Aspen Group Limited · ASX:APZ
Aspen — Merger or Acquisition (October 2015)
36 slides from Aspen's merger presentation, Oct 30, 2015
Slide 1: Revised Aspen Group Proposal to merge with Aspen Parks Property Fund
For personal use only Revised Aspen Group Proposal to merge with Aspen Parks Property Fund Creating a leader in value for money accommodation 30 October 2015 1
Slide 2: Disclaimer
DISCLAIMER For personal use only This presentation and the information in it is not investment or financial product advice and is not a recommendation or advice in relation to Aspen Group Limited (ACN 004 160 927) or Aspen Property Trust (ARSN 104 807 767) (together, “Aspen Group”), Aspen Parks Prop
Slide 3: Contents
CONTENTS For personal use only 1 Revised Aspen Group Proposal 2 Merged Group overview 3 Explanatory notes Slide 1. Benefits of the Merger 23 2. Pro forma Merged Group financial statements 26 3. Merged Group portfolio 29 3
Slide 4: Revised Aspen Group Proposal
1 Revised Aspen Group Proposal For personal use only 4
Slide 5: A superior value outcome for both Aspen Group and APPF securityholders
REVISED ASPEN GROUP PROPOSAL A superior value outcome for both Aspen Group and APPF securityholders than any other alternative For personal use only The Aspen Group Board Committee and APPF Board Committee have carefully assessed all available options, including the Sunsuper/Discovery Unsolicited Of
Slide 6: Process adopted by the Aspen Group Board Committee
REVISED ASPEN GROUP PROPOSAL Process adopted by the Aspen Group Board Committee For personal use only After close of business on Friday, 23 October 2015, Aspen Group received an Unsolicited Offer from Sunsuper / Discovery The Aspen Group Board Committee carefully assessed all the available options
Slide 7: Merged Group value proposition
REVISED ASPEN GROUP PROPOSAL Merged Group value proposition For personal use only The Merged Group is forecast to have FY16 underlying cash earnings of 14.1 – 16.0 cents per security1 and annualised FY16 distributions of 12.0 cents per security2 Sector peers trade on an earnings yield of approxi
Slide 8: The most compelling proposition available to APPF securityholders
REVISED ASPEN GROUP PROPOSAL The most compelling proposition available to APPF securityholders For personal use only Aspen Group's proposal is superior to the Sunsuper/Discovery Unsolicited Offer Provides the opportunity for APPF securityholders to remain fully invested and participate in the valu
Slide 9: Details of the Revised Aspen Group Proposal
REVISED ASPEN GROUP PROPOSAL Details of the Revised Aspen Group Proposal For personal use only The consideration for APPF securityholders represents a value of $0.60 per APPF security1 This represents a 29.8% premium to the APPF NAV of $0.4622 as at 30 June 2015 The form of consideration will be at
Slide 10: The Merger is forecast to be materially accretive to distributions
REVISED ASPEN GROUP PROPOSAL The Merger is forecast to be materially accretive to distributions1 For personal use only Distribution accretion reflects: the Merged Group's appropriate capital structure expected operating synergies of approximately $1.7 million per annum Aspen Group APPF2 +28% +
Slide 11: The Merged Group will have an appropriate capital structure
REVISED ASPEN GROUP PROPOSAL The Merged Group will have an appropriate capital structure For personal use only The Merged Group's target gearing range is between 25% - 35% Based on zero to full take-up of the Cash Option, pro forma 30 June 2015 gearing would range between: 28% - 41% 20% - 35
Slide 12: The Merged Group
For personal use only 2 The Merged Group 12
Slide 13: Profile of the Merged Group
THE MERGED GROUP Profile of the Merged Group For personal use only The Merged Group will be a more focused business owning, managing and developing value for money accommodation properties Permanent Largely retiree customers residents Land lease model (customer owns cabin) Stable, high quality
Slide 14: Profile of the Merged Group
THE MERGED GROUP Profile of the Merged Group For personal use only The Merged Group’s accommodation portfolio will be diversified by type and geography with representation across metropolitan, regional and tourist locations portfolio of 26 accommodation properties over 5,000 sites portfolio va
Slide 15: Profile of the Merged Group – geographic allocation
THE MERGED GROUP Profile of the Merged Group – geographic allocation For personal use only The Merged Group’s accommodation portfolio will have a national footprint 15
Slide 16: Profile of the Merged Group – property type allocation
THE MERGED GROUP Profile of the Merged Group – property type allocation For personal use only The Merged Group will own a portfolio of properties across a diversified customer base, reducing risk Mix of permanent residents and Mixed exposure is a frequent regulatory requirement short-stay (57%)
Slide 17: Profile of the Merged Group – site type allocation
THE MERGED GROUP Profile of the Merged Group – site type allocation For personal use only The Merged Group business focus will be to continue to shift toward residential/permanents Sale of three short stay resort-style assets in north-west WA Portfolio composition by sites 6,000 5,000 12% 20% 4,00
Slide 18: Profile of the Merged Group – operations
THE MERGED GROUP Profile of the Merged Group – operations For personal use only The Merged Group will operate a market leading fully integrated internalised platform Scale operations 11 year track record, with operations commencing in 2004 26 properties, located in every mainland state – 40% in
Slide 19: Profile of the Merged Group – development
