Service Corporation International · NYSE:SCI
Service Corporation International — Merger or Acquisition (May 2013)
12 slides from Service Corporation International's merger presentation, May 29, 2013
Slide 1: Forward-Looking Statements
Forward-Looking Statements Information set forth in this release contains forward-looking statements, which involve a number of risks and uncertainties. Readers are cautioned that any forward-looking information is not a guarantee of future performance and that actual results could differ materially
Slide 2: Transaction overview
Transaction overview On May 29, 2013, SCI announced a definitive agreement to acquire all of the outstanding shares of Class A and Class B common stock of Stewart Enterprises for $13.25 in cash Acquisition valued at $1.2 billion, or approximately $1.4 billion inclusive of cash and debt acquired Tran
Slide 3: Strategic rationale
Strategic rationale Complementary geographic fit in a highly fragmented industry and established platform in attractive metropolitan markets Further promotes our operational and preneed sales initiatives at a time where we believe the Baby Boomer impact is beginning to take effect Stewart has leader
Slide 4: Significant synergies
Significant synergies We expect to realize approximately $60 million in annual cost savings from the combined company within 24 months after close Synergy opportunities are significant Reduced back-office systems and infrastructure costs Elimination of duplicative public company and management struc
Slide 5: A look at the combined company
A look at the combined company SCI LTM 3/31/13 Stewart LTM 1/31/13 Pro forma Combined Company Estimated Synergies Post Synergy Pro forma Combined Company Revenues (in millions) $2,460.4 $526.9 $2,987.3 Operating Income (in millions) $428.4 $87.4 $515.8 Operating Margin 17.4% 16.6% 17.3% Adjusted EBI
Slide 6: Stewart LTM Adjusted EBITDA and purchase price
STEWART LTM ADJUSTED EBITDA PURCHASE PRICE ($ millions) ($ millions) Adjusted EBITDA $115.5 Cost of Equity $1,166 Pro forma synergies 60.0 Net debt 227 Adjusted pro forma EBITDA $175.5 Enterprise Value $1,393 MULTIPLES Pre-synergy multiple 12.1x Post-synergy multiple 7.9x Current SCI trading multipl
Slide 7: Funding for the transaction
Funding for the transaction Commitment currently in place from JPMorgan Chase Bank, N.A. to finance the acquisition We expect to use cash on hand from both companies at closing Optimal structure of permanent financing to be determined prior to the close of the transaction, but will likely involve a
Slide 8: Transaction summary
Transaction summary Expands unparalleled presence in the highly fragmented North America funeral and cemetery industry Complementary businesses with leadership positions Enhanced opportunities for operational and preneed sales initiatives in metropolitan markets at a time where we believe Baby Boome
Slide 9: Additional information
Additional information Additional Information About This Transaction In connection with the proposed transaction, Stewart Enterprises will file a proxy statement with the SEC. INVESTORS ARE URGED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. You
Slide 10: EBITDA & Adjusted EBITDA
EBITDA & Adjusted EBITDA We use EBITDA as an underlying operational performance measure of the continuing operations of the business and to have a basis to compare underlying operating results to prior and future periods To calculate EBITDA, we make adjustments to net income (a GAAP measure) to remo
Slide 11: EBITDA & Adjusted EBITDA reconciliation
EBITDA & Adjusted EBITDA reconciliation (in millions) SCI LTM at March 31, 2013 STEWART LTM at January 31, 2013 2012 Q1 12 Q1 13 LTM 2012 Q1 12 Q1 13 LTM Net income $152.5 $48.0 $57.6 $162.1 $35.9 $8.6 $15.5 $42.8 Provision for income taxes 91.5 23.1 35.3 103.7 18.7 4.6 5.2 19.3 Interest expense 135
Slide 12: EBITDA & Adjusted EBITDA reconciliation
EBITDA & Adjusted EBITDA reconciliation (in millions) scl STEWART LTM at March 31, 2013 LTM at January 31, 2013 2012, Qli2)«qii3—LTM 2012, Ql12 «iis LTM Net income $152.5 $48.0 $57.6 $162.1 $35.9 $8.6 $15.5 $42.8 Provision for income taxes 915 231 © 35.3. 103.7 18.7 46 52 193 Interest expense 135.0
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