Covista Inc. · NYSE:CVSA
Covista — Adtalem Global Education — Merger or Acquisition (September 2020)
27 slides from Covista's merger presentation, Sep 11, 2020
Slide 1: Acquisition of Walden University
Acquisition of Walden University September 11, 2020
Slide 2: Safe Harbor
Safe Harbor Certain statements contained in this presentation concerning Adtalem Global Education’s future performance, including those statements concerning expectations or plans, constitute “forward-looking statements” within the meaning of the Safe Harbor Provision of the Private Securities Litig
Slide 3: Today's presenters
Today’s presenters Lisa Wardell CEO and Chairman Stephen W. Beard Chief Operating Officer Michael Randolfi Chief Financial Officer ©2020 Adtalem Global Education Inc. All rights reserved. 3
Slide 4: Transaction overview
Transaction overview • Accretive transaction with clear opportunity for long-term value creation • Creates a premier national healthcare educator, expands the online platform, and offers Strategic substantial synergy potential Rationale • Pivotal step in Adtalem’s transformation into a workforce sol
Slide 5: Transaction details
Transaction details • $1.48 billion purchase price • Acquisition represents an LTM Adjusted EBITDA acquisition multiple of 8.4x pre- Transaction Structure synergies and a 6.2x post run-rate synergies of $60 million • All-cash transaction • $2.05 billion debt financing led by Morgan Stanley Financing
Slide 6: Next step in Adtalem's transformation to a workforce solutions provider
Next step in Adtalem’s transformation to a workforce solutions provider American University DeVry Ross Chamberlain of the University and Adtalem Acquisition Lisa Wardell University University Caribbean Carrington Brazil of Walden named CEO acquisition acquisition School of University divestiture Uni
Slide 7: Walden University is a fully online university with strong offerings in healthcare
Walden University is a fully online university with strong offerings in healthcare Overview Accomplishments • Provides bachelor's, master’s and doctoral degrees to • #1 conferrer of MSN degrees in the U.S. more than 50,000 students across all 50 states and • #1 among 372 U.S. institutions for awardi
Slide 8: Transaction will create premier national healthcare educator
Transaction will create premier national healthcare educator >90,000 Pro Forma Degree Mix2 #1 FY2020 Enrollment1 Undergraduate and Graduate Nursing Enrollment in the U.S. 23% 31% ~100 #1 Total Degree Provider of MDs, PhDs and Offerings/Programs Nursing degrees to African Americans 46% $1.65bn 82% FY
Slide 9: The combined company will have a market-leading position across a spectrum of nursing programs
The combined company will have a market-leading position across a spectrum of nursing programs Nursing MSN Generic BSN MSN - FNP DNP MSN RN to BSN Program Non-Clinical 2019 Rank #1 #1 #1 #1 #2 #2 #1 Provider 9,610 12,104 1,065 24,231 9,600 24,891 #2 Provider 5,610 2,795 1,004 9,600 2,955 11,176 ©202
Slide 10: Significant contributions to free cash flow
Significant contributions to free cash flow1 Expected Incremental • Expect addition of Walden Free Cash Flow1 Contribution from University to add substantial Walden University Acquisition free cash flow beginning in 160 year 1 $130M $140M 140 • $60M free cash flow contribution in year 1 120 $100M •
Slide 11: Highly accretive to EPS for year two and beyond
Highly accretive to EPS1 for year two and beyond Expected EPS1 Accretion from • Year 1 dilution due entirely Walden University Acquisition to purchase accounting 3 • Years 2 and 3 become 2.5 + $2.35 substantially accretive due 2 to realization of synergies 1.5 • Year 4 and beyond project + $0.75 + $
Slide 12: Significant ROIC and long-term value creation
Significant ROIC and long-term value creation • Compelling long-term Expected ATGE WACC vs. ROIC Year 1 value creation opportunity 12 10-12% for shareholders 10 • Expect acquisition to ~8% 8 generate 10%-12% ROIC beginning in year 1 6 • Exceeds current WACC 4 by 25% - 50% 2 0 ATGE WACC ROIC in Year
Slide 13: Committed financing with ability to deleverage
Committed financing with ability to deleverage Substantial Deleveraging Ability Financing Overview Deleveraging ability driven by: $2.05 billion in committed financing − Baseline earnings growth • $400 million revolving credit facility − Cost savings realization replaces current RCF − Strong free ca
Slide 14: Meets all of Adtalem's M&A criteria
Meets all of Adtalem’s M&A criteria 1 ROIC and accretive 4 Impact on global reach enterprise value 5 Synergy opportunities 2 Ability to scale 6 Positioned within 3 Talent Workforce Solutions value chain ©2020 Adtalem Global Education Inc. All rights reserved. 14
