National Bank Of Canada · TSX:NA
National Bank Of Canada — Merger or Acquisition (June 2002)
17 slides from National Bank Of Canada's merger presentation, Jun 11, 2002
Slide 1: Acquisition of Altamira
NATIONAL BANK OF CANADA Acquisition of Altamira June 11, 2002
Slide 2: Table of Contents
of contents Table 1 Executive Summary 2 Strategic Rationale 3 Altamira Overview 4 Impact on National Bank
Slide 3: Executive Summary
Executive Summary 1
Slide 4: Executive Summary
Executive Summary Executive Summary 1 n Improve NBC’s positioning in wealth management across Canada by acquiring a highly recognized brand name mutual fund manager/distributor OBJECTIVE n In line with NBC’s strategic objectives, this acquisition should provide long term synergies within both NBC an
Slide 5: The Transaction
The Transaction Executive Summary 1 PURCHASE PRICE ($ MILLIONS) n NBC to purchase all common and preferred shares outstanding, based on enterprise Bank Debt $ 195.9 value ranging between $473 M and $510 M. Shareholders Payment $ 277.1 to $ 314.1 At the sellers option, up to 20% of the Enterprise Val
Slide 6: Valuation
Valuation Executive Summary 1 n At a $510 million purchase price, the multiples of EBITDA and % of assets under management are somewhat below precedent transactions. EV/ EBITDA % OF AUM (1) Altamira 12.0x 9.5% Transaction Comparables Average 12.3x 10.2% BMO - Guardian Group of Funds (May 2001) 15.4x
Slide 7: Guidance and Timing
Executive Summary Executive Summary 1 n Neutral in 2002 and accretive in 2003 at approx. $0.04 GUIDANCE n Full impact in 2004 estimated at around $0.10 per share n Purchase & Sale Agreement negotiated and approved by Altamira shareholders n Unitholders to be notified of the change of control (60 day
Slide 8: Strategic Rationale
bd Strategic Rationale
Slide 9: Strategic Rationale
Strategic Rationale Strategic Rationale 2 Altamira represents a § Increase contribution from lucrative wealth management products unique opportunity for NBC to increase NBC’S § Expand outside Quebec in niches § Grow the distribution network its market share in OBJECTIVES § Focus on profitability wea
Slide 10: Potential Synergies
Strategic Rationale Potential Synergies Strategic Rationale 2 The merged entity has the potential for § Additional mutual fund sales through new sales and significant synergies REVENUE conversion of assets under administration mainly from revenue side. § Cross selling of banking products and service
Slide 11: Combined Company
Combined Company Strategic Rationale 2 NBC ASSET MIX COMBINED ENTITY ASSET MIX Combining the two companies will give Foreign Canadian Other Equity NBC access to more Money Canadian Foreign Market Foreign Equity profitable AUM, with Equity Equity US Equity 40% of the total IFIC US Equity AUM invested
Slide 12: Strength of Combined Company
Strength of Combined Company Strategic Rationale 2 § Offering of banking products and services to Altamira’s clients CROSS--SELLING CROSS § Altamira’s brand name mutual fund products with more lucrative equity fund emphasis § Use Altamira brand name to expand retail banking products outside Quebec §
Slide 13: Operational issues
Operational issues Strategic Rationale 2 CHALLENGES §Improve investment performance, especially in core funds §Accelerate sales that have lagged the industry in the past 2 years §Ensure retention of clients in the full brokerage and financial advisors channels 13
Slide 14: Impact on National Bank
Impact on National Bank 3
Slide 15: Impact on NBC results
Impact on NBC results The Impact on NBC 3 OCT-02 OCT-03 OCT-04 Marginal impact of Altamira EPS $0.003 $0.04 $0.10 ROE -0.02% 0.12% 0.37% Projections at Tier 1 October 31, 2002 BIS Ratio Marginal impact of Altamira * -1.03% Taking into account completion of 5% share buyback 9.5% - 9.75% 15
Slide 16: Integration
Integration The Impact on NBC 3 n Altamira to be kept as a separate entity. n We will provide Altamira management with a retention package. It is deemed important to retain their skills throughout the integration process. n Branding, customer service, call centers and technology will be maintained a
Slide 17: National Bank of Canada
NATIONAL BANK OF CANADA
National Bank of Canada — Merger or Acquisition (June 2002) on 6ix