Avantax, Inc. · GETTEX:3EV
Avantax — Infospace — Merger or Acquisition (January 2012)
21 slides from Avantax's merger presentation, Jan 9, 2012
Slide 1: Acquisition Overview
Exhibit 99.2 Acquisition Overview January 9, 2011 1
Slide 2: Safe Harbor
Safe Harbor During the course of this presentation, we may provide projections or other forward-looking statements regarding future events and/or future financial performance. We wish to caution you that you should not place undue reliance on such forward-looking statements because they are just pro
Slide 3: Introducing…
Introducing...
Slide 4: Transaction Overview
Transaction Overview • InfoSpace has agreed to acquire TaxACT for $287.5M in cash • Transaction represents an attractive return on shareholder capital • Anticipating debt financing of roughly $95M at the TaxACT subsidiary level, leaving InfoSpace with an estimated excess of $90M of cash at closing •
Slide 5: Investment Highlights
Investment Highlights Large, TaxACT Well Track Record Financial Growing Positioned of Execution Return Market Significant, Positive Step Forward for InfoSpace Shareholders 5
Slide 6: Investment Highlights
Investment Highlights Large, TaxACT Well Track Record of Growing Financial Return Positioned Execution Market • Enduring category • Digital shift in its early stages • Evolving consumer needs and preferences • Shifting provider landscape 6
Slide 7: Digital Shift Underway in Tax Preparation
Digital Shift Underway in Tax Preparation • Total tax year 2010 U.S. individual federal tax returns of ~ 140 million; expected to grow at roughly 1%-2% per year • Digital do-it-yourself (‘DDIY’) tax preparation supplementing ‘paper & pencil’ and professional preparation • Internet has increasingly b
Slide 8: Market Supported by Demographic Trends
Market Supported by Demographic Trends • Online tax preparation market expected to grow at ~10% + annually over the next few years, fueled by demographic shifts in the base of taxpayers • Online tax preparation providers are best positioned to meet evolving consumer needs and preferences Growth of “
Slide 9: Investment Highlights
Investment Highlights Large, Growing TaxACT Well Track Record of Financial Return Market Positioned Execution • Competitive market position • Leading brand and value based-positioning • Loyal growing customer base 9
Slide 10: Consumer Value Proposition
Consumer Value Proposition Well established brand, favorably positioned against identified market trends. • Net promoter score that compares favorably with Brand leading global consumer brands Acceptance • Recognized for ease of use, accessibility & reliability • Over 90% of taxpayers are paying mor
Slide 11: TaxACT NPS in Context
TaxACT NPS in Context Net Promoter Score Ranges and Leaders by Industry (US) TaxACT NPS Average Among the Highest Score Industry Leader Airlines JetBlue/SWA Auto Insurance USAA Banking USAA Brokerage and investments Vanguard Cable and satellite TV Verizon Cellular phone service MetroPCS Computer har
Slide 12: Product Leadership
Product Leadership Consumer Free “Free Federal for Everyone” • Full-featured, individual federal tax preparation • No-risk, no obligation solution “Deluxe” - $9.95; Enhanced feature set, including Consumer Paid additional reports, “life event” interviews and in depth help content “State” - $14.95 fo
Slide 13: Investment Highlights
Investment Highlights Large, Growing TaxACT Well Track Record Financial Return Market Positioned of Execution • In-market expertise & leadership in tax preparation • Dedicated, industry leading management team • Legacy of growth and profitability 13
Slide 14: Sustained Execution
Sustained Execution • Experienced management team lead by industry veterans • Proven online direct marketing capabilities • Consistent revenue growth and bottom line performance TaxACT Financial Performance ($ in millions) Revenue EBITDA $77.6 $70.0 $59.6 $51.2 $40.6 $35.5 $37.6 $31.5 $28.2 $30.1 $2
Slide 15: Investment Highlights
Investment Highlights Large, Growing TaxACT Well Track Record of Financial Market Positioned Execution Return • Strong, near-term return on shareholder capital • Pro-forma non-GAAP earnings per share of $1.21 • Positioned for future growth and investment 15
Slide 16: Superior Return on Shareholder Capital
Superior Return on Shareholder Capital ($ in thousands; financial figures represent twelve months ending September 30, 2011) Adjusted EBITDA $37,809 Less – Cash Interest Expense (4,500) (a) Less – Cash Taxes (650) (b) Less – Capital Expenditures (500) Levered Free Cash Flow $32,159 Cash from Parent
Slide 17: Compelling Pro Forma Financial Profile
Compelling Pro Forma Financial Profile Twelve months ending Sept. 30, 2011 ($ in Thousands) Pro Forma Combined Revenue $211,882 $78,093 $289,975 Adj. EBITDA $34,721 $37,809 $72,530 % Margin 16.4% 48.4% 25.0% Non-GAAP Net Income $13,796 $31,798 $45,594 Non-GAAP EPS - Diluted $0.36 $0.85 $1.21 Diluted
Slide 18: Future Growth and Investment Potential
Future Growth and Investment Potential Revenue $290M Adjusted EBITDA $73M Search TaxACT Revenue: $212M Revenue: $78M EBITDA $35M EBITDA: $38M Estimated Cash at Close in Excess of $90M Future Steps for Value Creation 1 Optimize and grow existing businesses 2 Identify areas for future investment 3 Dis
Slide 19: Non-GAAP Financial Measures
Non-GAAP Financial Measures nd Some measures presented for InfoSpace, Inc. ("InfoSpace") and 2 Story Software, Inc. ("TaxACT") in this presentation are non-GAAP financial measures within the meaning of the SEC's Regulation G. InfoSpace believes that presenting non-GAAP financial measures is useful t
Slide 20: Adjusted Pro Forma EBITDA Reconciliation
InfoSpace, Inc. Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measure Adjusted Pro Forma EBITDA Reconciliation (Unaudited) (Amounts in thousands) 12 Months Ended September 30, 2011 Pro Forma INSP TaxACT Combined GAAP pro forma net income, including pro forma interest
Slide 21: Pro Forma Non-GAAP Net Income Reconciliation
InfoSpace, Inc. Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measure Pro Forma Non-GAAP Net Income Reconciliation (Unaudited) (Amounts in thousands, except per share amounts) 12 Months Ended September 30, 2011 Pro Forma INSP TaxACT Combined GAAP pro forma net income,