Inotiv, Inc. · NASDAQ:NOTV
Inotiv — Merger or Acquisition (September 2021)
38 slides from Inotiv's merger presentation, Sep 21, 2021
Slide 1: Transaction Announcement September 2021
Transaction Announcement September 2021 Creating a Leader in Discovery and Preclinical Services and Products
Slide 2: Disclaimer
Disclaim e r 2 This presentation includes forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties that could cause actual results to differ materially from those projected including, without limitation, slide
Slide 3: Today's Presenters
Today’s Presenters Robert Leasure, Jr. Chief Executive Officer, President and Director 3 Beth Taylor Chief Financial Officer Adrian Hardy Chief Executive Officer John Sagartz Chief Strategy Officer
Slide 4: Inotiv & Envigo
Inotiv & Envigo Creating a leader in discovery and preclinical services and products Leading Provider of Full - service Preclinical CRO Services Leading Commercial Supplier of Global Research Models $286m F9M 6/30/21 Revenue (1) $35m F9M 6/30/21 Adj. EBITDA (1) c. 1 ,8 0 0 Headcount c.25 Locations a
Slide 5: Key Transaction Highlights
Key Transaction Highlights 5 Consideration • Purchase price of $545m (debt - free and cash - free) subject to customary adjustments (1) • Inotiv to issue 9,365,173 of common stock to Envigo shareholders (equating to $345m) in addition to $200m of cash Ownership • Inotiv shareholders will own c.64% o
Slide 6: Sources and Uses
Sources and Uses 1) Calculated based on share price at market close on Monday, September 20, 2021 of $36.81. 6 Inotiv’s Acquisition of Envigo will be Financed with a Combination of Debt and Inotiv Equity Sources of Funds ($ in millions) Sources A m o u n t Committed Debt Facilites $275 Issuance of N
Slide 7: Transaction Benefits
7 Transaction Benefits Scale Enhancement • Pro forma F9M Revenue of $286m and Adj. EBITDA of $35m (1) • Broad, combined customer base with c.3,000 customers across biotech, pharma, and academia • Expands geographic footprint and opens EU market for Inotiv’s services Full Spectrum Provider • Acquisit
Slide 8: II. Inotiv Overview
II. Inotiv Overview
Slide 9: Inotiv at a Glance
9 Inotiv at a Glance Company Overview By the Numbers • Inotiv, Inc., is a growing contract research organization (CRO) focused on delivering superior client service to the world’s leading drug discovery and development companies and medical device research organizations • The Company provides a comp
Slide 10: Inotiv at a Glance (Cont.)
• In Vivo sampling systems and accessories • Liquid chromatography and electrochemistry instruments platforms • Physiology monitoring tools 10 Inotiv at a Glance (Cont.) Services and Products Diverse Client Base Research Products (5% of TTM Revenue as of 6/30/21) • Analytical Method Development and
Slide 11: Consistent Growth and Acquisition Track Record
July & August 2021 DMPK Labs • Cardiovascular and renal pharmacology In Vivo capabilities • Early target validation $24 $26 $44 $61 $75 2 0 17A 2 0 18A 2 0 19A 2 0 20A LTM June 2021A Consistent Growth Achieved Under Current Leadership Inotiv has a Proven Track Record Integrating Opportunistic, Accre
Slide 12: Services and Capabilities Developed Internally
May 2019 Enhanced capabilities in developmental toxicology, specifically focused on learning and memory behaviors Startup Building Blocks Services and Capabilities Developed Internally Newly Established In - house Capabilities Reduce Outsourcing Expenses, Enhance Growth Prospects, Shorten Lead Times
Slide 13: III. Envigo Overview
III. Envigo Overview
Slide 14: Envigo at a Glance
Envigo at a Glance Company Overview By the Numbers • Envigo RMS Holding Corp is a leading provider of high - quality research models and services to the biopharmaceutical, contract research, academic and government markets • A leading dedicated research models platform offering a diverse range of mo
Slide 15: Envigo at a Glance (Cont.)
