Slide 1: Acquisition of Global Therapeutics and Equity Raising
McPherson’s Limited Acquisition of Global Therapeutics and Equity Raising 27 October 2020
Slide 2: Disclaimer
Disclaimer The following disclaimer applies to this presentation. Please consider its contents carefully. By accepting this presentation, you acknowledge that you are receiving it on the basis set out in the following paragraphs. This presentation has been prepared by McPherson's Limited (ASX:MCP) i
Slide 3: Contents
Contents 1 Transaction Overview 2 Global Therapeutics 3 Capital Raising Details 4 Key Risks 5 International Offer Restrictions 3
Slide 4: Transaction Overview
Transaction Overview 4
Slide 5: Highly complementary acquisition
Highly complementary acquisition McPherson’s has entered into an agreement to acquire the assets and brands of Global Therapeutics, a leading provider of branded Oriental and Western herbal and complementary medicine formulations for $27.0 million • Respected foundation from which McPherson’s can ex
Slide 6: Executing McPherson's strategy
Executing McPherson's strategy Global Therapeutics delivers on McPherson’s strategy of building a strong Health and Wellness pillar focused on owned brands and products, with significant growth and market share potential relative to the broader category Health and Wellness Household essentials & oth
Slide 7: Transaction summary
Transaction summary Following the acquisition of Global Therapeutics and the Equity Raising, McPherson’s is expected to have significant balance sheet flexibility to continue to pursue highly complementary acquisition opportunities • McPherson’s has entered into a binding agreement to acquire 100% o
Slide 8: Global Therapeutics
Global Therapeutics 8
Slide 9: Company overview
Company overview Global Therapeutics develops, markets and sells Oriental and Western herbal and complementary medicine formulations in Australia and New Zealand Background Product portfolio • Leader in harnessing the benefits of combining traditional herbal medicines with western complementary medi
Slide 10: Revenue segmentation
Revenue segmentation Diversified, premium product portfolio focused on large sub-segments within the supplements market including immunity, muscular support, bone and joint health, digestive and women's health FY20 invoiced sales by brand FY20 invoiced sales by product 26% 26% 31% $20.3m $20.3m 13%
Slide 11: Distribution network
Distribution network Highly complementary distribution network including pharmacy and specialty health food stores. Opportunity to leverage McPherson’s expanding online and export sales channel Health Food Stores Pharmacies Online and export Brand Brand Brand Significant opportunity in expansion int
Slide 12: Global Therapeutics' market positioning
Global Therapeutics’ market positioning Herbal and traditional products are a niche high growth sub segment of the broader complementary medicines sector The Australian Complementary Medicines industry generated $5.6 billion of sales in 2019 - 55% of sales comprised the ‘Vitamin & Dietary Supplement
Slide 13: Strategic rationale
Strategic rationale Global Therapeutics represents a transformational and strategically compelling acquisition, with significant growth opportunities, that advances McPherson’s position in Health and Wellbeing • Recognised and respected brand and product portfolio providing a unique point of differe
Slide 14: Integration strategy
Integration strategy McPherson's has a well-defined plan for the integration of Global Therapeutics into its existing business which will leverage our capacity and capability in order to drive operational improvements • Long serving and high quality management team with deep industry and category ex
Slide 15: Pro forma financial impact
Pro forma financial impact Global Therapeutics has strong margins providing scope for McPherson's to grow the business. The Acquisition further diversifies McPherson's sales mix and increases revenue derived from owned brands (~85% FY20 pro forma revenue) Pro forma FY20 revenue mix Period ending 30
Slide 16: Key acquisition terms
Key acquisition terms On 26 October 2020, McPherson’s entered into a binding Business Sale Agreement to acquire the Global Therapeutics business, brands and assets from Global Therapeutics, a subsidiary of Blackmores • Global Therapeutics must obtain consents to assign material contracts Key conditi
Slide 17: Capital Raising Details
Capital Raising Details 17
Slide 18: Acquisition funding
Acquisition funding The Acquisition will be fully funded in cash using proceeds from the Placement Estimated Sources A$m % Description Equity 36.5 100.0% Fully underwritten institutional placement to $27.0 million raise approximately $36.5 million acquisition price for Global Therapeutics business,
Slide 19: Equity Raising summary
Equity Raising summary Fully underwritten Placement to raise $36.5 million • Fully underwritten Institutional Placement to raise $36.5 million via the issue of 16.1 million New Shares (Placement) Offer structure and size • McPherson's also intends to raise up to $10 million via a non-underwritten se
Slide 20: Share Purchase Plan
Share Purchase Plan • McPherson’s will offer Eligible Shareholders the opportunity to participate in a non-underwritten SPP to raise up to $10 million • Eligible Shareholders on the register at 7pm (AEST) on Monday, 26 October 2020 in Australia and New Zealand will be invited to subscribe for up to
Slide 21: Equity Raising timetable
Equity Raising timetable Event Date Trading halt Tuesday, 27 October 2020 Placement bookbuild Tuesday, 27 October 2020 Announcement of the Placement and SPP Tuesday, 27 October 2020 Announcement of the outcome of the Placement Wednesday, 28 October 2020 Trading halt lifted. Trading resumes on the AS
Slide 22: Key Risks
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Slide 23: Key Risks
Key Risks There are risks associated with an investment in MCP. The material risks that have potential to have an effect on the Group’s financial prospects, and how the Group manages these risks are outlined on pages 14 and 15 of McPherson’s Limited 2020 Annual Report. Set out below is a summary of
Slide 24: Key Risks (cont.)
Key Risks (cont.) The health, wellness and beauty market is highly fragmented and MCP is or may be subject to competition both in traditional physical stores and online. MCP's market share may decrease if competitors grow their market share by building awareness in their brands, consolidating with o
Slide 25: Key Risks (cont.)
Key Risks (cont.) Under the Global Therapeutics acquisition agreement, MCP is contractually required to pay Global Therapeutics the purchase consideration agreed for the acquisition. As noted in this presentation, MCP is undertaking the placement provided for in this presentation to fund the conside
Slide 26: Key Risks (cont.)
Key Risks (cont.) Tax laws in Australia are complex and are subject to change periodically as is their interpretation by the relevant courts and the tax revenue authorities. Changes in tax law (including Taxation changes transfer pricing, GST, stamp duties and employment taxes), or changes in the wa
Slide 27: International Offer Restrictions
International Offer Restrictions 27
Slide 28: International Offer Restrictions
International Offer Restrictions 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. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any