Ma Financial Group Limited · ASX:MAF
Ma Financial — Merger or Acquisition (December 2021)
51 slides from Ma Financial's merger presentation, Dec 15, 2021
Slide 1: Acquisition, Trading Update & Equity Raising
Acquisition, Trading Update & Equity Raising 15 December 2021 NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer This investor presentation (including the appendices) (Presentation) is dated 15 December 2021 and has been prepared by, and is the sole responsibility of, MA Financial Group Limited (ABN 68 142 008 428) (MA). By attending an investor presentation or briefing, or acce
Slide 3: Important Notice and Disclaimer (continued)
Important Notice and Disclaimer (continued) This Presentation is for information purposes only and is not a prospectus, product disclosure statement or other offering document under Australian law or any other law (and will not be lodged with the Australian Securities and Investment Commission (ASIC
Slide 4: Important Notice and Disclaimer (continued)
Important Notice and Disclaimer (continued) Investors should also be aware that certain financial measures included in this Presentation are ‘non-IFRS financial information’ under ASIC Regulatory Guide 230: ‘Disclosing non-IFRS financial information’ and ‘non-GAAP financial measures’ within the mean
Slide 5: Important Notice and Disclaimer (continued)
Important Notice and Disclaimer (continued) The success of any of those strategies will be realised in the period for which the forward-looking statement may have been prepared or otherwise. Readers are strongly cautioned not to place undue reliance on forward-looking statements, particularly in lig
Slide 6: Important Notice and Disclaimer (continued)
Important Notice and Disclaimer (continued) The Joint Lead Managers (and their respective affiliates) may also receive and retain other fees, profits and financial benefits in each of the above capacities and in connection with the above activities. The Underwriters will receive fees for acting incl
Slide 7: Overview
Overview MA Financial Group
Slide 8: Summary
Summary 1 Agreement to acquire Finsure 2 FY21 Trading Update, upgraded FY21 guidance and FY22 outlook 3 Equity Raising of $100m at $7.75 per MAF share 8 NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES
Slide 9: Acquisition of Finsure
Acquisition of Finsure Agreement1 to acquire 100% of Finsure for $145 million from BNK Banking Corporation Ltd (BNK) implying 12.6x P/E2 Finsure is a top 4 Australian mortgage aggregator, servicing more than 2,000 brokers, with a loan book on platform of $60.8 billion3 Finsure is highly complementar
Slide 10: FY21 Underlying EPS Upgrade and FY22 Outlook
FY21 Underlying EPS Upgrade and FY22 Outlook In October 2021 MA announced expected Underlying earnings per share (EPS) growth in FY21 of 30%-40%. Continued business momentum and strong trading sees increased FY21 guidance and strong FY22 outlook Increased FY21 FY21 Underlying EPS now expected to be
Slide 11: Acquisition of Finsure
MA Financial Group Acquisition of Finsure 1
Slide 12: Strategic rationale for acquiring Finsure
Strategic rationale for acquiring Finsure Finsure provides powerful distribution infrastructure to the mortgage industry with a leading technology suite servicing a 2,000+ broker network Scalable, technology-enabled platform focused on c.$2 trillion mortgage market1 Strategically valuable distributi
Slide 13: Finsure within the MA group
Finsure within the MA group The acquisition of Finsure substantially strengthens MA’s Lending business. It progresses our vision to develop one of Australia’s leading, technology-enabled platforms in the mortgage market Corporate Advisory & Asset Management Lending Equities Transformational Asset Ma
Slide 14: Overview of Finsure
Overview of Finsure Finsure operates a platform connecting a panel of lenders to a network of mortgage brokers who source residential and commercial mortgages and asset finance on behalf of borrowers National 65+ network integrated $34bn p.a. of 2,000+ lender $61bn settlements brokers partners manag
Slide 15: Large addressable market (and growing)
Large addressable market (and growing) The mortgage market is a $2 trillion market with $353 billion in annual mortgage originations MORTGAGES OUTSTANDING (A$) 1 ANNUAL MORTGAGE VOLUMES (A$) 2 +64.9% +107.4% (5.1% CAGR) (7.6% CAGR) $2.0 trillion $353 billion annual mortgage total mortgages originati
Slide 16: Positive tailwinds: Customers are gravitating towards brokers
Positive tailwinds: Customers are gravitating towards brokers Broker market share continues to rise as customers seek improved choice, a wider spectrum of options and a trusted adviser to assist them through the mortgage application process BROKER MARKET SHARE 1 The Adviser: “What Borrowers Want” Su
