Avada Group Limited · ASX:AVD
Avada — Merger or Acquisition (August 2023)
31 slides from Avada's merger presentation, Aug 24, 2023
Slide 1: Strategic acquisition and capital raise
AVADA Group Limited Strategic acquisition and capital raise 24 August 2023
Slide 2: Important notice and disclaimer
Important notice and disclaimer Not for release to U.S. wire services or distribution in the United States Not Financial Product Advice This investor presentation (Presentation) has been dated 24 August 2023 and has been prepared and authorised by This Presentation is for information purposes only a
Slide 3: Important notice and disclaimer
Important notice and disclaimer This Presentation contains unaudited financial information for AVADA that has been prepared by AVADA's conduct and outcome of the Capital Raising and the use of proceeds thereafter, the Acquisition, statements about the management and includes certain pro forma financ
Slide 4: Important notice and disclaimer
Important notice and disclaimer Past Performance The information in this Presentation, including any opinions expressed to reflect AVADA's position as at the date of this Presentation, remains subject to change without notice and neither AVADA nor any of its Extended Parties are obliged Past perform
Slide 5: Executive summary
• Avada has entered into a binding agreement to Executive Transaction summary acquire the assets and business operations of STA Traffic Management Pty Ltd summary • One of the top five traffic management companies in Victoria Overview of STA • > 250 traffic controllers • 83 traffic management vehicl
Slide 6: Business overview
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Slide 7: Who we are
Existing (and future) Who we are large pipeline of infrastructure spend Only listed traffic AVADA offers integrated management provider traffic management operating in Australian and services, including Recurring maintenance NZ Established businesses Average sector revenue growth of 4.9% planning, p
Slide 8: Company milestones
Company milestones Laying the foundations for sustained value creation December 2021 2022 2023 2024 • Acquisition of 8 traffic • Growth of Australian • Entry into New Zealand • Continued focus on management companies territories: market: synergies and operational • Initial Public Offering Acquisitio
Slide 9: Transaction overview
See 02, i Transaction overview
Slide 10: Strategic rationale
Strategic rationale Consistent with the documented growth and strategic ambitions of AVADA Continuing to deliver on Established brand providing track record of sustainable earnings and AVADA's focus of increasing scale in the Victorian market geographical expansion and building market share across A
Slide 11: Overview of STA Traffic Management
Overview of STA Traffic Management Establishing a strong second brand in the Victorian market FAST FACTS Established in 2009, STA is within the top five traffic management companies in 19 DEPOTS Victoria Primarily servicing corporate clients in the infrastructure and utilities sectors 7 > 250 traffi
Slide 12: STA financial performance
STA financial performance $m FY22 LTM Apr 23 Revenue $18.6 $24.4 Growth 31% Gross profit $4.3 $5.6 Gross margin 23.2% 23.0% (1) Underlying EBITDA $1.9 $2.8 EBITDA % 10.4% 11.6% Notes LTM - Last Twelve Months (1) EBITDA is presented on a pre-AASB 16 basis and is adjusted to reflect management remuner
Slide 13: Overview of the transaction
Overview of the $m $m Purchase price transaction EBITDA - adjusted $2.8 Multiple 3x Purchase price $8.5 Deal summary Retention (10% payable in 12 months subject to targets being achieved) $0.9 Proposed • Acquisition of the assets and business of STA Traffic Upfront payment $7.6 acquisition Managemen
Slide 14: Pro forma income statement
Pro forma income FY24 FY24 statement FY23 Forecast Forecast $m (Unaudited) Low High AVADA Group Limited - Underlying EBITDA (1) $15.8 $20.0 $22.0 STA Underlying EBITDA (LTM Apr-23) $2.8 $2.8 $2.8 Proforma EBITDA (including STA) $18.6 $22.8 $24.8 Existing business $15.3 $16.5 $18.2 Acquisitions (Wils
Slide 15: Pro forma leverage
Pro forma leverage AVADA Group 30 June 2023 STA Impact of the $m (Unaudited) (completion) Offer Pro forma Cash and cash equivalents $10.8 - $(1.8) $9.0 Financial debt $(41.9) - - $(41.9) Net financial indebtedness $(31.1) - $(1.8) $(32.9) FY23 Unaudited EBITDA $15.8 Full year impact of Wilsons $2.8
