Readytech Holdings Ltd. · ASX:RDY
Readytech — Merger or Acquisition (November 2020)
30 slides from Readytech's merger presentation, Nov 6, 2020
Slide 1: Capital Raising and Acquisition Opportunity
November 2020 CAPITAL RAISING AND ACQUISITION OPPORTUNITY
Slide 2: Important Notice - Disclaimer
IMPORTANT NOTICE - DISCLAIMER Important Notice This Presentation does not purport to contain all the information that a prospective investor may require in This presentation (Presentation) is dated 6 November 2020 and has been prepared by ReadyTech evaluating a possible investment in ReadyTech nor d
Slide 3: Important Notice - Disclaimer (Cont)
IMPORTANT NOTICE – DISCLAIMER (CONT) Future performance No recommendation is made by any of the Disclaiming Parties as to whether you, your associates or This Presentation contains certain 'forward looking statements'. Forward looking statements can generally related parties should participate in th
Slide 4: Table of Contents
TABLE OF CONTENTS Executive summary 5 Strategy and acquisition 8 Capital raising 17 Trading update 22 Key risks 24 Appendix 28 4
Slide 5: Executive Summary
EXECUTIVE SUMMARY • ReadyTech has consistently stated its strategy to explore new and attractive verticals into which it will provide mission critical software as a service (SaaS) and expand its revenue and market penetration. Consistent with its listing prospectus, ReadyTech has been exploring inor
Slide 6: Executive Summary (Cont)
EXECUTIVE SUMMARY (CONT) • ReadyTech is raising additional capital to support this acquisition opportunity and provide certainty to finalise its due diligence and potential entry into binding transaction documents Execution of • Pentagon Holdco Pty Ltd (the parent entity of the Open Office Group) to
Slide 7: Executive Summary (Cont)
EXECUTIVE SUMMARY (CONT) • ReadyTech reaffirms FY21 guidance with FY21 Q1 trading in line with guidance assumptions • Revenue retention for FY21 Q1 maintained at 95% Trading update • Gross new business pipeline maintained at $14.0M • Continued growth in Sales and Marketing investment to drive top li
Slide 8: Strategy and Acquisition Opportunity
STRATEGY AND ACQUISITION OPPORTUNITY
Slide 9: Stated Strategy to Increase Focus on New Verticals
STATED STRATEGY TO INCREASE FOCUS ON NEW VERTICALS • ReadyTech looks to expand into a third vertical with a strategic acquisition • Opportunity is in line with ReadyTech’s strategy to identify new verticals and to provide mission critical SaaS, underpinned by its best practices approach to deploying
Slide 10: Investment Highlights (Open Office)
INVESTMENT HIGHLIGHTS (OPEN OFFICE) • Diverse array of software solutions offered by Open Office provides customers with an end-to-end offering Industry leading platform • Founded c.20 years ago and has evolved into a comprehensive product suite and modern tech stack and strong market position • Str
Slide 11: Investment Highlights (Cont)
INVESTMENT HIGHLIGHTS (CONT) • 75+ FTEs and an extremely experienced management team with 20+ years experience in the government and justice sectors. 65% of FTEs have R&D roles Experienced management • Open Office founder Phillip Simone and McGirr Technologies founder Peter Nanayakkara each bring wi
Slide 12: Open Office Overview
OPEN OFFICE OVERVIEW Open Office is an integrated business that services the government and justice verticals. The group consists of Open Office, which provides software solutions for a variety of local and state government uses cases and McGirr Technologies (McGirr), a market leader in the justice
Slide 13: Open Office Overview (Cont)
OPEN OFFICE OVERVIEW (CONT) SaaS solutions offered Asset Management Property, Finance, HR Customer Service Community Courts and Licensing and and Payroll Management 24/7 Justice Compliance Distinctive value proposition that differentiates from competitors User experience Functionality Implementation
Slide 14: Indicative Transaction Structure and Consideration
INDICATIVE TRANSACTION STRUCTURE AND CONSIDERATION • An initial upfront payment of $54 million (Upfront Consideration) • Payable in a mixture of cash of approximately $40.1M and approximately $13.9M in ReadyTech ordinary shares at a share price equal to the price of the Placement. Sellers could elec
