Mcpherson's Limited · ASX:MCP
Mcpherson's — Merger or Acquisition (March 2013)
23 slides from Mcpherson's's merger presentation, Mar 7, 2013
Slide 1: Acquisition of Home Appliances Pty Limited and Equity Raising
For personal use only McPherson’s Limited Acquisition of Home Appliances Pty Limited and Equity Raising 7 March 2013 Paul Maguire – Managing Director, McPherson’s Limited Paul Witheridge - Chief Financial Officer, McPherson’s Limited Owen Morgan – Managing Director, Home Appliances Pty Limited
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer This presentation (Presentation) has been prepared by McPherson's Limited (ABN 98 004 068 419) (McPherson's and Company). The Presentation is in relation to a placement to certain institutional and sophisticated investors (Placement) whereby new fully paid ordinary sh
Slide 3: Table of Contents
Table of Contents For personal use only 1 Executive Summary 4 2 Strategic Rationale 5 3 Overview of Home Appliances 6 4 Acquisition Impact on McPherson’s 12 5 Acquisition Funding 14 6 Conditions for Completion of Acquisition 15 7 Placement Timetable 16 8 Key Risks 17 9 International Selling Restrict
Slide 4: Executive Summary
Executive Summary Acquisition Overview McPherson’s has entered into a contract, which is conditional on receiving customary approvals, to acquire an ~82% interest in Home For personal use only » Appliances Pty Ltd (“HAPL”)1 for a total consideration of $22.0 million, representing 4.9x normalised FY1
Slide 5: Strategic Rationale
Strategic Rationale For personal use only Continues McPherson’s track record of successful acquisitions - Delivers on the strategy of generating growth through acquisition of compatible businesses; and - Targeting companies with well regarded brands, scope to grow and the potential to leverage McP
Slide 6: Market Overview
Overview of Home Appliances Market Overview For personal use only » The wholesale market for household appliances is estimated to reach $8.4 billion in FY13 - HAPL targets the ‘major appliances’ segment, the largest segment in this market, estimated to be valued at $2.9 billion in FY13 » The market
Slide 7: Business Overview
Overview of Home Appliances Business Overview For personal use only » Home Appliances Pty Ltd (“HAPL”) is a leading marketer and distributor of large appliances sold through major electrical retailers, kitchen companies and the commercial channel - Large appliance range focused on ovens, cooktops an
Slide 8: Brand Profile
Overview of Home Appliances Brand Profile For personal use only » Key owned brands; Euromaid, IAG and ARC FY12 Net Revenue Mix by Brand - Generated 90% of FY12 revenue Other » Euromaid is the primary HAPL brand 1% 6% - Generated 76% of FY12 revenue 4% - #2 in freestanding ovens1 6% - #3 in the cooki
Slide 9: Product Profile
Overview of Home Appliances Product Profile For personal use only FY12 Net Revenue Mix by Product » Focus on quality, affordable kitchen and related appliances Other (BBQs, taps, refrigeration) » Track record of developing new products to target under-served niches Dishwashers 4% 6% Washing machines
Slide 10: Expanded Housewares Offering
Overview of Home Appliances Expanded Housewares Offering For personal use only » The acquisition of Home Appliances expands the current offering in Housewares and allows McPherson’s to benefit from the increased consumer engagement with cooking Home Appliances Acquisition Existing McPherson’s Housew
Slide 11: Targeted Growth Opportunities
Overview of Home Appliances Targeted Growth Opportunities For personal use only Opportunity Strategy Organic growth in existing channels and geographies: — Retail Improved distribution in retail and market share growth in commercial and — Commercial kitchen due to increased sales capability — Kitche
Slide 12: Financial Impact on McPherson's
Acquisition Impact on McPherson’s Financial Impact on McPherson’s For personal use only » The acquisition is expected to be earnings per share accretive in FY141, being the first full financial year following completion of the acquisition » The acquisition diversifies McPherson’s channel base and in
Slide 13: Acquisition Integration
Acquisition Impact on McPherson’s Acquisition Integration of Home Appliances For personal use only » McPherson’s has extensive experience integrating businesses to yield synergistic benefits - Recent acquisitions of Footcare International and Cosmex International in 2012 » Home Appliances is operate
Slide 14: Acquisition Funding
Acquisition Funding » Acquisition will be fully funded via a $24.0 million fully underwritten placement to institutional and sophisticated investors, representing approximately 15% of current shares on issue (“Placement”) and a non-underwritten Share Purchase Plan (“SPP”)1 For personal use only » Un
Slide 15: Conditions for Completion of Acquisition
Conditions for Completion of Acquisition For personal use only » The acquisition of Home Appliances is conditional on receiving customary approvals and other standard completion conditions » To the extent the acquisition does not proceed, the proceeds from the Placement and SPP will be used by McPhe
Slide 16: Placement Timetable
Placement Timetable For personal use only Placement Date Placement bookbuild Thursday, 7 March 2013 Announce completion of Placement on ASX Friday, 8 March 2013 Settlement of new shares issued under the Placement Wednesday, 13 March 2013 Issue of new shares under the Placement Thursday, 14 March 201
Slide 17: Key Risks
Key Risks This section discusses the key risks attaching to an investment in shares in McPherson's, which may affect the future operati ng and financial performance of McPherson's and the value of McPherson's shares (before and after the proposed acquisition by McPherson's of Home Appliances). It al
Slide 18: Key Risks: Accounting, Taxation, Litigation
4. Changes in accounting or financial reporting standards Accounting or financial reporting standards may change. This may affect the reported earnings of McPherson's and its financial position from time to time. For personal use only 5. Taxation Future changes in Australian taxation law, including
Slide 19: Key Risks: Competition, Consumers, Brands
affected if the actions of competitors or potential competitors become more effective, or if new competitors enter the market, and McPherson's is unable to counter these actions. 2. Changing consumer preferences and buying patterns For personal use only There can be no assurance that demand by consu
Slide 20: Key Risks: Supply Chain, Key Customers
9. Supply chain management The efficiency of McPherson‘s overall supply chain is vital to McPherson's ongoing success. Any adverse changes or inefficiencies in McPherson‘s supply chain (such as increased freight costs due to increasing geographical diversity and increasing distributor reach) could h
Slide 21: Key Risks: Acquisition Integration and Liability
3. Integration risk The acquisition involves the integration of the Home Appliances business, which has previously operated independently to McPherson's. As a result, there is a risk that the integration of Home Appliances may be more complex than currently anticipated, encounter unexpected challeng
Slide 22: International Selling Restrictions
International Selling Restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. New Shares may not be offered or sold in any country outside Australia except to the extent permitted below. For perso
Slide 23: International Selling Restrictions: United Kingdom
United Kingdom Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amende