Elders Limited · ASX:ELD
Elders — Merger or Acquisition (November 2024)
48 slides from Elders's merger presentation, Nov 18, 2024
Slide 1: Acquisition of Delta and Equity Raising
18 November 2024 Acquisition of Delta and Equity Raising Attached is the Elders Limited (ASX:ELD) presentation regarding the acquisition of Delta Agribusiness Pty Ltd and equity raising. The presentation will be delivered by Mr Mark Allison, Chief Executive Officer, and Mr Paul Rossiter, Chief Finan
Slide 2: Acquisition of Delta Agribusiness and Equity Raising
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES 18 November 2024 Acquisition of Equity Raising Delta Agribusiness and
Slide 3: Important notice and disclaimer
Important notice and disclaimer NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES The following notice and disclaimer applies to this investor presentation (Presentation or document) and you should read it carefully before reading or making any other use of this Presentation o
Slide 4: Important notice and disclaimer
Important notice and disclaimer NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Financial data All dollar values are in Australian dollars (A$ or AUD) unless otherwise stated. Prospective investors should also be aware that the pro forma financial information included in thi
Slide 5: Important notice and disclaimer
Important notice and disclaimer NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Disclaimer The information in this Presentation has been obtained from or based on sources believed by Elders to be reliable. To the maximum extent permitted by law, Elders and Macquarie Capital
Slide 6: Contents
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Contents 1 01 Executive summary Insert divider title 6 3 2 Delta overview 9 A Insert divider title 7 3 Acquisition rationale 15 4 Acquisition funding and terms 22 5 Questions 26 A Pro forma balance sheet 27 B Key risks 29 C Int
Slide 7: Executive summary
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES 1 Executive summary
Slide 8: Executive summary
ELDERS LIMITED EXECUTIVE SUMMARY Executive summary NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Elders has entered into an agreement to acquire 100% of the shares in Delta for an enterprise value of $475 million1 ▪ Elders has entered into an agreement to acquire 100% of t
Slide 9: Executive summary (cont.)
ELDERS LIMITED EXECUTIVE SUMMARY NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Executive summary (cont.) The combination of Elders and Delta has the potential to generate annual net EBITDA synergies of approximately $12 million over three years post completion ▪ The Acquis
Slide 10: Delta overview
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES 2 Delta overview
Slide 11: Delta is a rural products and advisory services business
ELDERS LIMITED DELTA OVERVIEW Delta is a rural products and advisory services business NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Established in 2006, Delta is an Australian agribusiness providing rural products and advisory services through a network of 68 locations an
Slide 12: Delta's complementary business model
ELDERS LIMITED DELTA OVERVIEW Delta’s complementary business model NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Delta’s business model is complementary to Elders, strengthening Elders’ existing offering predominantly in rural products and digital and technical services Ru
Slide 13: Delta financial summary
ELDERS LIMITED DELTA OVERVIEW Delta financial summary NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Delta achieved a record financial result in the last twelve months to 30 June 2022, driven by favourable seasonal conditions and elevated farm input prices. Following a chal
Slide 14: Diversification by product and geography
ELDERS LIMITED DELTA OVERVIEW Diversification by product and geography NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Delta’s earnings base is diversified by product and geography, supplying a broad agribusiness offering to its rural and regional customers Sales by product
Slide 15: High quality leadership team
ELDERS LIMITED DELTA OVERVIEW High quality leadership team NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Delta’s experienced leadership team is excited to join Elders and will continue to manage the business following completion Gerard Hines Chris Duff Matt Freeman Managin
Slide 16: Acquisition rationale
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES 3 Acquisition rationale
Slide 17: Acquisition rationale
ELDERS LIMITED ACQUISITION RATIONALE Acquisition rationale NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Fully aligned to Elders’ core strategy and corporate acquisition principles Continues Elders’ successful track record of growing the business through disciplined acquis
Slide 18: Consistent with Elders' corporate acquisition principles
ELDERS LIMITED ACQUISITION RATIONALE Consistent with Elders’ corporate acquisition principles NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES The rationale and impact of the Acquisition adheres to Elders’ corporate acquisition principles Aligns with Elders’ strateg
Slide 19: Complementary geographic footprint
ELDERS LIMITED ACQUISITION RATIONALE Complementary geographic footprint NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Delta’s geographic footprint is highly complementary to Elders’ and fills key network gaps in New South Wales, North West Victoria, South Australia and Wes
Slide 20: Enhances Elders' technical expertise and offering
ELDERS LIMITED ACQUISITION RATIONALE Enhances Elders’ technical expertise and offering NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Extends Elders’ existing crop protection and animal health Addition of specialist and technical expertise to support offering through comple
Slide 21: Potential to generate meaningful synergies
ELDERS LIMITED ACQUISITION RATIONALE Potential to generate meaningful synergies NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES The combination of Elders and Delta is expected to generate annual net EBITDA synergies of approximately $12 million predominantly achieved through
Slide 22: Light touch integration approach
ELDERS LIMITED ACQUISITION RATIONALE Light touch integration approach NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Elders has a strong track record of successful business combinations and will safeguard the culture and strengths of Delta while maintaining robust Board bas
