MISTRAS Group Announces Acquisition of Onstream Pipeline Inspection
MISTRAS Group, Inc. (MG: NYSE), ("MISTRAS"), a leading "one source" global provider of technology-enabled asset protection solutions used to maximize the uptime and safety of critical energy, industrial, and public infrastructure, announced today that it had acquired 100% of the stock of Onstream Pipeline Inspection Services, Inc. ("Onstream"), a leading North American provider of proprietary technology enabling pipeline inspection and data analytics services primarily to the gathering and mid-stream market. The preliminary purchase price for Onstream, acquired from Novacap and affiliates, a Canadian private equity firm, and other shareholders, was approximately $143 million. In connection with the acquisition of Onstream, the Company upsized its existing credit facility to $400 million for a new 5-year period. The Company also updated its full year 2018 guidance of estimated consolidated revenues to $740 million, an increase of $10 million over the high end of the Company’s most recent outlook and exclusive of the impact from Onstream.

Dennis Bertolotti, Chief Executive Officer stated, "The acquisition of Onstream is an ideal opportunity to diversify our business. It will enable us to leverage our strength in the midstream market and accelerate our growth by accomplishing our strategic initiative to add a pipeline integrity pillar to our service portfolio. Onstream is recognized as a leading company in the small- to mid-bore pipeline inspection market in North America and it has been growing at better than 20% annually over the past five years, while maintaining an extremely attractive margin profile. Onstream is also a technological innovator, with a growing proportion of its revenues derived from new markets and services."

About Onstream Pipeline Inspection

Onstream is a leading provider of proprietary, technology-enabled inline inspection and data analytics services, and is a leading provider of inline inspection services in the "unpiggable" segment of the small to mid-bore North American gathering and midstream pipeline market. The recently commercialized 16 inch combination tool fleet marks the next stage in Onstream’s expansion into the large diameter midstream market of pipelines up to 20 inches. Onstream is able to produce actionable reports in approximately 20 days, compared to the 60 to 90 day industry norm. Onstream is also very proud of its culture of customer centricity and record for being able to responsively service customers whenever a pipeline inspection is necessary.

Onstream offers combination inspection tools with high-resolution sensors in both free swimming and tethered configurations to identify and record all pertinent pipeline data including hardware, girth welds, bends, metal loss defects and pipeline specific geometry features. Its bi-directional combination tether tool provides an inline inspection option for pipelines previously deemed to be "un-piggable" by traditional free swimming methods. Most importantly, Onstream consolidates all of the data it collects in its proprietary "Streamview" software, where a dedicated team of expert data analysts utilize proprietary algorithms to analyze data and quickly provide highly insightful reports to customers.

Onstream will continue to be managed by its key executives, (Chad Niehaus, President and Chief Executive Officer, and Gerry Wilkinson, co-founder and Chief Technology Officer). On behalf of Onstream, Chad Niehaus said, "The entire Onstream team is very excited to become part of MISTRAS Group, which has earned a reputation for its superior customer service, something for which we share a deep passion. As part of MISTRAS, we will have significant opportunities to utilize our extensive mutual customer relationships to accelerate our rate of growth, especially in the United States. While Onstream is not new to the pipeline inspection industry, it is fairly new to the US market. In addition, by incorporating MISTRAS’ world-class NDT (Nondestructive Testing) services and Advanced NDT technologies, we believe we will now be able to more quickly expand our existing service offering as well as develop and introduce new technologies that enhance our overall capabilities."

Onstream was founded in 2005 and is based in Alberta, Canada with an additional location in Houston, TX. Onstream generated revenues of approximately $26.7 million (representing a 4-year compound annual growth rate of over 25%) for the year ended December 31, 2017 [1]. The preliminary purchase price of approximately $143 million was paid for with borrowings from the Company’s credit facility as well as cash on hand. Based on the Company's projections for 2019, the purchase price for Onstream was approximately 9 times its expected 2019 EBITDA (earnings before interest, taxes, depreciation and amortization).

About MISTRAS Group, Inc.

MISTRAS is a leading "one source" global provider of technology-enabled asset protection solutions used to maximize the uptime and safety of critical energy, industrial, and public infrastructure. MISTRAS combines our industry-leading services, systems, and technologies to provide a unique, custom-tailored solution for each customer’s individual asset protection need.

Our asset protection portfolio includes field and laboratory inspections & testing; engineering services for asset integrity management; maintenance and light mechanical services; online asset-condition monitoring services; and manufacturing of inspection and monitoring equipment. Data from these solutions is centralized in MISTRAS’ world-class inspection data management software - PCMS™ - to provide our clients with integrated, comprehensive asset protection from a single provider.

For more information, please visit the company's website at www.mistrasgroup.com or contact Nestor S. Makarigakis, Group Director, Marketing Communications, by email at marcom@mistrasgroup.com or by telephone at +1 (609) 716-4000.