Gumtree Australia Markets Limited · ASX:GUM
Gumtree Australia Markets — Merger or Acquisition (August 2022)
26 slides from Gumtree Australia Markets's merger presentation, Aug 26, 2022
Slide 1: Investment Overview
Building a leading Australian classified media and consumer finance publisher reaching 10m households a month. A proposed acquisition of Gumtree Australia, Carsguide and Autotrader Australia Investment Overview The Market Herald (ASX:TMH) August 2022
Slide 2: Disclaimer
Disclaimer. This investor presentation contains summary information about The Market Herald Limited (Market Herald) and its activities current as at the date of this presentation. It is sourced from and should be read in conjunction with Market Herald's other periodic and continuous disclosure annou
Slide 3: Contents
Contents. Topic Page Summary 1 Offer 2 Source and Uses 3 Timetable 4 The Market Herald Strategy, Audience, Products, Growth, M&A Performance 5-9 The Market Herald Transformation and Deal Rationale 10 - 11 Gumtree Carsguide Autotrader, Audience, Products, Reach, Scale 12 - 13 Synergies illustrative e
Slide 4: Summary
Summary. The Market Herald is acquiring Gumtree*, Carsguide and Autotrader** to build a leading diversified media, ecommerce and financial services business reaching 10m*** Australians households a month. Acquisition The Market Herald (ASX: TMH) has signed an agreement to acquire 100% of the shares
Slide 5: Offer
Offer. Capital Investment Partners have been appointed LM and partial underwriter to a proposed 2 of 5 renounceable rights issue to raise AUD$26,551,148.76 at AUD$0.34 per share in The Market Herald Ltd. OFFER OVERVIEW The offer Details Lead Manager Capital Investment Partners Pty Ltd (CIP), Perth C
Slide 6: Sources and Uses
Sources and Uses. The sources of funds are debt and a rights offering. Uses of funds are vendor payments as well as transaction expenses and working capital. SOURCES AND USES Sources $AUD Uses $AUD Debt 61,420,000 Funds to vendor 86,710,000 Rights Offering 26,551,148 Working Capital 261,148 Transact
Slide 7: Timetable
Timetable The transaction timetable is indicative, subject to review and consents, and proposes the entitlement offer is announced on 26th August and new shares trade on the ASX on 20th September 2022. TIMETABLE Event Date Entitlement Offer Announced Friday 26th August 2022 Rights trading commences
Slide 8: Strategy
Strategy. Our strategy is to build an integrated consulting, content, classifieds and streaming video finance news platform. We have operational and cultural advantages over our peers and are growing fast. DIGITAL BUSINESS NEWS PLATFORM STRATEGY – PLAYBOOK Consulting Content Communities Classifieds
Slide 9: Audience
Audience. In Australia The Market Herald reaches approximately 2.5m typically affluent consumers and investors a month, with approximately 46m page views, and 11m streaming views. 6
Slide 10: Products
Products. We operate multiple brands and channels over one integrated multi-platform workflow. We create high quality news editorial, have many investor brands and are innovating new luxury listings offers. DIGITAL FINANCE NEWS PLATFORM STRATEGY – PRODUCRS BRANDS CHANNELS Editorial Investors Luxury
Slide 11: Growth
Growth. Our growth strategy is more products and more markets organically and through M&A. In 2019 we acquired Stockhouse, a financial forum in Canada, and are reviewing other targets around the world. DIGITAL BUSINESS NEWS PLATFORM STRATEGY – GROWTH More products Consulting Content Communities Clas
Slide 12: Stockhouse
Stockhouse. Since acquisition in 2019 the Canadian business has tripled revenues and quadrupled EBITDA, while increasing EBITDA margin. The Market Herald has proven capability to grow through M&A. CANADIAN ACQUISITION PERFORMANCE $AUD m Revenue EBITDA 19.45 EBITDA Margin 59% 56%% 13.99 40% 11.47 7.9
Slide 13: Transformation
Transformation. The FY22 pro-forma* creates a business with $120.1m revenues, $19.2m EBITDA excluding separation costs, and potential for improvement. Integration efficiencies should increase future margins. INDICATIVE** COMBINED BUSINESS PRO-FORMA $AUD m Revenue 120.1 EBITDA EBITDA Margin 36% 16% 1
