Bravura Solutions Limited · ASX:BVS
Bravura Solutions — Investor Presentation (May 2010)
42 slides from Bravura Solutions's investor presentation, May 10, 2010
Slide 1: May 2010 Rights Issue Investor Presentation
\ Bravura Solutions Limited May 2010 Rights Issue Investor Presentation 10 May 2010 1
Slide 2: Important notices and disclaimer
Important notices and disclaimer This investor presentation ("Presentation") is issued by Bravura Solutions Limited ACN 111 148 826 ("Bravura"). This Presentation is not a prospectus, disclosure document, product disclosure statement or other offering document under Australian law or under any o
Slide 3: Contents
Contents Executive summary 4 MFT overview 7 MFT Acquisition strategic rationale 10 Rights Issue 15 Key dates 22 Key risks 24 Foreign jurisdiction selling restrictions 33 Conclusion 40 Appendix
Slide 4: Executive summary
Executive summary
Slide 5: Executive summary
Executive summary Acquisition of Bravura to acquire MFT, a provider of transfer agency software and related services primarily in Europe Mutual Fund Total consideration of £20m which represents a 3.4 multiple of MFT‟s financial year ending 30 Technologies June 2010 (FY10) pro forma EBITDA Limite
Slide 6: Executive summary (cont'd)
Executive summary (cont‟d) Bravura announces a fully underwritten renounceable pro-rata rights issue to raise $23 million to Rights Issue assist in funding the acquisition of MFT and associated costs The rights issue will comprise: 1 for 1.82 renounceable pro-rata entitlement offer of 230,000,00
Slide 7: MFT overview
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Slide 8: MFT - overview
MFT - overview MFT is a provider of transfer agency and record keeping primarily in Europe Established in 1999, based just outside London, UK Provides software and managed services MFT‟s software solution, MFT GFAS®, is used by some of the UK‟s largest financial services companies (by FUM)
Slide 9: MFT pro forma EBITDA
MFT pro forma EBITDA MFT pro forma EBITDA - Unaudited In GBP '000s 30-Jun-09 1 30-Jun-10 5 Managed Service 9,730 10,032 Consulting 402 384 Development 2,687 3,369 Licence Fee 3 105 - 4 Non Recurring revenue 335 - Total revenue 13,259 13,785 Staff & Other Direct costs 6,239 4,961 Operating Contributi
Slide 10: MFT Acquisition strategic rationale
MFT Acquisition strategic rationale
Slide 11: MFT Acquisition strategic rationale
MFT Acquisition strategic rationale The Acquisition is expected to enable Bravura to: Increase market share to enhance its position in the transfer agency space in the European market Support 3 of the top 5 UK fund managers (by FUM) Add to, and create further scale in, its transfer agency cl
Slide 12: MFT Acquisition strategic rationale (cont'd)
MFT Acquisition strategic rationale (cont‟d) Quality and predictability of Bravura earnings are improved Increased certainty and stability of longer term annuity revenue streams MFT‟s FY10 pro forma EBITDA margin not reliant on licence fees Will assist in improving Bravura‟s leverage ratio 1
Slide 13: Acquisition integration
Acquisition integration Head of Business and Operations for MFT will report directly into Bravura‟s London based Global COO, Transfer Agency Minimal disruption to MFT operations as: Transitioning employees will remain in their current location Reporting lines within the business will remain
Slide 14: Details of the Acquisition of MFT
Details of the Acquisition of MFT Bravura has entered into a Sale and Purchase Agreement (“SPA”) with FIL under which Bravura has agreed to purchase all of the shares in MFT for £19 million payable on completion (and subject to adjustment in accordance with the SPA) and two earn out payments of £5
Slide 15: Rights Issue
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Slide 16: Details of the Rights Issue
Details of the Rights Issue 1 for 1.82 renounceable pro-rata rights issue of approximately 230 million new shares, raising approximately $23 million Issue Price of $0.10 per ordinary share in Bravura ("Share"), representing a 10% discount to the volume weighted average price of Bravura‟s Shares
Slide 17: Summary of Rights Purchase Agreement
Summary of Rights Purchase Agreement FIL has entered into a rights purchase agreement with each of Bravura‟s CEO Simon Woodfull‟s, Non-Executive Director Trevor Perry‟s and ex-CEO and ex- Director Iain Dunstan‟s associated entities (collectively the “Rights Parties”) (“Rights Purchase Agreement”). U
Slide 18: What are your options?
