Verra Mobility Corporation · NASDAQ:VRRM
Verra Mobility — Gores Holdings II — SPAC Merger (June 2018)
42 slides from Verra Mobility's SPAC merger presentation, Jun 21, 2018
Slide 1: Disclaimer
DISCLAIMER Confidentiality The information in this presentation is highly confidential. The distribution of this presentation by an authorized recipient to any other person is unauthorized. Any photocopying, disclosure, reproduction or alteration of the contents of this presentation and any forwardi
Slide 2: Presenters and Senior Leadership
PRESENTERS AND SENIOR LEADERSHIP owned companies to drive growth BillingTree and Managing Lynch 3 VERRA MOBILITY Note: Gores Holdings II is a separate entity from The Gores Group. The Gores Group makes no representations regarding the information contained herein, nor should this information be cons
Slide 3: Overview of Gores Holdings II and Platinum Equity
OVERVIEW OF GORES HOLDINGS II AND PLATINUM EQUITY • Success to date on debut SPAC, Gores Holdings, and its acquisition of Hostess Brands (NASDAQ: TWNK) • Founded in 1995, headquartered in Beverly Hills with principal offices in New York, Greenwich, Boston, London and Singapore • $13bn in AUM; closed
Slide 4: Verra Mobility Is a Unique Investment Opportunity
VERRA MOBILITY IS A UNIQUE INVESTMENT OPPORTUNITY WITH A STRONG POSITION, ATTRACTIVE FINANCIAL PROFILE AND CLEAR PATH FOR GROWTH #1 in Tech-Enabled Smart Transportation Solutions for Tolling & Fleet and Safety Automations Competitive Advantage Driven by a Compelling, Multifaceted and Durable Value P
Slide 5: Agenda
AGENDA I. Business Overview II. Growth Overview III. Projections IV. Transaction Summary 6 VERRA MOBILITY
Slide 6: I. Business Overview
I. Business Overview VERRA MOBILITY
Slide 7: ATS Has Rebranded to Better Align to Its Vision
B U S I N E S S O V E R V I E W ATS HAS REBRANDED TO BETTER ALIGN TO ITS VISION… (1) …TO BE THE GLOBAL LEADER IN SMART MOBILITY SOLUTIONS (1) Verra Mobility was formed through the combination of ATS, HTA and EPC, a European business. The financial information disclosed in this presentation is done o
Slide 8: Leading Provider of Tech-Enabled Smart Transportation Solutions
B U S I N E S S O V E R V I E W LEADING PROVIDER OF TECH-ENABLED SMART TRANSPORTATION SOLUTIONS THAT OFFER SAFETY, CONVENIENCE AND VALUE TO ITS CUSTOMERS Pro Forma Adj. Revenue (1) ($ in millions) $373 $347 $333 $297 $17 2015 2016 Services 2017 Product 2018E Pro Forma Adj. EBITDA and Margin (%)(2) (
Slide 9: Diverse Product Portfolio with Highly Recurring Service Revenue
B U S I N E S S O V E R V I E W DIVERSE PRODUCT PORTFOLIO WITH HIGHLY RECURRING SERVICE REVENUE • Primary products include • Austin • 48% market share 10 VERRA MOBILITY Tolling & Fleet 60% of Services Revenue Toll Management Violations Title and Registration Red Light, Speed and Bus • Enables fleet
Slide 10: Extensive Geographic Reach
B U S I N E S S O V E R V I E W EXTENSIVE GEOGRAPHIC REACH EUROPE WITH THE ACQUISITION IN THE U.S. AND NOW ACROSS OF EURO PARKING COLLECTION “EPC” 11 VERRA MOBILITY Represents coverage of customers European Violations Collection Speed • Representing more than 450 issuing organizations in 15 European
Slide 11: Differentiated Liability Management Tool for RAC and FMCs
B U S I N E S S O V E R V I E W DIFFERENTIATED LIABILITY MANAGEMENT TOOL FOR RAC AND FMC’S Toll Management Violations Title and Registration RAC FMC RAC & FMC RAC & FMC renewal rental car stickers, state transfers, registration plan for trucks and maximizing company’s ability to delinquencies violat
Slide 12: Verra Mobility Empowers Municipalities, School Districts and Law Enforcement
B U S I N E S S O V E R V I E W VERRA MOBILITY EMPOWERS MUNICIPALITIES, SCHOOL DISTRICTS AND LAW ENFORCEMENT AGENCIES TO ENHANCE PUBLIC SAFETY Large Cities / School Districts Large Cities School Districts Large Cities Technology Model 13 VERRA MOBILITY Economic Integrated • Captures images / video o
Slide 13: Strengthened Competitive Position and Financial Profile
B U S I N E S S O V E R V I E W VERRA MOBILITY HAS STRENGTHENED ITS COMPETITIVE POSITION, FINANCIAL PROFILE AND IS POISED FOR SIGNIFICANT GROWTH 1 2 3 4 Expansion 5 6 Capabilities 14 VERRA MOBILITY Developed New Technological In 2018, new solutions launched will include: consumer tolling (aka “Peasy
Slide 14: Investment Highlights
