Aspen Group Limited · ASX:APZ
Aspen — Merger or Acquisition (February 2016)
36 slides from Aspen's merger presentation, Feb 11, 2016
Slide 1: Revised Aspen Group Proposal to merge with Aspen Parks Property Fund
Revised Aspen Group Proposal to merge with Aspen Parks Property Fund Creating a leader in value for money accommodation 30 October 2015 1
Slide 2: Disclaimer
DISCLAIMER This presentation and the information in it is not investment or financial product advice and is not a recommendation or advice in relation to Aspen Group Limited (ACN 004 160 927) or Aspen Property Trust (ARSN 104 807 767) (together, “Aspen Group”), Aspen Parks Property Management Ltd (A
Slide 3: Contents
CONTENTS 1 Revised Aspen Group Proposal 2 Merged Group overview 3 Explanatory notes Slide 1. Benefits of the Merger 23 2. Pro forma Merged Group financial statements 26 3. Merged Group portfolio 29 3
Slide 4: Revised Aspen Group Proposal
1 Revised Aspen Group Proposal 4
Slide 5: A superior value outcome for both securityholder groups
REVISED ASPEN GROUP PROPOSAL A superior value outcome for both Aspen Group and APPF securityholders than any other alternative The Aspen Group Board Committee and APPF Board Committee have carefully assessed all available options, including the Sunsuper/Discovery Unsolicited Offer, and have conclude
Slide 6: Process adopted by the Aspen Group Board Committee
REVISED ASPEN GROUP PROPOSAL Process adopted by the Aspen Group Board Committee After close of business on Friday, 23 October 2015, Aspen Group received an Unsolicited Offer from Sunsuper / Discovery The Aspen Group Board Committee carefully assessed all the available options These options inclu
Slide 7: Merged Group value proposition
REVISED ASPEN GROUP PROPOSAL Merged Group value proposition The Merged Group is forecast to have FY16 underlying cash earnings of 14.1 – 16.0 cents per security1 and annualised FY16 distributions of 12.0 cents per security2 Sector peers trade on an earnings yield of approximately 6.4%3 The sen
Slide 8: The most compelling proposition available to APPF securityholders
REVISED ASPEN GROUP PROPOSAL The most compelling proposition available to APPF securityholders Aspen Group's proposal is superior to the Sunsuper/Discovery Unsolicited Offer Provides the opportunity for APPF securityholders to remain fully invested and participate in the value for money accommodat
Slide 9: Details of the Revised Aspen Group Proposal
REVISED ASPEN GROUP PROPOSAL Details of the Revised Aspen Group Proposal The consideration for APPF securityholders represents a value of $0.60 per APPF security1 This represents a 29.8% premium to the APPF NAV of $0.4622 as at 30 June 2015 The form of consideration will be at each APPF securityhold
Slide 10: The Merger is forecast to be materially accretive to distributions
REVISED ASPEN GROUP PROPOSAL The Merger is forecast to be materially accretive to distributions1 Distribution accretion reflects: the Merged Group's appropriate capital structure expected operating synergies of approximately $1.7 million per annum Aspen Group APPF2 +28% +29% FY16 DPS FY16 DPS
Slide 11: The Merged Group will have an appropriate capital structure
REVISED ASPEN GROUP PROPOSAL The Merged Group will have an appropriate capital structure The Merged Group's target gearing range is between 25% - 35% Based on zero to full take-up of the Cash Option, pro forma 30 June 2015 gearing would range between: 28% - 41% 20% - 35% (post a sale of Spea
Slide 12: The Merged Group
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Slide 13: Profile of the Merged Group
THE MERGED GROUP Profile of the Merged Group The Merged Group will be a more focused business owning, managing and developing value for money accommodation properties Permanent Largely retiree customers residents Land lease model (customer owns cabin) Stable, high quality, annuity residential