Slide 17: Positive tailwinds: Lending evolution as non-majors continue to win share
Positive tailwinds: Lending evolution as non-majors continue to win share Increasing market share of non-major lenders is reliant on broker distribution channels. Owning the strategic distribution infrastructure to support this thematic is a valuable asset MAJORS’ SHARE OF BROKER VOLUME 1 NON-MAJORS
Slide 18: Why we like Finsure
Why we like Finsure Finsure comprises powerful distribution infrastructure for loan products at scale. It is highly synergistic with our proprietary capabilities in credit, lending & technology Product Differentiated platform proposition for brokers focused on technology & value-add service innovati
Slide 19: Why we like Finsure (continued)
Why we like Finsure (continued) Finsure has a highly regarded management team with substantial experience in the mortgage broking, aggregation and financial services industries John Kolenda Simon Bednar David Maher Kevin Nguyen CEO Finsure GM Finsure Head of Head of Marketing Technology 25+ years ex
Slide 20: Growth profile
Growth profile Finsure has almost doubled its broker market penetration over the last six years, with an average monthly net broker growth of 20 brokers per month1 Finsure’s broker network was 2,064 (12.2%) at September FINSURE BROKER MARKET S HARE (%) 2021 as its growth profile continues 11.8% 10.6
Slide 21: Focus on building long-term sustainable earnings growth
Focus on building long-term sustainable earnings growth The acquisition of Finsure provides MA with valuable infrastructure to accelerate growth in Lending 01. 02. 03. Builder of valuable Scalable asset Diversified capital businesses in large management business sources and client addressable market
Slide 22: Equity Raising
MA Financial Group Equity Raising 22
Slide 23: Key details of the offer
Key details of the offer MA Financial Group is conducting a fully underwritten Institutional Placement to raise c.$100 million and a non- underwritten Share Purchase Plan to raise up to c.$10 million • Fully underwritten institutional placement (“Placement”) of new fully paid ordinary shares (“New S
Slide 24: Equity raising timetable
Equity raising timetable1 Event Time and date (AEDT) Record date for SPP 7.00pm, Tuesday, 14 Dec 2021 Announcement of Placement and SPP Wednesday, 15 Dec 2021 Placement bookbuild Wednesday, 15 Dec 2021 Announcement of the outcome of the Placement Thursday, 16 Dec 2021 Trading halt lifted Thursday, 1
Slide 25: Appendix
MA Financial Group Appendix 25
Slide 26: MA Financial FY22 outlook
01 MA Financial FY22 outlook 26
Slide 27: Near term outlook
Near term outlook Positive business momentum in FY21 providing confidence in FY22 outlook FY2 1 GUIDANCE UPGRADED TO ABOVE 40 % EPS GROWTH 1 FY2 2 OUTLOOK FOR 1 5% TO 2 5% EPS GROWTH 2 • FY21 Underlying EPS growth now expected to exceed the upper end • FY22 Underlying EPS growth is expected to be up
Slide 28: Summary of placement agreement
02 Summary of placement agreement 28
Slide 29: Summary of Placement Agreement
Summary of Placement Agreement • MA Financial Group Limited (MA Financial) has appointed UBS Securities Australia Limited and Ord Minnett Limited (together, the Underwriters) to underwrite the Placement and, with MA Moelis Australia Advisory Pty Ltd (together with the Underwriters, the Joint Lead Ma
Slide 30: Summary of Placement Agreement (continued)
Summary of Placement Agreement (continued) − MA Financial breaches the Corporations Act, its constitution, the ASX Listing Rules or other applicable laws or has failed to comply with its continuous disclosure obligations under the Corporations Act or ASX Listing Rules; − a statement contained in the
Slide 31: Key Risks
OS MA Financial Group Key Risks 31
Slide 32: Key risks
Key risks Investors should be aware that there are risks associated with an investment in MA. These risks may affect the future operating and financial performance of MA and the value of MA shares. Some of these risks are specific to an investment in MA and the shares issued under the Placement and
Slide 33: Key risks (continued)
Key risks (continued) Increased governmental and regulatory scrutiny or negative publicity Governmental scrutiny from regulators, legislative bodies and law enforcement agencies with respect to matters relating to the financial services sector generally has increased dramatically over the past few y
Slide 34: Key risks (continued)