B U S I N E S S O V E R V I E W INVESTMENT HIGHLIGHTS 1 Market leader with highly differentiated and proprietary platforms 2 Sustainable competitive advantage in the marketplace 3 Contracted recurring revenue business model 4 Strong revenue growth and robust margins 5 Experienced management team wit
Slide 15: Market Leader with Highly Differentiated and Proprietary Platforms
B U S I N E S S O V E R V I E W MARKET LEADER WITH HIGHLY DIFFERENTIATED AND 1 PROPRIETARY PLATFORMS #1 RAC & FMC Toll Transaction Processing #1 Red Light Safety #1 Speed Safety #1 School Bus Safety 16 VERRA MOBILITY Automating Smarter Transportation Automating Safer Transportation …supported by the
Slide 16: Sustainable Competitive Advantage in the Marketplace
B U S I N E S S O V E R V I E W SUSTAINABLE COMPETITIVE ADVANTAGE IN THE 2 MARKETPLACE Superior scale • Manages more than 8.5mm vehicles for the largest rental car and fleet management companies Processes more than ~165 million toll transactions annually Renters / Violators Tolling Authorities • • H
Slide 17: Contracted Recurring Revenue Business Model
B U S I N E S S O V E R V I E W CONTRACTED RECURRING REVENUE BUSINESS MODEL 3 • • • • • Large installed base provides recurring revenue Multiple year contracts with core customers High retention rate of 97% of cameras for Safety Automations Approximately 80% of revenue is contracted through 2020 and
Slide 18: Strong Revenue Growth and Robust Margins
B U S I N E S S O V E R V I E W STRONG REVENUE GROWTH AND ROBUST MARGINS 4 Strong Pro Forma Adj. Revenue Growth ($ in millions) • The Company has grown services revenue at near double digits the past few years $347 $333 • Expectation is for continued high single digit growth $17 $3 $297 $10 • With a
Slide 19: Experienced Management Team with a Track Record of Success
B U S I N E S S O V E R V I E W EXPERIENCED MANAGEMENT TEAM WITH A TRACK RECORD 5 OF SUCCESS 20 VERRA MOBILITY Liz Caracciolo, EVP, Government Solutions • Client-facing and business development experience with a history of increasing the lifetime value of client relationships • Joined Verra Mobility
Slide 20: II. Growth Overview
II. Growth Overview VERRA MOBILITY
Slide 21: Multiple Levers for Sustained Growth
G R O W T H O V E R V I E W VERRA MOBILITY HAS MULTIPLE LEVERS FOR SUSTAINED GROWTH • An increasing number of toll roads and migration to cashless tolling driving the need for smart technology • Increased focus on traffic safety for drivers, pedestrians, bicyclists and law enforcement • Leveraging e
Slide 22: Industry Tailwinds – Tolling Segment
G R O W T H O V E R V I E W BENEFIT FROM STRONG INDUSTRY TAILWINDS – 1 TOLLING SEGMENT Number of trips per year on tolled roads ($ in billions) • In 2010, 29% of all toll revenues were collected in cash. However, in 2015, $13.8 • 2020-2025: Most remaining states start looking at interstate tolling f
Slide 23: Industry Tailwinds – Safety Segment
G R O W T H O V E R V I E W BENEFIT FROM STRONG INDUSTRY TAILWINDS – 1 SAFETY SEGMENT Cameras for red light, speed and school •Vehicle miles traveled, distracted driving & speed limits are increasing nationally •Vision Zero adoption across most major U.S. cities is driving capital investment to make
Slide 24: Leverage Platform into New End-Markets
G R O W T H O V E R V I E W LEVERAGE PLATFORM INTO NEW END-MARKETS 2 Ride-Sharing • Opportunities include ride-sharing company-owned cars / fleets Verra Mobility would also be: • Insulated from market swings between ride-sharing and RACs • Providing the same valuable service to both car sharing and
Slide 25: Expand Platform with New Products
G R O W T H O V E R V I E W EXPAND PLATFORM WITH NEW PRODUCTS 3 Peasy Verra Mobility Street Safe • Allows consumers to benefit from tolling coverage across most of the nation’s toll roads • A handheld speeding camera that enables officers to cite speeders directly from a handheld device Increases bo
Slide 26: Expand Globally
G R O W T H O V E R V I E W EXPAND GLOBALLY 4 Footprint • Founded in 1988 with operations in London and Budapest • 450 customers and only 38 employees • Servicing customers in their contact center in 18 languages and 13 currencies • Connected to 30 Vehicle Licensing Authorities (VLAs) and issuing to
Slide 27: Pursue Accretive Acquisitions Across Existing and New Markets