Slide 23: Acquisition funding and terms
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES 4 Acquisition funding and terms
Slide 24: Acquisition funding and terms
ELDERS LIMITED ACQUISITION FUNDING AND TERMS Acquisition funding and terms NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES The Acquisition of Delta will be funded through approximately 60% cash consideration and 40% of new Elders shares issued to Delta shareholders as scrip
Slide 25: Overview of the Equity Raising
ELDERS LIMITED ACQUISITION FUNDING AND TERMS Overview of the Equity Raising NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES ▪ A fully underwritten 1 for 5.05 pro rata accelerated non-renounceable entitlement offer of new ordinary Elders shares (New Shares) to raise approxima
Slide 26: Equity Raising timetable
ELDERS LIMITED ACQUISITION FUNDING AND TERMS Equity Raising timetable NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Event Date Trading halt and announcement of the Acquisition and Equity Raising, Institutional Entitlement Offer opens Monday, 18 November 2024 Institutional
Slide 27: Questions
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES 5 Questions
Slide 28: Pro forma balance sheet
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES A Pro forma balance sheet
Slide 29: Pro forma balance sheet
ELDERS LIMITED PRO FORMA BALANCE SHEET Pro forma balance sheet NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Elders1 Delta2 $m 30-Sep-24 30-Jun-24 Adjustments3 Elders pro forma Cash and cash equivalents 40 - 50 90 Trade and other receivables 895 113 - 1,008 Inventories and
Slide 30: Key risks
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES B Key risks
Slide 31: Key risks
ELDERS LIMITED KEY RISKS Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Introduction This section discusses some of the key risks associated with an investment in New Shares in Elders. These risks may affect the future operating and financial performance of Elders
Slide 32: Key risks
ELDERS LIMITED KEY RISKS Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Further, if any of the conditions are not satisfied or waived or take longer than anticipated to satisfy, completion of the Acquisition may be deferred or delayed or may not occur on the curre
Slide 33: Key risks
ELDERS LIMITED KEY RISKS Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES The successful operation of Delta’s business relies on its ability to retain experienced and high-performing key management and operating personnel with the company. Delta as a subsidiary of E
Slide 34: Key risks
ELDERS LIMITED KEY RISKS Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES As part of the Acquisition, Delta shareholders will receive consideration in the form of fully paid ordinary shares in Elders. Existing Elders shareholders will have their shareholding diluted
Slide 35: Key risks
ELDERS LIMITED KEY RISKS Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES If you do not participate in the Entitlement Offer, or do not take up all of your entitlements to acquire New Shares under the Entitlement Offer, your percentage shareholding in Elders will be
Slide 36: Key risks
ELDERS LIMITED KEY RISKS Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES This is the risk of operational, financial and reputational damage from Elders' interactions with the natural environment, particularly through Elders’ supply of chemicals and fertilisers to t
Slide 37: Key risks
ELDERS LIMITED KEY RISKS Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Elders engage with numerous counterparties. Elders extend credit to approved parties and may experience losses from a customer's inability to settle debts. Additionally, Elders is Counterparty
Slide 38: Key risks
ELDERS LIMITED KEY RISKS Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES General There are general risks associated with investments in equity capital such as Elders' Shares. The trading price of Shares may fluctuate with movements in equity capital markets in Aust
Slide 39: Key risks
ELDERS LIMITED KEY RISKS Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Future changes in Australian taxation law, including changes in interpretation or application of the law by the courts or taxation authorities in Australia, may affect the taxation treatment o
Slide 40: International offer jurisdictions
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES C International offer jurisdictions
Slide 41: International offer restrictions
ELDERS LIMITED INTERNATIONAL OFFER RESTRICTIONS International offer restrictions NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES This document does not constitute an offer of new ordinary shares (New Shares) of the Company in any jurisdiction in which it would be unlawful. I
Slide 42: International offer restrictions
ELDERS LIMITED INTERNATIONAL OFFER RESTRICTIONS International offer restrictions NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provi
Slide 43: International offer restrictions
ELDERS LIMITED INTERNATIONAL OFFER RESTRICTIONS International offer restrictions NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Switzerland The New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange or on any other stock excha
Slide 44: Overview of underwriting agreement terms
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES D Overview of underwriting agreement terms
Slide 45: Overview of underwriting agreement terms
ELDERS LIMITED UNDERWRITING AGREEMENT SUMMARY Overview of underwriting agreement terms NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Macquarie is acting as lead manager, bookrunner and underwriter (Underwriter) of the Entitlement Offer. Elders has entered into an underwrit
Slide 46: Overview of underwriting agreement terms
ELDERS LIMITED UNDERWRITING AGREEMENT SUMMARY Overview of underwriting agreement terms NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Listing (a) Elders ceases to be admitted to the official list of ASX or the securities are suspended from official quotation on the ASX (oth
Slide 47: Overview of underwriting agreement terms
ELDERS LIMITED UNDERWRITING AGREEMENT SUMMARY Overview of underwriting agreement terms NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Change in Issuer's management* A proposed change of the chairman or chief executive officer of Elders occurs. Change in Target's management
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