Epe Capital Partners Ltd. Class A · JSE:EPE
Epe Capital Partners Ltd. Class A — Ethos Capital — Merger or Acquisition (November 2019)
9 slides from Epe Capital Partners Ltd. Class A's merger presentation, November 2019
Slide 1: Investor Presentation November 2019
INVESTOR PRESENTATION NOVEMBER 2019 1
Slide 2: Transaction Overview
TRANSACTION OVERVIEW – Brait is raising up to R5.6 billion through a Rights Offer to materially reduce its current leverage; Ethos Fund VII (R750m) and Ethos Capital (R600m) will jointly commit R1.35bn to the Rights Offer – Brait will amend its strategy to focus on maximising and realising value fro
Slide 3: Transaction Rationale
TRANSACTION RATIONALE – Brait has a core portfolio of distinctive, financially strong and cash generative investments that are currently undervalued, in part, due to Brait’s overleveraged balance sheet – Ethos Capital will acquire a stake in the Brait asset base and participate on the value unlock t
Slide 4: Investment in a High-Quality Asset Base…
INVESTMENT IN A HIGH-QUALITY ASSET BASE… Highlights of largest exposures % of NAV – Leading international health club operator serving >1.2 million members and operating 240 clubs across four continents in eight countries – Focus is shifting from footprint repositioning and expansion to extracting v
Slide 5: …At a Significant Discount to NAV
…AT A SIGNIFICANT DISCOUNT TO NAV R38.00 The current Brait NAV implies a NAV per share of R21.60 R38.00. Post a R5.6bn Rights Offer, the NAV per share equates to R21.60 R10.81 R9.40 At the maximum Rights Offer price of R9.40 per share, Ethos’ effective in-price is R10.81 NAV / Share (Pre rights NAV
Slide 6: Brait's New Value Maximisation and Realisation Strategy
BRAIT’S NEW VALUE MAXIMISATION AND REALISATION STRATEGY Strategy for the investment portfolio – Continued focus on the digitisation thesis and systems VIRGIN – Rigorous focus on capex plans for all regions based on return on capital ACTIVE – Focus on FCF generation (South Africa, United Kingdom) and
Slide 7: Deaggregation of the Anticipated Returns
DEAGGREGATION OF THE ANTICIPATED RETURNS Composition of the Returns In total, ‘Asset Attractive risk- Gearing level; return’ accounts for adjusted return 11% 60% of the total IRR, with only 27% Driven by: Asset return - “value growth” – Discounted entry price A significant FCF, required to come – Hi
Slide 8: Enhanced Diversification of the Ethos Capital Asset Base
ENHANCED DIVERSIFICATION OF THE ETHOS CAPITAL ASSET BASE PORTFOLIO: BY SECTOR (BASED ON 30 SEPT 2019 NAV) Industrials Following the investment into Brait, Ethos Capital’s largest 7% Telco services 17% three assets will make up c.50% of its portfolio: 8% Consumer goods Virgin Active (22%), ChannelVAS
Slide 9: Disclaimer
DISCLAIMER THE INFORMATION CONTAINED HEREIN IS PROVIDED FOR INFORMATIONAL AND DISCUSSION PURPOSES ONLY AND IS NOT, AND MAY NOT BE RELIED ON IN ANY MANNER AS, LEGAL, TAX OR INVESTMENT ADVICE OR AS AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY AN INTEREST IN ANY OF THE ETHOS PRIVATE EQUITY FUN
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