Kinatico Limited · ASX:KYP
Kinatico — Merger or Acquisition (February 2021)
30 slides from Kinatico's merger presentation, Feb 10, 2021
Slide 1: Acquisition of Bright People Technologies
Acquisition of Bright People Technologies Authorised by the CV1 Board of Directors February 2021 ASX : CV1
Slide 2: Agenda
Agenda Acquisition overview 4 MergeCo profile & capabilities 10 Placement overview 18 CV1 trading update 22 Appendix - Risks 25 - Glossary CV1 GROUP | 2
Slide 3: Disclaimer
Disclaimer This presentation has been prepared by CV Check Ltd ‘CVCheck’ or ‘CV1’. By receiving this presentation, you This presentation is not intended to be used for the basis of making an investment decision. The information acknowledge and represent to CVCheck that you have read, understood and
Slide 4: 1. Acquisition overview
1. Acquisition overview CV1 GROUP | 4
Slide 5: Digital transformation has created a gap in workforce compliance management
Digital transformation has created a gap in workforce compliance management The conduct of commerce relies on trust A fast-paced digital shift has occurred, unmatched by change in trust systems that underpin workforce management Evolving customer needs… …amidst global thematics… EMPLOYERS • Protecti
Slide 6: Acquisition summary
Acquisition summary Creating a credentials-based workforce management capability, on a SaaS business model About CV1…. Through its proprietary online platform cvcheck.com, focused on verifying credentials, CV1 has become a leading provider of background screening for enterprises and individuals in A
Slide 7: Bright People Technologies
Bright People Technologies A leading provider of credentials-based workforce management software through the Enable and Cited brands Key Highlights Overview of Bright People Technologies • SaaS business model with blue chip customers • Established in 2002, Bright launched one of the earliest SaaS pr
Slide 8: Acquisition rationale
Acquisition rationale ✓ Acquisition accelerates CV1’s roadmap by combining it’s screening solutions with Bright’s credentials-based workforce Accelerates strategic management platform technology roadmap ✓ Creates an end-to-end workforce credentials management capability to better serve evolving cust
Slide 9: Key transaction terms
Key transaction terms • CV1, through its wholly owned subsidiary (Credentials Management Information Systems Pty Ltd), has entered into a binding Share Purchase Agreement (“SPA”) with the shareholders Binding agreement of CI6 Pty Ltd to acquire 100% of the issued capital of CI6 Pty Ltd, an entity th
Slide 10: 2. MergeCo profile and capabilities
2. MergeCo profile and capabilities CV1 GROUP | 10
Slide 11: MergeCo capability
MergeCo capability Creating a credentials-based workforce management capability, on a SaaS business model Onboarding and Background Screening Deployment Recurring Compliance Future Employment Induction • Individual’s profile with credentials held on • Identity verification • Configurable onboarding
Slide 12: Broad complementary customer base
Broad complementary customer base Industry based analysis of CV1’s broad customer base indicates high potential demand for this newly created credentials-based workforce management capability Over 410 returning blue chip customers including… Blue chip client base …plus over 5,650 returning SME custo
Slide 13: Integration strategy
Integration strategy Integration plan to drive growth, extract synergies and accelerate product roadmap Integration Integration focus areas Completion target team Customer engagement: • Unified team formed to • Phase 1 CY2021 Q1 drive the integration • Branding Planning of Bright people alignment to
Slide 14: Future growth
Future growth CV1 will accelerate its growth trajectory through the following key drivers • Cross-sell the Bright credentials management solution to CVCheck’s extensive pool of large enterprise customers Increased scale and revenue • Leverage CVCheck’s successful HRIS integrations model into Bright’
Slide 15: Pro-forma combined P&L
Pro-forma combined P&L Transaction expands CV1 pro forma revenues to ~$17.3m CV11 Bright2 Pro-forma P&L (June Y/E, $m)3 FY19A FY20A FY19A FY20A FY19A FY20A Total revenue 12.4 12.4 5.2 4.9 17.6 17.3 Cost of Sales -5.7 -5.6 -0.7 -0.7 -6.4 -6.4 Gross Profit 6.7 6.7 4.5 4.1 11.1 10.9 Other income 0.1 0.
