horizontal integration. For further information, please contact Mihalis Belantis, CEO and Director, #4034, 909 – 17th Avenue SW, Calgary, Alberta, T2T 0A4, Tel: (403) 478-0055, Fax: (403) 770-8468, Email: [email protected].

Cautionary Statements

Statements in this press release may contain forward-looking. The words “will,” “anticipate,” believe,” “estimate,” “expect,” “intent,” “may,” “project,” “should,” and similar expressions are intended to be among the statements that identify forward-looking statements. The forward-looking statements are founded on the basis of expectations and assumptions made by the Corporation. Readers are cautioned that assumption used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Corporation. The Corporation does not have any obligation to update or revise any forward-looking statements except as expressly required by applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The securities of QE2 have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Not for distribution to U.S. Newswire Services or for dissemination in the United States of America. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.

Globally, Infrastructure Investment in High Demand

Posted by AGORACOM-JC at 9:32 AM on Monday, December 8th, 2014

Calgary, Alberta / December 8, 2014 / Like veins and arteries in the human body, infrastructure is absolutely vital to a city. Infrastructure promotes commerce, facilitates exports and can be big business. Hedge funds, private equity and even sovereign wealth funds routinely invest in toll roads, bridges, utilities and port facilities around the globe. What’s the allure of such investments? Long-term, steady, recurring revenues. In many instances the growth in revenue is thought to be at about the rate of GDP in the region. In a world with unusually low interest and stock markets at all-time highs, the hunt for decent returns is on. Clearly, it makes sense to invest in fast-growing parts of the world, but to mitigate risk it also makes sense to invest in safe places.

The next best way to invest in infrastructure build outs and the maintenance of these assets, is to invest in companies that provide essential services to support and grow infrastructure needs. Attractive investments are not easy to come by. Investing in large, publicly-listed companies might give one the desired exposure, but large enterprises are typically tied to the volatility of the stock markets. Instead, smaller companies involved in the space have the distinct advantage of being able to grow rapidly through acquisitions. Acquisitions not only move the needle, but also diversify revenue streams and mitigate overall risk. Even better would be a small publicly-listed company that is actively rolling up private, “mom & pop shops” that can be acquired at very attractive valuations. One such company, one of the very few doing this in Alberta, is TSX Venture-listed QE2 Acquisition Corp. [TSXV:QE]. “QE2” refers to the north-south Alberta highway that connects its two largest cities: Calgary and Edmonton. Effectively, it’s the backbone that keeps Alberta moving. A company like QE2 should have low correlation to the overall stock markets as it pursues its roll-up strategy.

First Two Acquisitions

QE2 has already made two acquisitions; the first was Pillar Contracting in October, 2013. The primary services of portfolio company Pillar include; street light bulb replacement and post painting, safety testing for street light integrity, traffic lights maintenance and flagging services, among other things. Pillar had a 16 year history of success and growth prior to being acquired by QE2 and has its sights on continuing this trend. Importantly, the Founder of Pillar agreed to continue to operate the business – a common theme among QE2’s acquired portfolio companies. As part of QE2, Pillar has access to a strong customer base including major utility companies and municipalities in Alberta and Saskatchewan. Pillar offers QE2 possible expansion into the private sector with a focus on parking lots, transmission boxes, cable boxes and oversized loads. Therefore, like QE2’s other portfolio business and acquisitions to follow, low-risk, high visibility recurring revenue streams through service and maintenance are the key.

Candesto Enterprises was acquired in April, 2014. Primary services include, assembly and installation of highway signs, guardrails and miscellaneous fencing installations. Candesto had a successful operating history of over 20 years and the Founder is willing to stay on for another five years. Therefore, QE2 management expects consistent margins and operating performance from Candesto. Candesto’s customer base includes municipalities and general contractors.

