Piper Sandler Companies · NYSE:PIPR
Piper Sandler Companies — Piper Jaffray Companies — Merger or Acquisition (July 2019)
22 slides from Piper Sandler Companies's merger presentation, Jul 9, 2019
Slide 1: Forward-looking statements
This presentation and the conference call to discuss the contents of this presentation contain forward-looking statements. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements. These forward-looking statements cover,
Slide 2: Piper Jaffray and Sandler O'Neill announce merger
REALIZE THE POWER OF PARTNERSHIP ® PIPER SANDLER COMPANIES Piper Jaffray is a leading investment bank and institutional securities firm. Through a distinct combination of candid counsel, focused expertise and empowered employees, we deliver insight and impact to each and every relationship. Our prov
Slide 3: Merger details
PIPER JAFFRAY COMPANIES AND SANDLER O’NEILL + PARTNERS Merger details Piper Jaffray Companies to acquire 100% of Sandler O’Neill + Partners Merged company will be named Piper Sandler Companies, combining two trusted and established firms with matching client-centric cultures Brings together the lead
Slide 4: Strategic rationale for the combination
Complements current franchise by adding $225M+ of annual investment banking revenues from financial services industry Increases scale and diversity across investment banking industry sectors The leading financial services investment bank with approximately $300M of annual revenues Adds a large, dura
Slide 5: The leading financial services investment bank
Source: S&P Global Market Intelligence Does not combine the results of advisors which have merged until the date such merger was completed 1 Includes transactions with announced deal values; statistics reflect January 1, 2012 through June 15, 2019 2 Full deal value credited to underwriter Mergers an
Slide 6: Sandler O'Neill revenues by business activity
$ in millions M&A / Advisory Services Financing Fixed Income Equity Commissions Six consecutive years of revenue growth driven by increasing market share Advisory-led franchise which has more than doubled since 2011 Strong capital markets origination business that does not rely on the balance sheet
Slide 7: Market leadership in financial services M&A
Source: S&P Global Market Intelligence Financial services encompasses banks & thrifts, insurance, asset management, securities services, specialty finance, financial technology & REITs Includes all U.S. financial services transactions announced since January 1, 2002 with disclosed deal value and a f
Slide 8: Market leadership in financial institutions capital raising
Source: S&P Global Market Intelligence Includes all bank & thrift common equity raises between January 1, 2009 and June 5, 2019 Full credit to lead and co-managers Does not combine the results of advisors that have merged until the date such merger was completed Top ranked in common equity raising f
Slide 9: Durable and consistent market environment
Source: S&P Global Market Intelligence and FDIC; data as of December 31, 2018 # of Deals Deals / # of Banks (%) Stable bank operating environment with favorable M&A outlook Large, consistent market with an average of 250+ deals per year Significant market with over 5,000 banks consistently consolida
Slide 10: Increases scale and diversity across industry sectors
1 2018 Piper Jaffray standalone investment banking revenues include both corporate advisory and capital markets revenues (excludes public finance) 2 2018 Pro forma investment banking revenues combines Piper Jaffray standalone investment banking revenues with Sandler O’Neill M&A / Advisory Services r
Slide 11: Elevates advisory platform within the middle market
CAGR is calculated over the 8-year period from 2011 to 2018 pro forma, which replaces the 2018 Piper Jaffray standalone year 1 Pro forma combines 2018 Piper Jaffray standalone revenues with Sandler O’Neill revenues 2 Refer to page A-1 of the Appendix for a reconciliation of Piper Jaffray standalone
Slide 12: Elevates capital raising platform within the middle market
1 2018 Piper Jaffray standalone capital markets revenues reflect equity financing revenues 2 2018 Pro forma capital markets revenues combines Piper Jaffray standalone capital markets revenues with Sandler O’Neill revenues from financing of $70M 3 Transactions and value both include community bank, s
Slide 13: Adds advice-driven fixed income business
Deep penetration with banks – covering 1000+ banks Differentiated, advisory-based model that leverages the capabilities of the whole firm and drives investment banking revenue Strong analytics with a holistic approach to balance sheet management with comprehensive modeling capabilities for assets, l
Slide 14: Enhances equities business through expanded resources
1 Piper Jaffray standalone research coverage reflects current stocks under coverage 2 Pro forma research coverage combines Piper Jaffray standalone research coverage with approximately 200 stocks under coverage from Sandler O’Neill 31% increase in coverage Enhances equities business through expanded
Slide 15: Leadership of Piper Sandler financial services business
Jimmy Dunne will continue to focus on exactly the same work he has been doing for the past several years, providing guidance and strategic advice to clients on M&A deals and other transactions Dunne will be named vice chairman of Piper Sandler Companies, and senior managing principal of the Piper Sa
Slide 16: Shareholder value creation
Increases revenue by 44% and adds a highly complementary, market-leading financial services industry platform Enhances scale, durability, and diversity of the firm Accretive to operating margin, ROE, EPS and employee productivity metrics Meaningfully accretive acquisition Grows advisory business by
Slide 17: Total shareholder return and PJC share price
1-Year 3-Year 5-Year TOTAL RETURN AS OF JUNE 28, 20191 CM Index reflects KBW Capital Markets Index 1 Represents total shareholder return for the 1-Year, 3-Year, and 5-Year periods ending June 28, 2019 EVR 129.14% PJC 121.12% HLI 112.90% MC 106.85% SF 97.85% OPY 93.08% PJT 85.05% CM Index 64.51% S&P
Slide 18: Piper Sandler Companies pro forma
Metrics are on a pro forma basis combining Piper Jaffray standalone with Sandler O’Neill 1 Includes 2018 Piper Jaffray standalone adjusted net revenues; refer to page A-1 of the Appendix for a reconciliation of Piper Jaffray standalone adjusted net revenues to U.S. GAAP net revenues 2 Includes 2018
Slide 19: Piper Sandler pro forma financial metrics
$1.1 Billion 75% 50%+ 17-19% ‘Adjusted Net Investment Banking Advisory Servi Revenues! Revenue Mix Revenue Targeted Operating ‘Margin PIPER SANDLER A LEADING FINANCIAL ADVISORY AND CAPITAL MARKETS FIRM $150M+ 2.0 <1x Annual Years Expected to Leverage Cash Flow? Pay off Acquisition (Debt to EBITDA) D
Slide 20: Reconciliation for Non-GAAP Financial Measures: Net revenues
This presentation includes non-GAAP, or ‘‘adjusted,’’ financial measures. Management believes that presenting results and measures on an adjusted basis in conjunction with the corresponding U.S. GAAP measures provides the most meaningful basis for comparison of its operating results across periods,
Slide 21: Reconciliation for Non-GAAP Financial Measures: Cash flows and EBITDA
A-2 Reconciliation for Non-GAAP Financial Measures APPENDIX Annual cash flows The following table presents the components of standalone annual cash flows for Piper Jaffray Companies for the year ended December 31, 2018: Earnings before interest, taxes, depreciation, and amortization ("EBITDA") The f
Slide 22: Reconciliation for Non-GAAP Financial Measures (appendix)
APPENDIX Reconciliation for Non-GAAP Financial Measures Annual cash flows The following table presents the components of standalone annual cash flows for Piper Jaffray Companies for the year ended December 31, 2018: (Sin thousands) 2018 Net income applicable to Piper Jaffray Companies U.S. GAAP basi
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