Crown Capital Partners, Inc. · TSXV:CRWN
Crown Capital Partners — Investor Presentation (August 2016)
24 slides from Crown Capital Partners's investor presentation, August 2016
Slide 1: Crown Capital Partners Inc. Investor presentation August 2016
CROWN CAPITAL PARTNERS INC. TSX: CRN Investor presentation August 2016
Slide 2: Forward looking statements
Forward looking statements This presentation contains certain “forward looking statements” and certain “forward looking information” as defined under applicable Canadian securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”, “
Slide 3: Everyday funding challenge of a successful company
Everyday funding challenge of a successful company Fast growing Dilution averse Flexibility Capital constrained 3
Slide 4: Canada's largest independent discount brokerage
3% 10% interest 25% upfront fee IRR Canada’s largest independent discount brokerage $10M loan: prepaid with equity kicker in Q3 2015 4
Slide 5: Mid-market funding gap
mid-market funding gap 6,000 Canadian companies public / chartered private bank equity 31% debt Canada’s GDP 5
Slide 6: Providing capital to successful companies
Providing capital to successful companies 15+ year track 35 transactions $430 million in loans record to date 6
Slide 7: How we choose investments
How we choose investments Successful Companies Market allows 2 3 of Premium Pricing Asset Rich Great companies, great pricing drives our model 7
Slide 8: Our simple strategy
Our simple strategy Double impact on Loan to Value Cash flow = Enterprise value Debt levels = Equity upside Greatly limits default risk 8
Slide 9: Alternative capital for mid-market companies
Alternative capital for mid-market companies Transitory capital with High-value portfolio comprised of high returns stable, sustainable cash flows Type Special situations Long term Fixed rate long-term loans / participating Form Senior / subordinated debentures loans / perpetual debt structures / re
Slide 10: Why it works for us
Why it works for us Nightingale Chairs Genalta Power Debt recapitalization Medium-term capital requirement to execute construction of power facilities Sensitive to dilution Sensitive to dilution 2% 13% 16.7% 2% 10% 14.1% upfront fee interest rate gross IRR upfront fee interest rate gross IRR 60-mont
Slide 11: Why it works for them
Why it works for them $5.00 $4.00 $3.00 Crown Capital invests $22.5M in CRH Medical to fund $2.00 acquisition $1.00 Jan14 Dec 14 Dec 15 Strong cash flow results in reduced leverage – lowering risk 11
Slide 12: Established track record of success
Established track record of success 16 14 14 Number of investments 12 10 Consistent strong returns 8 7 with low volatility 6 5 4 3 2 2 Average IRR of ~15% 0 <0% 0-10% 10-20% 20-30% >30% Range of IRR 12
Slide 13: Private credit market: Underfunded asset class
Private credit market: Underfunded asset class commercial private infrastructure real estate credit 1980’s 1990’s today Inefficient markets create Untapped asset class high yield opportunities with consistent returns 13
Slide 14: Special situations: Accelerating deal flow
Special situations: Accelerating deal flow Well-known, reliable market 500M Optimized deal structure from experience of four funds 3-6 $15 M $ transactions average Broadened origination capabilities per annum targeted deal size portfolio Opportunity to launch focused funds Proven ability to underwri
Slide 15: Long-term financing: Strong, stable portfolio of attractive returns
Long-term financing: Strong, stable portfolio of attractive returns previous loans 12% 12% 12% new loans 12% 12% 12% 2- 4 transactions per annum 12% 12% 12% 12% 12% 12% $20M average 12% 12% 12% 12% 12% deal size 12% 12% 12% 12% 12% 12% 12% $500M 12% 12% 12% 12% 12% 12% 12% 12% 12% targeted portfolio
Slide 16: Strong transaction pipeline since IPO
Strong transaction pipeline since IPO 3,500 220 44 11 6 4 Contacts Initial Deal Draft Term Preliminary Commitment Closed Review Sheets Term Sheets Letters Capital Markets 2,000 Wealth Advisors 1,000 Company Direct 500 16
Slide 17: Current portfolio
Current portfolio $15.0 million $25.0 million $20.0 million Refinancing Growth Financing Growth Financing May 2016 December 2015 (long-term) November 2015 $15.0 million $4.0 million $22.5 million Growth Financing Management Buyout Acquisition Financing September 2015 April 2015 December 2014 17
Slide 18: Proven team delivering results
Proven team delivering results Senior Management Board of Directors George Fowlie Chairman of the Board Chris Johnson CFA Brent Hughes CFA Former Deputy Chairman & Head of Investment President & CEO Banking, Westwind Partners Responsible for directing Crown Capital’s EVP, Chief Compliance Former Par
Slide 19: Specialists in the core fundamentals
Specialists in the core fundamentals Robust Disciplined Proven portfolio origination underwriting management Extensive experience and Portfolio risk minimized broad contact base across through close working Canada and the U.S. relationships and rigorous ~12-week process reporting requirements Source
Slide 20: How we make money
How we make money Interest Bonus features Fees IR>14% Additional Interest Deal fees Phantom IR 12-14% Warrants Equity No Kicker IR 10-12% Base management fees IR<10% Gifted Equity Performance fees Targeted % of total revenue 80% 10% 10% Cash flow diversification 20
Slide 21: Q2 2016 financial highlights
Q2 2016 financial highlights $5.0mm $2.6mm $3.0mm $1.7mm $0.18 Total revenue Interest revenue Adjusted EBIT Comprehensive Income per basic income share $10.68 total equity per share (basic) 21
Slide 22: Investment Highlights
Investment Highlights • Leading alternative lender with enviable track record • 15-year track record; one of the most experienced teams in Canada • Large target market and current market conditions provide significant opportunity for growth • 6,000+ companies in the Canadian mid-market • Strong and
Slide 23: Market facts
Market facts Ticker CRN Market cap ~$90 million 52-week high / low $9.95 – $6.72 Shares 9.49 million outstanding (FD) (10.16 million) Quarterly dividend $0.11 per common share Yield ~4.7% 23
Slide 24: Contact
TSX: CRN Contact Craig Armitage craig.armitage@crowncapital.ca 416.347.8954
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