These two acquisitions are examples of the private companies that make the grade: steady growth, solid margin companies on their own, but combined with other portfolio companies, ample opportunities for synergies. The client base of each acquired company instantly becomes customer targets for all of QE2’s portfolio companies. In a recent interview, CEO and Director Mr. Mihali (Mike) Belantis commented, “Our companies provide niche or speciality services to the municipalities and blue chips, meaning the likes of Epcor and Fortis. So QE2’s companies are not directly exposed to the cyclicality of the oil and gas sectors but instead to the infrastructure and utility investment by the province and secondary enterprise in Alberta. And our oil & gas exposure is further dampened by the fact that a significant portion of our revenue comes from maintenance work in addition to installation work.”

QE2 is an M&A expert and has a pipeline of future acquisitions that it believes could vault annual revenues from about $10 million to $100 million by 2018. For each deal they commit to, they pass on many others. Finding companies that are the right fit is what the management team specializes in, and this is a company with a top-tier management team by any measure. Growth in 2015 is expected to be robust with the acquisition of 2-3 new portfolio companies.

Why Alberta?

Earlier I mentioned that hedge and private equity funds can earn attractive returns by building infrastructure. A way in which they can boost equity returns is by employing debt. As a public company with strong financial backers, QE2 also has access to debt. QE2 uses a prudent mix of debt, cash on hand and QE2 shares (some of which go to the principals of the private companies) to make acquisitions. Over time, synergies could become an important growth and margin enhancer.

QE2 has a very well done and informative corporate presentation. According to its November slide deck, “Alberta is growing at the fastest rate of any province in Canada and has been the leader of economic growth for the past 20 years. Exceptional economic landscape is backed by aggressive government plans to continue building new infrastructure over the next decade. Projected infrastructure growth due to the economic growth and continued population expansion provides a fertile platform for business. Alberta’s economic expansion is expected to accelerate to 3.7% in 2014 after gaining momentum through 2013. Alberta’s robust outlook builds on an estimated 3.3% expansion in 2013, the fourth straight year above 3.0%, outperforming Canada and U.S. economic growth.”

As a recent example of Alberta’s commitment to growth, on November 10th Alberta and Ottawa signed a renewed, expanded deal to deliver $2.3 billion in gas tax funds to help municipalities build infrastructure. These funds are designed for important core civic infrastructure. The deal will deliver $208 million to Alberta this year and a total of $2.3 billion by 2024. Of course most Canadians already know that Alberta is a leader in investment, population growth, exports, GDP, housing, construction and employment growth. However, I should add that Alberta’s growth has been among the strongest of any region in North America.

Conclusion

Investing in infrastructure and utilities through hedge funds and private equity is out of the reach for most investors. A good way to get exposure to what the, “smart money” is doing is by investing in QE2 Acquisition Corp. As one of the first and most aggressive aggregators of solidly profitable Albertan private companies, investors get the best of both worlds- a strong underlying economy that supports growth and relatively low-risk businesses that taken together, make the whole less risky than the sum of the parts. Furthermore, I believe over time that QE2 should exhibit low correlation to the overall stock markets, a distinct advantage compared to larger less diversified peers. With a tight share structure of 28.5 million shares with and just over 15 million free trading shares at this time, QE2 is definitely a company worth looking closely at.

Please click on the following links for more information:

Corporate Homepage:

Bob Moriarty article November 24th.
Interview with CEO November 19th.

By Peter Epstein

Disclosure: Mr. Epstein owns shares of QE2 Acquisition Corp. This article and all articles written by Mr. Epstein does not represent investment advice and express his opinions only. Mr. Epstein is not a registered investment advisor. Readers should consult with their own investment advisors before considering buying or selling any securities mentioned in this article. The author has been retained by QE2 Acquisition Corp for consulting purposes.

CONTACT INFORMATION

QE2 Acquisition Corp.
Mihalis Belantis
CEO and Director
(403) 701-7299
[email protected]

SOURCE: QE2 Acquisition Corp.

