Good day and thank you for standing by. Welcome to the Exco Technologies Limited Acquisition Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would like to hand the conference over to your speaker today, Darren Kirk, President and CEO. Please go ahead. Thank you, Victor. Good morning, ladies and gentlemen. Welcome to Exco Technologies Conference Call. The purpose of today's call is to discuss Exco's acquisition of Halex Extrusion Dies in Europe. Joining me on the call this morning is Matthew Posno, our CFO, as well as Nick Gnatyuk, Vice President and General Manager of our Extrusion Group. I'll provide some brief opening remarks, then we will open the call for any questions. Before I begin, I would like to make some comments about forward-looking information. In today's news release, you'll find cautionary notes in that regard. While I won't repeat the contents, I want to emphasize that they apply to this discussion today. First, I must say I am extremely pleased that we have reached this agreement to acquire the extrusion die business from Halex Holdings GmbH. We have been looking to expand our existing extrusion die business into Europe for some time, and we see Halex as the perfect fit to do so. Halex Extrusion Dies was founded in 1990 and operates 4 key manufacturing locations. The plants are roughly equal sized and extremely well-positioned in the heart of Europe's manufacturing industries. 2 of the plants are in Germany, one in the north part of the country and one towards the south. The other 2 plants are located in the northern industrial region of Italy, right around Brescia. All of these regions are vital extrusion markets. As I've indicated in the past, the extrusion die business is characterized by very short lead times, around 7-10 days from order to delivery, so proximity to customers is certainly key. Halex has a very strong and established brand name with excellent quality products and a competent management team. The company recorded steady growth over the years and is now the second-largest extrusion die manufacturer in Europe. Importantly, Halex is also the leading provider of extrusion dies for complex shapes. Together with Exco's six extrusion die facilities in the Americas and Castool's global presence in extrusion tooling solutions, Exco will become one of the largest extrusion tooling providers around the world. Strategically, we see this acquisition as opportunistic to capitalize on the growing market for extrusions in Europe. The European market is similar in size to North America and is expected to see decent growth over the next few years. This growth is being driven by the automotive sector, in particular, as internal combustion engines strive to become lighter in weight, but more so by the electric vehicle revolution. EVs need to be light in weight in order to maximize the range of the battery, and aluminum extrusions are used throughout the structure of the vehicle, including in battery enclosures and various crash zones. Demand for aluminum extrusions is growing strongly across many industries as the world seeks to reduce emissions and become more sustainable. These extrusions are increasingly working their way into the solar industry, automation, high-speed rail, and energy-efficient buildings. As well, aluminum has infinite recyclability. Combined with its lightweight, high strength to weight ratio, corrosion resistance, and formability, it is an important element in many sustainable solutions. Beyond these considerations, our customer base is becoming more global, and this acquisition will enable us to better serve these customers with consistent, high quality products. The acquisition will also provide positive benefits to Castool in Europe, which you know only very recently opened their new facility in Morocco. The European market is very similar to North America, but it does have some nuances that differentiate it, including more complex extrusion shapes generally owing to the mix of industries. These include much more activity in automation, robotics, and rail. Halex design and manufacturing capabilities are very well suited to these industries. Looking at the competitive landscape, there are relatively few players of size in this space, and acquiring Halex is perhaps the last opportunity for Exco to enter the European market in very desirable locations at scale. We had considered entering Europe through greenfield investments in a low-cost country. However, it would take a long time to achieve critical mass, and penetrating Western Europe would be very difficult. Extrusion operations have their preferred die shops they deal with, and incumbents are difficult to dislodge. We believe integration risks are low. We do not plan to undertake meaningful changes to Halex near term, and key existing management will remain with Halex. Yet longer term, we expect through the sharing of best practices and leveraging of greater global scale, we will certainly see synergies. We do not expect material integration charges, although some front-end capital to modernize certain equipment and better position the business for expected growth is likely. We expect to close the acquisition in the spring of 2022. Our targeted date to close the transaction is in April, although it could slip by a month or two, depending on how long it takes to complete certain transaction-dependent actions. Halex's annual revenue total almost EUR 40 million currently, representing about CAD 55 million of incremental revenue. The Halex operations will fall under the leadership of Nick, as head of our Extrusion Group, and we will report the results of Halex within our Casting and Extrusion segment. Once included, we expect our segment pro forma EBITDA margins will see slight downward pressure, but we remain firmly confident in achieving our five-year target for a 20% segment margin. The acquisition, however, will be immediately accretive to earnings per share. With regards to valuation, the acquisition is valued at EUR 40 million on an enterprise value basis. This will consist of approximately CAD 36 million in equity and CAD 4 million for the assumption of debt and debt-like liabilities. Exco will fund the equity portion with available bank lines. Our pro forma leverage will remain very low, with net debt to EBITDA of less than half a turn. With that, it concludes my remarks. I look forward to welcoming all Halex employees to Exco once the transaction closes in the spring. I will now turn the call back to the operator to facilitate any questions. As a reminder, to ask a question, you will need to press star one on your telephone, and to withdraw your question, just press the pound key. Once again, that's star one for questions. Please stand by for questions. Our first question will come from the line of David Ocampo from Cormark Securities. You may begin. Good morning, everyone. Good morning. Good morning. Darren or Nick, I was wondering if you could provide the breakdown for the end market, specifically for Halex. I was just more curious, is there significant runway to sort of ramp up automotive and particularly EV, or is that kind of at a level that where you're seeing your current operations at today? Well, I guess in Europe, the end market diversity is a little more diverse than in North America. Building and construction is the largest end market. It's kind