Metcash Limited · ASX:MTS
Metcash — Merger or Acquisition (August 2016)
24 slides from Metcash's merger presentation, Aug 24, 2016
Slide 1: Home Timber & Hardware Group Acquisition and Funding
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA For personal use only Home Timber & Hardware Group Acquisition and Funding 1
Slide 2: Disclaimer
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Disclaimer For personal use only This presentation contains summary information about Metcash required to be given under Chapter 6D of the Corporations Act. intended to identify forward looking statements. Indications of, Limited (ABN 3
Slide 3: Table of Contents
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA For personal use only Table of Contents • Executive summary • Home Timber & Hardware Group • Combined business and synergies • Equity raising • Appendices • Key risks • Foreign selling restrictions / offer jurisdictions • Contact detail
Slide 4: Executive summary
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Executive summary For personal use only • Metcash has entered into a binding agreement to acquire 100% of the Home Timber & Hardware Group (‘HTH’), a leading participant in the hardware market in Australia • Purchase consideration of $1
Slide 5: Executive summary
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Executive summary For personal use only • Acquisition aligns with Metcash’s strategy to be the leading independent wholesaler in each of its three Pillars • Combined hardware turnover of ~$2b, servicing a national network of ~1,800 stor
Slide 6: Home Timber & Hardware - overview
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Home Timber & Hardware - overview For personal use only Summary • Long-established independent hardware network • Services a network of ~1,200 retail stores across Australia1 ‐ 43 company-owned stores, of which Mitre 10 will acquire 41
Slide 7: Home Timber & Hardware - store network
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Home Timber & Hardware - store network For personal use only Store Locations by State1,2,3 Company-owned stores Geographic split Location type Bannered independent stores Unbannered independent stores (stores) (stores) DC Distribution c
Slide 8: Acquisition creates significant scale
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Acquisition creates significant scale For personal use only Metcash HTH Combined Key Brands Sales ($m)1 ~$1,100m ~$970m ~$2b Trade | Retail sales split1 55% | 45% 62% | 38% 59% | 41% 30 majority owned 71 majority / wholly owned4 Corpora
Slide 9: Significant opportunities for synergies
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Significant opportunities for synergies For personal use only Area Opportunity • Consolidation of distribution network Supply chain • Route efficiency and scale leverage • Review organisation structure Human resources • One head office
Slide 10: Impact of acquisition on pro forma gearing
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Impact of acquisition on pro forma gearing For personal use only Pro-forma gearing 30 April 2016 Adjustment 30 April 2016 Metcash Actual for Acquisition Pro-forma combined Net debt ($m) 275.5 85.0 360.5 Equity ($m) 1,369.1 80.0 1,449.1
Slide 11: Equity raising
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Equity raising For personal use only Institutional Placement Placement • Fully underwritten institutional placement of 40 million shares to raise $80 million Placement Price • The offer price per share under the Placement is fixed at $2
Slide 12: Equity raising timetable
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Equity raising timetable For personal use only Event Date Record Date for SPP 23 August 2016 Trading halt (before market) 24 August 2016 Book-build conducted for Placement Announcement of completion of Placement (pre-market) Trading hal
Slide 13: Appendices
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA For personal use only Appendices • Key risks • Foreign selling restrictions • Contact details 13
Slide 14: Key risks
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Key risks For personal use only This section includes details of the key risks attaching to an investment in shares in Metcash. These risks may affect the future operating and financial performance of Metcash and the value of Metcash sh
Slide 15: Key acquisition risks
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Key acquisition risks For personal use only Risk Description Reliance on information Metcash undertook a due diligence process in respect of HTH, which included the review of financial and other information provided by provided HTH. Des
Slide 16: Key acquisition risks continued
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Key acquisition risks continued For personal use only Risk Description Operational implementation risk The integration of a business of the size HTH carries risk, including potential delays or costs in implementing necessary changes, an
Slide 17: Key acquisition risks continued
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Key acquisition risks continued For personal use only Risk Description As Metcash (through its wholly-owned subsidiary, Mitre 10 Australia Pty Ltd) is acquiring the shares in Danks Holdings Pty Limited, the Group will assume the liabili
Slide 18: Metcash Group - key business risks
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Metcash Group - key business risks For personal use only Risk Description Strategic risks Consumer behaviour and preferences continue to change and are influenced by factors such as economic conditions, healthy living trends and increas
Slide 19: Key business risks continued
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Key business risks continued For personal use only Risk Description People and culture The increasing competitive landscape and the ongoing need for market participants to remain agile in order to adapt to consumer preferences, has heig
Slide 20: Key general and share related risks
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Key general and share related risks For personal use only Risk Description Risks associated with an There are general risks associated with investments in equity capital. The trading price of shares may fluctuate with movements in equit
Slide 21: Key general and share related risks continued
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Key general and share related risks continued For personal use only Risk Description Taxation The ability of Metcash to obtain the benefit of existing tax losses and claim other beneficial tax attributes will depend on future circumstan
Slide 22: Foreign selling restrictions / offer jurisdictions
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Foreign selling restrictions / offer jurisdictions For personal use only International Offer Restrictions Autorité des marchés financiers ("AMF"). The New Shares have not offer to the public in Hong Kong within six months following the
Slide 23: Foreign selling restrictions / offer jurisdictions
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Foreign selling restrictions / offer jurisdictions For personal use only Malaysia defined in section 275(2) of the SFA). In the event that you are not Services and Markets Act 2000, as amended ("FSMA")) has been an investor falling with
Slide 24: Contact details
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Contact details For personal use only For additional information contact: Investor Enquiries: Ross Moffat, Acting Head of Investor Relations Phone: +61 2 9751 8368 E-mail: ross.moffat@metcash.com Merrin Hodge, Investor Relations Manager