Envigo at a Glance (Cont.) Best - in - Class Research Models Large Research Models Small Research Models 26% of F9M 6/30/21 Revenue Industry leading provider of the broadest range of research models Research Models 47% of F9M 6/30/21A Revenue High - quality support services offered worldwide Service
Slide 16: Envigo Financial Snapshot
Envigo Financial Snapshot Revenue $246 $115 $141 20 2 0A F6M 6/30/20 F6M 6/30/21 ($ in millions) ($ in millions) Grow t h c.22% 16 $24 $17 Growth c.179% $6 20 2 0A F6M 6/30/20 F6M 6/30/21 10% 5% 12% Adj. EBITDA Margin 1) 2020 revenue and Adj. EBITDA reflect twelve - year period results ending Decemb
Slide 17: Transformational Transactions in Past Years
Transformational Transactions in Past 3 Years Envigo was formed and has grown to focus on research models and service (“RMS”) excellence in core markets • Converted relationship to a breeding & boarding long term agreement for warehousing and distribution outsourcing in North America with 2 - year e
Slide 18: Strong RMS Footprint Operating Globally
Strong RMS Footprint Operating Globally Envigo has Strategically Positioned Itself as a Leader in Research Models Services in Key Research Locations • Domestic and international presence extends to 8 U.S. states, the United Kingdom, the Netherlands, Italy, France and Israel • Corporate headquarters
Slide 19: High Retention Rate with Client Base
High Retention Rate with Client Base That Demand High Quality Research Models Envigo Supplies Customers with Genetically Consistent Research Models Time after Time, creating Incredibly Strong Customer Relationships and Driving High Retention Rates • Over 2,500 total customers with ~330 new customers
Slide 20: IV. Merger Highlights
IV. Merger Highlights
Slide 21: Merger Highlights
Merger Highlights Combination Creates Full - Spectrum Preclinical Solutions Provider 1 Attractive Diversification with Significant Cross - selling Opportunity 2 Exposure to Large and Growing End Markets 3 Strong Customer Value Proposition Underpinned by a Scaled, Broad Service Offering 4 Broad Custo
Slide 22: Combination Creates Full-Spectrum Preclinical Solutions Provider
In Vivo Services Research Models Toxicology DMPK Consulting Combination Creates Full - Spectrum Preclinical Solutions Provider 1. • Inotiv and Envigo are both leaders in their respective core markets and the combination enhances its customer value proposition o Inotiv is a leading provider of precli
Slide 23: Attractive Diversification with Significant Cross-selling Opportunity
Note: Figures shown may not sum to 100% due to rounding. 1) Inotiv TTM revenue based on TTM 6/30/2021 Awards % and applied to TTM 6/30/21 Revenue. TTM Revenue By Type • Creates a scaled, pre - clinical focused leader Attractive Diversification with Significant Cross - selling Opportunity 2. Combined
Slide 24: Exposure to Large and Growing End Markets
35 30 25 20 15 10 5 0 Drug Discovery Preclinical Exposure to Large and Growing End Markets 3. Large and Growing End Markets… x The nonclinical market is expected to grow at a CAGR of 6.3% to reach ~$24 billion by 2026 (1) x There are currently about 9,600+ molecules in the preclinical phase globally
Slide 25: Strong Customer Value Proposition
Strong Customer Value Prop Created Through Uniquely Differentiated, Scaled and Broad Service Offering 4. Deep expertise and high - science capabilities across the discovery and preclinical continuum 1 Global service delivery across key geographies in North America and Europe 2 Enhanced ability to se
Slide 26: Broad Customer Base Across Large Pharma, Biotech, and CROs
Broad Customer Base Across Large Pharma, Biotech, and CROs with Significant Opportunity 5. c . 3,000 Total Customers c .$ 12.9m Average Revenue of Top 10 Customers c.10 Years Average Relationship Tenure of Top 5 Customers Total Revenue by Customer (1) Top 10 36% All Other Customers 64% TTM Revenue B