Slide 16: Pro-forma capital structure
Pro-forma capital structure Transaction adds further scale to MergeCo with a pro-forma market cap of ~$71m The Company will be well capitalised post transaction to pursue further organic and inorganic growth opportunities Indicative MergeCo Pro-forma4 Units CV1 Bright MergeCo Shares Shares MergeCo P
Slide 17: Transaction summary
Transaction summary Fast paced change means employers have to better manage increasingly complex workforce needs and 1 empower individuals to participate in securely providing required credentials 2 Transaction creates a credentials-based workforce management capability to meet those needs 3 Deliver
Slide 18: 3. Placement overview
3. Placement overview CV1 GROUP | 18
Slide 19: Placement overview
Placement overview1 Placement raising $10.5m from the issue of ~63.6 million new CV1 shares (“New Shares”) under CV1’s existing Offer structure & size placement capacity per ASX Listing Rules 7.1 and 7.1A. The Placement was well supported by new and existing institutional investors, including CV1’s
Slide 20: Indicative transaction timetable
Indicative transaction timetable1 CV1 shareholders will vote on the Bright transaction at an EGM planned for early April 2021 The transaction is expected to be completed by mid April 2021 Event Indicative Date Transaction announced and CV1 resumes trading on ASX Wednesday 10th February Settlement of
Slide 21: Sources & uses
Sources & uses Proceeds from the Placement will be applied to: Sources Amount ($m) Uses2 Amount ($m) Placement (before costs)1 10.50 Bright net debt repayments 3.25 Bright acquisition integration costs 3.00 Transaction costs 1.05 MergeCo working capital & future growth 3.20 Total sources 10.50 Total
Slide 22: 4. CV1 trading update
4. CV1 trading update CV1 GROUP | 22
Slide 23: Corporate Overview (pre-Placement and Bright acquisition)
Corporate Overview (pre-Placement and Bright acquisition) Share price / volume history (A$; millions) Market Capitalisation and Enterprise Value 0.21 12.0 Market Details Units Value 0.19 10.0 Shares outstanding m 292.2 0.17 8.0 Last close (5 Feb 2021) A$/share 0.175 0.15 Volume (m) Price (A$) Market
Slide 24: Trading update
Trading update CV1 continues to perform strongly, with revenue records set in the most recent quarter, most recent half and in it’s most recent 12-month ARR. Cash positive during H1 FY21, strong balance sheet with $5.2m in cash as at 31 December 2020 and no debt. Recent performance CV1 Revenues ($m)
Slide 25: 5. Appendix
5. Appendix ⎯ Key risks ⎯ Glossary CV1 GROUP | 25
Slide 26: Key risks – specific 1/2
Key risks – specific 1/2 Pursuant to the SPA, CV1 has agreed to acquire 100% of the issued capital of the head entity of the Bright group, settlement of which is subject to satisfaction of certain conditions (including CV1 shareholder approval). There is a risk that the conditions for settlement of
Slide 27: Key risks – specific 2/2
Key risks – specific 2/2 Reliance upon telecommunications systems collectively supplied by government and third party providers is an integral feature of providing services Reliance on third party over the internet. As such, CV1 places reliance on the proper operation and maintenance of those facili
Slide 28: Key risks – general
Key risks – general The global economy, including each of the markets in which CV1 operates, is in the midst of a pandemic relating to the novel coronavirus now known as COVID-19. The pandemic has lead to the adoption of unprecedented preventative measures by Governments and other authorities. Event
Slide 29: Glossary
Glossary API Application Programming Interface MIS Management Information System Bright Bright People Technologies SaaS Software as a Service CV1 CV Check Ltd SPA Share Purchase Agreement HRIS Human Resource Information System SME Small and medium sized enterprises CV1 GROUP | 29
Slide 30: Thank you
Thank you CH OS check CV1GROUP | 30