Covista Inc. · NYSE:CVSA
Covista — Adtalem Global Education — Merger or Acquisition (February 2021)
26 slides from Covista's merger presentation, Feb 2, 2021
Slide 1: Acquisition of Walden University Supplemental Materials
Acquisition of Walden University Supplemental Materials February 2, 2021
Slide 2: Safe Harbor
Safe Harbor Certain statements contained in this presentation concerning Adtalem Global Education’s future performance, including those statements concerning expectations or plans, constitute “forward-looking statements” within the meaning of the Safe Harbor Provision of the Private Securities Litig
Slide 3: Transaction Rationale
Transaction Rationale • Walden University is the flagship online university of Laureate Education offering more than 80 programs and is the #1 conferrer of Master of Science in Nursing (“MSN”) degrees, Master of Science in Healthcare Administration (“MHA”) degrees and doctoral degrees in public heal
Slide 4: Walden Transaction at a Glance
Walden Transaction at a Glance Financial Strategic Transaction Attributes $591M 88% $456M TTM Jun20 TTM Jun20 EBITDA attributable to Pro Forma TTM Jun20 EBITDA, Revenue1 Healthcare-focused colleges1 including $60M expected synergy2 29% #1 5.3x TTM Jun20 Adjusted Enrollment ranking in Undergrad Purch
Slide 5: Walden Overview: Enrollment Mix
Walden Overview 100% Online; 50k+ Enrollment 77% of Enrollment in Healthcare- focused colleges The Richard W. Riley College of Education & College of Health Sciences College of Social and Behavioral Sciences College of Management and Technology Leadership • College of Nursing Schools: (i) Psychology
Slide 6: Walden: Healthcare-Focused College Mix & Growth Rates
Walden: Healthcare-Focused College Mix & Growth Rates • Healthcare-focused colleges contribute 77% of revenue and 88% of adjusted EBITDA and have realized modest growth in recent years • Steady historical growth in healthcare-focused colleges has recently accelerated. Calendar 2020 third quarter new
Slide 7: Labor Shortage in US Healthcare Expected to Grow
Labor Shortage in US Healthcare Expected to Grow • Demand for healthcare practice and healthcare support professionals currently exceeds supply by 44% and 9%, respectively • Shifting US demographics expected to increase healthcare professional supply/demand imbalance o Increasing older population cr
Slide 8: High Growth Expected in US Nursing Education Market
High Growth Expected in US Nursing Education Market • US nursing education market currently $28B and expected to grow at a 21% CAGR to $60B by 2024 • Combined business is expected to be #1 in US nursing enrollment, but still less than 10% of total market share which provides continued opportunity to
Slide 9: US Behavioral Health Trends: Growing Demand & Supply Shortages
US Behavioral Health Trends: Growing Demand & Supply Shortages • Rapidly growing demand for behavioral health services driven by greater access, increased awareness and impacts of COVID-19 o US behavioral health spending has increased 63% over the last decade1 o 47 million of the 65 million US adult
Slide 10: Transaction Creates Premier National Healthcare Educator
Transaction Creates Premier National Healthcare Educator Healthcare-Focused Institutions Combined Healthcare-Focused Degree Mix Rankings >80,000 #1 Enrollment 35% Undergraduate and Graduate Nursing 20% Enrollment in the US $1.35B #1 Revenue Provider of US Licensed Physicians 45% 10% #1 YoY New Bache
Slide 11: Combined Financial Profile
Combined Financial Profile • Walden acquisition expected to add scale and enhance margin profile Revenue Adjusted EBITDA Adjusted EBITDA Margin FY20 Basis (TTM Jun20) FY20 Basis (TTM Jun20) FY20 Basis (TTM Jun20) ($ millions) ($ millions) $1,643 $60M cost $60M cost synergies $456 29% synergies 28% $
Slide 12: Complementary Platforms with Significant Growth Opportunities
Complementary Platforms with Significant Growth Opportunities • Combined educational offerings are complementary o Modality (% Online): Adtalem = 56%, Walden = 100%, Combined = 81% ̶ Ability to leverage Chamberlain’s 22 physical campuses to offer hybrid programs and expand offerings o Degree-Level (
Slide 13: Walden Bolsters Critical Online Capabilities
Walden Bolsters Critical Online Capabilities • The combined company is expected to rank in the top 5 of US online educators1 and bring to bear industry-leading capabilities across the entire online education services value chain, positioning it to capitalize on growth in online and hybrid learning •