THE MERGED GROUP Profile of the Merged Group – development For personal use only The Merged Group will be well positioned to progress an expanded development pipeline In-house team Located in both Sydney and Perth Combine traditional residential, caravan park and manufactured housing experience
Slide 20: Profile of the Merged Group – acquisitions
THE MERGED GROUP Profile of the Merged Group – acquisitions For personal use only The Merged Group will continue a strong acquisition track record Clear criteria Locational focus on: metropolitan, existing asset clusters, or major regional population centres (especially east coast) Attractive in
Slide 21: Profile of the Merged Group – positive industry fundamentals
THE MERGED GROUP Profile of the Merged Group – positive industry fundamentals For personal use only The Merged Group will be positioned to take advantage of supportive social trends and positive industry fundamentals Demographics Increasing retiree population Lengthening life expectancy Inadeq
Slide 22: Explanatory Notes
For personal use only 3 Explanatory Notes 22
Slide 23: Benefits of the Merger for Aspen Group securityholders
EXPLANATORY NOTE Note 1 – Benefits of the Merger for Aspen Group securityholders For personal use only Increased exposure to a quality portfolio of assets the Merger presents an opportunity for Aspen Group to achieve scale efficiently; APPF properties are valued at a weighted average capitalisat
Slide 24: Benefits of the Merger for APPF securityholders
EXPLANATORY NOTE Note 1 – Benefits of the Merger for APPF securityholders For personal use only Ability to remain fully invested in the value for money accommodation asset class, and to enjoy the income and capital returns that would come from remaining invested in a sector with positive long term t
Slide 25: Benefits of the Merger for APPF securityholders
EXPLANATORY NOTE Note 1 – Benefits of the Merger for APPF securityholders For personal use only Appropriate capital structure pro forma 30 June 2015 gearing of the Merged Group is expected to range from approximately 28% - 41%, based on zero to full take-up of the Cash Option; and post a sale of
Slide 26: Merged Group pro forma consolidated statement of financial position
EXPLANATORY NOTE Note 2 – Merged Group pro forma consolidated statement of financial position as at 30 June 2015 For personal use only APPF Aspen Group Pro forma Merged Group pro forma pro forma adjustments pro forma 30 June 2015 30 June 2015 30 June 2015 30 June 2015 $’000 $’000 $’000 $’000 Current
Slide 27: Merged Group pro forma consolidated earnings forecast for FY2016
EXPLANATORY NOTE Note 2 – Merged Group pro forma consolidated earnings forecast for the year ending 30 June 2016 For personal use only Merged Group APPF Aspen Group Pro forma adjustments pro forma FY16 FY16 FY16 FY16 $’000 $’000 $’000 $’000 Net property income 24,482 34,098 - 34,098 Net development
Slide 28: Sensitivity
EXPLANATORY NOTE Note 2 – Sensitivity For personal use only Impact of Cash Option take up on the pro forma FY16 consolidated earnings forecast and consolidated statement of financial position as at 30 June 2015 100% take-up 50% take-up 0% take-up Cents per Cents per Cents per $’000 $’000 $’000 secur
Slide 29: Accommodation portfolio summary
EXPLANATORY NOTE Note 3 – Accommodation portfolio summary For personal use only Carrying Residential / value Cap rate Property Location State Tenure permanent Annuals Short-stay Resources Total ($ 000's) (%) Ballina Ballina NSW Both (F&L) 82 - 141 - 223 17.2 9.0% Dubbo Parklands Dubbo NSW Freehold -
Slide 30: Merged Group Portfolio
EXPLANATORY NOTE Note 3 Ballina Lakeside Dubbo Parklands Harrington Horseshoe Lagoon For personal use only Merged Group North Coast, NSW Dubbo, NSW North Coast, NSW Moama, NSW Portfolio Description Located on the NSW Far-North Located in close proximity to Located on the NSW Mid-North Located in the
Slide 31: Merged Group Portfolio
EXPLANATORY NOTE Note 3 Four Lanterns Estate Maiden’s Inn A Shady River Tomago Van Village For personal use only Merged Group Leppington, NSW Moama, NSW Moama, NSW Tomago, NSW Portfolio Description Located within the SW Sydney Located in the Echuca / Located in the Echuca / Located within the greate
Slide 32: Merged Group Portfolio
EXPLANATORY NOTE Note 3 Twofold Bay Beach Wallamba River Ashley Gardens Boathaven For personal use only Merged Group Eden, NSW North Coast, NSW Melbourne, Victoria Ebden, Victoria Portfolio Description Located in Eden on the NSW Located on the NSW Mid-North Located in Braybrook, 10km Located near Al
Slide 33: Merged Group Portfolio
EXPLANATORY NOTE Note 3 Geelong Riverview Yarraby Balmoral Coogee Beach For personal use only Merged Group Geelong, Victoria Echuca Village, Victoria Karratha, WA Fremantle, WA Portfolio Description Located in Geelong, a short Located in the town of Echuca, Located in the town of Karratha Located ap
Slide 34: Merged Group Portfolio
EXPLANATORY NOTE Note 3 Cooke Point Mandurah Gardens Pilbara Perth Vineyards For personal use only Merged Group Port Hedland, WA Mandurah, WA Karratha, WA Perth, WA Portfolio Description A coastal property overlooking Situated approximately 65km Located in the Pilbara region of Located 14 km from th
Slide 35: Merged Group Portfolio
EXPLANATORY NOTE Note 3 Woodman Point Karratha Village Adelaide Caravan Park Myall Grove For personal use only Merged Group Fremantle, WA Karratha, WA Adelaide, SA Roxby Downs, SA Portfolio Description Located 10km from the historic Located in the Pilbara region of Located 3km from the centre of Loc
Slide 36: Merged Group Portfolio
EXPLANATORY NOTE Note 3 Port Augusta Australiana Top Tourist Park For personal use only Merged Group Port Augusta, SA Hervey Bay, QLD Portfolio Description Located in Port Augusta, Located in Hervey Bay, 297km 318km north-west from north of Brisbane. Adelaide. Home to permanent residents Focuses on