LPL Financial Holdings Inc. · NASDAQ:LPLA
LPL Financial — Merger or Acquisition (August 2017)
12 slides from LPL Financial's merger presentation, Aug 15, 2017
Slide 1: Purchase of National Planning Holdings, Inc.
LPL Financial Purchase of National Planning Holdings, Inc. August 15, 2017 Member FINRA/SIPC
Slide 2: Notice to Investors: Safe Harbor Statement
Notice to Investors: Safe Harbor Statement Statements in this presentation regarding LPL Financial Holdings Inc. (together with its subsidiaries, including LPL Financial LLC, the “Company” or “LPL Financial”) and its potential future levels of assets serviced, advisor headcount, additional run-rate
Slide 3: Notice to Investors: Non-GAAP Financial Measures
Notice to Investors: Non-GAAP Financial Measures The management of the Company believes that presenting certain non-GAAP measures by excluding or including certain items can be helpful to investors and analysts who may wish to use some or all of this information to analyze the Company’s current perf
Slide 4: We are focused on growth and execution to create long-term shareholder value
We are focused on growth and execution to create long-term shareholder value Grow our Core Business Execute with Excellence + Leverage the strength of our markets and model + Drive greater efficiency and productivity • Capitalize on secular trends • Continuously improve over time • Expand leadership
Slide 5: Transaction Summary
Transaction Summary • Transaction structured as an asset purchase with an initial purchase price of $325M • Contingent payment amount increases from $0 to $123M, based on the percentage of National Planning Holdings, Inc.’s (“NPH”) advisor production transferred, ranging from 72% to 93.5% respective
Slide 6: Value Proposition
Value Proposition NPH Advisors LPL Advisors Retail Clients Competitive payout Leverage scale to drive continued Enhanced investment capabilities: capability, pricing, and service Centrally Managed, Separately Managed, Enhanced capabilities enhancements in areas like: LPL research Onboardin
Slide 7: Purchase Price
Transaction multiple estimated to be ~5X run-rate EBITDA accretion $448M Contingent payment varies with transfer rate(1) – aligning incentives Purchase Price $399M 85% - 93.5% and providing downside purchase $371M 80% - 85% price protection $325M $342M 75% - 80% 72% - 75% Run-rate EBITDA accreti
Slide 8: Pro Forma Transaction Economics and Scale
Pro Forma Transaction Economics and Scale Transaction can drive meaningful Transaction can extend our market leadership in the EBITDA growth IBD/Hybrid and Bank/Insurance channels IBD / Hybrid channels Bank / Insurance channel 13%-18% (~$4.1T of assets)(3) (~$1T of assets)(3) Growth Pro Forma Pro Fo
Slide 9: Illustrative Transaction Timeline
Illustrative Transaction Timeline 2H 2017 1H 2018 2H 2018 Transaction Closed and Announced, Contingent Payment Transaction Purchase Price Paid (8/15) (in 1H 2018) Signing and Payment Onboarding costs Advisor Wave 1 Onboarding Wave 2 Run-rate benefit (by end of 2018) Benefit Ramp EBITDA and EPS Benef
Slide 10: Appendix
APPENDIX 10
Slide 11: Transaction Accounting Reference
Transaction Accounting Reference Area Item Accounting Treatment Purchase Price Initial purchase price ($325M at Close) Recorded as Intangible Assets (amortized over time) and Goodwill Contingent payment ($0 to 123M) Onboarding Costs Staffing to onboard advisors and client assets Core G&A expense Acc
Slide 12: Reconciliation of Net Income to EBITDA
APPENDIX Reconciliation of Net Income to EBITDA EBITDA is a non-GAAP measure. Please see a description of EBITDA under “Non-GAAP Financial Measures” on page 3 of this presentation for additional information. Set forth below is a reconciliation from the Company’s net income to EBITDA for the periods
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