QE2 Acquisition Corp. Announces Award Of Streetlight Services Contract By City Of Calgary

Posted by AGORACOM-JC at 9:44 AM on Thursday, December 4th, 2014

CALGARY, ALBERTA / December 4th, 2014) / QE2 Acquisition Corp. (“QE2” or the “Corporation”) (TSX VENTURE:QE) is pleased to announce that Pillar Contracting Ltd. (“Pillar”), a wholly owned operating subsidiary, has successfully bid and been awarded a contract by the City Of Calgary to continue the installation phase of 1,000 new LED streetlight heads in parts of the city.

Pillar is based in Fort Saskatchewan, Alberta, and became QE2’s first acquisition in October 2013. Pillar provides streetlight, electrical, equipment painting and traffic control services to a range of municipal and blue chip clients. Pillar has operated successfully for over 17 years with growth driven primarily by repeat customers and word of mouth. The City Of Calgary becomes Pillar’s newest municipal customer and represents the first successful bid for Pillar under QE2’s ownership. In order to service the contract, Pillar will make use of storage facilities and logistics at QE2’s second wholly owned operating subsidiary, Candesto Enterprises Ltd. (“Candesto”), which QE2 acquired in April 2014 and is based at Calgary.

Mark Lacoursiere, Pillar’s General Manager, states, “Becoming part of the QE2 portfolio has extended Pillar’s capabilities in terms our geographical footprint, access to capital and expertise to bid on work. We’re excited to provide Pillar’s specialist streetlight services to the City Of Calgary. There are over 80,000 streetlights in Calgary that could benefit from LED technology. Pillar has the expertise and capacity to change every one of them.”

The contract is expected to commence in early December and be completed on or around the middle of February 2015.

“The shift to LED technology will provide higher quality lighting for our roadways, while also reducing electricity usage and lowering maintenance costs,” said Troy McLoed, Director of Roads. “Calgary is a rapidly growing city, and this initiative will help us deliver cost-effective and sustainable infrastructure.”

For more information on The City of Calgary’s e2 Street Lighting Program, please visit Calgary.ca and search “LED lighting”. For media inquiries, contact The City of Calgary’s Transportation Department at 403-828-2954, or email [email protected].

About QE2 Acquisition Corp. (www.qe2corp.com):

QE2 is a forward thinking, Alberta-founded firm that acquires and grows well-managed, profitable, asset-backed, Alberta-based businesses in the infrastructure and utility service sectors. QE2’s growth strategy is a mergers and acquisitions program which leverages the synergies that can be achieved by vertical and horizontal integration. For further information, please contact Mihalis Belantis, CEO and Director, #4034, 909 – 17th Avenue SW, Calgary, Alberta, T2T 0A4, Tel: (403) 478-0055, Fax: (403) 770-8468, Email: [email protected].

Cautionary Statements

Statements in this press release may contain forward-looking. The words “will,” “anticipate,” believe,” “estimate,” “expect,” “intent,” “may,” “project,” “should,” and similar expressions are intended to be among the statements that identify forward-looking statements. The forward-looking statements are founded on the basis of expectations and assumptions made by the Corporation. Readers are cautioned that assumption used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Corporation. The Corporation does not have any obligation to update or revise any forward-looking statements except as expressly required by applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The securities of QE2 have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Not for distribution to U.S. Newswire Services or for dissemination in the United States of America. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.

QE2 Acquisition Corp. Announces Letter Of Intent To Acquire Accredited Electrical Contractor In Edmonton, Alberta

Posted by AGORACOM-JC at 10:12 AM on Wednesday, December 3rd, 2014

CALGARY, ALBERTA / December 3rd, 2014 / QE2 Acquisition Corp. (“QE2” or the “Corporation”) (TSX VENTURE:QE) is pleased to announce that it has signed a letter of intent to acquire a privately-owned accredited electrical contractor (the “Acquisition Target”) located in the Edmonton area of Alberta (the “Transaction”). The purchase price will be based on the Acquisition Target’s most recent financial statements. The acquisition will be funded by cash. The specific terms of the Transaction will be disclosed in a separate news release to follow in due course.

