Boxwood and PE-backed Atlas to merge

Boxwood Merger Corp, a blank check company and Atlas Intermediate Holdings, a provider of professional testing, inspection, engineering and consulting services, have agreed to merge. The enterprise value is $709.5 million. Upon the closing of the transaction, Atlas will become an indirect subsidiary of Boxwood. Also, Boxwood plans on changing its name to Atlas Technical Consultants. Harris Williams is advising Atlas on the deal. Currently, Atlas is a portfolio company of Bernhard Capital Partners. Bernhard and the Atlas management team will retain a “significant” equity stake in Atlas Technical moving forward.

PRESS RELEASE

AUSTIN, Texas–(BUSINESS WIRE)–Boxwood Merger Corp. (Nasdaq: BWMC, BWMCU and BWMCW) (“Boxwood”), a publicly-traded special purpose acquisition company, and Atlas Intermediate Holdings LLC (“Atlas”) (combined together with Boxwood, the “Company”), a leading provider of professional testing, inspection, engineering and consulting services, announced today that they have entered into a definitive agreement whereby Atlas will become a wholly-owned indirect subsidiary of Boxwood. Atlas is currently a portfolio company of Bernhard Capital Partners (“Bernhard Capital”). The new company will be well-positioned to benefit from favorable tailwinds, including the growing need to inspect, service, repair and invest in U.S. infrastructure.

Immediately following the proposed transaction, Boxwood intends to change its name to Atlas Technical Consultants, Inc. (“Atlas Technical”) and its shares of Class A common stock are expected to continue to be listed on The Nasdaq Stock Market under the ticker symbol “ATCX.” Bernhard Capital and the Atlas management team will retain a significant equity stake in Atlas Technical at the closing of the proposed transaction.

Headquartered in Austin, Texas, Atlas provides mission-critical technical services that help its public and private sector clients test, inspect, certify, plan, design and manage a wide variety of projects across the transportation, commercial, industrial, government, education and other nonresidential markets. Atlas serves as a trusted advisor to its clients, which include government agencies, quasi-public entities, schools, hospitals, utilities and airports, as well as private sector clients across a variety of industries. Approximately 95% of Atlas’ revenues are generated from clients that have tenures longer than 10 years.

Atlas’ testing, inspection and quality assurance services require a high degree of technical expertise, as clients rely on Atlas to ensure that their structures are designed, engineered, built and maintained in accordance with building codes, regulations and the highest quality standards. Atlas’ highly technical infrastructure services are delivered through a nationwide footprint, as its approximately 2,100 highly-skilled, technical staff of scientists, engineers, inspectors and other field experts operate from over 140 offices located across 40 states.

Since its inception, Atlas has strategically expanded its footprint and capabilities through acquisitions of premier national and large regional technical service companies to create an unmatched platform. This includes, among others: the acquisitions of PaveTex Engineering, specializing in materials engineering and testing, quality control testing, and construction quality assurance; Moreland Altobelli Associates, a full-service engineering, design and program management firm; Engineering Testing Services, a provider of innovative quality control testing and inspection solutions for construction material manufacturers; and its most recent combination with ATC Group Services, a leading integrated environmental engineering consulting firm with over 40 years of experience.

Upon the closing of the proposed transaction, the Company will be led by Atlas’ highly experienced management team, including Chief Executive Officer L. Joe Boyer and Chief Financial Officer Walter Powell, who will continue to serve in their respective roles. Mr. Boyer possesses more than 30 years of experience in the technical services industry and Mr. Powell has over 25 years of financial and audit expertise in both public and private companies. Stephen Kadenacy, Chairman and Chief Executive Officer of Boxwood, will become Atlas’ Executive Chairman upon the closing of the transaction, bringing with him his unique combination of C-suite experience, industry acumen and deep knowledge of M&A and capital markets.

“Atlas is precisely the kind of company that we were looking for since our IPO,” commented Mr. Kadenacy. “It’s a high margin, low risk, pure technical services company with a national platform, serving a diverse base of clients with long-standing relationships. Atlas has a recurring and contracted revenue base derived mostly from non-discretionary testing and inspection projects required by regulatory agencies, and is strategically positioned to benefit from the growing need to service, repair and rebuild the nation’s aging infrastructure. We expect to deliver both organic and acquisitive growth while continuing the best-in-class cash flow performance that Atlas has achieved since its inception. Additionally, this is a 95% time and materials and cost-plus business with a multi-year backlog that provides exceptional visibility into its growth trajectory. We believe Atlas exhibits all of the key factors central to our strategy.”

