Ingersoll Rand Inc. · NYSE:IR
Ingersoll Rand — Gardner Denver Holdings — Merger or Acquisition (April 2019)
31 slides from Ingersoll Rand's merger presentation, Apr 30, 2019
Slide 1: Ingersoll Rand and Gardner Denver Announce a Compelling Transaction
Ingersoll Rand and Gardner Denver Announce a Compelling Transaction April 30, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the proposed transaction between Gardner Denver Holdings, Inc. (“Gardner Denver”) and Ingersoll-Rand plc (“Ing
Slide 3: Non-GAAP Financials
Non-GAAP Financials Included in this presentation are certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Operating Margin, and Organic Revenue, designed to supplement, and not substitute for, the financial information presented in accordance with
Slide 4: Today's Presenters
Today’s Presenters 4 Michael LamachChairman and CEO Susan CarterSVP and CFO Vicente ReynalCEO Neil SnyderCFO
Slide 5: Transaction Overview
Transaction OverviewMichael Lamach | Chairman and CEO, Ingersoll Rand
Slide 6: Unlocking Significant Shareholder Value: Formation of Two Industry-Leading Global Companies
Unlocking Significant Shareholder Value:Formation of Two Industry-Leading Global Companies 6 Overview of Today’s Announcement Definitive agreement to combine Ingersoll Rand Industrial segment and Gardner Denver, creating premier Industrial company Remaining Ingersoll Rand businesses to become a lead
Slide 7: IndustrialCo and ClimateCo Structure and Consideration
7 ClimateCo Name:Expected to be renamed with new stock tickerLeading market positions with franchise brands, including Trane and Thermo KingManagement:Michael Lamach, Chairman & CEO (current Ingersoll Rand Chairman & CEO)Board of Directors to retain current membership IndustrialCo Structure &Conside
Slide 8: Transaction Benefits for Gardner Denver and Our Shareholders
Transaction Benefits for Gardner Denver and Our Shareholders Vicente Reynal | CEO, Gardner Denver
Slide 9: IndustrialCo: Diversified Global Leader in Mission-Critical Flow Creation and Industrial Products
IndustrialCo: Diversified Global Leader in Mission-Critical Flow Creation and Industrial Products 1 Presented on a 2019E basis. Pro forma for pending Precision Flow Systems (“PFS”) acquisition. EBITDA is pro forma for anticipated cost synergies of ~$250M that we expect to realize by the end of year
Slide 10: Gardner Denver is a ~$2.7B Premier Industrials Flow Creation Company
39% 61% FY 2018 34% 52% Gardner Denver is a ~$2.7B Premier Industrials Flow Creation Company 10 Key Financial Metrics (FY2019E)¹ Business Highlights Revenue ~$2.7B Adj. EBITDA ~$0.7B Adj. EBITDA Margin ~25% Medical (~10%) Geographic Mix² Revenue Mix Broad range of gas pumps, liquid pumps and liquid
Slide 11: Ingersoll Rand Industrial is a Highly Strategic and Additive Asset-Rich Portfolio
24% 17% 59% Ingersoll Rand Industrial is a Highly Strategic and Additive Asset-Rich Portfolio 11 Key Financial Metrics (FY 2019E)1,2 Business Highlights Revenue ~$3.8B Adj. EBITDA ~$0.7B Adj. EBITDA Margin ~18% Geographic Mix1,3 Revenue Mix1 1 Pro forma for pending PFS acquisition.2 Presented on an
Slide 12: Transaction Benefits: Greater Scale, Balance and Diversity
Transaction Benefits:Greater Scale, Balance and Diversity 12 1 Greater Scale with Iconic Brands 2 Enhanced End Market Balance and Diversity ~$6.6B1 premier industrial with expansive global footprint to best serve our customers Combined 300+ year history of operational excellence, innovation and qual
Slide 13: Transaction Benefits: Broadens Portfolio of Technologies and Solutions
Column1 C olumn2 Broadens Portfolio of Technologies and Solutions 13 3 Transaction Benefits: Compression Expanded offering from specialized air to ultra-high pressure Blower & Vacuum Complementary technologies enhancing the depth of combined offering Fluid Management² Significant platform expansion
Slide 14: Strong Recurring Revenue and Aftermarket Platform
39% 40% 40% 14 IndustrialCo Creates a ~$2.5B recurring service andaftermarket platform 40% of IndustrialCo revenue Solidifies resiliency of the business Expands already large installed base 4 Transaction Benefits: Ingersoll RandIndustrial Segment Strong Recurring Revenue and Aftermarket PlatformFY20
Slide 15: Transaction Benefits: World-Class Operating Platform Fueled by a Talented Global Workforce
15 Servicing Customer Needs with Highly Engaged Performance CultureUnderpinned by World-Class Operating Platforms 1 2 3 4 Drive innovation and productivity Proven & unique system to accelerate profit growth Committed to sustainability and energy efficiency Focus on employeeengagement 5 Transaction B
Slide 16: Transaction Benefits for Gardner Denver and Our Shareholders
Transaction Benefits for Gardner Denver and Our Shareholders Neil Snyder | CFO, Gardner Denver
Slide 17: IndustrialCo Financial Profile