For more than 30 years, the Acquisition Target has developed an electrical services business that serves the industrial and utility markets including a combination of blue chip and government clients. The Acquisition Target specializes in medium and high voltage installations, commissioning and start up in industrial plants, heavy industrial refineries and utility stations. This acquisition complements QE2’s current operating subsidiaries in terms of its geographical footprint, expertise and expands QE2’s customer base. As part of the transaction, the owner of the Acquisition Target has agreed to enter into a three-year consulting agreement with the company.

QE2 expects to complete the Transaction in or about January 2015. This completion will be subject to the negotiation of a definitive share purchase agreement, board and regulatory approvals, satisfactory due diligence, customary closing conditions and the closing of a brokered financing, the terms of which will be disclosed at a later date.

“This acquisition helps QE2’s emergence as a consolidator within the infrastructure and utility service industry in Alberta,” states Mihalis ‘Mike’ Belantis, QE2’s CEO. “The Acquisition Target is owner-operated with a strong management team and staff in place. It has worked successfully with our first acquisition, Pillar Contracting Ltd. (“Pillar”), on multiple projects. In addition, the Acquisition Target has relationships with several customers that we currently do not service and which will therefore allow us to expand our scope.”

“This acquisition is an example of QE2 implementing its horizontal and vertical integration strategy. We expect the Acquisition Target to share operations and key management with Pillar,” states Rob Harding, QE2’s CFO. “Alberta continues to outperform much of North America in terms of its year on year economic growth and there are multiple catalysts on the horizon to ensure that continues. Our current operating subsidiaries directly benefit from capital and maintenance spending on infrastructure and utilities. We are confident that the Acquisition Target offers similar potential, and will create immediate and accretive benefits for our business.”

About QE2 Acquisition Corp. (www.qe2corp.com):

QE2 is a forward thinking, Alberta-founded firm that acquires and grows well-managed, profitable, asset-backed, Alberta-based businesses in the infrastructure and utility service sectors. QE2’s growth strategy is a mergers and acquisitions program which leverages the synergies that can be achieved by vertical and horizontal integration. For further information, please contact Mihalis Belantis, CEO and Director, #4034, 909 – 17th Avenue SW, Calgary, Alberta, T2T 0A4, Tel: (403) 478-0055, Fax: (403) 770-8468, Email: [email protected].

Cautionary Statements

Statements in this press release may contain forward-looking information including without limitation, statements pertaining to the closing of the Transaction and obtaining necessary approvals. The words “will,” “anticipate,” believe,” “estimate,” “expect,” “intent,” “may,” “project,” “should,” and similar expressions are intended to be among the statements that identify forward-looking statements. The forward-looking statements are founded on the basis of expectations and assumptions made by the Corporation. Readers are cautioned that assumption used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Corporation. The Corporation does not have any obligation to update or revise any forward-looking statements except as expressly required by applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The securities of QE2 have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Not for distribution to U.S. Newswire Services or for dissemination in the United States of America. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.

QE2 Acquisition Corp (QE: TSX-V) Robust Growth Marks This Compelling Infrastructure Play

Posted by AGORACOM-JC at 2:11 PM on Wednesday, November 5th, 2014

“Albertans created QE2 Acquisition Corp. with the true Alberta spirit of determination and the desire to create opportunity within the local economy through innovative vision and hard work. It was an idea six years in the making, formed while living and working within the province’s rural towns and urban centers. The relationships that were forged during this period would eventually culminate to form QE2 – from influential finance professionals to research analysts, salespeople and marketers, to business owners and families. QE2 is a company forged by a group of organized, motivated and extraordinary people with a vision to do extraordinary things.”

