Quarterhill Inc · TSX:QTRH
Quarterhill — Merger or Acquisition (August 2021)
14 slides from Quarterhill's merger presentation, Aug 16, 2021
Slide 1: Acquisition of ETC
Acquisition of ETC Conference Call, August 16, 2021 TSX: QTRH OTCQX: QTRHF
Slide 2: Important Cautionary Notes
Important Cautionary Notes Certain statements in this presentation, other than statements of historical fact, may special charges and other one-time items; (v) depreciation of right-of-use assets include forward-looking information that involves various risks and uncertainties and property, plant an
Slide 3: Transaction Highlights
Transaction Highlights Paul Hill CEO, Quarterhill 3
Slide 4: Quarterhill to acquire ETC for $150M
Quarterhill to acquire ETC for $150M The addition of ETC transforms Quarterhill About ETC into a key player in the Intelligent ETC is a leader in Tolling technology as a software Transportation Systems industry services provider & integrator Founded HQ Workforce ▪ Expected Revenue of $95.0 - 120.0M
Slide 5: Strategic Rationale
Strategic Rationale 1. Entry into Tolling ▪ Tolling and broader “user-funded infrastructure” market has significant tailwinds Sector ▪ Complementary to IRD’s capabilities in tolling 2. Experienced ▪ Executive team well established; ~100 years experience in Tolling & ITS Management Team ▪ Major recen
Slide 6: Business Model & Product Overview
Business Model & Product Overview ▪ Core product is the “riteSuite” ETC Product/Service Overview platform, a highly scalable solution ▪ Applications in Roadside, Back Office & Interoperability Systems ▪ Strengths in vehicle identification, tracking/usage charging & interoperability (IOP) ▪ Supports
Slide 7: Customer strategy: land-and-expand
Customer strategy: land-and-expand Average contract duration of 12 years and 8.8x total lifetime revenue vs. original contract value Lifetime Customer Revenue as Multiple of Original Contract 23.6x Increase 6.3x Increase 3.8x Increase 15.0x Increase 7
Slide 8: Market Dynamics: Growth in Tolling
Market Dynamics: Growth in Tolling Growth in Miles of Toll Roads (Miles) Gas Tax Purchasing Power Nearly Halved 30,000 25,000 20,000 15,000 10,000 5,000 - 2014 2020 2025 Toll Enabled Vehicles (# Vehicles) 140,000,000 120,000,000 Tolling and broader Road Usage 100,000,000 80,000,000 Charging are beco
Slide 9: Swift Execution of M&A Strategy
Swift Execution of M&A Strategy Smart cities Other ITS segments Aviation Marine Rail CVO & Enforcement Target capital deployment Achieved in 2021 $400M $159M Road sub-segments up to over the next 5 years* ~40% of target in year 1 Route Mobility Public Transit Optimization as a Service Acquisitions c
Slide 10: Financial Highlights
Financial Highlights John Rim CFO, Quarterhill 10
Slide 11: Financial Summary
Financial Summary Financial Highlights Valuation Overview * ▪ ETC’s core business of existing customers provides Purchase Price EBITDA Multiple * Revenue Multiple * strong visibility into “base” performance ▪ +$4Bn US market pipeline & recent “win-rate” of +40% drive confidence in management’s abili
Slide 12: Unlocking value through scale
Unlocking value through scale Target Proforma Acquired Growth * Market Cap Potential* Revenue Adjusted EBITDA 29% CAGR 2 $1050M Proforma Proforma ITS Only ITS Only $460M $70M $292M Current Dec. 31, 2020 2025 Current $43M 1 $145M 2 Assumes 114M total shares outstanding 2020 2021 2022 2023 2024 2025 2
Slide 13: Acquisition of ETC Q&A
Acquisition of ETC Q&A Conference Call, August 16, 2021 TSX: QTRH OTCQX: QTRHF
Slide 14: Head Office and Key Contacts
HEAD OFFICE KEY CONTACTS Quarterhill Inc. Corporate Development 25 King St. W., Suite 1101 Paul Hill Toronto, ON paul.hill@quarterhill.com M5L 2A1 Canada Investor Relations ANALYST COVERAGE Dave Mason Canaccord 416-247-9652 Doug Taylor ir@quarterhill.com CIBC General Inquiries Todd Coupland info@qua