Mattr Infrastructure Technologies uses advanced material technologies and complex manufacturing expertise to deliver solutions to infrastructure markets worldwide. These markets range from aeronautics to outer space, from communications to energy, from transportation to water management. However, arriving at this point in the company’s success required the entire organization to pivot and work together on moving in a different direction.

“Prior to my arrival, the organization was primarily focused on offshore oilfield pipeline products and services,” says Mike Reeves, president and CEO. He joined the company in 2021.

“While the company had, at that time, some product lines unrelated to the offshore pipeline sector, those businesses were well hidden from both clients and our employees,” Reeves continues. “With significant volatility in the offshore oil pipeline construction sector, the magnitude of market swings was difficult for a company of our size to navigate. So, in partnership with the board of directors, our executive leadership team conducted a critical review of our business portfolio.”

This deep, honest dive into the inner workings of the company helped uncover the organization’s true core competencies, macro business drivers and long-term competitive advantages.

“The decision was made to narrow our business activities to tightly align with our core competencies, streamlining our portfolio to focus exclusively on the design and manufacture of premium products that would deliver consistent growth and profitability. We divested everything else via eight transactions,” says Reeves. “In parallel, we focused our energy and resources on the four core business lines that will drive us forward, changed our name from Shawcor to Mattr and converted our analyst community from energy services to diversified industrials. This organizational rebirth saw Mattr emerge as a materials technology provider that supports the expansion and renewal of critical infrastructure worldwide.”

The four core businesses that Mattr retained were Xerxes(R), Flexpipe(R), Shawflex and DSG-Canusa. The transformation was largely concluded with the sale of the majority of its pipe coating business to Tenaris in November of 2023. A small remaining pipe coating operation in Brazil was not included as part of the transaction; the plan is to sell this business in the near future. The company generated substantial proceeds from these strategic actions, in the range of $450M CAD.

A paradigm shift of this magnitude can often create tension across a corporation. A close, working partnership between Mattr’s executive leadership team, the wider company management and the board of directors ensured that this was not the case.

“We prioritized internal communication,” says Reeves. “We were very transparent across the company about what we were doing and why. By enrolling our employees to be an active part of the process, the team embraced and helped drive the necessary changes.”

Reeves has plenty of positive things to say about the team.

“We have very talented people that work well together as a team, including over 550 employees in Alberta, primarily split between Edmonton and Calgary. Our culture is one of teamwork, creativity, accountability and honesty. This has allowed us to move quickly and be nimble in the face of constant change in the world and markets around us.

“To be honest, this is one of the best teams that I have ever worked with, and I have been with many teams. It comes down to how well people work with and care for each other. A company culture of collaboration existed prior to my arrival, and I believe we have successfully strengthened it over the last three years.

As part of its strategy going forward, Mattr takes a firm and measured approach to capital allocation. The company paid down debt, moving from a net-debt-to-adjusted EBITDA ratio north of 5.0x in 2020 to 0.2x as of June 30, 2024. Mattr is comfortable operating with a leverage ratio up to 2.0x.

Reeves adds, “Approximately $200M of organic capex is being deployed over 2023-2024 to support the growth of our four core businesses. Capital investments include:

• A new Flexpipe facility in Rockwall, Texas that commenced production in July of 2024.
• A new Xerxes facility in Blythewood, South Carolina that commenced production in July of 2024.
• A bifurcation and relocation of its North American production footprint for its Shawflex and DSG-Canusa businesses from its Rexdale facility in the Greater Toronto Area to new facilities in Fairfield, Ohio and Vaughan, Ontario.

“These investments will leave substantial unused facility space to accommodate further production in the coming years. With our initial equipment population, we believe we can generate $150M of annual incremental revenue. Modest incremental investments can then be made to add production lines at each of these sites in 2025 and beyond. We believe that for every incremental dollar of capex invested in these sites, we can generate between $2.5 - $4 of incremental annual revenue.”

To further support its goals, Mattr initiated a Normal Course Issuer Bid (NCIB) to buy back company shares in 2022, which it maxed out at the end of 2023 with ~$70M in shares repurchased and cancelled. The company then renewed its NCIB at the end of June 2024 and remains very active on repurchases.

“Mattr is also contemplating strategic M&A – specifically to acquire a US wire and cable footprint to complement its Shawflex business,” Reeves notes. “Shawflex is the only business in our portfolio that does not have a US footprint. While Shawflex has expanded its reach into the US market over the last few years, in some cases it is precluded from US participation because of the Buy America Act. While we generally target a Net Debt to Adjusted EBITDA ratio below 2.0x, we would consider moving modestly above 2.0x for such M&A; working it down over the next 12-18 months.”

Mattr is grateful for its relationship with ATB and the financial institution’s role in helping the corporation transition and grow.

“We appreciate the analyst coverage ATB has provided,” says Reeves. “Tim Monachello has been very detail oriented and helpful with current and future potential investors. We receive first class service from ATB and continued support to help fuel our growth."

As he reflects on the changes Mattr has undergone and the transformation achieved, Reeves concludes, “Every arm of the organization has driven the successful transition of the company. Recently our teams established four new manufacturing sites for us, two of which are now online, on time and on budget, further helping to position us for our next phase of growth. We have completed our transformation. The next steps are about investing in ourselves, embarking on selective acquisitions and growing profitably while keeping our employees safe delivering quality products to our customers and value to all of our stakeholders.”

Learn more at www.mattr.com.

From the October 2024 edition of Business in Calgary, and Business in Edmonton. Shared with permission.