Slide 14: Profile of the Merged Group
THE MERGED GROUP Profile of the Merged Group The Merged Group’s accommodation portfolio will be diversified by type and geography with representation across metropolitan, regional and tourist locations portfolio of 26 accommodation properties over 5,000 sites portfolio valued at $250 million
Slide 15: Profile of the Merged Group – geographic allocation
THE MERGED GROUP Profile of the Merged Group – geographic allocation The Merged Group’s accommodation portfolio will have a national footprint 15
Slide 16: Profile of the Merged Group – property type allocation
THE MERGED GROUP Profile of the Merged Group – property type allocation The Merged Group will own a portfolio of properties across a diversified customer base, reducing risk Mix of permanent residents and Mixed exposure is a frequent regulatory requirement short-stay (57%) Greater flexibility to
Slide 17: Profile of the Merged Group – site type allocation
THE MERGED GROUP Profile of the Merged Group – site type allocation The Merged Group business focus will be to continue to shift toward residential/permanents Sale of three short stay resort-style assets in north-west WA Portfolio composition by sites 6,000 5,000 12% 20% 4,000 23% 22% 3,000 2,000
Slide 18: Profile of the Merged Group – operations
THE MERGED GROUP Profile of the Merged Group – operations The Merged Group will operate a market leading fully integrated internalised platform Scale operations 11 year track record, with operations commencing in 2004 26 properties, located in every mainland state – 40% in NSW Over 400 employe
Slide 19: Profile of the Merged Group – development
THE MERGED GROUP Profile of the Merged Group – development The Merged Group will be well positioned to progress an expanded development pipeline In-house team Located in both Sydney and Perth Combine traditional residential, caravan park and manufactured housing experience Development Creating
Slide 20: Profile of the Merged Group – acquisitions
THE MERGED GROUP Profile of the Merged Group – acquisitions The Merged Group will continue a strong acquisition track record Clear criteria Locational focus on: metropolitan, existing asset clusters, or major regional population centres (especially east coast) Attractive income yields and develo
Slide 21: Profile of the Merged Group – positive industry fundamentals
THE MERGED GROUP Profile of the Merged Group – positive industry fundamentals The Merged Group will be positioned to take advantage of supportive social trends and positive industry fundamentals Demographics Increasing retiree population Lengthening life expectancy Inadequate savings drives re
Slide 22: Explanatory Notes
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Slide 23: Benefits of the Merger for Aspen Group securityholders
EXPLANATORY NOTE Note 1 – Benefits of the Merger for Aspen Group securityholders Increased exposure to a quality portfolio of assets the Merger presents an opportunity for Aspen Group to achieve scale efficiently; APPF properties are valued at a weighted average capitalisation rate of 13.1%, wit
Slide 24: Benefits of the Merger for APPF securityholders
EXPLANATORY NOTE Note 1 – Benefits of the Merger for APPF securityholders Ability to remain fully invested in the value for money accommodation asset class, and to enjoy the income and capital returns that would come from remaining invested in a sector with positive long term trends Improved liquidi
Slide 25: Benefits of the Merger for APPF securityholders (continued)
EXPLANATORY NOTE Note 1 – Benefits of the Merger for APPF securityholders Appropriate capital structure pro forma 30 June 2015 gearing of the Merged Group is expected to range from approximately 28% - 41%, based on zero to full take-up of the Cash Option; and post a sale of Spearwood South indus
Slide 26: Merged Group pro forma consolidated statement of financial position