Slide 14: Cost Synergy Opportunities
Cost Synergy Opportunities • Cost synergies expected to deliver $60M annual savings driven by increased back-office operational efficiencies and thoughtful integration of business units • All synergies are designed to align with core integration guiding principle of delivering superior student outco
Slide 15: Walden Transaction: EBITDA Multiples
Walden Transaction: EBITDA Multiples INPUTS & ASSUMPTIONS HEADLINE BASE BASE & COST SYNERGIES ($ millions) PURCHASE PRICE COMPONENTS: 1,432 1,432 - 200 1,432 - 200 171 171 171 + 60 Purchase Price 1,480 Estimated Closing Adj. (-) 48 Headline Purchase Price 1,4321 Tax Step-Up Value (-) 2002 Base Purch
Slide 16: Cash Flow and Capital Implications
Cash Flow and Capital Implications • Significant incremental cash flow resulting from the Walden acquisition expected to enable quick debt paydown and fuel investment in the combined business • Anticipated to be accretive to adjusted EPS year one and beyond. Walden transaction ROIC 10%-12%+ • Manage
Slide 17: Superior Student Outcomes Drive Compelling Value Proposition
Superior Student Outcomes Drive Compelling Value Proposition • Adtalem is a high-quality Title IV institution and a good steward of Title IV funds, driving a compelling value proposition for our students and graduates First Time Pass Rates1 First Time Residency Match Rates2 91% 94% 94% 88% 95% 92% N
Slide 18: Mission and Social Impact
Mission and Social Impact • Adtalem is mission driven and delivers real social value by broadening access to training for skilled and in-demand careers in healthcare • Walden shares our mission and focus on social impact Serving Diverse Students Addressing Critical Needs And Doing So Responsibly 55%
Slide 19: Adtalem's Evolution
Adtalem’s Evolution • Adtalem has a long history of successfully executing moves that better align the Company’s portfolio with evolving market demand – including both large scale divestitures and strategic investments in new growth platforms • Walden acquisition complements a streamlined and focuse
Slide 20: Success with Previous Acquisitions
Success with Previous Acquisitions • Extensive experience with M&A in service of consistent, thoughtful, strategic portfolio optimization that drives both shareholder value and positions the Company for future growth • Previous acquisitions have yielded superior student outcomes and strong financial
Slide 21: Appendix
Appendix ADTALEM GLOBAL EDUCATION
Slide 22: Chart 1 – Incremental Unlevered Free Cash Flow
Chart 1 – Incremental Unlevered Free Cash Flow Preliminary Financial Information We report our financial results in accordance with U.S. generally accepted accounting principles. All projected financial data in this presentation is preliminary, as financial close procedures for the periods presented
Slide 23: Chart 2 – Incremental Earnings per Share
Chart 2 – Incremental Earnings per Share Preliminary Financial Information We report our financial results in accordance with U.S. generally accepted accounting principles. All projected financial data in this presentation is preliminary, as financial close procedures for the periods presented are n
Slide 24: Chart 3 – Leverage & EBITDA
Chart 3 – Leverage & EBITDA Preliminary Financial Information We report our financial results in accordance with U.S. generally accepted accounting principles. All projected financial data in this presentation is preliminary, as financial close procedures for the periods presented are not yet comple
Slide 25: Chart 4 – Leverage & EBITDA 2 Years Post-Close
Chart 4 – Leverage & EBITDA 2 Years Post-Close Preliminary Financial Information We report our financial results in accordance with U.S. generally accepted accounting principles. All projected financial data in this presentation is preliminary, as financial close procedures for the periods presented
Slide 26: Chart 5 – Return on Invested Capital
Chart 5 – Return on Invested Capital Preliminary Financial Information We report our financial results in accordance with U.S. generally accepted accounting principles. All projected financial data in this presentation is preliminary, as financial close procedures for the periods presented are not y
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