QE2 Acquisition Corp.’s Robust Growth Marks This Compelling Infrastructure Play

QE2 Acquisition Corp. (formerly Crowsnest Acquisition Corp.. TSXV: CAW.P) recently announced that it has closed its qualifying transaction by way of Crowsnest purchasing all of the issued and outstanding common shares in the capital of QE2 Acquisition Corp., and warrants to purchase QE2 Acquisition Corp. shares. This resulted in QE2 Acquisition Corp. becoming a wholly-owned subsidiary of Crowsnest. The combined entity changed its name to QE2 Acquisition Corp and trades under the symbol (TSXV: QE). QE2 Acquisition Corp., “QE2” has exactly what investors are looking for–positive normalized cash flow, a strong, low-risk growth profile through acquisitions and good financial visibility. QE2 has these attributes and more, a company with solid margins, closely tied to one the strongest economies in North America– Alberta, Canada. Canadians have been well aware of the booming economy in Alberta for years, now Europeans and Americans are looking for investment opportunities in Alberta as well.

QE2 truly has the best of both worlds, a growing, diversified portfolio of low-risk business, driven by strong growth markets in Alberta. Clients are municipalities, major utility and construction companies that primarily depend on general economic and population growth rather than cyclical factors. Current acquisition targets have a proven track-record of bottom line growth. Investors in this dynamic company receive exposure to infrastructure-focused companies that have proved resilient across a wide spectrum of market conditions. The secret sauce, which I will get into in more detail later, is the powerful combination of enhanced access to capital for growth constrained target companies and the opportunity for synergies among portfolio companies over time.

I’ve met with and spoken to some key people and I know the company’s new CFO Robert Harding from his time as CFO of a billion dollar oil sands company. This team has a tremendous skill set and they get things done. Further, QE2 has attracted a strong base of committed investors. CEO Mike Belantis said,

“We aim to grow QE2 through accretive acquisitions, organic growth from synergies realized by vertical and horizontal integration opportunities, sales and marketing channel expansion and access to available capital. The objective is to grow QE2 to $100 million in annual revenues by 2018.” [Please see Management Bios below].

Alberta, Canada Hard to Find a Better Place to Invest

Before I launch into the exciting story unfolding for QE2, it’s vitally important to understand the economic strength of Alberta’s economy. If one wanted to start a new business anywhere in North America, Alberta would be at the top of the list. There are several websites that describe Alberta’s vibrant economy, but I believe that a June, 2014 report from RBC summarizes the situation especially well. Please consider the following four quotes from that report,

“The contrast between booming conditions in one province (Alberta) and more moderate pace of growth everywhere else in the country rarely has been as stark, with Alberta this year far outpacing all other provincial economies. We expect all provincial economies will grow in 2014. Alberta will far outpace all others…Virtually every indicator continues to point toward booming conditions in the province. We expect this boom to continue. The bright job prospects in the province represent a powerful magnet to attract workers from outside the province—from both other provinces and countries—and strong immigration in turn will remain a main conduit to growth.”

“Alberta’s economy is in a class by itself in Canada. It has grown by an average growth rate of 4.3% in the past four years or almost twice the national average during that time. Last year, it grew by an estimated 3.7%, which would be a very strong rate that we expect will be replicated in 2014. Not only would this rate place Alberta far atop the provincial growth rankings this year, but also it would make it the lone province above the 2014 national average of 2.4%—a feat without precedent in the history going back to the early 1980s.”

“At its core, brisk activity in Alberta finds much of its source in the booming energy sector with massive investment in the oil sands still ongoing and crude oil production rising rapidly. More and more, the expansion is being fuelled by gains in a broader spectrum of economic sectors. Very strong population growth—the strongest seen in 30 years in the province—for instance, pumps up demand for housing and a wide array of consumer goods and services.”

“Almost everywhere we look, we see signs of a booming economy. Merchandise exports were up 16.0% year over year in the first quarter. Sales of manufacturers, wholesalers, and retailers were up 8.4%, 5.2%, and a very strong 10.0%, respectively, on the same basis. Increases in crude oil production were in the vicinity of 8% early this year. Housing starts stood 12.0% above year-ago levels in the first four months of 2014. Non-residential building construction climbed a solid 8.5% in the first quarter from the same period in 2013. In all this, the private sector remained in hiring mode, thereby boosting total employment by 3.3% compared to a year ago. Indeed, Alberta’s economic performance continues to impress and appears to be comfortably seated in the driver’s seat to drive growth in Canada.”

