Slide 1: Synaptics to Acquire DisplayLink
Synaptics to Acquire DisplayLink July 20, 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Forward-looking statements give our current expectations and projections relatin
Slide 3: Disclaimer Regarding Non-GAAP Financial Measures
Disclaimer Regarding Non-GAAP Financial Measures In this presentation, we disclose certain financial measures that are not calculated in accordance United States generally accepted accounting principles, including Synergized EBITDA, non-GAAP gross margin, non-GAAP EPS and free cash flow. We have not
Slide 4: Strategic Rationale
Strategic Rationale Financially compelling transaction • $305M purchase price is at ~6x synergized EBITDA • Immediately and significantly accretive to non-GAAP margins, free cash flow, and EPS • Accelerates diversification into IoT In-depth market knowledge helps drive unique and significant synergi
Slide 5: DisplayLink – Leadership in Universal Docking
DisplayLink – Leadership in Universal Docking Founded in Revenue CAGR Track Record of Success 2003 29% >$500M UK Based 2011-19 Lifetime Revenue Strong Market Validation >250 40M+ 100+ Patents and ICs SHIPPED Certified End Patent Applications Products High Performance Software and Video Compression T
Slide 6: Expands Position in Enterprise Docking Market
Expands Position in Enterprise Docking Market Commercial MST Hub Docks Universal Docks Thunderbolt / USB-C Alt-mode docks Software based multi-4K docking system • Windows OS • Any OS • Specific port type matched to notebook • Any port type, any notebook • Throughput up to 26Gbps today • 96Gbps throu
Slide 7: Trends Driving Universal Dock Adoption
Trends Driving Universal Dock Adoption Market Trends Technology Trends WORK FROM HOME MULTIPLE DISPLAYS BYOD HIGHER RESOLUTION OFFICE HOTELING VIDEO CASTING © 2020 Synaptics Incorporated 7
Slide 8: Well Positioned for New Opportunities
Well Positioned for New Opportunities 4K 4K 4K 4K TODAY 4x4K Support ✓ Complete portfolio for CIO TOMORROW 8K 10K ✓ Any device, OS or interface USB 4 Future-proof with 8K and 10K support ✓ Seamless user experience ✓ Future-proof FUTURE enterprise IT spend Roadmap for wireless docking and displays ©
Slide 9: Transaction Overview
Transaction Overview • $305M total purchase price Consideration • All-cash consideration from Synaptics • Expected to close during Synaptics fiscal Q1’21; no expected regulatory filings Timing • Subject to customary closing conditions • $94M in CY2019 Sales Financials • Immediately accretive to Syna
Slide 10: Compelling Financial Combination
Compelling Financial Combination DisplayLink Synergy Transaction Combined Attractive Valuation Non-GAAP ($M) CY2019 Plan w/ Synergy w/ Synergy $305 / $94 Sales = Revenue $94 $94 ~3x EV / Sales Gross Profit 72 72 $305 / $46 EBITDA = ~6x EV / EBITDA Gross Margin 77% 77% + 2% Operating Expense 46 -15 3
Slide 11: Accretive to our Financial Model
Accretive to our Financial Model Long-Term Broadcom DisplayLink Model Wireless IoT Revenue +4-6% Non-GAAP Gross Margin >50% Non-GAAP Operating Margin ~20% Accelerates Synaptics Ability to Deliver Long-Term Shareholder Value Long-term financial model as presented on June 9, 2020; see disclaimer conce
Slide 12: Continues Synaptics Diversification into IoT
Continues Synaptics Diversification into IoT YTD Synaptics Pro Forma with Long-Term Revenue Mix IoT Acquisitions Model IoT IoT 37% IoT 28% 40% Connectivity DisplayLink YTD Synaptics: Q1-Q3’20 FY2020 Net Revenue less divested LCD TDDI Net Revenue Pro Forma: Expected Net Revenue from transactions in a
Slide 13: Capital Deployment for Growth & Accretive Assets
Capital Deployment for Growth & Accretive Assets $711 TDDI Divestiture $139 $250 Wireless IoT Connectivity transaction announced 7/7/2020 Revolver Draw $100 $472 $472 $305 DisplayLink transaction announced 7/20/2020 $156 Remaining cash balance Post-Transactions Q3'20 Ending Available Balance Post-Tr
Slide 14: Summary
Summary Compelling financial transaction: ~6x EBITDA and highly accretive Highly complementary to roadmap with unique synergies Accelerates Synaptics’ long-term IoT diversification strategy Well positioned to capitalize on technology and market trends ~6x EBITDA includes planned synergy achievement
Slide 15: Q&A
Q&A © 2020 Synaptics Incorporated 15