Graincorp Limited Class A · ASX:GNC
Graincorp Limited Class A — Merger or Acquisition (October 2009)
30 slides from Graincorp Limited Class A's merger presentation, Oct 6, 2009
Slide 1: GrainCorp United Malt Holdings Investor Presentation announcement
For personal use only Company announcement GrainCorp Limited ABN 60 057 186 035 Date: Tuesday, 6 October 2009 To: The Manager Announcements Company announcements office Lodged via www.asxonline.com PUBLIC ANNOUNCEMENT Contents for immediate release: GRAINCORP UNITED MALT HOLDINGS INVESTOR PRESENTATI
Slide 2: Acquisition of United Malt Holdings
For personal use only Acquisition of United Malt Holdings A$100 million Institutional Placement and Investor Presentation 9 for 10 Entitlement Offer to raise A$489 million 6 October 2009
Slide 3: Important Notice
For personal Important Notice use only This Presentation is issued by GrainCorp Limited (ACN 057 186 035) (“GrainCorp”) in relation to an accelerated entitlement offer to subscribe for new ordinary shares in GrainCorp (New Shares) to be made to eligible institutional shareholders of GrainCorp (“Inst
Slide 4: Agenda: Transaction Overview
For Agenda personal use only Transaction TransactionOverview Overview Strategic Rationale United Malt Holdings Financial Impact Acquisition Funding Conclusion Grain Storage | Supply Chain Logistics | Grain Trading |Port Terminals | Merchandise | Allied Mills 2
Slide 5: Transaction Overview
For personal Transaction Overview use only Agreement to acquire United Malt Holdings (“UMH”) for A$757 million Acquisition Agreement to acquire UMH for A$757 million(1), which represents a multiple of: Agreement Executed − 5.7x LTM EBITDA(2) Completion expected by end of November 2009 United Malt UM
Slide 6: Agenda: Strategic Rationale
For Agenda personal use only Transaction Overview Strategic StrategicRationale Rationale United Malt Holdings Financial Impact Acquisition Funding Conclusion Grain Storage | Supply Chain Logistics | Grain Trading |Port Terminals | Merchandise | Allied Mills 4
Slide 7: GrainCorp Transformation
For personal GrainCorp Transformation use only Prior to the proposed acquisition of UMH, GrainCorp had already undertaken a significant transformation Restructured the Board and appointed a new management team Improved GrainCorp’s capital structure through a ~$200 million equity raising earlier this
Slide 8: Creates an Australian Based International Agribusiness
For personal use only Creates an Australian Based International Agribusiness Grain storage, handling, logistics, trading, flour milling and malting in Australia, Canada, the United States and the United Kingdom The acquisition will increase GrainCorp’s market capitalisation from ~$806 million to $1,
Slide 9: Strong Strategic Fit with GrainCorp's Existing Business
For personal use only Strong Strategic Fit with GrainCorp’s Existing Business Storage and Logistics Grain Trading Downstream processing Existing Valuable portfolio of Major Australian grain Processing wheat for flour GrainCorp infrastructure assets in key trader exporting bulk via 60% ownership of A
Slide 10: Diversification of Earnings and Operating Cash Flows
For personal use only Diversification of Earnings and Operating Cash Flows Revenue by geography(1) EBITDA by segment(2) Canada Storage & 14% Logistics US 23% Malt 8% 43% UK Ports Australia 12% 17% 66% Allied Mills Trading 2% 15% UMH provides vertical and geographical UMH’s earnings are not significa
Slide 11: Generating Value for Shareholders
For personal use Generating Value for Shareholders only Attractive The agreed purchase price is attractive, representing a multiple of: Acquisition − 5.7x LTM EBITDA(1) Multiple Earnings Per The acquisition would have been 22.9% – 25.8% accretive on a pro forma Share Accretive basis for the year end
Slide 12: Agenda: United Malt Holdings
For Agenda personal use only Transaction Overview Strategic Rationale United UnitedMalt MaltHoldings Holdings Financial Impact Acquisition Funding Conclusion Grain Storage | Supply Chain Logistics | Grain Trading |Port Terminals | Merchandise | Allied Mills 10
Slide 13: UMH – A Leading International Malt Manufacturer
For personal use only UMH – A Leading International Malt Manufacturer UMH overview Fourteen manufacturing facilities, with new Pinkenba facility under construction Operations in Australia, the United States, Canada, and the United Kingdom North America United Kingdom Australia Canada Malting Great W
Slide 14: UMH is the World's Fourth Largest Commercial Maltster
For personal use only UMH is the World’s Fourth Largest Commercial Maltster UMH supplies a number of the world’s largest UMH is executing expansion plans to increase brewers and distillers annual production capacity up to approximately 1.2 million tonnes UMH services over 800 customers in the brewin
Slide 15: Malt Production: Strong Underlying Industry Fundamentals
Malt Production: For personal use only Strong Underlying Industry Fundamentals Global beer consumption rising Global Scotch whisky consumption rising Beer brewing is the largest global market for The production of whisky is the second largest malt, representing ~95% of end market usage global market