In pouring over the substantial amount of data in the RBC report, one thing that also stands out is Alberta’s unemployment rate in fiscal 2015 is forecast  to be 3.9% vs. 6.6% for Canada as a whole. A 3.9% unemployment rate is one third that of western Europe!

An investment in QE2 is like an investment in Alberta on steroids. QE2 is penetrating this booming economy with targeted acquisitions of private companies at very attractive valuations. Once these acquisitions are integrated, which is typically easy because the businesses are largely run autonomously, the whole becomes worth substantially more than the sum of the parts. Private companies frequently lack access to growth capital and debt financing. As a growing public company with committed stakeholders, QE2 has ready access to both and will use a prudent mix of cash, equity and debt to continue acquiring new businesses. Each acquisition will not only make the company larger and stronger, but will also diversify revenues and profits. This roll-up strategy of attractive, but growth constrained companies into a vehicle that can comfortably utilize debt and share best practices across all portfolio companies is a proven model in many industries.

How a Portfolio of Otherwise Boring Companies Adds Up to a High-Growth Investment Vehicle

QE2’s strategy is to acquire infrastructure-focused service providers in Alberta and improve their performance through superior operations management and business plan execution. QE2 has already completed two private company acquisitions. Pillar Contracting was acquired in October, 2013 with 2013 normalized EBITDA of $0.56 million. The implied valuation of Pillar Contracting was an attractive 2.4x EV/EBITDA. Primary services of portfolio company Pillar include; street light bulb replacement and post painting, safety testing for street light integrity, traffic lights maintenance and flagging services, among other things. Pillar had a 16 year history of success and growth. Importantly, the Founder has agreed to continue to operate the business, a common theme among acquired portfolio companies. As part of QE2, Pillar has a strong customer base including major utility companies and municipalities in Alberta and Saskatchewan. Pillar offers QE2 access to both expansion into Saskatchewan (and possibly Manitoba) as well as possible expansion into the private sector with a focus on parking lots, transmission boxes, cable boxes and oversized loads. Therefore, like QE2’s other portfolio business and acquired businesses to follow, low-risk, high visibility recurring revenue streams through service and maintenance.

Candesto Enterprises was acquired in April, 2014. Highlights of this portfolio company is that it had 2013 EBITDA of $1.5 million, implying an EV/EBITDA multiple of just 1.8x. Primary services include, assembly and installation of highway signs, guardrails and miscellaneous fencing installation. Camdesto had a successful operating history of over 20 years and the Founder is willing to stay for another five years. Therefore QE2 management expects consistent margins and operating performance in the future. Candesto’s customer base includes municipalities and general contractors. Given Candesto’s experience and efficiency in guardrails and signage installation, direct competitors are likely to subcontract the company’s services to the benefit of QE2 overall. These two acquisitions are instructive, steady growth, solid margin companies on their own, but combined with other portfolio companies, ample opportunities for synergies arise. The client base of each acquired company instantly becomes customer targets for all of QE2’s portfolio companies.

Synergies Could be Significant Over Time

Another example of synergies that can be exploited is in the area of operations management and equipment/facilities maintenance and procurement. Centralizing these key functions across a much larger base provides economies of scale and opportunities to cut costs and enhance margins. Even just a 5% margin boost from an acquired company would make a big difference as the benefit to the bottom line flows through year after year. Importantly, each portfolio company will have increased access to growth capital from its QE2 parent, meaning that BOTH margins and the top line should grow faster and more sustainably than they would as private standalone companies. That’s a prime reason why QE2 can acquire companies at attractive valuations…they have so much to offer the selling companies that it’s a win-win for everyone.