Slide 14: Rationale
Rationale. Online classified businesses account for a significant part of the valuations of listed AU publishers. Acquiring a leading classified site will create significant value for The Market Herald. SELECTED LISTED AU MEDIA PUBLISHER PEERS. - ALL FIGURES INDICATIVE Market Capitalisation $AUD bn
Slide 15: Gumtree, Carsguide, Autotrader - products
Gumtree, Carsguide, Autotrader - products. Gumtree, Carsguide and Autotrader is a highly attractive marketplace ecosystem with highly complementary brands outstanding reach, championing sustainability through the circular economy. BRANDS PRODUCTS Classifieds Editorial Motors Reaches 1 in 3 Australia
Slide 16: Gumtree, Carsguide, Autotrader – Scale
Gumtree, Carsguide, Autotrader – Scale. In Australia GCA reaches approximately 7.5m buyers and sellers a month, with approximately 37m site visits and 120m page impressions, with significant revenue upside compared to peers. Classifieds audience Motors audience Gumtree general The combined motor cla
Slide 17: Synergies
Synergies. Gumtree attracts many high value listings that can be enhanced with better editorial. The Market Herald’s Fancy luxury classified platform is an opportunity to create significant value. GUMTREE LISTING THE MARKET HERALD EDITORIAL Source: Gumtree, The Market Herald, 2022 14
Slide 18: Peers
Peers. The Wall Street Journal’s Buy Side, launched June 2022, and The Financial Times How To Spend It, relaunched May 2022, are examples of other business news platforms building similar strategies. WALL STREET JOURNAL EDITORIAL FINANCIAL TIMES EDITORIAL Source: TMH, WSJ, FT 2022 15
Slide 19: Challenger
Challenger. The combined Gumtree, Carsguide and Autotrader proposition is a challenger to the future of automotive listings in Australia with planned new features and a range of future options. GUMTREE CARSALES SEGMENT SUMMARY Challenger position Private Segment leader Gumtree beats or is closing th
Slide 20: Risks
Risks. 1. Key risks This section sets out some of the key risks associated with The Market Herald and its existing business; the Acquisition; and participation in the Offer and share ownership. The risks set out in this section are not listed in order of importance and do not constitute an exhaustiv
Slide 21: Risks
Risks. 2. The Market Herald risks con’t Customer service The Market Herald 's ability to maintain relationships with major customers is integral to its financial performance. This in turn depends on its ability to offer competitive service standards and pricing. Poor performance in either area may l
Slide 22: Risks
Risks. 3. Acquisition risks Completion risks The Market Herald may terminate the SPA in certain circumstances, including in the circumstance where certain conditions for the benefit of The Market Herald have not been satisfied. If such termination rights are exercised, the Acquisition may not occur.
Slide 23: Risks
Risks. 4. GCA risks con’t Historical liability in respect of GCA As the acquisition of GCA is structured as a share sale, The Market Herald may become directly or indirectly liable for any liabilities that GCA has incurred in the past as a result of prior acts or omissions, including liabilities whi
Slide 24: Restrictions
Restrictions. This document does not constitute an offer of rights or New Shares 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 country outside Australia except to the extent
Slide 25: Restrictions - Continued
Restrictions - Continued This document does not constitute an offer of rights or New Shares 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 country outside Australia except to
Slide 26: Approved by the board of The Market Herald
Jag Sanger, Managing Director | The Market Herald +61 447 105 189 | jag.sanger@themarketherald.com.au www.themarketherald.com.au investors@themarketherald.com.au Approved by the board of The Market Herald 26
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