Target Hospitality Corp. · NASDAQ:TH
Target Hospitality — Platinum Eagle Acquisition — SPAC Merger (November 2018)
25 slides from Target Hospitality's SPAC merger presentation, Nov 29, 2018
Slide 1: Proposed Business Combination Among Platinum Eagle, Target Lodging and Signor Lodging
Confidential Information Proposed Business Combination Among Platinum Eagle, Target Lodging and Signor Lodging
Slide 2: Disclaimer - Important Information
2 Disclaimer Important Information This investor presentation (“Investor Presentation”) is for informational purposes only and does not constitute an offer to sell, a s olicitation of an offer to buy, or a recommendation to purchase any equity, debt or other financial instruments of Platinum E agl e
Slide 3: Entrepreneurial Team with Proven Execution Capabilities
3 Troy Schrenk Chief Commercial Officer Andy Aberdale Chief Financial Officer Entrepreneurial Team with Proven Execution Capabilities TL’s Core Management Team has been together since the “ beginning ” TL has the most experienced team in the industry Hospitality, overall accommodations operations, s
Slide 4: Nation's Largest Network of Flexible Accommodation Space
4 Nation’s Largest Network of Flexible Accommodation Space… Business Model Combining Most Attractive Elements of Specialty Rental and Catering/Hospitality Services to Produce EBITDA Margins Over 50% • Turnkey solutions with integrated design and installation, catering, security, recreational and oth
Slide 5: Three Way Merger Creating Powerful Public Platform for Growth
5 Click to edit footnote text Three Way Merger Creating Powerful Public Platform for Growth • 22 Facilities (Including 15 in Permian) • ~13,000 Beds • Unmatched Network scale blanketing Permian and Bakken Basins Platinum Eagle (PEAC) Target Hospitality (TH) • High margin services which enhance value
Slide 6: Target Hospitality Investment Highlights
6 6 Target Hospitality Investment Highlights (1) Click to edit footnote text Largest Network of U.S. Communities Serving Most Attractive Shale Basins 1 • Represents 12,989 beds serving premier customer base through industry’s largest network • $450.6mm of Gross Book Value as of July 2018 in accommod
Slide 7: Consolidated Financial Performance – Growth Accelerating
7 7 $85.5 $80.1 $125.5 $149.3 $165.9 2016A 2017A LTM July 2018 2018F 2019E Consolidated Financial Performance – Growth Accelerating Confidential Information • Consolidated Revenue and EBITDA CAGRs from 2016 - 2019E of ~25% • 2019E EBITDA forecast solely from current total contract value and full - y
Slide 8: Multi-Billion Dollar U.S. Market Opportunity
8 Multi - Billion Dollar U.S. Market Opportunity Delaware Shale Midland Shale Multi - Billion Dollar U.S. Market $1.0 Billion in Permian Alone Carlsbad, NM Odessa, TX Midland, TX • 15 facilities blanketing the Permian Basin, a $1.0 billion opportunity alone • Power of network effect provides geograp
Slide 9: Expanding Catering and Managed Services; Government End-Market
9 9 • Growing catering and managed services platform across diversity of end - markets, both organically and through acquisitions − Government, Pipelines, Corrections and Education • Currently identified organic growth opportunities include: Government and Hospitality End - Markets • With approved G
Slide 10: Why We Win – Customer-Centric Focus
10 Why We Win – Customer - Centric Focus and The Target 12 Meeting Customer Needs Through Differentiated and Unparalleled Suite of Solutions 01 FOOD 02 REST 03 CONNECTION 04 WELLNESS 05 COMMUNITY 06 HOSPITALITY ENGAGEMENT 07 PERFORMANCE 08 SAFETY 09 LOYALTY 10 PRODUCTIVITY 11 PREPAREDENESS 12
Slide 11: Premier Customer Base and Durable Commercial Contracts
11 Premier Customer Base and Durable Commercial Contracts Serving the Largest O&G Companies in the United States Business Underwritten by Strong Commercial Contracts • Diversified across O&G value chain • Focus on large Upstream customers underpins stability and growth • Integrated into customer pla
Slide 12: Resilient and Strengthened Platform Addressing Growth Opportunities