IndustrialCo Financial Profile 17 2019E Revenue ~$2.7B ~$3.8B ~$6.6B 2019E Adj. EBITDA ~$0.7B ~$0.7B ~$1.6B3(With Synergies)~$1.4B(Without Synergies) 2019E Adj. EBITDA Margin ~25% ~18% ~25%3(With Synergies)~21%(Without Synergies) Capital Intensity(Capital Expenditure / LTM Revenue) ~2% ~2% ~2% Indus
Slide 18: Transaction Benefits: Compelling Value Creation
Run-Rate Synergy Estimate Transaction Benefits:Compelling Value Creation Global manufacturing and service footprint optimizationContinued deployment of operational efficiency initiatives through world-class operating platform Greater scale enables increased procurement powerDirect and indirect sourc
Slide 19: Efficient Capital Structure Provides Flexibility Going Forward
Without Synergies 19 IndustrialCo Net Debt / Adj. EBITDA1 1 Estimated IndustrialCo Net Debt calculated as Gardner Denver midpoint 2019E net leverage guidance of 1.6x adjusted to give effect to $1.9B of debt incurred to fund cash proceeds to Ingersoll Rand. Includes 2019E Adjusted EBITDA for Gardner
Slide 20: IndustrialCo: Straightforward Strategy For Increasing Shareholder Value
20 Deploy Talent Expand Margins Accelerate Growth Allocate Capital Effectively Creating Shareholder Value... Provides Greater Scale and Reach through Leading Brands and Market PositionEnhances End Market Balance and DiversityBroadens Portfolio of Technologies and SolutionsStrong Recurring Service an
Slide 21: Transaction Benefits for Ingersoll Rand and Our Shareholders
Transaction Benefits for Ingersoll Rand and Our Shareholders Michael Lamach | Chairman and CEO, Ingersoll Rand
Slide 22: Transaction Benefits for Current Ingersoll Rand Shareholders
Transaction Benefits for Current Ingersoll Rand Shareholders 22 Reverse Morris Trust structures transaction to be tax-freeto both companies’ shareholdersAt close, 50.1% of IndustrialCo owned by existing Ingersoll Rand shareholders, 49.9% owned by existing Gardner Denver shareholders$5.8B1 in equity
Slide 23: Global Sustainability Megatrends Play to Strengths of Pure Play ClimateCo
Global Sustainability Megatrends Play to Strengths of Pure Play ClimateCo 23 URBANIZATION RESOURCE CONSTRAINTS 60% of the population, or 5billion peoplewill be living in cities1* Expected 30-35% increasein food production21 billion newair conditioners installed3* ~15-60% increase in annual CO2e emis
Slide 24: ClimateCo Becomes Pure-Play Global Leader in Climate Control Solutions
ClimateCo Becomes Pure-Play Global Leaderin Climate Control Solutions for Buildings, Homes, and Transportation 24 Pro FormaFY2019E ~$12.9BRevenues ~$2.0BAdj. EBITDA Complete portfolio of energy-efficient equipment, controls and services, continuing to generate top- tier growth and high recurring rev
Slide 25: ClimateCo Pro Forma Financials
ClimateCo Pro Forma FinancialsSusan Carter | SVP and CFO, Ingersoll Rand
Slide 26: ClimateCo Pro Forma Financials (Based On January 2019 Guidance)
ClimateCo Pro Forma Financials (Based On January 2019 Guidance) 26 ~$12.9B ~$2.0B ~15.7% Less than 21% to 22% 3% to 4% 1% to 2% of Revenue >= 100% Adj. Net Income BBB $2.12 per Share ClimateCo FY2019E Pro Forma Metrics1 ClimateCo to mitigate $100M in estimated stranded costs from the transaction by
Slide 27: ClimateCo Pro Forma Financials (Based On January 2019 Adj. EPS Guidance)
ClimateCo Pro Forma Financials (Based On January 2019 Adj. EPS Guidance) 27 ~($1.75) ~($0.20) ~$0.30 ~$0.35 $6.15 to $6.35 $4.40 to $4.60 $4.85 to $5.05 FY19 Guidance Industrial1 FY19 Interest on2 Use of $1.9B ~$100M FY19 (With Industrial) Separation ClimateCo PFS Borrowing Cash Proceeds Stranded Cl
Slide 28: ClimateCo Will Continue to Execute a Consistent Strategy
ClimateCo Will Continue to Execute a Consistent Strategy that Delivers Profitable Growth with Singular Climate Focus 28 Nexus of sustainability and energy efficiency global megatrends SustainedGrowth 1. Margin improvementand powerful cash flow OperationalExcellence 2. Reinvestment, dividends, share
Slide 29: Unlocking Significant Shareholder Value Through the Formation of Two Industry-Leading Global Companies
Unlocking Significant Shareholder ValueThrough the Formation of Two Industry-Leading Global Companies 29 IndustrialCo ClimateCo Global Industry Leadership Creates a premier Industrial company with ~$6.6B1 of revenue, ~$1.6B1,2 of Adj. EBITDA and pro forma 2019E Leverage of ~1.9x3, including synergie
Slide 30: Appendix
Appendix
Slide 31: Important Additional Info and No Offer or Solicitation
Important Additional Info and No Offer or Solicitation IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND ITIn connection with the proposed transaction, Gardner Denver and Ingersoll Rand Industrial will file registration statements with the SEC registering shares of Gardner Denver common stock and I
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