Slide 16: Securing Long-term Customer Requirements
For personal use only Securing Long-term Customer Requirements Malt production security Production volumes supported by supply Total global area of malting barley sown has commitments decreased over the past 20 years Many customers require certainty of malt supply Increasing focus of brewers to obta
Slide 17: UMH Historical Financial Performance
For personal use UMH Historical Financial Performance only UMH earnings growth driven by: Increased margins as a result of an improved customer mix Higher earnings from ancillary business streams such as Merchanting and Country Malt Increased by-product income UMH historical financial performance (F
Slide 18: UMH Growth Opportunities
For personal UMH Growth Opportunities use only Arbroath (Scotland) 57,000 MT capacity expansion Total project cost of £23 million with substantially all capex spent by completion Scheduled for completion December 2009 Modernisation of germination vessels and conveying equipment High efficiency kiln
Slide 19: GrainCorp's Intentions for UMH
For personal use GrainCorp’s Intentions for UMH only All material elements of the UMH business will continue to operate substantially in the same manner as they do currently The Combined Group will be led by a management team comprising executives from each of GrainCorp and UMH Continuity through re
Slide 20: Agenda: Financial Impact
For Agenda personal use only Transaction Overview Strategic Rationale United Malt Holdings Financial FinancialImpact Impact Acquisition Funding Conclusion Grain Storage | Supply Chain Logistics | Grain Trading |Port Terminals | Merchandise | Allied Mills 18
Slide 21: FY2009 Results Update
For personal FY2009 Results Update use only NPAT guidance issued on 3 August 2009 of $53 – 63 million Updated guidance of $60 – $63 million reflecting: − Grain receivals in excess of 9.6 million tonnes − Grain export volume through GrainCorp ports of 5.0 million tonnes − GrainCorp Trading exports of
Slide 22: Pro Forma Financial Impact
For personal Pro Forma Financial Impact use only Pro forma EPS for FY2009 (A$ in millions) Low High GrainCorp pro forma EPS (A$ per share) 0.59 0.61 UMH FY2009 EBIT (before MTM derivatives) 119 119 (-) Interest (16) (16) (-) Tax (24) (24) Pro forma NPAT 146 149 Pro forma Shares outstanding (millions
Slide 23: Pro Forma Capital Structure
For personal Pro Forma Capital Structure use only Pro forma capitalisation as at 31 March 2009 (A$ in millions) GrainCorp GrainCorp Combined Group actual pro forma(1) pro forma(2) Short-term debt 351 276 458 Term debt 223 105 105 Total debt 574 381 563 Cash and cash equivalents (11) (11) (11) Net to
Slide 24: Dividend Policy
For personal Dividend Policy use only Intention to pay $0.15 per existing share for FY2009 final dividend before adjustment for shares issued under the entitlement offer and placement Represents dividend of approximately $0.073 per share on a post-equity raising basis (assuming approximately 102 mil
Slide 25: Agenda: Acquisition Funding
For Agenda personal use only Transaction Overview Strategic Rationale United Malt Holdings Financial Impact Acquisition AcquisitionFunding Funding Conclusion Grain Storage | Supply Chain Logistics | Grain Trading |Port Terminals | Merchandise | Allied Mills 23
Slide 26: Committed Acquisition Funding
For personal use Committed Acquisition Funding only Institutional A$100 million equity placement to institutional investors Placement − To be undertaken in conjunction with the Institutional Offer bookbuild − Underwritten at a 10.2% discount to theoretical ex-entitlements price (“TERP”)(1) Entitleme
Slide 27: Entitlement Offer Details
For personal Entitlement Offer Details use only Offer 9 for 10 fully underwritten pro-rata Entitlement Offer to raise approximately A$489 million Size(1) − Approximately A$220 million institutional component − Approximately A$269 million retail component Record date is 9 October 2009 7.00 pm (Sydney
Slide 28: Entitlement Offer Timetable
For personal Entitlement Offer Timetable use only Event Date Announcement of Acquisition and Entitlement Offer 6 October 2009 Institutional Entitlement Offer opens 6 October 2009 Institutional Entitlement Offer closes 6 October 2009 Institutional Bookbuild and Placement 7 October 2009 Record Date un
Slide 29: Agenda: Conclusion
For Agenda personal use only Transaction Overview Strategic Rationale United Malt Holdings Financial Impact Acquisition Funding Conclusion Conclusion Grain Storage | Supply Chain Logistics | Grain Trading |Port Terminals | Merchandise | Allied Mills 27
Slide 30: Compelling Strategic Rationale
For personal use Compelling Strategic Rationale only Transforms GrainCorp into an international agribusiness Strong strategic fit with GrainCorp’s core business Diversification of earnings and operating cash flows UMH’s sales volumes are supported by long-term customer relationships Attractive acqui