12 - 1,250,000 2,500,000 3,750,000 5,000,000 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Barrels Per Day Permian Basin and Williston Basin Production (1) Permian Basin Production Permian Basin Forecast Williston Basin Production Williston Basin F
Slide 13: TH's Powerful Unit Economics
13 13 ($25,000,000) ($5,000,000) $15,000,000 $35,000,000 $55,000,000 $75,000,000 $95,000,000 $115,000,000 $135,000,000 $155,000,000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 TH’s Powerful Unit Economics… Click to edit footnote text TH Overview • Rigorous process for vetting projects and dete
Slide 14: Consolidated EBITDA Bridge LTM July 2018 to 2019E
14 14 $125.5 $155.4 $165.9 $13.6 $2.0 $17.4 $3.0 $10.5 Consolidated EBITDA Bridge LTM July 2018 to 2019E Confidential Information (1) Assumes COGS PPPD improves from $ 40.8 July 2018 LTM to $ 36.7 for 2019 to reflect increase in scale and capacity. (2) Assumes $ 2.0mm in SG&A savings with the majori
Slide 15: Exceptional Free Cash Flow Profile
15 15 $149.3 $54.3 $2.4 $15.6 $131.3 $55.2 $14.8 $7.0 2018F EBITDA TL Maintenance Capex Deferred Revenue 2018F Discretionary Free Cash Flow TL Growth Capex SH Growth Capex SH Capex Facilities Improvement 2018F Free Cash Flow $165.9 $136.4 $3.0 $13.5 $149.4 $13.0 2019E EBITDA TL Maintenance Capex Def
Slide 16: United States: Outlook and Focus
16 United States: 206 Outlook and Focus Upside Beyond Forecast: Organic Growth in Core Business (all new beds) Size (~# of Beds) First Revenues Capex ($mm) Minimum Contract Term Minimum Contracted EBITDA ($mm) 250 Q2 2019 $3.5 3 years $4 – $5 500 Mid 2019 $25 3 years $27 320 Mid 2019 $16 3 years $17
Slide 17: Incremental Upside – Major Projects and M&A
17 17 LOI Awarded for U.S . Refinery Project • LOI executed in 2018 with anticipated 2019 start date • Existing 596 bed community to support ~24 month project • Supporting the construction of a state - of - the - art crude oil refinery sited on approximately 150 acres in Belfield , North Dakota – th
Slide 18: Appendix
18 Appendix
Slide 19: Entrepreneurial Team with Proven Execution Capabilities Supported by Experienced Board
19 Entrepreneurial Team w ith Proven Execution Capabilities Supported by Experienced Board • TL’s Core Management Team has been together since the “ beginning ” • TL has the most experienced team in the industry • Hospitality, overall accommodations operations, sales and construction are industry le
Slide 20: Growth and Stability Capitalizing on Long-Term Investment in U.S. Shale
20 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 0% 20% 40% 60% 80% 100% 120% Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18
Slide 21: TH's Upside: Data Analytics Driving the Business
21 21 TH’s Upside: Data Analytics Driving the Business Sales and Operational Planning Process Commercial Processes (Systems) Management (People) • Revenue optimization tactics • Review weekly rates & utilization trends • Monitor and coach sales performance • Weekly sales/BD call to review − Regional
Slide 22: Illustrative Transaction Framework
22 Illustrative Transaction Framework Click to edit footnote text P F equity value breakdown Ownership PF Shares SPAC shareholders 30.8% 32.5mm SPAC sponsor promote shares 5.8% 6.1mm PIPE shareholders 7.6% 8.0mm Sellers rollover equity 55.9% 59.1mm Total shares outstanding 100.0 % 105.7mm $1,397 $1,
Slide 23: Superior ROIC Compared to Specialty Rental Comparables
23 Characteristic Specialty Rental Market Leaders (1) Market Leader Average Unit Cost $32,400 $3,000 $50,000 (5) Average Daily Rental Rate (2) $30.00 ± $3.33 $70.00 (6) Average Revenue Payback Period (3) ~36 months ~30 months ~24 months Target Time Utilization 80% 75% 95% Average Economic Life 20 ye
Slide 24: Target Comparables Universe
24 (1) EBITDA figures are all restated for extraordinary items. (2) Latest Thomson/ FirstCall /Bloomberg estimates and Wall Street Research. (3) Market Value calculated using treasury stock method to quantify impact of Founder Shares and Warrants. Enterprise Value, Revenue and EBITDA are pro forma f
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