Slide 15: Indicative Transaction Structure and Consideration (Cont)
INDICATIVE TRANSACTION STRUCTURE AND CONSIDERATION (CONT) • The earn out consideration may be paid in cash, ReadyTech ordinary shares (at specified pricing) or a combination of cash and ReadyTech ordinary shares • The share price for ReadyTech Shares will be $2.00 for Earn Out Consideration Tranche
Slide 16: Independent Board Committee Supports Proposed Acquisition
INDEPENDENT BOARD COMMITTEE SUPPORTS PROPOSED ACQUISITION • Strong alignment to strategic goal to grow into a new vertical through M&A, providing ReadyTech with a potential new and attractive vertical with entry into the local and state government and justice sectors and adding to its client portfol
Slide 17: Capital Raising
ben ReadyTech CAPITAL RAISING
Slide 18: Capital Raising
CAPITAL RAISING • A fully underwritten institutional Placement is being undertaken to Sources and Uses provide certainty to ReadyTech to finalise its due diligence and potentially enter into binding transaction documents in respect of the (excluding any SPP) Open Office business • If the acquisition
Slide 19: Capital Raising Details
CAPITAL RAISING DETAILS Offer size Offer price Ranking SPP • In order to help partly fund the • Fixed Offer Price of $1.88 per • New Shares issued under the • ReadyTech announces a share acquisition opportunity, share (New Share) Placement and (if it proceeds) purchase plan (SPP) scheduled ReadyTech
Slide 20: Share Purchase Plan
SHARE PURCHASE PLAN • ReadyTech announces a share purchase plan (SPP) scheduled to be conducted in 2021 in connection with the potential completion of the acquisition of Open Office to allow eligible ReadyTech shareholders an opportunity to acquire additional shares in ReadyTech. The SPP will not be
Slide 21: Indicative Timetable
INDICATIVE TIMETABLE Thursday Friday, Monday, Wednesday, Thursday, 5 November 2020 6 November 2020 9 November 2020 11 November 2020 12 November 2020 Record Date for Trading halt and Announcement of Settlement of Allotment and SPP (7:00pm announcement of completion of the Placement normal trading of
Slide 22: Trading Update
be ReadyTech TRADING UPDATE
Slide 23: FY21 Trading Update
FY21 TRADING UPDATE • ReadyTech reaffirms FY21 guidance as disclosed to the market on 26 August 2020 with Q1 trading in line with guidance assumptions. Revenue retention for Q1 maintained at 95% • Gross new business pipeline maintained at $14.0M • Continued growth in Sales and Marketing investment t
Slide 24: Key Risks
be ReadyTech KEY RISKS
Slide 25: Key Risks
KEY RISKS The risks associated with ReadyTech’s business set out in the prospectus dated 29 March 2019 (Prospectus) and ReadyTech’s 2020 annual report (Annual Report) still apply and are incorporated by reference as updated by the risks set out below. The risks included in the Prospectus and Annual
Slide 26: Key Risks (Cont)
KEY RISKS (Cont) COVID-19 related risks (cont) It is still not fully known to what extent the COVID-19 pandemic will continue to disrupt domestic and international economic activity. The indirect impact of the pandemic on the broader economy is likely to affect retail activity generally and may have
Slide 27: Key Risks (Cont)
KEY RISKS (Cont) Risk of not completing the Open Office acquisition As stated in this Presentation in relation to Open Office, there is no certainty that binding transaction documentation will be agreed and executed nor that any transaction will result. If the acquisition of Open Office does not tak
Slide 28: Appendix
be ReadyTech APPENDIX
Slide 29: International Selling Restrictions
INTERNATIONAL SELLING RESTRICTIONS This document does not constitute an offer of New Shares in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any country outside Australia except to
Slide 30: Summary of Underwriting Termination Events
SUMMARY OF UNDERWRITING TERMINATION EVENTS ReadyTech has entered into an agreement with Wilsons Corporate Finance Limited • any government or any governmental or regulatory body issues, or threatens to issue, proceedings or (Underwriter) (Placement Agreement), under which the Underwriter will accept
ReadyTech Holdings — Merger or Acquisition (November 2020) on 6ix