What are your options? Take up all of your Rights Take up all of your Rights and apply for Additional New Shares subject to availability and Board allocation policy Sell all of your Rights on ASX Take up part of your Rights and sell part of your Rights on ASX Take up part of your Rights an
Slide 19: Sources and uses of funds
Sources and uses of funds Sources A$000's Uses A$000's Cash 3,134 Consideration¹ 31,667 Rights issue 23,000 Train DD costs 1,025 Exercise of 53,333,334 Underwriter Options 8,000 Rights Issue related cost² 905 Underwriting costs² 537 Total 34,134 Total 34,134 1. Represents the initial consideration o
Slide 20: Pro forma balance sheet
Pro forma balance sheet A$000's BVA¹ MFT² Adjustments³ Pro forma Current assets Cash and cash equivalents 5,548 798 (3,134)⁴ 3,212 Trade and other receivables 34,385 22 - 34,407 Other current assets 1,937 105 - 2,042 Total current assets 41,870 925 (3,134) 39,661 Non-current assets Intangibles 130,8
Slide 21: Potential control effects
Potential control effects Following allotment of New Shares under the Rights Issue, the Underwriters or its associates could end up with a shareholding in Bravura of between 41.62% and 73.70% and a voting power of between 51.90% and 73.70%. The Underwriters‟ shareholding in Bravura will depend on,
Slide 22: Key dates
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Slide 23: Key dates
Key dates Event Date Bravura shares trade "Ex rights", rights trading commences Wednesday, 12 May 2010 Record Date for the Rights Issue 7.00pm, Tuesday, 18 May 2010 Mailing of offer documents to Eligible Shareholders completed Monday, 24 May 2010 Rights Issue opens Monday, 24 May 2010 Close of Right
Slide 24: Key risks
Key risks
Slide 25: Key risks
Key risks The historic share price performance of Bravura Shares provides no guidance as to Bravura‟s future share price. There are a number of risks, both specific to Bravura and general investment risks, which may materially and adversely affect the future performance of Bravura and the value
Slide 26: Key risks (cont'd)
Key risks Investors should be aware that there are risks associated with any investment listed on ASX. The value of New Shares may rise above or fall below the Issue Price, depending on the financial condition and operating performance of Bravura. Further, Bravura and the price at which its Shares
Slide 27: Key risks
Key risks The financial performance of Bravura is to a significant degree dependent on new licence sales and in any given financial year the size and quantity of such sales are difficult to predict and may exceed or be lower than expected. Bravura's wealth management applications and transfer ag
Slide 28: Key risks (cont'd)
Key risks Third parties may claim the technology Bravura has developed, acquired or incorporated into its products will infringe the rights third parties may hold and there is also a risk that the seller of technology which it has acquired may not have appropriately protected the intellectual prop
Slide 29: Key risks
Key risks MFT is reliant on four key customers which generate approximately 98% of MFT‟s total revenue. Cessation or change of trade with one customer may have a significant impact on MFT‟s future trading performance. Due to there not being a requirement under Bermudan law to produce financial s
Slide 30: Key risks
Key risks On completion of the SPA, a transitional services agreement will be entered into. Under the transitional services agreement, various premises related, equipment related and ad hoc transitional services will be provided until 31 December 2010. Despite this, the process of integrating the
Slide 31: Key risks
Key risks Completion of the SPA is conditional on the Underwriters not exercising their right to terminate the Underwriting Agreement in respect of certain termination events which are beyond the control of Bravura. MFT / The termination events for this purpose are the events described in section 6.
Slide 32: Key risks
Key risks An active trading market in the Rights may not develop. It may therefore be difficult for you to sell your Rights on the ASX. Rights Bravura is conducting the Rights Issue in order to partly fund the Acquisition. If the SPA is Issue terminated for any reason before allotment of New Sha
Slide 33: Foreign jurisdiction selling restrictions
Foreign jurisdiction selling restrictions The New Shares and Additional New Shares are not being offered or sold to the public within New Zealand other than to existing shareholders of Bravura with registered addresses in New Zealand to whom the offer of New Shares is being made in reliance on the
Slide 34: Glossary
Glossary Term Definition Acquisition The acquisition of MFT by Bravura Additional New Shares New Shares applied for by an Eligible Shareholder that are in excess of that Eligible Shareholder‟s Rights under the Rights Issue ASSB Has the meaning given to it in the Corporations Act Australian Accountin
Slide 35: Glossary (cont'd)
Glossary (cont‟d) Term Definition Eligible Shareholders A holder of Shares that is: registered as a holder of Shares as at the Record Date; either: has a registered address in Australia or New Zealand; or is an Eligible Overseas Institution; is not in the United States and is neither a U.S
Slide 36: Glossary (cont'd)
Glossary (cont‟d) Term Definition Entitlement and Acceptance Form The personalised entitlement and acceptance form accompanying the Rights Issue Offer Document which Eligible Shareholders may use to apply for New Shares and Additional New Shares EPS Earnings per Share FIL FIL Limited FUM Funds under
Slide 37: Glossary (cont'd)
Glossary (cont‟d) Term Definition MFT Mutual Funds Technologies Limited a company incorporated in Bermuda New Share A new Share to be issued under the Rights Issue. For the avoidance of doubt any Additional New Shares issued will be New Shares Record Date The time and date for determining entitlemen
Slide 38: Glossary (cont'd)
Glossary (cont‟d) Term Definition Share A fully paid ordinary share in the capital of Bravura SPA The agreement dated on or about 10 May 2010 between Bravura and FIL in respect of the sale and purchase of MFT TERP Theoretical “Ex rights” price Underwriters The following entities, being wholly owned
Slide 39: Glossary (cont'd)
Glossary (cont‟d) Term Definition Underwriter associates As at the date of this Presentation Ironbridge Capital Holdings Pty Limited – ACN 104 198 110 Ironbridge Capital Pty Limited – ACN 105 880 108 Ironbridge Capital II Pty Limited – ACN 120 177 782 Ironbridge Capital II A Pty Limited – AC
Slide 40: Conclusion
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Slide 41: MFT Acquisition conclusion
MFT Acquisition conclusion Expected to be EPS accretive In line with core strategy of concentrating on transfer agency and wealth management Improvement in earnings predictability Increase certainty and stability of longer term annuity revenue streams Reduced leverage ratio 41 Not for dist
Slide 42: Appendix: Top UK Fund Managers by TA Provider & Platform
Appendix Top 5 UK Fund Managers by TA Provider & Platform as at 31 March 2010 Position Company AUM Transfer Agent TPA System 1 Invesco Perpetual £36, 144, 095, 132 In-house GFAS 2 FIL Investment Management Limited £28, 417, 215, 171 In-house GFAS 3 Legal & General (Unit Trust) Managers £27, 022, 610