3p Learning Ltd. · ASX:3PL
3p Learning — Merger or Acquisition (April 2021)
30 slides from 3p Learning's merger presentation, Apr 12, 2021
Slide 1: 3P Learning Investor Presentation
1 12th April 2021 For personal use only 3P Learning Investor Presentation
Slide 2: Important Notice (1 of 2)
2 Important Notice (1 of 2) For personal use only This presentation has been prepared by 3P Learning Limited ("3PL") in connection with the proposed acquisition by 3PL of the entire issued share capital in Blake eLearning Pty Ltd ("Blake") ("Merger"). Not an offer This presentation does not constitu
Slide 3: Important Notice (2 of 2)
3 Important Notice (2 of 2) For personal use only Forward looking statements This presentation contains both historical and forward looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward looking statements. The forward-looking statements in t
Slide 4: Contents
4 Contents For personal use only Transaction Overview 5 Overview of Blake eLearning 8 Strategic Rationale and Overview of MergeCo 13 Key Risks 24
Slide 5: Transaction Overview
For personal use only 5 Transaction Overview
Slide 6: Transaction Overview
6 Transaction Overview For personal use only Transaction ▪ 3P Learning Limited (“3PL”) to merge with Blake eLearning Pty Ltd (“Blake”) (“Merger”) by acquiring 100% of Blake from Pascal Details Educational Services Pty Ltd as trustee for the Blake Sandblom Trust and the BeL Unit Trust, and KPIT Pty L
Slide 7: Financial Highlights
7 Financial Highlights For personal use only The Merger adds significant scale to 3PL and establishes a solid platform for growth ($M)(1) + CY20PF Revenue 56.2 100.5 79% CY20PF EBITDA including synergies and 15.5 42.9 177% strategic cost efficiencies(2)(3) CY20PF EBIT including synergies and 3.9 20.
Slide 8: Overview of Blake
For personal use only Overview of Blake 8
Slide 9: Company Overview
9 Company Overview For personal use only Overview Key Highlights ▪ Blake is part of the Pascal Press Group, Australia’s leading independent educational publishing group which has been publishing and developing books, teacher support material and online content for over 30 years $40.4m CY20 Reported
Slide 10: Key Product Overview
10 Key Product Overview For personal use only Blake offers a broad product suite comprising high quality literacy and numeracy products for children between the ages of 2-13 years Online Courses Ages 5–10 First Steps Learning to Read Building Confidence Learning Math Support for Reading Delight your
Slide 11: Blake Financial Highlights
11 Blake Financial Highlights For personal use only Since FY18, Blake’s revenue and EBIT has grown at a 35% and 261% CAGR B2C and B2B revenue(1) EBIT ($M) ($M, % of revenue) CAGR ‘18-’20(2) CAGR ‘18-’20(2) 29.5% 35% 24.0% 40.4 16.6% 11.9 32.0 12.8 18% 2.5% 24.0 11.4 7.7 19.1 10.0 47% 4.0 261% 8.5 27
Slide 12: Geographic Reach
12 Geographic Reach For personal use only Blake has 4 offices across 4 different continents and customers in more than 100 countries Global B2C Presence B2C Revenue by Region(1)(3) (% of Total B2C Revenue) CAGR ‘18-’20(2) . 25.9 82% 23% 19.2 20% 69% 31% 11.5 29% 15% 7.8 30% 17% 28% 46% Office locati
Slide 13: Strategic Rationale and Overview of MergeCo
For personal use only 13 Strategic Rationale and Overview of MergeCo
Slide 14: Strategic Rationale
14 Strategic Rationale For personal use only The Merger creates multiple strategic and operational opportunities to enhance shareholder value 1 Creates a large scale EdTech platform ▪ Creates a scalable EdTech business with MergeCo CY20PF revenue of $100.5m and CY20PF EBIT of $20.8m 2 Enhances growt
Slide 15: Synergies and Strategic Cost Efficiencies
15 Synergies and Strategic Cost Efficiencies For personal use only The Merger is expected to generate c.$7.5m - $12.5m of annual synergies and strategic cost efficiencies from FY22 onwards Time to Realise Annualised Savings ($M) Cost to Realise(2) Description (months)(1) Estimate(3) Consolidate and
Slide 16: MergeCo Complementary Offering
16 MergeCo Complementary Offering For personal use only MergeCo will have a complementary product offering that leverages the combined strengths of 3PL and Blake and creates opportunities for expansion across geographies and channels Extensive product coverage across subjects, student year groups an
Slide 17: MergeCo Key Metrics
