Huntington Ingalls Industries, Inc. · NYSE:HII
Huntington Ingalls Industries — Merger or Acquisition (July 2021)
15 slides from Huntington Ingalls Industries's merger presentation, Jul 6, 2021
Slide 1: Huntington Ingalls Industries to Acquire Alion Science and Technology
Huntington Ingalls Industries to Acquire Alion Science and Technology July 6, 2021 Mike Petters President and Chief Executive Officer Tom Stiehle Executive Vice President and Chief Financial Officer
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements in this presentation regarding our proposed acquisition of Alion Science & Technology (the “transaction”), the expected time for completing the transaction, the expected benefits and synergies of the transaction, including the effect of the transaction on revenu
Slide 3: Strategic Acquisition Enhances Technical Solutions
Strategic Acquisition Enhances Technical Solutions Alion significantly expands HII ability to support U.S. Navy and DoD customers in their most critical national security missions Enhanced high-end capabilities are complementary to existing HII work and provide critical mass in targeted markets
Slide 4: Overview of Alion
Overview of Alion Other 6% U.S. Army 8% (% FY21E Revenue) Customer Mix U.S. Navy ~8.4% ~$1.6B 84% U.S. Air 33% FY22E 3,200 ~$3B+ Force 25% FY22E Cleared Adj. EBITDA Employees Backlog DoD/Other Revenue Personnel Margin1 Classified 28% Alion by Core Capabilities (% FY21E revenue) C5ISR Cyber & Electro
Slide 5: Alion is Highly Consistent with Stated Strategy
Alion is Highly Consistent with Stated Strategy Alion Transaction Alignment With HII Strategy Complements HII’s Adds Alion’s $3B+ of backlog supporting ongoing revenue visibility Revenue Visibility and Competitively positioned incumbency with Alion’s 90%+ recompete win rate Competitive Posture
Slide 6: Synergy Driven by Complementary Capabilities & Customers
Synergy Driven by Complementary Capabilities & Customers TSD Market Focus Areas + Alion Alion Business Groups Navy Navy ISR integration & Multi-domain ISR operations Other Customer breadth, Other C5ISR Joint planning and Sensor data fusion & DoD ISR processing / AI DoD operations processing
Slide 7: Positioning on Key Navy Priorities – Distributed Maritime Ops.
Positioning on Key Navy Priorities – Distributed Maritime Ops. Distributed Maritime Operations (DMO) is among the Navy’s top modernization priorities HII + Alion combination will provide differentiated capabilities for DMO pursuit HII + Alion DMO Elements Combined Capabilities Navy’s DMO concept
Slide 8: Financial Details of Transaction
Financial Details of Transaction Purchase Price ~$1.65 billion purchase price Adj. EBITDA ~$135 million 2022E Adj. EBITDA1 EV Multiple ~12.2x 2022E Adjusted EBITDA1 Funding $1 billion in new senior notes, $650 million in new term loan facility Leverage Pro forma 2021E debt to Adjusted EBITDA1 of 3.3
Slide 9: Significant Near and Long-Term Financial Benefits
Significant Near and Long-Term Financial Benefits Accelerates Technical Accretive to cash flow in 2022 Expect ~$200M of Solutions’ revenue growth incremental free cash Expect GAAP EPS neutral in flow1 2022-2024, net Technical Solutions expected 2022, accretive in 2023 of financing impacts
Slide 10: HII will Continue Consistent Capital Allocation Priorities
HII will Continue Consistent Capital Allocation Priorities Generational investment in shipyards concluding in 2021 as planned Accelerated growth and incremental free cash flow1 further facilitates continued dividend growth Alion acquisition consistent with strategic portfolio shaping and finan
Slide 11: Key Takeaways
Key Takeaways 1. Alion represents an unmatched strategic fit for HII 2. Enhances technical capabilities and improves HII position in high-growth mission-critical security solutions 3. Provides high-end solutions critical to multi-domain distributed operations, well aligned with future U.S. Navy and
Slide 12: Appendix
Appendix HUNTINGTON INGALLS INDUSTRIES PROPRIETARY
Slide 13: Acronym list
Acronym list AI/ML: Artificial Intelligence/Machine Learning C5: Command, Control, Computers, Communications and Cyber CAGR: Compound Annual Growth Rate DMO: Distributed Maritime Operations DoD: Department of Defense ELICSAR: Enterprise Logging Ingest and Cyber Situational Awareness Refinery EW: Ele
Slide 14: Non-GAAP Measures Definitions
Non-GAAP Measures Definitions We make reference to “adjusted EBITDA”, “adjusted EBITDA margin” and “free cash flow.” Adjusted EBITDA and EBITDA margin are not measures recognized under GAAP. They should be considered supplemental to and not substitutes for financial information prepared in accordanc
Slide 15: HUNTINGTON INGALLS INDUSTRIES HARD STUFF DONE RIGHT
15 HUNTINGTON INGALLS INDUSTRIES HARD STUFF DONE RIGHT
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