“This transaction directly aligns with our intention to enter the public markets as we look to realize the full growth potential of our purpose-built platform,” said Mr. Boyer. “We are proud to partner with Boxwood at this unique inflection point in the evolution of our company as we capitalize on our multi-pronged growth strategy to expand our market share and become the preferred provider of professional and technical services in our industry. We look forward to further extending the reach of our platform by cross-selling our diverse set of services to existing customers while attracting new customers through our enhanced platform of capabilities.”

Transaction Summary
The transaction reflects an implied enterprise value at closing of $709.5 million for the Company, based on current assumptions, excluding the net present value of an anticipated tax benefit of $55 million. Upon the closing of the proposed transaction, Boxwood will be reorganized in an “Up-C” structure. The cash component of the purchase price to be paid to the existing Atlas equity holders is expected to be funded by Boxwood’s cash in trust and debt financing, for which a commitment has been obtained. The balance of the consideration payable to the existing Atlas equity holders will consist of rollover equity in the Company and a subsidiary thereof to facilitate the company’s “Up-C” structure. Bernhard Capital and the Atlas management team will remain investors by rolling over significant equity into the Company and such subsidiary.

The boards of directors of both Boxwood and Atlas have approved the proposed transaction. Completion of the proposed transaction is subject to Boxwood stockholder approval and other customary closing conditions. The parties expect that the proposed transaction will be completed in the fourth quarter of 2019.

Advisors
Greenhill & Co. and Macquarie Capital are acting as financial advisors to Boxwood and BofA Merrill Lynch, Morgan Stanley, Macquarie Capital and Helena Capital Advisors are acting as capital markets advisors to Boxwood. Boxwood has secured committed debt financing for the transaction from Macquarie Capital and Natixis. Winston & Strawn LLP and Atrium LLP are serving as legal advisors to Boxwood and Kirkland & Ellis LLP is acting as legal advisor to Atlas.

Investor Conference Call Information
Boxwood and Atlas will host a joint investor conference call to discuss the proposed transaction on August 13, 2019 at 10 AM ET.

Interested parties may listen to the call via telephone by dialing 1-877-407-9716 (Domestic) or 1-201-493-6779 (International). A telephone replay will be available shortly after the call and can be accessed by dialing 1-844-512-2921 (Domestic) or 1-412-317-6671 and entering pass code: 13693526.

The conference call webcast and a related investor presentation with more detailed information regarding the proposed transaction will be available in the Investor Information section of the Boxwood website at www.boxwoodmc.com. The investor presentation has been furnished by Boxwood with the SEC under cover of a Current Report on Form 8-K, which can be viewed at the SEC’s website at www.sec.gov.

About Boxwood Merger Corp.
Boxwood Merger Corp. is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Boxwood’s business strategy is to target, identify and complete an initial business combination with a company that provides technical and industrial services across a broad range of industries to leverage the experience of Boxwood’s management team. Boxwood raised $200 million in its initial public offering and began trading on Nasdaq in November 2018. Its shares of Class A common stock, units and warrants trade under the ticker symbols “BWMC,” “BMWCU” and “BWMCW,” respectively.

About Atlas
Headquartered in Austin, Texas, Atlas is a leading provider of professional testing, inspection engineering and consulting services, offering solutions to public and private sector clients in the transportation, commercial, water, government, education and industrial markets. With offices located throughout the United States, the Company provides a broad range of mission-critical technical services, helping clients test, inspect, certify, plan, design, and manage a wide variety of projects across diverse end markets. For more information, go to https://www.oneatlas.com/.

About Bernhard Capital Partners
Bernhard Capital Partners is a services-focused private equity management firm established in 2013 by Jim Bernhard, Jeff Jenkins and a team of experienced private equity professionals. Bernhard Capital seeks to create sustainable value by leveraging its founding partners’ experience in acquiring, operating and growing services businesses. From strategic industry insight to operational efficiencies and best-practice management, Bernhard Capital looks to provide resources far beyond its investments. Bernhard Capital portfolio companies include Atlas Technical Consultants, Bernhard, Brown and Root, Charah Solutions, Epic Piping, The Lemoine Company and United Utility.