Slide 16: Capital raising
Soo Mn. mm Capital raising
Slide 17: Sources and uses of funds
Sources and uses of funds $m Capital raising via an institutional placement offer $7.0 Cash from AVADA Group Limited $1.8 Total sources $8.8 Funding the acquistion of STA Traffic Management $7.6 Capital raise costs $0.4 Acquisition costs $0.8 Total uses $8.8 AVADA Group Limited – Strategic acquisiti
Slide 18: Key offer information
Key offer Offer structure and size information Institutional placement to professional and sophisticated investors to raise approximately A$7.0 million via the issue of approximately 11.67 million fully paid ordinary shares (‘New Shares’), comprising: o $5.74 million Institutional Placement at $0.60
Slide 19: Timetable
Timetable Indicative timetable1 Trading halt Tuesday 22nd August 2023 Institutional Placement bookbuild closes 4:00pm AEST Tuesday 22nd August 2023 Announcement of Offer and trading halt lifted – Thursday 24th August 2023 Shares recommence trading on ASX Settlement of Institutional Placement Tuesday
Slide 20: Key risks
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Slide 21: Key Risks
Key Risks Investors are strongly cautioned not to place undue reliance on forward-looking This section describes the key 3. AVADA may be adversely impacted by industrial relations issues business risks of investing in AVADA and in connection with the Capital Raising. It does not describe all the ris
Slide 22: Key Risks
Key Risks 5. Acquisition due diligence risk 8. Contractual risks AVADA undertook a due diligence process in respect of STA, which relied in part on the review of financial and other The Group operates, and will continue to operate, through a series of contractual relationships with customers and inf
Slide 23: Key Risks
Key Risks 11. Workplace health and safety results in significant compliance costs and could expose AVADA to legal liability or place limitations on operations. Unfavourable changes to the regulatory environment for traffic control services in Australia may have an impact on the The Group’s employees
Slide 24: Key Risks
Key Risks 20. Further acquisitions and shareholder dilution any of the conditions are not satisfied or waived, completion of the Acquisition (Completion) may be deferred or may not occur on the current terms or at all. Where the Acquisition is not completed as a result of a failure to satisfy AVADA’
Slide 25: Key Risks
Key Risks 3. Reliance on information provided AVADA undertook a due diligence process in respect of the Acquisition, which relied in part on the review of financial and other information provided by STA. Despite making reasonable efforts, AVADA has not been able to verify the accuracy, reliability o
Slide 26: Key Risks
Key Risks 3. General investment risks foreseeable. 1. General equity market and investment risk No assurance can be given that the New Shares will trade at or above the Capital Raising price. None of AVADA, its Board, or any other person guarantees the market performance of the New Shares. Any inves
Slide 27: Key Risks
Key Risks 5. Accounting standards 10. Other Australian accounting standards are set by the AASB and are outside the Directors’ and AVADA’s control. Changes to The above risks should not be taken as a complete list of the risks associated with an investment in AVADA. The risks accounting standards is
Slide 28: Appendices
A INNNHI Appendices
Slide 29: Business sale agreement summary
Business sale agreement summary Business Purchase Agreement Summary Acquisition The traffic control business operated by STA Traffic Management Pty Ltd (ACN 090 451 853) Purchase Price • An initial up front purchase price of $7,6 million to be paid in cash, subject to adjustment for employee entitle
Slide 30: International Offer Restrictions
International Offer Restrictions International Offer Restrictions This document does not constitute an offer of new ordinary shares (“New Shares”) of the Company in any The New Shares are not being offered or sold in New Zealand (or allotted with a view to being offered for jurisdiction in which it
Slide 31: Contact Us
Contact Us AVADA Group Limited ABN 57 648 988 783 Suite 1, Level 2, 116 Ipswich Road Woolloongabba QLD 4102 T 1300 321 995 E contact@avadagroup.com.au avadagroup.com.au