Novatti Group Ltd. · ASX:NOV
Novatti — Merger or Acquisition (May 2017)
14 slides from Novatti's merger presentation, May 8, 2017
Slide 1: basis2 Acquisition
For personal use only basis2 Acquisition
Slide 2: Disclaimer – Important Notice
Disclaimer – Important Notice This document has been prepared by the management of Novatti Group Limited (Company). For personal use only The information is based on publicly available information, internally developed data and other sources. Where any opinion is expressed in this document, it is ba
Slide 3: Acquisition Rationale
Acquisition Rationale basis2 is a profitable utility billing For personal use only business with excellent technology, “sticky” customers and key distribution partners Strongly Earnings Accretive Strongly Synergistic • Includes significant prepaid revenues, • Builds on Novatti’s Transactions then on
Slide 4: Opportunity Overview
basis2 – Opportunity Overview For personal use only Seller Prophecy International Limited Nature of • Utility billing software, primarily for water utilities operations • Operating for more than 10 years • Major clients - Philadelphia Water, City of Cairo • 95% of revenues from US • 5% of revenues f
Slide 5: Technology Overview
basis2 – Technology Overview For personal use only Drives value for customers by: • Improving operational efficiencies • Reducing the cost of serving customers Basis2 is an advanced billing and customer information system (CIS) for the worldwide Technology is: utilities industry • Built on Oracle •
Slide 6: Strong, proven, customer benefits
Strong, proven, customer benefits For personal use only Product benefits • Easy to configure and maintain by users and partners basis2 CIS • Exploits the features and capabilities of Oracle − flexible, • Relatively low implementation costs better value and lower • Stable/robust product with low ongo
Slide 7: The Market
basis2 – The Market For personal use only Solution suitable for all • High value, high margin sales utilities – Water, • Replacement market is small, infrequent Electricity, Gas, Internet • Many new utilities in emerging markets • Indicated demand via key distribution partner • Low cost to deliver &
Slide 8: Integration
basis2 − Integration “Tuck in” asset acquisition For personal use only Sales & Distribution • Growth not actively sought by current owner • Distribution crossover in key markets - Middle East and Africa • Customers under serviced • Can integrate and offerings to existing clients of both Novatti and
Slide 9: Financials
basis2 − Financials For personal use only Revenue $1.7m (USD$1.25m) EBITDA $1.1m (USD0.825m) Cashflow Year in advance payments from two largest clients – paid in April/May each year Monthly receipts circa $90k per month Expenses circa $50k per month Exchange rate 0.75 cents © Novatti 2017 | www.nova
Slide 10: Effect on Consolidated Financial Position
Effect on Consolidated 31 December Acquisition of Entitlement Issue net of Consolidated Financial Novatti Group Statement of Financial Position 2016 basis2 costs pro-forma Current Assets Position Cash and cash equivalents Trade and other Receivables 2,639,097 1,513,034 (2,141,831)¹ ² 73,136 3,055,87
Slide 11: Transaction Overview
basis2 – Transaction Overview For personal use only Transaction type: Price: Multiple: Business AU$2.75m 2.6 x EBITDA & Asset sale Reason for sale Transition & Synergy • basis2 is a solution, Integration Savings inconsistent with current • Bolt on acquisition. • Nil in year 1 owner’s go-to-market st
Slide 12: Compelling Value Acquisition
basis2 – Compelling Value Acquisition For personal use only Revenue Recurring revenue Cashflow Increased by $1.7m with Half of revenue is recurring Positive cash flow from day 1 potential for further growth Novatti EBITDA Synergy Savings US presence Assist in Company’s target of Low First major clie
Slide 13: Transaction Summary
Transaction Summary 1. 2. 3. For personal use only basis2 is an established Stable and predictable Novatti’s businesses is and profitable utility billing cash generation with targeted to be profitable business with excellent immediate cash flows – in FY2018 and basis2 technology, “sticky” ongoing ne
Slide 14: Contact
For personal use only Contact: Peter Cook Chief Executive Officer & Managing Director peter.cook@novatti.com | +61 411 111 153 Peter Pawlowitsch Chairman peter.pawlowitsch@novatti.com | +61 419 299 302 www.novatti.com