Srg Global Limited · ASX:SRG
Srg Global — Merger or Acquisition (February 2023)
31 slides from Srg Global's merger presentation, Feb 16, 2023
Slide 1: Acquisition of ALS Asset Care and Equity Raise Presentation
16 FEBRUARY 2023 Not for release to United States wire services or distribution in the United States
Slide 2: Overview
OVERVIEW SRG has entered into binding documentation to acquire 100% of ALS Industrial Pty Ltd (ALS Asset Care) (“Asset Care”) for $80m on a cash-free, debt-free and normal level of working capital basis Transaction Details – Asset Care is a 100%-owned subsidiary of ASX-listed ALS Ltd (~$6b market
Slide 3: Rationale
RATIONALE Asset Care is the clear market leader in asset integrity and reliability services nationally with over 65 years of operating history Market leader in asset and select customer relationships spanning 25+ years integrity and reliability Leading position in key end markets of mining, oil
Slide 4: We are a diversified industrial services company
US We are a diversified We bring an engineering The most sought-after industrial services mindset to deliver diversified industrial company critical services for services business major industry 4 4
Slide 5: With what we do
WITH WHAT WE DO Integrity & reliability engineering We bring an engineering Asset repair and Testing & mindset to deliver protection services inspection critical services for major industry Asset Care enables SRG to provide an end-to-end solution for asset maintenance services Access Condition servi
Slide 6: Most sought-after diversified industrial services business
MOST SOUGHT-AFTER DIVERSIFIED INDUSTRIAL SERVICES BUSINESS LEADERSHIP HORIZON Zero Harm / ESG industry leader and recognised employer / partner of choice Domestic / International growth in Engineered Products across all SRG operating segments Selective strategic acquisitions to complement capabi
Slide 7: Transaction Overview
GLOBAL ASSERCARE TRANSACTION OVERVIEW
Slide 8: Market leader in asset integrity & reliability services
MARKET LEADER IN ASSET INTEGRITY & RELIABILITY SERVICES #1 in asset 65+ years of 600+ highly #1 integrity in asset& operating skilled full-time reliability integrity & history in employees Mackay services reliability Australia Moranbah Emerald services Gladstone Roma Brisbane Kalgoorlie Singleton St
Slide 9: Industry leading technical expertise
INDUSTRY LEADING TECHNICAL EXPERTISE Consulting Inspection & Testing Other Services Integrity & Reliability Non-Destructive Mechanical, Materials Inspection Condition Monitoring Training Services Engineering Testing & Product Testing Material testing to Training services to Engineering consulting Vi
Slide 10: Highly skilled team of technicians
HIGHLY SKILLED TEAM OF TECHNICIANS Experienced and Tenured Management Employees Post Acquisition +23% General Manager Business Support Manager (Asset Care) (HR, QA, HSE, L&D, 600 3,200 Technical & Commercial) 2,600 20 13 25 10 State Manager State Manager (NSW, VIC, QLD) (WA, SA, NT) Asset Care Pro-F
Slide 11: Accelerates shift towards annuity revenue and earnings
ACCELERATES SHIFT TOWARDS ANNUITY REVENUE AND EARNINGS Asset Care Pro-Forma 1% 33% 42% 43% Revenue by 49% Business Mix1 18% 99% 15% Asset Maintenance Mining Services Engineering & Construction 1% 42% Revenue by Recurring 49% 51% 58% vs. Project Based1 99% Recurring Project Based 1% 26% 32% EBITDA by
Slide 12: Step change, accretive acquisition
STEP CHANGE, ACCRETIVE ACQUISITION Pro-Forma 12-Months EBITDA Key Financial Highlights +21% 15.4 88.9 EPS(A) accretive, pre cost and revenue EBITDA and EBIT(A) 73.5 synergies, on a pro- margin accretive1 forma FY23E basis1 Asset Care has a Asset Care has capital-light business historically d
Slide 13: For growth
FOR GROWTH “A COMBINED SRG GLOBAL AND ASSET CARE BRINGS TOGETHER TWO HIGHLY COMPLEMENTARY MARKET LEADING BUSINESSES THAT ENHANCE AND ACCELERATE THE COMBINED GROUP’S 3 GROWTH AMBITIONS” 2 1 Leverage Technology Leverage Market Position Leverage Platform Data management Technical capability Servi
Slide 14: Equity Raising Overview
GLOBAL EQUIMNARAISIING OVERVIEW
Slide 15: Offer summary
OFFER SUMMARY SRG is conducting a fully underwritten institutional placement to raise ~$46.4 million and a non-underwritten Share Purchase Plan to raise up to $5 million Fully underwritten institutional placement to eligible institutional investors to raise approximately $46.4 million (“Placement”