of about 30%-35% of the total. But you know, I guess the vehicle or transportation market in Europe is probably around 20-25%. Automotive is a big component of that, but it's growing strongly similar to the way it is in North America. I mean, I guess the beauty about this business is that the end markets are very diverse. There's diversity of customers, and it's got a tailwind of growth across all industries due to sustainability initiatives, including automotive. That's true in Europe and in North America. That's perfect. Darren, you touched a little bit about a bit of margin compression, at least in the near term. Do you see this business getting up into that 20% range, or is it gonna take, you know, some sort of capital investment or some sort of synergies to get there? Yeah, there'll certainly be synergies and capital investments that are required to get there. I mean, we don't like to talk about the individual businesses in terms of profitability just because this industry is so competitive, and I'm sure there's a number of competitors on the call today. You know, broadly speaking, within the segment, we've got a five-year target of 20% EBITDA margin. We remain very confident that we're gonna get there. Maybe just shifting over to just the general M&A landscape. I think in your 2026 target, you put out sort of a soft guidance to add CAD 250 million in revenue. How does the landscape look today for both Automotive and Casting and Extrusion? Probably most importantly, can we expect further acquisitions, or is now the focus just on the integration of Halex? Well, I guess it's one step at a time, David. This is, you know, a pretty decent-sized acquisition for us. It does achieve kind of our strategic objective of expanding the extrusion die business to further jurisdictions. Europe is certainly an attractive one with lots of tangible benefits here for the broader Casting and Extrusion segment. I don't. You know, we're not currently on the lookout for any further acquisitions of size in either segment. With that said, you know, we certainly look at everything that's available. As I mentioned on the last call, I mean, there's a lot of assets that are becoming available, but they are by and large not in our focus. They tend to be more distressed at this point of the cycle, and we're not interested in turnaround plays. Perfect. Just a housekeeping question. Does this change your CapEx spend for 2022, or how should we think about that? I mean, we're gonna spend something somewhere around, call it CAD 4 million or CAD 5 million over the next 12 months after it closes. How much of it falls into this fiscal year versus kicks into our fiscal 2023? That's a bit of a timing issue of how long it takes to get machinery equipment ordered and so on. I'm gonna say there won't be a big impact this year, but some might fall in this year and then the rest next. That's it for me. I'll hop back in queue. Thank you. Thanks, David. Once again, that's star one for questions, star one. Our next question is coming from the line of Peter Sklar from BMO Capital Markets. You may begin. Hi, good morning. Darren, you didn't give any indication of what valuation you paid for the business. Can you talk a little bit about what you paid in terms of multiple on EBITDA? Well, I guess we've put a few data points out there, Peter, that I'll leave you to back into it. You know, we've said that it's about EUR 40 million of revenue, and it's gonna have a slight compression at the front end on the segment's EBITDA margin. You know, that should be sufficient information for you to make some assumptions and figure out what we paid. Okay, great. Nick, I just have some questions I wanna ask you. Can you talk about, like, who is the due diligence team that looked at this acquisition? Did COVID constrain your ability, you know, to be boots on the ground due diligence? I'll take that, Peter, 'cause you know, we were all involved in it here. Certainly, Paul Riganelli headed up the legal aspects, and Matthew Posno headed up the financial aspects. Brian, myself, and Nick were all deeply involved for the strategic and operational aspects of the due diligence. That certainly included some time in Europe and getting to know the management team and the facilities. That pretty much covered off the due diligence. We certainly facilitated all of those efforts with some external providers of various services where we needed to. Okay. How long did this due diligence, you know, discussions with the company and due diligence process, over what period did that transpire? It was a good three months or so, Peter. Okay. Nick, can you talk about, like, how does that compare to an Exco, you know, extrusion tooling shop in terms of the capital equipment you have in there, software, processes, you know, that kind of thing? We have a lot of similarity, but we have a lot of differences. I find it a lot of very strong point what they do in Europe. I'm thinking if we will combine these two companies together, it will be very beneficial for us, for them, and it's for market in general. There are differences, and we will try to use these differences in best practices for our own benefit. Right. Okay. And Darren, like, what has this business been growing at in terms of its top line? Like, it sounds like the business is quite strong. Has this business had a good growth rate over the recent past? You know, it's been decent. You know, I'd say that our growth rate has been stronger than Halex, although Halex has still been decent. One thing to point out here is that Halex has been owned by financial sponsors pretty much for the better part of the last 10 years. You know, quite frankly, we have a different objective in terms of where we wanna position this business going forward. I think that you know, with our focus on strategic investments and growth and best practices in terms of our operating knowledge, that we think that we can improve the growth that Halex has enjoyed going forward. Okay. That kind of led into my last question, which was, you know, other than, you know, it sounds like you're buying a good business at a reasonable valuation, like how does Exco create value? It sounds like you're saying you believe you can bring things to the table and accelerate the growth rate. Is that how I should think? With any acquisition, you know, you need to improve the operating margin and the growth prospects in order to realize value. We think that we are uniquely positioned to achieve those objectives by virtue of our long and leading experience in this business in the Americas and the fact that, you know, it really has been owned by a different type of investor for the last 10 years or so. When we look at the holistic package here, we do believe that we are uniquely positioned to realize value from this acquisition. Right. Okay. That makes sense. Thank you. Thank you for your answers. Thanks, Peter. Thanks, Peter. Once again, that's star one for any questions, star one. I'm not showing any further questions in the queue at this moment. Okay. Well, with that then, I guess we can move to conclude the call. I wish everyone a safe and enjoyable holiday, and we look forward to talking to you early next year with our next quarter results. Thanks, everyone. This concludes today's conference call. Thank you for participating. You may now disconnect.