Investing - Brookfield Asset Management

Case Study: Armtec Infrastructure
• Investment Type
– $125 million senior secured loan
• Business Overview
– Manufacturer of pre-cast concrete, steel and plastic pipe products
– End markets: infrastructure, commercial and residential
construction
– 47 manufacturing and sales facilities across Canada
– Soft market conditions combined with operational challenges
resulted in substantial but temporary impairment to earnings
• Investment Thesis
– Replacement of bank lender group and operating discipline i are expected to return the company to historical profitability
– Seven-year warrants provide upside if company outperforms
– Leveraged Brookfield’s operational capabilities to execute
a proprietary transaction on an accelerated basis
– Senior secured loan is well protected by $300 million in tangible assets
– Opportunity to earn equity returns with limited risk
($millions)
$100
$80
$60
$40
$20
$0
$80
2009
EBITDA
$30
1
TTM
EBITDA
1
Trailing 12 months
• Target Return: 25%
153
| Brookfield Asset Management Inc.