17 MergeCo Key Metrics For personal use only MergeCo will have a more diverse channel and geographic mix and it will own or be the licensee of all intellectual property material to the business + 17% APAC 22% APAC 60% 55% Geographic Mix(1) 24% EMEA EMEA 23% Americas Americas B2B income 24% from 3PL
Slide 18: MergeCo Key Financials
18 MergeCo Key Financials For personal use only MergeCo will have a larger customer base and more attractive earnings profile Total Customers(1) Pro Forma Revenue(2) Pro Forma EBITDA(2)(3)(4) (‘000s) ($M) ($M) 5,917 6,035 5,713 1,248 1,288 100.5 1,158 42.9 89.1 4,669 4,747 78.3 10.0 4,555 44.4 33.7
Slide 19: Pro Forma Income Statement
19 Pro Forma Income Statement For personal use only Pro forma income statement for the period ended 31 December 2020 Pro Forma Adjustments Reported Reported Pro Forma ($M) CY20 3PL Blake(1) Adjustments ▪ The pro forma information assumes 3PL has been Revenue 56.2 40.4 4.0 100.5 determined as the acq
Slide 20: Pro Forma Balance Sheet
20 Pro Forma Balance Sheet For personal use only Pro forma balance sheet as at 31 December 2020 Reported Reported Pro Forma Pro Forma Adjustments(4) ($M) Dec 20 3PL Blake(1) Adjustments Current assets ▪ Pro forma adjustments have been made to reflect Cash and cash equivalents 15.0 13.8 0.0 28.9 the
Slide 21: Other Transaction Considerations (1 of 2)
21 Other Transaction Considerations (1 of 2) For personal use only Board ▪ Following completion, the MergeCo Board of Directors will comprise: Composition ― Non-Executive Chairman: Matthew Sandblom, founder and current Executive Chairman of Blake ― Three current directors of 3PL, being Sam Weiss, Cl
Slide 22: Other Transaction Considerations (2 of 2)
22 Other Transaction Considerations (2 of 2) For personal use only Non-Compete ▪ The Share Sale Agreement provides that the Sellers' key personnel are restricted from engaging in any business or activity which Restrictions competes with the business conducted by Blake ▪ This restriction applies duri
Slide 23: Transaction Process & Timeline
23 Transaction Process & Timeline For personal use only The Merger is subject to shareholder approval ▪ The Merger is subject to shareholder approval and the satisfaction or waiver of the other conditions precedent under the Share Sale Agreement – Shareholders will receive an explanatory statement,
Slide 24: Key Risks
For personal use only Key Risks 24
Slide 25: Key Risks
25 Key Risks For personal use only General ▪ An investment in 3PL will be exposed to a number of risks as a result of proceeding with the Merger. A decision not to proceed with the Merger will also expose your investments in 3PL to a number of risks ▪ Risks that the Directors believe are potentially
Slide 26: Key Risks (continued)
26 Key Risks (continued) For personal use only Risks relating to the implementation of the Merger, if approved ▪ As with any merger, combining the businesses of 3PL and Blake may carry some integration risk, including potential delays or costs in implementing necessary changes, difficulties in integ
Slide 27: Key Risks (continued)
27 Key Risks (continued) For personal use only Risks relating to 3PL following the Merger, if approved ▪ Given the size and growth outlook of the Blake business, the operating and financial performance of Blake in the future will have a material impact on the performance of 3PL and on the value of 3
Slide 28: Key Risks (continued)
28 Key Risks (continued) For personal use only Risks relating to 3PL following the Merger, if approved (continued) ▪ Possible difficulties in bringing together two different culture and management styles in an effective manner ▪ 3PL undertook a due diligence process in respect of Blake, which relied
Slide 29: Key Risks (continued)
29 Key Risks (continued) For personal use only Risks relating to 3PL following the Merger, if approved (continued) ▪ If the Merger proceeds, MergeCo will be responsible for any outstanding liabilities that Blake has incurred prior to the Merger, including any liabilities that were not identified dur
Slide 30: Key Risks (continued)
30 Key Risks (continued) For personal use only Business specific risks ▪ 3PL faces a number of risks to its business, including: ▪ Blake faces a number of risks to its business, including: ― 3PL operates in a highly competitive industry and there are a large ― Blake operates in a highly competitive