Dyno Nobel Limited · ASX:DNL
Dyno Nobel — Incitec Pivot — Merger or Acquisition (March 2008)
17 slides from Dyno Nobel's merger presentation, Mar 11, 2008
Slide 1: Recommended offer for Dyno Nobel
Recommended offer for Dyno Nobel Investor Presentation 11 March 2008 Julian Segal Managing Director & CEO James Fazzino Finance Director & CFO
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Incitec Pivot Limited for professional and sophisticated investors. The information contained in this presentation is for information purposes only and does not constitute an offer to issue, or arrange to issue, securities or other financial products
Slide 3: What we are announcing today
What we are announcing today • Proposed A$3.3bn acquisition of Dyno Nobel • Unanimous recommendation from the Dyno Nobel Board • Implementation by Scheme of Arrangement • Price of A$2.80 per share for outstanding shares(1) • 75% scrip, 25% cash mix (with mix and match option) • Including IPL’s exist
Slide 4: What is the strategic rationale?
What is the strategic rationale? • The super cycle is driving demand in both hard and soft commodities Industrialisation of Chinese and Indian economies driving the mining boom Growth in China and India per capita GDP driving a step change in food consumption (a shift from “starch to protein”) • Exp
Slide 5: IPL and Dyno Nobel are a natural combination
IPL and Dyno Nobel are a natural combination • IPL and Dyno Nobel are both chemical companies • Nitrogen-based chemical manufacturing is at the core of both companies Manufacturing drives profitability • Fertiliser and explosives fit together Commonality in underlying chemical processes and inputs I
Slide 6: Combined business is positioned for growth
Combined business is positioned for growth • Building on strength #1 or #2 in chosen markets • Step change in market capitalisation and business size Able to fund larger projects Creates critical mass in corporate Creates manufacturing critical mass • Capital structure to support growth opportunitie
Slide 7: ASX Top 30 company
ASX Top 30 company Market capitalisation circa A$9.0bn(1) Dyno Nobel Shareholders 17% + = 83% Existing IPL Shareholders IPL Dyno Nobel Combined A$7.5bn A$2.3bn A$9.0bn(1) • Merged entity would be in the ASX Top 30 • Dyno Nobel shareholders will own up to ~ 17% of the enlarged entity (1) Proforma mar
Slide 8: Shape of the expanded business
Shape of the expanded business Earnings Before Interest & Taxes (EBIT)(1) 24% 28% N. America Australia + = / Asia 100% Australia 76% 72% Australia N. America / Asia IPL Dyno Nobel Combined Product diversification(2) 6% N. America 48% Fertiliser Fertiliser 100% Fertiliser + 94% Explosives = 52% Explo
Slide 9: What we are offering: Key terms
What we are offering: Key terms • Implied A$2.80 per share offer for the remaining circa 86.8% of Dyno Nobel’s ordinary shares not owned by IPL Offer Scrip component of A$2.10(1) (75%) per Dyno Nobel share Cash component of A$0.70 (25%) per Dyno Nobel share • Subject to due diligence by IPL (10-day
Slide 10: Attractive offer for IPL and Dyno Nobel shareholders
Attractive offer for IPL and Dyno Nobel shareholders • Creates value for all shareholders Meets IPL’s 15% IRR investment criteria Acquisition premium of 25.7% to Dyno Nobel’s 1-month VWAP(1) Share in the value creation and growth of the merged group Scrip-for-scrip CGT rollover relief for Dyno Nobel
Slide 11: Financing the proposal
Financing the proposal • IPL has secured a A$2.4bn acquisition facility from a consortium of leading commercial banks 364 day multi-currency (A$ / US$) acquisition bridge • The facility will be used to Fund the A$500m cash component of the offer consideration Refinance IPL & Dyno Nobel existing debt
Slide 12: How do we deliver > 15% IRR
How do we deliver > 15% IRR Improve Dyno Nobel business efficiency • Acceleration and delivery of current efficiency program IPL’s track • Manufacturing improvement record of delivery • Overhead rationalisation • Swing of production between fertilisers and explosives • Proven management team – deliv
Slide 13: Summary
Summary • Input-side exposure to super-cycle from both hard and soft commodities • A natural combination positioned for growth • Creates value for all shareholders • Meets IPL’s investment criteria and creates double digit EPS accretion in year 2 • Conservatively geared capital structure Global scal
Slide 14: Incitec Pivot Q&A
Incitec Pivot Qa
Slide 15: Contacts
Contacts Investor Relations Media Incitec Pivot Incitec Pivot Simon Atkinson Stewart Murrihy T: +61 3 8695 4555 T: +61 3 8695 4419 M: +61 405 513 768 M: +61 418 121 064 O’Sullivan Pullini – M&A Adviser Gavin Anderson & Co Tony O’Sullivan Felicity Allen T: +61 2 9258 8555 T: +61 413 946 701 15
Slide 16: Q&A Appendix
Incitec Pivot Qa
Slide 17: Nitrogen chemistry
Nitrogen chemistry Additive Finished Product End Market Fertiliser / Ammonia Industrial + Carbon Urea Fertiliser Dioxide Natural / Synthetic Ammonia Ammonium Fertiliser / + Nitric Acid Gas Nitrate (AN) Explosives Urea / Ammonium Nitrate Fertiliser (UAN) + Phosphoric Ammonium Fertiliser Acid Phosphat