Valuation 

QE2 is new to the market, but there are a number of comparable companies to consider when valuing the company. The average Enterprise Value, “EV”/EBITDA ratio of peer companies is roughly 5x-6x. By comparison QE2 estimates its 2015 EV/EBITDA ratio will be 5.2x based on its two closed acquisitions. Recall, QE2’s two portfolio companies, Pillar and Candesto were acquired at implied EV/EBITDA ratios of 2.4x and 1.8x, respectively. This is at the lower end of the range of company guidance to make acquisitions of companies at an EV/EBITDA ratio of 2x-4x.

Therefore, I think that with additional accretive acquisitions the valuation gap to peers might grow, but as QE2 establishes itself as a true peer, the valuation gap will diminish by way of the company’s stock price rising. Especially as QE2 is the only pure-play infrastructure services company focusing on Alberta. With only 28.5 million basic shares outstanding, this is a stock that could move up quickly on good news. The last equity financing was done at $0.30 per share, so the market cap then was $8.6 million.

Importantly, the valuation really gets interesting if, for example, the company’s next acquisition is done at a 2.0x-3.0x EV/EBITDA multiple and this hypothetical deal doubled revenues and normalized EBITDA. An acquisition like this, if valued at a 5x-6x multiple by the market, would essentially double the value of QE2 to shareholders. Perhaps even more than double the equity value if a prudent amount of debt were to be used to close the acquisition. As long as too much debt is not deployed, rolling up private companies into a public vehicle is a proven strategy for success in multiple industries.

The company’s stated goal is to achieve $100 million in run-rate revenues by 2018. This might sound like a lofty goal, but with each portfolio company acquisition, QE2’s ability to prudently utilize debt and cash and raise success-based equity capital will only get stronger. Further economies of scale will accrue to the company. Synergies will be spread over a larger group of owned companies. And, of course, cross-selling opportunities will increase with each and every acquisition. All of the above does not even consider the possibilities of entering Manitoba and Saskatchewan in the future. Along the way, if QE2 executes on its plans, the company itself could become a takeover target.

Conclusion

In a stock market marked by the TSX Composite and S&P500 near all-time highs, it’s getting harder to find attractively valued growth companies that are also relatively low risk. QE2 is well positioned as an investment that has rapid growth potential, solid margins, the ability to harvest synergies and diversify, the opportunity to expand outside of Alberta– underpinned by the spectacular growth of Alberta’s booming economy. Fueled by a top-notch management team, QE2 is a company that should be on investor’s radar screens in the near future.

Management Team & Directors

Mihali (Mike) Belantis, CEO and Director

Mr. Belantis has more than 15 years’ experience identifying opportunities, investing and consulting for companies in both the private and public sectors. He has played a key role in developing the vision and implementing the initial foundation for many successful startups in some cases achieving market caps in excess of $300 million. As CEO, Mr. Belantis is involved in all aspects of QE2’s acquisitions, investments and new project initiatives. He also leads the team in setting the strategy and vision for the organization and articulating the road map for growth and a sustainable competitive advantage. Mr. Belantis is involved in identifying prospective targets and market opportunities; in the case of acquisitions, conducting due diligence, determining appropriate valuation and structure, developing strategy for and conducting negotiations, driving activities to closure and coordinating with other business units.
Rob Harding, CFO

Mr. Harding is a senior financial and management consultant with over 20 years of experience in start-ups through to multinational entities in the bulk highway transportation, engineering and construction and oil and gas industries. His experience includes accounting, risk management, strategic leadership, corporate finance, corporate governance, human resources and facilities management. Mr. Harding was most recently with Athabasca Oil Corporation where he held positions of Controller, Vice-President Finance & CFO and Vice-President Corporate Services where he was part of the leadership team that delivered a multi-billion dollar joint venture with Petro China, a $1.3 billion initial public offering, grew the oil sands contingent resources to over 10 billion barrels and expanded into light oil increasing production from inception to over 5,000 barrels of oil equivalent per day. Mr. Harding lived and worked internationally for over four years within the oil and gas industry with involvement in projects ranging from field operations for approximately 20,000 barrels per day production to construction and operation of multi-billion dollar LNG facilities. He received his Certified Management Accountant in 1996, a Masters of Business Administration in 2006 and recently earned the ICD.D designation as a graduate of the Institute of Corporate Directors. Mr. Harding currently serves on the board of directors and audit committee of CMA Alberta.