Slide 16: Sources and uses of funds
SOURCES AND USES OF FUNDS Sources of Funds1 $m % Uses of Funds $m % Proceeds from Placement (before costs) 46.4 54.9% Purchase consideration 80.0 94.7% Acquisition debt facility 30.0 35.5% Transaction and integration costs 4.5 5.3% Existing cash 8.1 9.6% Total Sources 84.5 100% Total Uses 84.5 100%
Slide 17: Pro-forma capital structure
PRO-FORMA CAPITAL STRUCTURE SRG Standalone Pro-Forma1 Share price $ / share 0.7552 0.7203 Shares outstanding M 448.1 512.5 Market capitalisation $m 338.3 369.0 Cash4 $m 75.8 67.7 Debt4 $m 37.7 67.7 Net debt / (cash) $m (38.1) (0.0) Note: (1) Shown exclusive of the SPP as this is non-underwritten. (2
Slide 18: Equity raising timetable
EQUITY RAISING TIMETABLE Event Date1 Record date for SPP 7PM AEDT on Wednesday, 15 February 2023 Trading halt and announcement of Acquisition, Placement and SPP Thursday, 16 February 2023 Placement bookbuild Thursday, 16 February 2023 Trading halt lifted – trading resumes on ASX Friday, 17 February
Slide 19: Important Notices and Disclaimers
GLOBAL LNPIPIEINIDIDS ZN3 DISCEAIMERS)
Slide 20: Important notices and disclaimer
IMPORTANT NOTICES AND DISCLAIMER Not for release to US wire services or distribution in the United States. Unless otherwise defined in these notices and disclaimer, capitalised terms have the meanings given to them elsewhere in this Presentation. This investor presentation (Presentation) is dated 16
Slide 21: Important notices and disclaimer
IMPORTANT NOTICES AND DISCLAIMER Not financial product advice or offer (cont.) The distribution of this Presentation in jurisdictions outside Australia may be restricted by law and you should observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of ap
Slide 22: Important notices and disclaimer
IMPORTANT NOTICES AND DISCLAIMER Reliance on Third Party Information To the extent this Presentation contains information that has been derived from publicly available sources, SRG has not independently verified the information obtained from such third party source. While the SRG believes that such
Slide 23: Key Risks
GLOBAL LNPIPLEINIDID [83 IKEVARISICS 00
Slide 24: Key risks
KEY RISKS Overview This section discusses some of the key risks associated with any investment in SRG, which may affect the value of SRG shares. The risks set out below are not necessarily listed in order of importance and do not constitute an exhaustive list of all risks involved with an investment
Slide 25: Key risks
KEY RISKS Professional negligence and product liability claims As a professional service provider, and manufacturer and supplier of specialist products, SRG is exposed to the risk of professional negligence and product liability claims against it. SRG maintains professional indemnity and product lia
Slide 26: Key risks
KEY RISKS Competition Competition in the construction and services industry is significant, and competition from other construction and specialist contracting and services companies may impact the future profitability of SRG. Competition includes major construction companies in Australia and interna
Slide 27: Key risks
KEY RISKS Investment in shares (cont.) The operational and financial performance and position of SRG and SRG’s share price may be adversely affected by a worsening of general economic conditions in Australia, as well as international market conditions and related factors. It is also possible that ne
Slide 28: Appendix: Summary of Placement Agreement
GLOBAL ARRENDIXGe: SUMMARY OLF RPEACENMENT AGREEMENT
Slide 29: Summary of placement agreement
SUMMARY OF PLACEMENT AGREEMENT SRG has entered into an underwriting agreement with the Underwriter in respect of the Placement (Underwriting Agreement). The Underwriting Agreement contains representations and warranties and indemnities in favour of the Underwriter. Details of the fees payable to the
Slide 30: Foreign Selling Restrictions
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Slide 31: Foreign selling restrictions
FOREIGN SELLING RESTRICTIONS This Presentation does not constitute an offer of New Shares in any jurisdiction in which it would be unlawful. In particular, this Presentation may not be distributed to any person, and the New Shares may not be offered or sold, in any country outside Australia except t