Earlypay Limited · ASX:EPY
Earlypay — Merger or Acquisition (September 2019)
16 slides from Earlypay's merger presentation, Sep 10, 2019
Slide 1: Acquisition of Classic Funding Group
CML Group Acquisition of Classic Funding Group 9 September 2019 CEO Daniel Riley CFO Steve Shin
Slide 2: Executive Summary
Executive Summary CML has executed a Heads of Agreement for the strategic acquisition of Classic Funding Group • CML has executed a Heads of Agreement to acquire Classic Funding Group (“CFG”) • Transaction price of $11m (~$6m Goodwill) • To be funded by a new facility and CML’s existing equity Trans
Slide 3: Transaction Overview
Transaction Overview CML will acquire 100% of CFG with the transaction to be completed by mid-October 2019 CML will initially require $18m to purchase the shares of CFG • $11m for 100% of the shares in CFG, including approximately $6m of Goodwill • $7m for the replacement of Mezzanine debt provided
Slide 4: Invoice Discounting
Invoice Discounting Invoice Discounting Top 20 ID Clients by Industry Type • Stable base of Invoice Discounting clients Business Services Wholesale 20% • Business has doubled over last 5-years 35% • Increases CML’s existing Invoice Discounting business by ~5x in Funds Advanced as at FY’19 Customers
Slide 5: Equipment Finance
Equipment Finance Equipment Finance Opportunity • CFG’s Equipment Finance business consist of • Merging of books to drive lower cost of funds − Traditional Business Finance1,2 (~75%) and Consumer • Cross-selling factoring into EF clients (6000+ potential new clients) Finance3 (~25%) − Continuation o
Slide 6: Combined Group
Combined Group CML’s emerging services, Invoice Discounting and Equipment Finance will gain critical scale on acquisition of CFG Funds Advanced Pre Acquisition Acquisition Contribution - Funds Advanced Funds Advanced Post Acquisition $300m $200m $106m $125m Invoice Equipment Equipment Factoring Fina
Slide 7: Strategic Rationale & Synergies
Strategic Rationale & Synergies The acquisition of CFG will accelerate CML’s growth strategy and has many strategic benefits and synergies • CML expects $1m+ pa of cost savings through refinance of Mezz debt and dilution of funding • Increases current Invoice Discounting business costs on utilisatio
Slide 8: Combined Funding Structure
Combined Funding Structure New facilities set to drive lower cost of funding and diversification of funding sources Funding CML CFG Combined CML Cost Comment Corporate Bond #1 $25m - $25m BBSW + 5.4% FIIG Bond Corporate Corporate Bond #2 $20m - $20m 7.95% Previously denoted as 'Equipment Finance Bon
Slide 9: Strategy and Outlook
Strategy and Outlook The acquisition of CFG further improves CML’s ability to build market share and facilitate growth in business volumes
Slide 10: FY’20 & Outlook
FY’20 & Outlook Guidance On of $10.6m+ a run-rate basis CML’s in FY’17 annualised turnover for Invoice Finance is over $2bn Increased business volumes are expected in FY’20, namely: Invoices Funded • Invoice Factoring – at the end of H2’19 the business was showing Invoice Factoring FY'19 strong orga
Slide 11: FY’20 & Outlook
FY’20 & Outlook The acquisition of CFG further improves CML’s growth outlook • CML’s strategy has been to work towards a lower-cost funding structure within Equipment Finance Division to replicate interest cost saving strategy implemented in Invoice Finance Division • The acquisition of CFG immediat
Slide 12: Appendix
Appendix cashflow @ f =) cashllow. finance finance Availability = CML Group (aS) | Redhat cashflow finance [> ein |e ic]
Slide 13: Historical Growth
Historical Growth Guidance CML of $10.6m+ has delivered in FY’17 year-on-year growth, translating into consistent growth in shareholder returns consistent Invoices Funded Revenue Underlying EBITDA Invoice Factoring Invoice Discounting Finance Revenue Other Divisions 43m 1536m 20.4m 1328m 17.6m 1001m
Slide 14: Senior Management
Senior Management • Daniel commenced with CML in 2002 and has been CEO since 2010. Daniel launched the Invoice Finance business in 2012 and transitioned CML from a recruitment services firm to a finance business, managing an accelerated growth program, including the acquisition of four key finance c
Slide 15: Disclaimer
Disclaimer This presentation (“this Presentation”) has been prepared by CML Group Limited [ACN 098 952 277] (“CML” or the “Company”) and is dated 9 September 2019. Summary information This Presentation contains summary information about the current activities of CML as at the date of this Presentati
Slide 16: CML Group
cashflow S finance Availability [Fai cashflow S finance (Fai CML Group cashflow finance [> ein |e ic]