Enpro Inc. · NYSE:NPO
Enpro — EnPro Industries — Merger or Acquisition (July 2019)
20 slides from Enpro's merger presentation, Jul 22, 2019
Slide 1: Overview of LeanTeq Acquisition
OVERVIEW OF LEANTEQ ACQUISITION JULY 22, 2019
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Statements made in the course of this presentation that express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They involve a number of risks and
Slide 3: LeanTeq Introduction
LEANTEQ INTRODUCTION Ersro WIZARARAG LeanTegq Co., Ltd
Slide 4: EnPro (NYSE: NPO) | Attractive Portfolio of Businesses
ENPRO (NYSE: NPO) | ATTRACTIVE PORTFOLIO OF BUSINESSES 2018 Revenue Contribution Company Overview SALES BY SEGMENT SALES BY MARKET Headquarters Charlotte, NC Manufacturing Facilities 30 primary 17% Sealing Products HD/MD 3 25% Global Employees ~6,000 Engineered Products 21% General Industrial 18% 62
Slide 5: LeanTeq Adds Significant Value to Our Portfolio
LEANTEQ ADDS SIGNIFICANT VALUE TO OUR PORTFOLIO Strengthens and Adds proprietary Aligns with EnPro’s Compelling growth and Expected to be expands EnPro’s technology, growth strategy and margin profile with accretive to adjusted existing $100M+ capabilities and a fits its acquisition consistent cash
Slide 6: Acquisition Meets Both M&A and Growth Objectives
ACQUISITION MEETS BOTH M&A AND GROWTH OBJECTIVES LEANTEQ COMPLEMENTS ENPRO’S M&A CRITERIA ENPRO GROWTH OBJECTIVES STRATGIC FIT Highly engineered products with mission-critical applications; “high-value niches” IP-rich / proprietary technology and know-how Attractive and growing end markets; cy
Slide 7: LeanTeq at a Glance
LEANTEQ AT A GLANCE KEY STATISTICS 2018 REVENUE CONTRIBUTION Founded 2011 Global Employees 260 65% USED KITS/PARTS1 35% NEW KITS/PARTS1 Facilities 3 2 Taiwan • Aftermarket / refurbishment • OEMs send new kits/parts to LeanTeq to be 1 U.S. cleaned, coated, tested and verified before • Chip manufactur
Slide 8: Compelling Strategic and Financial Benefits
COMPELLING STRATEGIC AND FINANCIAL BENEFITS PROPRIETARY Maintains a market-leading position with highly differentiated, proprietary technology and processes, and a 1 CAPABILITIES AND commitment to stringent technical specifications; LeanTeq is a leader in cleaning for advanced nodes. TECHNOLOGY Serv
Slide 9: Highly Differentiated, Technical Service Offering
1 HIGHLY DIFFERENTIATED, TECHNICAL SERVICE OFFERING PROPRIETARY, TECHNOLOGY- INDUSTRY-LEADING ENABLED PROCESS TECHNICAL QUALIFICATIONS End-to-end, multi-phase process Cleaning of critical parts for advanced designed around nodes quality measurement and control Detailed documentation 7 “Class 100” cl
Slide 10: Highly Attractive Market Dynamics
2 HIGHLY ATTRACTIVE MARKET DYNAMICS Global Semiconductor Wafer Market1 ($B) KEY TRENDS (Aftermarket) • Increased demand for semiconductor logic and memory due $656 to the rapidly expanding digital economy – Smartphones $343 – Autonomous vehicles – High-speed wireless connectivity (5G) – Artificial i
Slide 11: Well-Positioned in Semiconductor Value Chain
3 WELL-POSITIONED IN SEMICONDUCTOR VALUE CHAIN Key: Solid line represents part flow Dotted line represents relationship Provide components, assemblies LeanTeq services Provide aftermarket cleaning and refurb and services to OEMs; additionally, foundries & IDMs services for critical process equipment
Slide 12: Deeply Experienced Leadership Team
4 DEEPLY EXPERIENCED LEADERSHIP TEAM KING KOO KEN LOO Founder & General Manager Technical Director • Senior leadership has an average ~20+ years experience in semiconductor industry, in both Asia and U.S. • Deep chemical, engineering and manufacturing expertise • Long-standing, strategic industry re
Slide 13: Enhances EnPro's Financial Profile
5 ENHANCES ENPRO’S FINANCIAL PROFILE ENPRO LTM REVENUE 1 ($M) SEALING PRODUCTS SEGMENT LTM ADJUSTED EBITDA MARGIN 1 $1, 590.00 $1,579 $1, 570.00 18.2% - 18.5% $1, 550.00 16.5% $1, 530.00 $1,524 $1, 510.00 $1, 490.00 $1, 470.00 $1, 450.00 EnPro Pro forma EnPro Sealing Pro Forma Products Segment • The
Slide 14: LeanTeq and Aseptic Group Transaction Summary
LEANTEQ AND ASEPTIC GROUP TRANSACTION SUMMARY • Valued at $345 million, includes The Aseptic Group, announced July 2, 2019 and LeanTeq Terms • Key LeanTeq management to rollover equity investment and continue in leadership role • Mix of cash, revolving credit facility, new term loan, and rollover eq
Slide 15: Funding Strategy and Financial Profile
FUNDING STRATEGY AND FINANCIAL PROFILE PRO FORMA MATURITY SCHEDULE ($M) PRO FORMA LEVERAGE Senior Existing Unsecured Revolver Notes 2.7x 1.5x – 2.0x New 1.6x Term $350 Loan A $350 $150 2020 2021 2022 2023 2024 2025 2026 3/31/2019 Pro forma YE 2020 Target Close • Well-balanced capital structure with
Slide 16: LeanTeq Adds Significant Value to Our Portfolio
LEANTEQ ADDS SIGNIFICANT VALUE TO OUR PORTFOLIO Strengthens and Adds proprietary Aligns with EnPro’s Compelling growth and Expected to be expands EnPro’s technology, growth strategy and margin profile with accretive to adjusted existing $100M+ capabilities and a fits its acquisition consistent cash
Slide 17: Appendix
APPENDIX
Slide 18: Reconciliation of Adjusted EBITDA
RECONCILIATION OF ADJUSTED EBITDA (Stated in Millions of Dollars) 18
Slide 19: Reconciliation of Adjusted Segment EBITDA
RECONCILIATION OF ADJUSTED SEGMENT EBITDA (Stated in Millions of Dollars) 19
Slide 20: Reconciliation of LTM Results
RECONCILIATION OF LTM RESULTS EnPro Adjusted EBITDA Sealing Products Adjusted EBITDA Revenue Adjusted EBITDA Revenue Adjusted EBITDA ($ in millions) Margin % ($ in millions) Margin % Plus: Plus: Three Months Ended March 31, 2019 360 43 12.0% Three Months Ended March 31, 2019 225 34 15.0% Year Ended