Maggie Beer Holdings Ltd. · ASX:MBH
Maggie Beer — Merger or Acquisition (March 2019)
40 slides from Maggie Beer's merger presentation, Mar 4, 2019
Slide 1: Acquisition of remaining 52% of Maggie Beer Products and $15.9m equity raising
Acquisition of remaining 52% of Maggie Beer Products Pty Ltd (“MBP”) and $15.9m equity raising 4 March 2019 – This presentation may not be released to US wire services or distributed in the United States except by Longtable to Approved US Shareholders
Slide 2: Disclaimer
Disclaimer The following notice and disclaimer applies to this presentation and you are therefore advised to read this carefully before reading or making any other use of this presentation or any information contained in this presentation. In accepting this presentation, you agree to be bound by the
Slide 3: Disclaimer
Disclaimer Some of the information in this presentation is based on unaudited financial data which may be subject to change. “Pro-forma” financial information has not been audited or reviewed. The pro-forma financial information included in this presentation is for illustrative purposes and does not
Slide 4: Executive summary
Executive summary Longtable has entered into a conditional binding agreement to acquire the remaining 52% of Maggie Beer Products Pty Ltd (“MBP”) for $10m. The acquisition of the balance of Maggie Beer rounds out the Longtable portfolio MBP has considerably improved its operating performance wit
Slide 5: Overview of the capital raising
Overview of the capital raising The structure of the MBP acquisition is as follows $8.5m cash consideration $1.0m scrip consideration Acquisition overview $0.5m convertible note Longtable has been a 48% shareholder in MBP since July 2016 Implied acquisition multiple of ~10.6x FY19 projec
Slide 6: Maggie Beer overview
€ Maggie Beer overvi PONGTA Je GROUP
Slide 7: Maggie Beer Products
Maggie Beer Products Maggie Beer Products is an iconic food brand offering a range of premium foods delighting Australians for more than 40 years across the following categories Cheese Ice Cream Fruit pastes and jams Verjuice, olive oils and vinaigrettes Stocks and soups Paté Low and n
Slide 8: Improving financial profile
Improving financial profile $1.5m EBITDA for H1FY19 compared to ($1.3)m EBITDA FY18 Revenue up 4% to $11.5m Sales to major retailers is a MBP (A$'000s)1 H1 FY19 H1 FY18 H2 FY18 significant contributor to sales growth Net revenue 11,547 11,098 7,892 Gross Margin 4,436 4,418 2,537 Sales from new
Slide 9: Longtable & Maggie Beer Products
Longtable & Maggie Beer Products Longtable has had an active role in supporting MBP through a corporatisation strategy July 2016 February 2019 A foot in the door Closing the circle Acquisition of 48% for $15m Acquisition of 52% for $10m Non-controlling stake but strong 100% ownership contractual
Slide 10: Strong financial outlook
Strong financial outlook Ongoing strategic plan to deliver FY19 on track to deliver strong stronger revenue growth and results higher EBITDA margins Sales from new categories including Growth with current and new portfolio of Cheeses and Stocks reflect opportunity products for a greater product
Slide 11: Strategic rationale
Strategic rationale 11
Slide 12: Growth strategy
Growth strategy Longtable’s growth strategy for Maggie Beer Products focuses on leveraging the strong brand equity of the brand to introduce new customers that believe in not just Maggie but all that Maggie Beer stands for… inspirational, authentic and gracious Innovation and Product Development Lev
Slide 13: Integration benefits
Integration benefits There are a number of cost benefits and management synergies to be realized following integration Sales management Product development Supply chain Combine the South Strong New Products Combining logistics Australian sales team development team at and warehousing MBP train
Slide 14: Strong alignment of interests
Strong alignment of interests The deal structure ensures a continuation of the strong relationship between Longtable and Maggie Beer Brand Ambassador agreement $1m - $1.5m1 of Maggie to join consideration LON Board2 in shares in LON Alignment of Interests 1Up to $1.5m of shares will be issued as con
Slide 15: Longtable Group overview
Longtable Group overview 15
Slide 16: Longtable Group's premium brands
Longtable Group’s premium brands Longtable has curated a house of premium brands in lifestyle food and beverage with a focus on consumer demand for high quality, nutritious, premium food and beverages July 2016 December 2017 August 2018 February 2019 Maggie Beer Paris Creek Saint David Dairy Maggie
Slide 17: Portfolio results H1 FY19
Portfolio results H1 FY19 Saint David Dairy Sales growth trajectory ahead of St David Paris Maggie expectations $000’s Longtable Corporate Dairy2 Creek Beer Addressing higher near term input costs – cream and overtime labour – that Net revenue 11,014 2,999 8,015 11,547 impacted H1 margin Paris C
Slide 18: Saint David Dairy
Saint David Dairy Delivering on the growth story and well positioned for continued success Revenue up 31% St David Dairy1 H1 FY19H1 FY18 milk sales up 17%, butter and cream sales (A$'000s) up 71% Net revenue 3,597 2,737 number of customers up by 27% Gross Margin (product) 2,192 1,756 Gross m
Slide 19: Paris Creek Farms
Paris Creek Farms We will build on the initiatives in H1FY19 in the next six months and beyond with revenue growth and cost reductions set to drive improved performance Continue National Now in more than 200 stores down the Eastern seaboard and growing across 3 distribution push key supermarket ch
Slide 20: Paris Creek Farms – beyond FY19