Slide 15: Increasing exposure to industry with robust growth dynamics
Increasing exposure to industry with robust growth dynamics Occupations In Which Demand Exceeds Supply Healthcare Practitioners 44% Business and Finance 21% Computer and Mathematical 17% Architecture and Mathematical 15% Transportiation and Material Moving 13% Building and Grounds 9% Healthcare Supp
Slide 16: Increasing exposure to growing online modality and nursing education
Increasing exposure to growing online modality and nursing education • The online learning market is expected to grow at a CAGR of 11% during 2019 - 20251 • Degrees granted by online providers have outpaced degrees granted from on-campus or hybrid models across degree levels over the last five years
Slide 17: Delivers substantial scale in online offerings
Delivers substantial scale in online offerings 58% 100% 82% Adtalem online Walden University online Online students in pro students students forma entity Walden University’s Complementary Program Offerings and Strong Online Capabilities Position Adtalem to Lead in Online Healthcare Education • Broad
Slide 18: Multiple opportunities to scale offerings for students and employers
Multiple opportunities to scale offerings for students and employers • Deepen national and global presence to meet student needs while prioritizing high-demand markets • Leverage new and existing programs to develop life-long learning opportunities • Increase scale to engage large employer partners
Slide 19: Walden University brings with it a strong and experienced management team
Walden University brings with it a strong and experienced management team with online and sector expertise Steven Tom CTO • Deep technology experience in various industries • Joined Walden University as Vice President of Global Technology Paula Singer Innovation in Jan. 2018 CEO • Deep experience in
Slide 20: Combined entity will drive broader access and superior academic outcomes
Combined entity will drive broader access and superior academic outcomes to larger student population Providing the Best Broadening ACCESS to Combined Capabilities Lead to EXPERIENCE Across High-Quality Education Superior Student IMPACT Modalities • Offerings across price segments • Combined physica
Slide 21: Significant synergy opportunities
Significant synergy opportunities • Annual synergies of ~$60 Expected Synergies vs. Cost by Year (in millions) million delivered through 70 increased efficiencies in ~$60M ~$60M 60 marketing spend and back 50 office operations 40 • Total integration cost of ~$30M ~$30M 30 ~$60 million over three 20
Slide 22: Summary: A strategic, transformative, accretive transaction
Summary: A strategic, transformative, accretive transaction ✓ Adds Significant Free Cash Flow Beginning in Year 1 and Highly Accretive to Earnings in Future Years ✓ Strong ROIC and Compelling Opportunity for Long-term Value Creation ✓ Industry Tailwinds in Recession-Resilient Industry with Compellin
Slide 23: Appendix
Appendix ADTALEM GLOBAL EDUCATION
Slide 24: Chart 1 – Incremental free cash flow
Chart 1 – Incremental free cash flow Preliminary Financial Information We report our financial results in accordance with U.S. generally accepted accounting principles. All projected financial data in this presentation is preliminary, as financial close procedures for the periods presented are not y
Slide 25: Chart 2 – Incremental earnings per share
Chart 2 – Incremental earnings per share Preliminary Financial Information We report our financial results in accordance with U.S. generally accepted accounting principles. All projected financial data in this presentation is preliminary, as financial close procedures for the periods presented are n
Slide 26: Chart 3 – Return on invested capital
Chart 3 – Return on invested capital Preliminary Financial Information We report our financial results in accordance with U.S. generally accepted accounting principles. All projected financial data in this presentation is preliminary, as financial close procedures for the periods presented are not y
Slide 27: Chart 4 – Leverage and EBITDA
Chart 4 – Leverage and EBITDA Preliminary Financial Information We report our financial results in accordance with U.S. generally accepted accounting principles. All projected financial data in this presentation is preliminary, as financial close procedures for the periods presented are not yet comp
Adtalem Global Education — Merger or Acquisition (September 2020) on 6ix