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: LPL Financial Purchase of National Planning Holdings, Inc.
August 15, 2017 LPL Financial Purchase of National Planning Holdings, Inc. Exhibit 99.2
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: Grow our Core Business, Execute with Excellence
Grow our Core Business Execute with Excellence We are focused on growth and execution to create long-term shareholder value = Asset and gross profit growth = Operating leverage and capital allocation Create Long-Term Shareholder Value + Leverage the strength of our markets and model Capitalize on se
Slide 5: Transaction Summary
Transaction Summary Business Overview Strategic Rationale Shareholder Value Creation Terms NPH is the holding company for an independent broker/dealer network with ~3,200 advisors serving ~$120B of client assets(1) NPH client asset mix is ~75% brokerage and ~25% advisory, with client cash sweep bala
Slide 6: Value Proposition
Value Proposition NPH Advisors LPL Advisors Retail Clients Competitive payout Enhanced capabilities Onboarding funding: onboarding assistance loans, LPL covers account closure and transfer fees Simplified account onboarding: automated, large-scale, negative consent process; repapering simplified wit
Slide 7: Transaction multiple estimated to be ~5X run-rate EBITDA accretion
Transaction multiple estimated to be ~5X run-rate EBITDA accretion Total Purchase Price (2) $325M $342M $371M $399M $448M Estimated On-boarding Costs(3) $40M $45M $50M $55M $60M Total Consideration $365M $387M $421M $454M $508M Run-rate EBITDA Accretion(3) $75M $80M $85M $90M $100M Run-rate EPS (ex.
Slide 8: Pro Forma Transaction Economics and Scale
13%-18% Growth Pro Forma Transaction Economics and Scale Transaction can drive meaningful EBITDA growth Transaction can extend our market leadership in the IBD/Hybrid and Bank/Insurance channels (1) ~$75M - $100M ~$636M - $661M LPL ~10% NPH ~2%(1) Pro Forma ~12%(1) NPH ~2%(1) Pro Forma ~14%(1) LPL ~
Slide 9: Illustrative Transaction Timeline
Illustrative Transaction Timeline 2H 2018 1H 2018 2H 2017 Transaction Signing and Payment Advisor Onboarding Benefit Ramp Transaction Closed and Announced, Purchase Price Paid (8/15) Contingent Payment (in 1H 2018) Onboarding costs Wave 1 EBITDA and EPS Benefit Ramp Run-rate benefit (by end of 2018)
Slide 10: Appendix
APPENDIX
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
Reconciliation of Net Income to EBITDA APPENDIX 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
LPL Financial Holdings — Merger or Acquisition (August 2017) on 6ix