Fletcher Morgan, Executive Vice President

Dr. Morgan is a strategic and management consultant with over 10 years’ experience overseeing multi-million dollar projects and programs in the United Kingdom and Europe. Dr. Morgan has both a masters and a medical degree from Cambridge University, United Kingdom. His analytical work has included the US natural gas market and the North American Oil & Gas midstream service sector. In 2012, he acted as an advisor to one of the Big Six Canadian banks on commodity-related investment opportunities including LNG transportation. As Executive Vice President, Fletcher will maintain QE2’s corporate infrastructure and lead identification of new business opportunities, conducting required due diligence on potential targets and managing the acquisition process from scoping & planning to modeling & negotiations of final closing transactions. Currently, Dr. Morgan is working on completing his Certified Financial Analyst.

Douglas Bachman, Director

Mr. Bachman brings in excess of 25 years experience of Corporate Finance and Management from a Tier One Canadian Chartered Bank. During his financial career Doug has attained numerous top performance and achievement awards across Canada. Mr. Bachman has a Business Management Degree and numerous other courses including Financial Credit and Risk Analysis, Canadian Securities Certificate, and is a graduate of the University of Alberta Corporate Executive Program.

Joe Gagliardi, Director

Joe Gagliardi is a Certified Management Accountant and the Founding Partner of a successful Alberta-based recruiting firm, Recruitment Partners. Prior to his 8 years as a professional recruiter Mr. Gagliardi worked as a senior accounting professional with both private and publicly traded organizations, earning him a wide spectrum of experience in industrial manufacturing, oil and gas service companies, food processing and agriculture, where he has held roles from Controller to CFO. Mr. Gagliardi is an active volunteer in the business community, particularly as a Director on the Board of Directors for CMA Alberta and as the Chair of the Business Advisory Council for the J.R. Shaw School of Business (NAIT). As the CFO for QE2 Acquisition Corp., Mr. Gagliardi will work as a key member of the Executive Team on all strategic and tactical matters as they relate to the corporation’s finances. His focus will be in both the target and operational areas of budget management, cost benefit analysis, forecasting needs and the securing of new funding.

Robb McNaughton, Director

Mr. McNaughton has been a partner in the Securities and Capital Markets Group at the law firm Borden Ladner Gervais LLP since July 2013.  From March 2010 to July 2013, Mr. McNaughton was a partner in the Corporate Finance Group at the law firm Gowling Lafleur Henderson LLP.  Prior thereto, Mr. McNaughton was a lawyer and partner with Fraser Milner Casgrain LLP (currently, Dentons LLP).  Mr. McNaughton worked from September 2002 to November 2003 as the Vice-President of Strategy and Corporate Operations at Assante Corporation, which was a financial services company formerly listed on the Toronto Stock Exchange that was sold to CI Financial in 2003 for approximately $850 million. Mr. McNaughton’s professional experience includes working as an operations executive at a Japanese company based in Osaka and Tokyo. Mr. McNaughton graduated from Queen’s University with a Bachelor of Arts (Honours) degree in 1991. In 2000, Mr. McNaughton received a Bachelor of Laws degree and a Master of Business Administration degree from the University of Western Ontario’s Faculty of Law and Richard Ivey School of Business.

Maria Nathanail, Lawyer & Director

Maria Nathanail has been practicing law since 2006. Her experience has helped her to develop her excellent legal, commercial and business development skills. She is currently an associate with Burstall Winger LLP in Calgary, Alberta, practicing in the areas of securities, corporate finance, mergers and acquisitions and general corporate commercial law. Prior to that, Ms. Nathanail was an associate with Torys LLP and Gowling Lafleur Henderson LLP. Ms. Nathanail obtained a Bachelor of Arts Degree in Political Science from the University of Calgary and a Juris Doctor from the University of Saskatchewan.