UNITE Group plc · LSE:UTG
UNITE — Merger or Acquisition (July 2019)
18 slides from UNITE's merger presentation, July 2019
Slide 1: Unite – Investor Presentation: Proposed placing and acquisition of Liberty Living
Unite – Investor Presentation Proposed placing and acquisition of Liberty Living July 2019
Slide 2: Disclaimer
DISCLAIMER This document, which has been prepared by The Unite Group plc (the "Company"), is produced solely for information purposes in connection with the proposed acquisition of Liberty Living Group Plc and its subsidiaries ("Liberty Living") (the "Acquisition") and a proposed placing (the "Placi
Slide 3: Transaction Overview
TRANSACTION OVERVIEW Acquisition of Liberty Living’s 24,021 bed portfolio for c.£1.4bn in a NAV-for-NAV deal from Canada Pension Plan Investment Board (CPPIB) - Financed through a combination of cash and shares - CPPIB to become a 20% shareholder in Unite A transformative acquisition leveraging
Slide 4: Leveraging Unite's Best-in-Class Platform
LEVERAGING UNITE’S BEST-IN-CLASS PLATFORM Liberty Living complements Unite’s existing Geographical breakdown of combined portfolio1 portfolio Beds % of GAV2 Liberty Market - Overlap in 14 cities – adds scale in strong City Unite Living Combined Combined share3 markets including London, Manchester,
Slide 5: Liberty Living Is a High-Quality Portfolio
LIBERTY LIVING IS A HIGH-QUALITY PORTFOLIO Liberty Living is aligned with Unite’s focus on quality Beds under nomination agreements (2018/19)4 and visibility of income Length Unite Liberty Combined Living - 82% aligned to high and mid-ranked universities1 Single year 7,543 4,343 11,886 - 51% nomin
Slide 6: Leveraging the Best of Both
LEVERAGING THE BEST OF BOTH Integration phase will leverage best practices from Income breakdown by type1,2,3 Liberty Living operations 100% 3% 4% - Strong local operations capability and university 80% 39% 47% relationships 60% Opportunities to further strengthen our product and 40% service off
Slide 7: Transaction Structure
TRANSACTION STRUCTURE Unite to acquire Liberty Living portfolio on a NAV-for-NAV Funding sources and uses basis in a class 1 transaction Sources £m Total consideration of c.£1.4bn (EV of c.£2.2bn)1 Shares issued to CPPIB 580 financed through cash (c.£0.8bn) and shares (c.£0.6bn) 9.99% share plac
Slide 8: Acquisition Accelerates Unite's Earnings Outlook
ACQUISITION ACCELERATES UNITE’S EARNINGS OUTLOOK Materially accretive to earnings from 2020 Expected synergy realisation - Accelerates and extends earnings growth £m 18 15 - 85% dividend pay-out ratio for enlarged group 12 Annual cost synergies of £15m from 2021 9 6 - Operating and overhead savi
Slide 9: Continued Financial Discipline
CONTINUED FINANCIAL DISCIPLINE Conservatively funded acquisition, maintaining Illustrative capital structure (Unite share) investment and development capacity Unite Liberty Living Day 1 post- (Mar-2019) acquisition3 (Mar-2019)2 - Day 1 LTV of c.40% GAV (£m)1 3,060 1,992 4,915 - Target LTV of 35% p
Slide 10: Unite Current Trading and Outlook
UNITE CURRENT TRADING AND OUTLOOK H1 trading in line with management’s expectations Unite occupancy and rental growth and outlook positive 5% 99% 98% 98% 99% 98% 100% - 88% reserved for 2019/20 (2018/19: 87%) 4% 80% - Confident in rental growth outlook of 3.0-3.5% 3% 60% Ongoing progress with de
Slide 11: Conclusion
CONCLUSION Transformative acquisition of a high-quality and complementary portfolio Leverages our operating platform to generate significant synergies Enhancements through combining the best of both businesses Confident in medium-term rental growth outlook of 3.0-3.5% Accelerates and exten
Slide 12: Timetable
TIMETABLE 3 July Announcement of the proposed acquisition and placing (ABB) 3 July Shareholder circular published (post closing of ABB) 23 July Unite General Meeting 23 July Unite interim results Q3 2019 End of CMA Phase 1 review End Q3 2019 Anticipated CMA clearance End Q3 2019 Target
Slide 13: Placing Overview
PLACING OVERVIEW Structure: Accelerated Bookbuild Rationale: Proceeds used to part fund cash component of acquisition. In the event the acquisition does not complete then net proceeds will be retained by Unite for alternative acquisitions or development opportunities Size of Issue: Up to 9.99%
Slide 14: Appendices
UNITE STUDENTS APPENDICES ~
Slide 15: Liberty Living Overview
LIBERTY LIVING OVERVIEW Liberty Living portfolio as at 31 May 2019 Combined portfolio of 72,836 beds in 173 properties across the UK Properties Beds Unite Liberty Living Cardiff1 8 3,480 Unite and Liberty Living Manchester 5 2,681 Liverpool 4 2,369 Aberdeen Newcastle 4 2,205 Birmingham 4 1,572 Leice
Slide 16: Combined Group – Key Metrics
COMBINED GROUP – KEY METRICS Day 1 post- Unite Liberty Living2 acquistion3 GAV (£bn, Unite share)1 3,060 1,992 4,915 NOI yield 5.0% 5.3% 5.1% NOI margin (FY2018) 75% 71% n/a EBIT margin (FY2018) 71% 59% n/a Cost of debt 3.8% 2.9% 3.5% Source: Unite (as at March 2019), Liberty Living (as at March 201
Slide 17: Continued Balance Sheet Discipline
CONTINUED BALANCE SHEET DISCIPLINE Unite will assume c.£850m of Liberty Living debt Key debt statistics (Unite share) facilities at an average cost of 2.9% Unite Liberty Living Day 1 post- (Mar-2019) acquisition2 (Mar-2019) - £300m 2024 bond Net debt1 £887m £814m £1,907m - £300m 2029 bond LTV1 29%
Slide 18: Unite Development and Partnership Pipeline
UNITE DEVELOPMENT AND PARTNERSHIP PIPELINE Secured pipeline of 6,532 beds to deliver Target Total Secured completed Total development Forecast yield by 2022 delivery beds value costs on cost (£m) (£m) - c.70% nominations on 2019 openings Wholly owned Skelhorne Street, Liverpool 2019 1,085 95 74 8.