EXPLANATORY NOTE Note 2 – Merged Group pro forma consolidated statement of financial position as at 30 June 2015 APPF Aspen Group Pro forma Merged Group pro forma pro forma adjustments pro forma 30 June 2015 30 June 2015 30 June 2015 30 June 2015 $’000 $’000 $’000 $’000 Current assets Cash and cash
Slide 27: Merged Group pro forma consolidated earnings forecast FY16
EXPLANATORY NOTE Note 2 – Merged Group pro forma consolidated earnings forecast for the year ending 30 June 2016 Merged Group APPF Aspen Group Pro forma adjustments pro forma FY16 FY16 FY16 FY16 $’000 $’000 $’000 $’000 Net property income 24,482 34,098 - 34,098 Net development income 2,652 3,232 86
Slide 28: Sensitivity
EXPLANATORY NOTE Note 2 – Sensitivity Impact of Cash Option take up on the pro forma FY16 consolidated earnings forecast and consolidated statement of financial position as at 30 June 2015 100% take-up 50% take-up 0% take-up Cents per Cents per Cents per $’000 $’000 $’000 security security security
Slide 29: Accommodation portfolio summary
EXPLANATORY NOTE Note 3 – Accommodation portfolio summary Carrying Residential / value Cap rate Property Location State Tenure permanent Annuals Short-stay Resources Total ($ 000's) (%) Ballina Ballina NSW Both (F&L) 82 - 141 - 223 17.2 9.0% Dubbo Parklands Dubbo NSW Freehold - - 127 - 127 11.3 10.2
Slide 30: Merged Group Portfolio: Ballina to Horseshoe Lagoon
EXPLANATORY NOTE Note 3 Ballina Lakeside Dubbo Parklands Harrington Horseshoe Lagoon Merged Group North Coast, NSW Dubbo, NSW North Coast, NSW Moama, NSW Portfolio Description Located on the NSW Far-North Located in close proximity to Located on the NSW Mid-North Located in the Echuca / Coast, 30km
Slide 31: Merged Group Portfolio: Four Lanterns to Tomago
EXPLANATORY NOTE Note 3 Four Lanterns Estate Maiden’s Inn A Shady River Tomago Van Village Merged Group Leppington, NSW Moama, NSW Moama, NSW Tomago, NSW Portfolio Description Located within the SW Sydney Located in the Echuca / Located in the Echuca / Located within the greater growth corridor, 51k
Slide 32: Merged Group Portfolio: Twofold Bay to Boathaven
EXPLANATORY NOTE Note 3 Twofold Bay Beach Wallamba River Ashley Gardens Boathaven Merged Group Eden, NSW North Coast, NSW Melbourne, Victoria Ebden, Victoria Portfolio Description Located in Eden on the NSW Located on the NSW Mid-North Located in Braybrook, 10km Located near Albury/Wodonga Sapphire
Slide 33: Merged Group Portfolio: Geelong to Coogee Beach
EXPLANATORY NOTE Note 3 Geelong Riverview Yarraby Balmoral Coogee Beach Merged Group Geelong, Victoria Echuca Village, Victoria Karratha, WA Fremantle, WA Portfolio Description Located in Geelong, a short Located in the town of Echuca, Located in the town of Karratha Located approximately 8km drive
Slide 34: Merged Group Portfolio: Cooke Point to Perth Vineyards
EXPLANATORY NOTE Note 3 Cooke Point Mandurah Gardens Pilbara Perth Vineyards Merged Group Port Hedland, WA Mandurah, WA Karratha, WA Perth, WA Portfolio Description A coastal property overlooking Situated approximately 65km Located in the Pilbara region of Located 14 km from the Perth Pretty Pool In
Slide 35: Merged Group Portfolio: Woodman Point to Myall Grove
EXPLANATORY NOTE Note 3 Woodman Point Karratha Village Adelaide Caravan Park Myall Grove Merged Group Fremantle, WA Karratha, WA Adelaide, SA Roxby Downs, SA Portfolio Description Located 10km from the historic Located in the Pilbara region of Located 3km from the centre of Located in Roxby Downs, p
Slide 36: Merged Group Portfolio: Port Augusta and Hervey Bay
EXPLANATORY NOTE Note 3 Port Augusta Australiana Top Tourist Park Merged Group Port Augusta, SA Hervey Bay, QLD Portfolio Description Located in Port Augusta, Located in Hervey Bay, 297km 318km north-west from north of Brisbane. Adelaide. Home to permanent residents Focuses on short stay tourist and