Key risks (continued) Integration and synergies There is a risk that the success and profitability of MA following completion could be adversely affected if Finsure is not integrated effectively. There is a risk that integration could take longer, be more complex or cost more than expected, encounte
Slide 35: Key risks (continued)
Key risks (continued) Change of control risk The Acquisition will trigger change of control clauses in some material contracts to which Finsure or its subsidiaries are party. Where triggered, the change of control clause will, in most cases, require MA to seek the counterparty’s consent in relation
Slide 36: Key risks (continued)
Key risks (continued) COVID-19 The performance of MA depends heavily upon the performance of its investments and the conditions of the equity and financial markets generally across Australia and internationally. These markets are highly cyclical and exposed to changes in prevailing economic conditio
Slide 37: Key risks (continued)
Key risks (continued) Climate change risk Climate change is a material risk for MA, its business and clients. Climate change is systemic and a significant long term driver of financial and non-financial risk, including environmental risks, supply chain disruption, transition risks such as changes in
Slide 38: Key risks (continued)
Key risks (continued) Law, regulation, and regulatory policy Significant investor visa program Asset management generates a portion of revenue from clients who participate in the significant investor visa program. The significant investor visa program is an initiative set up by the Australian govern
Slide 39: Key risks (continued)
Key risks (continued) Funds return and management fee rates Achieving satisfactory investment returns on the funds which MA manages is critical to retaining existing investors and attracting new investors. While MA’s management fees are largely based on a fixed percentage of assets under management,
Slide 40: Key risks (continued)
Key risks (continued) Brand and reputation Satisfactory performance of services The success of MA is dependent on its reputation. MA may face damage to its professional reputation if its services are not regarded satisfactorily. Corporate Advisory & Equities businesses depend to a large extent on re
Slide 41: Key risks (continued)
Key risks (continued) Information technology systems and infrastructure MA relies on third party software products and services for its management of information systems. Any damage or interruptions from systems failures, computer viruses, cyber- attacks or other events, to these systems could impai
Slide 42: Key risks (continued)
Key risks (continued) Future capital requirement of MA There can be no assurance MA will not need to raise additional capital to fully exploit business opportunities available to it. There can be no assurance that MA will be able to raise such capital on favourable terms (or at all) or, if it is abl
Slide 43: Key risks (continued)
Key risks (continued) Insurance risk Failure of MA’s insurance carriers or its failure to maintain adequate insurance cover could adversely impact its results of operations. MA maintains insurance that it considers to be prudent for the scope and scale of its activities. If MA’s insurers fail to per
Slide 44: Key risks (continued)
Key risks (continued) Changes in taxation laws and policies Tax laws are in a continual state of change and reform, which may affect MA and its shareholders. Tax liabilities are the responsibility of each individual investor. There may be tax implications arising from ownership of the shares, the re
Slide 45: International Offer Restrictions
04 International Offer Restrictions 45
Slide 46: 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 not be offered or sold, in any
Slide 47: International Offer Restrictions (continued)
International Offer Restrictions (continued) Certain Canadian income tax considerations. Prospective purchasers of the New Shares should consult their own tax adviser with respect to any taxes payable in connection with the acquisition, holding or disposition of the New Shares as there are Canadian
Slide 48: International Offer Restrictions (continued)
International Offer Restrictions (continued) Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission
Slide 49: International Offer Restrictions (continued)
International Offer Restrictions (continued) Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or mat
Slide 50: International Offer Restrictions (continued)
International Offer Restrictions (continued) United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Ma
Slide 51: MA Financial Group
NE MA Financial Group
MA Financial Group — Merger or Acquisition (December 2021) on 6ix