Mach7 Technologies Ltd. · ASX:M7T
Mach7 Technologies — Merger or Acquisition (June 2020)
26 slides from Mach7 Technologies's merger presentation, Jun 10, 2020
Slide 1: Acquisition of Client Outlook (“eUnity”)
Acquisition of Client Outlook (“eUnity”) Fully Underwritten Placement and Non-renounceable Entitlement Offer 10 June 2020 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Mach7 Technologies Limited (M7T) in connection with the proposed acquisition by M7T of the entire issued share capital in Client Outlook Inc., (Client Outlook) (Acquisition) and an offer (Offer) comprising an accelerated non-renounceable pro rata ent
Slide 3: Disclaimer (continued)
Disclaimer (continued) Financial data All amounts are in Australian Dollars ($ or AUD) unless otherwise indicated. A number of figures, amounts, percentages, estimates, calculations of value and fractions in this presentation are subject to the effect of rounding. Accordingly, the actual calculation
Slide 4: Transaction Overview
•Mach7 to acquire 100% shares in Client Outlook Transaction Overview •Purchase price ~$40.8M (CA$38.5M), all cash deal •Represents 4.86x historical revenue multiple (pre-synergies) •Expected to complete by 10 July 2020 •Single enterprise viewing and integration platform About Client Outlook •Highly
Slide 5: About Client Outlook
ABOUT CLIENT OUTLOOK Company Customers Financials Enterprise Viewer • Founded 2002 • Industry's first and • ~100 customers • Revenues $8.8m • Incorporated & HQ only zero-footprint across North FY20 (31 Jan. 20) Ontario, Canada viewing & integra- America & Asia • 48% CAGR last 3 • Privately held tion
Slide 6: Solves Enterprise Imaging Challenges
Solves Enterprise Imaging Challenges ZERO-FOOTPRINT • eUnity does not leave any image or patient information on any device ensuring maximum patient privacy. ZERO- FLEXIBLE FOOTPRINT ARCHITECTURE MANY DISPARATE SYSTEMS (DATA ACCESS ISSUES) HARDWARE INTENSIVE (COSTLY) • reduce heavy hardware • elimina
Slide 7: One of two viewing specialists
– one of two viewing specialists Major healthcare Large and mid-size Data management Viewing specialists technology vendors imaging IT specialists specialists Managed service business Foundation for enterprise Platform approach and four Performance / efficiency Priority 1 models and operational and
Slide 8: Strategic Rationale
STRATEGIC RATIONALE Complete Enterprise Imaging Solution provider (front + back end) – delivers significant commercial opportunity enterprise imaging data platform Can now offer departmental clinical diagnostic (back end) PACS solution - significantly increasing market opportunity to US$2.75BN (
Slide 9: Client Outlook Revenues
Client Outlook Revenues Strong revenue growth for last 3 years – CAGR 48% High proportion of recurring revenue (45%) FY Revenues (A$) Recurring Revenue (A$) 10,000,000 4,500,000 9,000,000 4,000,000 8,000,000 3,500,000 7,000,000 3,000,000 6,000,000 2,500,000 5,000,000 2,000,000 4,000,000 1,500,000 3,
Slide 10: Significant Commercial Opportunities…
Significant Commercial Opportunities… Business transforming acquisition Brings in-house one of two viewing specialist products on market today - to offer total image management package & PACS system Expands the Mach7 client offering into US$2Bn PACS market Client Outlook enterprise viewer repr
Slide 11: Expanded Addressable Global Imaging Market
Expanded Addressable Global Imaging Market Mach7 Addressable Market* 3,500 3,000 2,500 Mach 7 alone (US$0.75 BN 2018) 2,000 Mach 7 + Client Outlook 1,500 (US$2.75 BN 2018) 1,000 500 - 2016 2017 2018 2019 2020 2021 2022 • Total Market ~US$3BN by 2020 – growing 5-6% CAGR PACS EI VNA & IE • Enterprise
Slide 12: Near term tender opportunities
Near term* tender opportunities #1 M7 & CO Both M7 & CO finalists; Vendor of bidding together $13M Choice to be awarded before (same customer) end of the year #2 M7 bidding joint solution (as $16M Finalists Tender “win” CO's reseller) chances significantly #3 M7 bidding to Acquisition offers custome
Slide 13: Customer Expansion Mach7 + Client Outlook
Customer Expansion Mach7 + Client Outlook 13
Slide 14: Immediate Customer Expansion