Paris Creek Farms – beyond FY19 We are actively preparing for launch in wellness and nutrition for value-added dairy products including powders Expected initial trial in H1 2020 for nutritional dairy products utilizing existing capability and capacity Largest supply of White space in Marketing, sa
Slide 21: Post-acquisition structure
Post-acquisition structure 100% 100% 100% ON COMPLETION 21
Slide 22: Transaction funding and equity offering
Transaction funding and equity offering 22
Slide 23: Transaction funding and terms
Transaction funding and terms Total consideration of $10m for 52% of MBP Consideration includes: Purchase price $8.5m cash consideration $1.0m scrip consideration $0.5 in convertible note A partially underwritten equity raising at $0.20 per share, comprising $2.18m Placement $13.71m
Slide 24: Equity offering structure
Equity offering structure An institutional placement of $2.18m within the Company’s current 15% placement capacity (“Placement”) Offer A fully underwritten, non-renounceable rights issue on a 1:1.95 basis to existing shareholders to raise up structure to $13.71m (“Rights Issue”) Approximately
Slide 25: Sources and uses of funds
Sources and uses of funds Sources of funds $m Equity raising – Placement 2.18 Equity raising – Entitlement Offer 13.7 Total $15.9 Use of funds $m Cash consideration for acquisition of MBP 8.5 Working capital, research and development, sales and marketing initiatives 6.5 Costs of the Offer 0.9 Total
Slide 26: Use of funds
Use of funds Continued investment in sales and distribution strategy to support national Market Development distribution expansion Marketing campaigns to support growth across all three brands Organic certification of biodynamic milk and products to better capture value of China International
Slide 27: Pro-forma balance sheet
Pro-forma balance sheet Net assets increase $16m post-acquisition Pre- Post- acquisition acquisition $'000s Dec-18 Dec-18 Assets Cash 3,978 13,835 Trade receivables 2,802 8,154 Inventory 1,463 3,712 PPE 16,240 19,773 Investments (MBP) 5,306 0 Goodwill / Other 41,412 48,041 Intangibles Other assets 3
Slide 28: Timetable
Timetable LONGTA3Le GROUP Trading halt request submitted to ASX Thursday 28 February 2019 Thursday 28 February 2019 Placement utilising Company's 15% capacity under ASX L.R. 7.1. Thursday 28 February 2019 Friday 1 March 2019 Resumption of trading, announcement of placement Monday 4 March 2019 Monday
Slide 29: Key takeaways
Key takeaways MBP is an iconic food brand offering a offers a range of premium foods delighting Australians for more than 40 years MBP is projected to generate $19-$19.5m and EBITDA of $1.7m-$1.9m Acquisition of MBP, represents the completion of a corporate restructure and rationalization whil
Slide 30: Longtable Group
LONGTA3LE GROUP
Slide 31: Appendix - Risks
Appendix - Risks 31
Slide 32: Key risks
Key risks This section discusses some of the key risks with an investment in shares in Longtable. Each of the risks set out below could, in isolation or in combination, if they eventuate, have a material adverse impact on Longtable’s business, financial condition, results of operations and prospects
Slide 33: A. Acquisition risks
A. Acquisition risks Historical liabilities If the Acquisition completes, Longtable will become directly or indirectly liable for any liabilities that Maggie Beer Products has incurred in the past, including liabilities which were not identified by Longtable during its due diligence or which are gre
Slide 34: A. Acquisition risks
A. Acquisition risks Change of control risk As a result of the Acquisition, customers of Maggie Beer Products that are not bound by contract or that have rights to terminate their contracts for convenience may elect to terminate their relationship with Maggie Beer Products. If any material customers
Slide 35: B. Business risks
B. Business risks The Company is committed to the effective management of risk to reduce uncertainty in the Group’s business outcomes and to protect and enhance shareholder value. There are various risks that could have a material impact on the achievement of the Group’s strategic objectives and fut
Slide 36: B. Business risk
B. Business risk Environmentally Given that Longtable is a food processor and manufacturer, environmental issues relating to noise, air, waste water sustainable emissions and contamination arise from time to time. Longtable is subject to environmental laws and regulations in each of business practic
Slide 37: B. Business risk
B. Business risk Increased competition Longtable participates in a highly competitive fast moving consumer goods global business against materially larger global competitors who have significantly more access to capital and resources. Longtable is subject to competition for the supply of milk and ot
Slide 38: C. Offer risks
C. Offer risks Underwriting risk Longtable has entered into an underwriting agreement under which Bell Potter Securities Limited (the Underwriter) has agreed to fully underwrite the Entitlement Offer, subject to the terms and conditions of the underwriting agreement between the parties (the Underwri
Slide 39: C. Offer risks
C. Offer risks Risks associated with an There are general risks associated with investments in equity capital such as Longtable shares. The trading price of Longtable investment in shares shares may fluctuate with movements in equity capital markets in Australia and internationally. This may result
Slide 40: International offer restrictions
International offer restrictions International offer 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. In particular, this document may not be distributed to any person, and the New Shares may
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