Advanced Energy Industries, Inc. · NASDAQ:AEIS
Advanced Energy Industries — Merger or Acquisition (May 2019)
16 slides from Advanced Energy Industries's merger presentation, May 15, 2019
Slide 1: Acquisition of Artesyn Embedded Power: Creating a Pure-Play Power House
Acquisition of Artesyn Embedded Power Creating a Pure-Play Power House Ke Advanced | yay is, 2019 = Energy.
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements in this presentation regarding the proposed transaction between Advanced Energy, Artesyn Embedded Technologies, Inc. (“Artesyn”) and its owners , the expected timetable for completing the transaction, future financial and operating results, benefits and synergies of
Slide 3: Creating a Pure-Play Power House
Creating a Pure-Play Power House AE to acquire Artesyn Embedded Power for $400 million in total consideration TRANSFORM STRATEGIC VALUE & EXPAND FIT CREATION
Slide 4: A Highly Strategic and Transformative Acquisition
A Highly Strategic and Transformative Acquisition = GLOBAL PLATFORM with $1.3 billion” of revenue and a global presence TRANSFORM & across critical technologies and markets EXPAND = EXPANDS SAM BY 3X to $7.5 billion” by adding new attractive growth verticals in Datacenter, 5G infrastructure, Industr
Slide 5: At a Glance: Artesyn Embedded Power (Artesyn EP)
At a Glance: Artesyn Embedded Power (Artesyn EP) WHO IS ARTESYN EMBEDDED POWER = One of the World’s largest suppliers of power conversion technologies and products = Market leader of highly-engineered, application-specific power supplies in demanding equipment applications = Highly valued as a trust
Slide 6: Artesyn EP's Products and Customers
Artesyn EP’s Products and Customers MARKETS TELECOM & NETWORKING SERVER & STORAGE INDUSTRIAL & MEDICAL & PRODUCTS — High-Efficiency Telcom Power Gece) Rectifier System Mounted Power y? a Server Power Digital DC-DC Supply Modules Configurable Industrial Open Frame Bulk ay DC-DC Board CUSTOMERS BE Mic
Slide 7: A Global Platform with Unmatched Capabilities
A Global Platform with Unmatched Capabilities Families of Products Leading Market Positions Year Originally founded R&D as % of Sales Patent Portfolio Manufacturing Sites & Advanced + Energy. $719 million Plasma Power Generation High Voltage Power Supplies Power Controls & Metrology Semiconductor Eq
Slide 8: Triples AE's SAM and Diversifies AE's Presence
Triples AE’s SAM and Diversifies AE’s Presence 3X EXPANSION TO AE’S SAM Strategic Benefits: AE Current SAM" = $2.5B New SAM" = $7.5B a Instantly BsOeGEIs AEG Maria Neda Medical presence to multiple verticals id ial i % ae fnductria sei snl * New verticals help balance the volatility Tech in the semi
Slide 9: Strong Macro Growth Drivers Across All Verticals
Strong Macro Growth Drivers Across All Verticals DATACENTER HYPERSCALE = Growing cloud adoption across enterprise IT = Increased workload driven by Al & ML = Power cost and efficiency increasingly important & Data Economy 5G WIRELESS INFRASTRUCTURE = Delivering up to 100X faster speed than 4G/LTE =
Slide 10: Transaction Details
Transaction Details TRANSACTION CONSIDERATION SOURCE OF FUNDS TRANSACTION VALUE EXPECTED SYNERGIES TIMING AND APPROVAL Total purchase price of $400 million, including approx. $364 million in cash and approx. $36 million of assumed liabilities, subject to final adjustment” Agreement covers Artesyn Em
Slide 11: Path for Accelerating EPS Growth
Path for Accelerating EPS Growth ARTESYN EP GROSS MARGINS > >28% 26% - = Deal Close” 18-24 month” Long- term” ARTESYN EP ADJUSTED OPERATING MARGINS” >13% Deal Close” 18-24 month” Long-term” Target to Meaningfully Accelerate Margin Expansion and Earnings Accretion (1) Definition of Artesyn Adjusted f
Slide 12: Deliver Top Quartile Industrial Technology Financial Performance
Deliver Top Quartile Industrial Technology Financial Performance Combined with Advanced Energy Artesyn EP Synergies” Long-term Targets” 2018 Revenues $719 million $593 million $1,312 million >$1,500 million Gross Profits” $368 million $140 million $517 million 540% Margins % 51.2% 23.5% 39.4% ° Oper
Slide 13: Significant Financial Value Creation
Significant Financial Value Creation LOW COST OF FUNDING ATTRACTIVE VALUATION BETTER THAN BUYBACKS Wey Casi of Debt Libor . 2018 EV/revenue ~0.7x Calculated CSARSTOLA to non-GAAP financing +75bps” EPS at semi mid-cycle”: Debt financing as % of en 2018 ieee with ~5x Buyback 12% total cash outlay” syn
Slide 14: Capital Structure Transformation
Capital Structure Transformation PRE ACQUISITION POST ACQUISITION Q1 2019 Ending Pro Forma Cash & ws Cash & Equiv. Es Equiv.” aa Debt som Pro Forma Debt ~$350M Net Cash $354M Pro Forma Net S Cash" (aaa Gross Leverage None Gross Leverage” ~1.6x Net Leverage None Net Leverage” ~0.1x Cash Deployment 70
Slide 15: Creating a Pure-Play Power House
Creating a Pure-Play Power House AE to acquire Artesyn Embedded Power for $400 million in total consideration TRANSFORM STRATEGIC VALUE & EXPAND CREATION 1s
Slide 16: Non-GAAP and Adjusted Financial Measures
Non-GAAP and Adjusted Financial Measures Advanced Energy’s non-GAAP measures exclude the impact of non-cash related charges such as stock-based compensation and amortization of intangible assets, as well as discontinued operations, minority interest, and non-recurring items such as acquisition- rela
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