Immediate Customer Expansion Immediately expands Mach7’s customer base by ~100 Provides access to new territories (Canada, Italy, China ) Allows for Mach7 to combine PACS & VNA in single tender - & retain 100% of the profits Increases the number of tender opportunities available for bidding
Slide 15: Benefits of Acquisition
Benefits of Acquisition LOW RISK • Well known - both companies are in partnership today – reselling each other’s product • No technology risk - deep technology integration already completed • Team is already familiar with skills and strength/weakness of each team REVENUE SYNERGIES • One deployment t
Slide 16: Post-Acquisition
Post-Acquisition Executive Retention - two founder executives, VP Sales, and VP Engineering will be retained in the business going forward, providing important continuity and additive skills to the Mach7 team. They will be incentivized to build shareholder growth through the Mach7 Long Term Incent
Slide 17: Financials
FINANCIALS Pro-forma Forecast Combined historical LTM Combined – CY2021 Revenues $21.8M, with $9.5M (43.5%) $27M (f) revenue for CY21 recurring allows 6 months for integration and re- development of product marketing strategy. EBITDA +$0.2M $2M (f) p/a in cost synergies by 31 Post Acquisit
Slide 18: Fund Raising
FUND RAISING A fully underwritten Equity Raising of approximately $34.8 million (Equity Raising or Offer) via: − an institutional Placement of $3.7 million; Offer Size & Structure − a 1 for 4 pro-rata accelerated non-renounceable entitlement offer of approximately $31.1 million Approximately 51.
Slide 19: Timetable
Timetable Event Date (2020) Announcement of the Offer 10 June Institutional Placement and Entitlement Offer opens 10 June Announcement of results of Institutional Placement and Entitlement Offer 12 June “Ex” Date (being the date that Shares start trading without Entitlements to participate in Entitl
Slide 20: Key Risks
KEY RISKS This section outlines some of the key risks associated with an investment in the Company's shares, together with risks relating specifically to participation in the Offer. This is not an exhaustive list of the relevant risks and the risks set out below are not in order of importance. Addit
Slide 21: Acquisition Risks
Acquisition Risks Information risk The Company undertook a due diligence process in respect of Client Outlook, which relied in part on the review of financial and other information (including unaudited financial information) concerning the business and corporate structure of Client Outlook, which
Slide 22: Business Risks
Business Risks Effect of COVID-19 The COVID-19 pandemic has had and continues to have an impact on the Company’s business. In particular, the Company has observed a slowdown in the buying market for its new products resulting from the temporary reduction of revenue in the healthcare sector. Ther
Slide 23: General Risks
General Risks Macroeconomic and Socioeconomic factors The performance of the Company will continue to be influenced by the overall condition of the economy in Australia and other jurisdictions in which the Company operates and any deterioration in economic growth could adversely affect the Company
Slide 24: Offer Risks
Offer Risks Equity raising risk The Company has entered into an Underwriting Agreement with Morgans Corporate Limited (Lead Manager) (Underwriting Agreement), pursuant to which the Lead Manager has agreed to fully underwrite the Offer on the terms and conditions of the Underwriting Agreement. If cer
Slide 25: Offer Risks (continued)
Offer Risks (continued) k) the Company becomes required to give, or gives, in respect of a cleansing notice issued in connection with the Offer which is defective, a notice in accordance with subsection 708AA(12) or subsection 708A(9) of the Corporations Act, as the case may be, to correct that clea
Slide 26: Offer Risks (continued)
Offer Risks (continued) a general moratorium on commercial banking activities in, or any adverse change or disruption to the existing financial markets of Australia, Hong Kong, New Zealand, Canada or the United States of America is declared by the relevant central banking authority in any of those
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