G R O W T H O V E R V I E W PURSUE ACCRETIVE ACQUISITIONS ACROSS EXISTING AND 5 NEW MARKETS 28 VERRA MOBILITY Targeted Segments for M&A Growth Potential Synergies End-market Customer Technology Cash Flow Management has identified 34 potential acquisition opportunities • Verra Mobility has recently e
Slide 28: III. Projections
III. Projections VERRA MOBILITY
Slide 29: Consistent High-Margin Revenue Growth with Significant FCF Generation
P R O J E C T I O N S VERRA MOBILITY HAS DEMONSTRATED CONSISTENT HIGH-MARGIN REVENUE GROWTH WITH SIGNIFICANT FCF GENERATION ($ in millions) % Services Growth Transaction processing-based business model with high recurring revenue of 97% and 97% cameras retained upon renewal 10% 9% 8% 10% $412 10% $4
Slide 30: Well Positioned for Organic Growth in Existing and New Categories
P R O J E C T I O N S VERRA MOBILITY IS WELL POSITIONED FOR ORGANIC GROWTH IN EXISTING AND NEW INTERNATIONALLY CATEGORIES BOTH DOMESTICALLY AND Increased congestion pricing on HOV and other roadways (Consumer Tolling) Opportunities Growth 31 VERRA MOBILITY Verra Mobility Projected Organic Growth 201
Slide 31: IV. Transaction Summary
IV. Transaction Summary VERRA MOBILITY
Slide 32: Transaction Terms
T R A N S A C T I O N S U M M A R Y TRANSACTION TERMS Pro Forma enterprise value of $2,404 million (11.0x 2018E Adj EBITDA) Pro Forma 2018E net debt / 2018E Adj EBITDA of 3.9x(1) Existing Verra Mobility shareholders to be paid $642 million cash consideration(3) and issued 65.2 million roll-over shar
Slide 33: Best-in-Class Growth, Margin and Free Cash Flow Characteristics
T R A N S A C T I O N S U M M A R Y VERRA MOBILITY HAS BEST-IN-CLASS GROWTH, MARGIN AND FREE CASH FLOW CHARACTERISTICS Revenue CAGR EBITDA CAGR EBITDA Average = 9.5% Revenue Average = 7.3% Revenue EBITDA EBITDA Average = 9.6% Revenue Average = 7.0% Average = 35.7% Average = 32.6% Average = 40.2% Ave
Slide 34: Unique and Attractive Investment Opportunity at a Compelling Valuation
T R A N S A C T I O N S U M M A R Y VERRA MOBILITY REPRESENTS A UNIQUE AND ATTRACTIVE INVESTMENT OPPORTUNITY AT A COMPELLING VALUATION Average = 14.0x Average = 16.6x Average = 15.3x Average = 15.2x Average = 18.2x Average = 20.6x Average = 17.4x Average = 15.9x Recurring Revenue Transaction Process
Slide 35: Transaction Summary: TEV Multiples
TRANSACTION SUMMARY VERRA MOBILITY REPRESENTS A UNIQUE AND ATTRACTIVE INVESTMENT OPPORTUNITY AT A COMPELLING VALUATION TEV / 2018E EBITDA TEV / 2019E EBITDA . é $4 & ~ = § » § §$ 4 ge & ALT TULL Hn SS. Ot See? ae Some GB ewes fsa, TSE Cis - Gre ee? meer fe ge SYS cis TEV / 2018E Free Cash Flow” TEV
Slide 36: Adj. Revenue Reconciliation
A P P E N D I X ADJ. REVENUE RECONCILIATION A• Amortization of contract incentive payment. Amount stepped down in 2017 due to purchase accounting adjustments following Platinum’s purchase. This is a non-recurring adjustment and is not expected going forward B• Pre-acquisition results for Sunshine in
Slide 37: Adj. EBITDA Pre-EPC Reconciliation – Verra Mobility, Pre-HTA
A P P E N D I X ADJ. EBITDA PRE-EPC RECONCILIATION – Verra Mobility, PRE-HTA AND A• Adjustment to add back deal fees incurred in relation to Platinum’s acquisition of Verra Mobility in May 2017, as well as the acquisition of HTA. Includes legal, HSR filing and M&A fees B• Sponsor management fees pai
Slide 38: Adj. EBITDA Reconciliation – HTA
A P P E N D I X ADJ. EBITDA RECONCILIATION – HTA A• Seller expenses related to legal, M&A, travel, entertainment and non-business activities B• Add-back for the cash-to-GAAP adjustment for a $6 million incentive payment to a RAC in 4Q 2017. Should be capitalized, but flows through to the P&L in the
Slide 39: Adj. EBITDA Reconciliation – EPC
A P P E N D I X ADJ. EBITDA RECONCILIATION – EPC A• Non-recurring discretionary employee and transaction bonuses related to a change in control event B• Legal fees associated with the appointment of additional directors to the Company's board. This expense is non-recurring in nature C• EBITDA fees p
Slide 40: Combination of Verra Mobility & HTA Expected Synergies
A P P E N D I X COMBINATION OF Verra Mobility & HTA IS EXPECTED TO DELIVER SYNERGIES OF $8M – $12M EBITDA IN 2018 ($18mm – $21mm RUN-RATE) based on combined entity spend contracted staff, purchased goods & services licenses, software, & hardware cost The 2018E plan also includes an additional $10m o
Slide 41: VERRA MOBILITY v A '7.., VElmA MOBILITY
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