Slide 27: Solid Momentum Bolstered by Accretive Add-on Acquisitions
$115 $141 $45 $60 27 Solid Momentum Bolstered by Accretive Add - on Acquisitions 6. Grow t h c.33% Grow t h c.22% Revenue (FYE 9/30; $ in millions) 1) Pro forma for HistoTox and Boulder acquisitions. 2) “L9M” represents unaudited revenue for the nine - month period ended June 30, 2021 and June 30, 2
Slide 28: Experienced Management Team with Proven Track Record
Experienced Management Team with Proven Track Record 7. Beth Taylor – Chief Financial Officer ▪ 30+ years of experience in corporate and operational finance and accounting ▪ Prior companies: Endocyte, Inc., Author Solutions, Inc., Harlan Laboratories (joined 2007), Inc., Republic Airways Holdings an
Slide 29: Significant Opportunity to Create Shareholder Value
Significant Opportunity to Create Shareholder Value 8. Creates Leading Global Provider of Full - Spectrum Preclinical Services and Research Model Solutions P Cross - selling opportunity across existing customer base P Widens geographic reach by opening EU market to Inotiv’s preclinical services P St
Slide 30: Financial Overview
Financial Overview
Slide 31: Combined Financial Highlights
31 Combined Financial Highlights – L9M 6/30/21 Revenue $74m (1) Revenue $212m PF Adj. EBITDA $9m (1) Adj. EBITDA $28m Margin 12% Margin 13% Revenue $286m PF Adj. EBITDA (2) $35m Note: Financials represents unaudited pro forma revenue and Adjusted EBITDA for the nine - month period ending June 30, 20
Slide 32: Historical Financial Highlights
32 Historical Financial Highlights $115 $141 $45 $60 L9M 6/30/20 L9M 6/30/21 (FYE 9/30; $ in millions) (FYE 12/31; $ in millions) Grow t h c.22% (FYE 9/30; $ in millions) Revenue Adj. EBITDA (FYE 12/31; $ in millions) $6 $17 $3 $5 L9M 6/30/20 L9M 6/30/21 Grow t h c.179% L6M 6/30/20 L6M 6/30/21 L6M 6
Slide 33: Long Term Targets
33 Long Term Targets High - Single Digit to Low - double Digits Combined Organic Revenue Growth Low - to Mid - Double Digits Preclinical Revenue Growth Mid - to High - Single Digits Research Models Revenue Growth 18% - 22% EBITDA Margin 2x - 3x Long Term Net Leverage Multiple
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Slide 35: Inotiv Non-GAAP EBITDA Reconciliation
35 Inotiv Non - GAAP EBITDA Reconciliation 1) 2) 3) 4) For the three and nine months ended June 30, 2021, charges for legal services, accounting services, travel, and other related ac tivities in connection with the acquisitions of HistoTox Labs and Bolder BioPATH. For the nine months ended June 30,
Slide 36: Envigo Non-GAAP EBITDA Reconciliation
36 Envigo Non - GAAP EBITDA Reconciliation 1) 2) 3) For fiscal year 12/31/2020 and the six months ended June 30, 2021, relates to charges incurred to integrate the businesses acquired in FY19. Represents non - cash write - off of property, plant and equipment, goodwill and intangible assets. Due to
Slide 37: Inotiv Pro Forma EBITDA Reconciliation
Inotiv Pro Forma EBITDA Reconciliation Nine Months Ended June 30, 2021 GAAP Net Income (Loss) ( $641) Interest Expense 1,532 Income Taxes (Benefit) Expense ( 128) Depreciation and Amortization 7,138 EBITDA $7,901 Stock Option Expense 1,040 United Kingdom Lease Liability Reversal Benefit ( 179) Gain
Slide 38: Combined Inotiv + Envigo Pro Forma EBITDA Reconciliation
Combined Inotiv + Envigo Pro Forma EBITDA Reconciliation 38 Nine Months Ended June 30, 2021 Total PF Non - GAAP GAAP Net Income (Loss) ( $7,820) Interest Expense 13,601 Income taxes (benefit) expense 14,569 Depreciation and amortization 24,585 EBITDA $44,936 Stock Compensation Expense 1,470 Acquisit