Accel Entertainment, Inc. · NYSE:ACEL
Accel Entertainment — Merger or Acquisition (July 2024)
17 slides from Accel Entertainment's merger presentation, Jul 15, 2024
Slide 1: Acquisition of Fairmount Holdings
Acquisition of Fairmount Holdings FanDuel Sportsbook & Horse Racing (Collinsville, Illinois) July 2024
Slide 2: Important Information
Important Information Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical
Slide 3: Acquisition of Fairmount Holdings
Acquisition of Fairmount Holdings Extends Accel’s Local Gaming footprint with the purchase of the only active horse racing venue in greater St. Louis; includes an Organization Gaming License to offer casino gaming positions as well as a partnership with FanDuel to participate in sport wagering in Il
Slide 4: US Local Gaming Market – Growth Catalyst for Accel
US Local Gaming Market – Growth Catalyst for Accel 2023 REVENUE BY MARKET TOTAL ADDRESSABLE MARKET (“TAM”) • Most Local Gaming assets remain unconsolidated: ($ IN BILLIONS) − Many multi-generational owners whose children no longer want to Historical participate in their family’s business, or Horse R
Slide 5: Who We Are
Who We Are Company Overview • Distributed gaming is legal and regulated in 11 states and these state markets generally adhere to 2 basic business models: − Revenue share is defined by law and the retailer and the gaming operator must be separate entities; or − Revenue share is negotiated between the
Slide 6: How We Create Value
How We Create Value Core Operations • Focus on Customer Relationships − Exceptional infrastructure to support our retail partners’ growth, including relationship management, business development and data analytics/reporting − Self-service technology to lessen staffing burdens for our retail partners
Slide 7: Diversification and Prudent Capital Allocation
Diversification and Prudent Capital Allocation Accel continues to expand its footprint into new markets Acquisitions have diversified revenue mix (Machine count by state) (Revenue mix by state) 2% 2% 10% 25,083 23,541 827 12% 391 2,704 2,645 6,276 6,108 100% 74% 14,397 15,276 13,639 12,247 10,499 7,
Slide 8: Exceptional Five–Year Growth Trend
Exceptional Five–Year Growth Trend Revenue Gross Profit Adjusted EBITDA1 Discretionary FCF2 ROIC3 29% 25% 23% 25% CAGR CAGR CAGR CAGR $353 $181 $95 13% $1,170 7% $147 $80 $39 $429 FY19 FY23 FY19 FY23 FY19 FY23 FY19 FY23 FY19 FY23 1. Adjusted EBITDA is a non-GAAP metric. See Appendix for a reconcilia
Slide 9: Transaction Summary – FanDuel Sportsbook & Horse Racing
Transaction Summary – FanDuel Sportsbook & Horse Racing Acquisition Background • Acquiring FanDuel Sportsbook & Horse Racing in Collinsville, Illinois for approximately $35 million1 • At the election of sellers, William Stiritz, former CEO of Post Holdings and Ralston Purina, and Robert Vitale, CEO
Slide 10: Development Strategy – FanDuel Sportsbook & Horse Racing
Development Strategy – FanDuel Sportsbook & Horse Racing We have identified key partners to operate and advise on various aspects of the project − Racetrack/Parimutuel Betting – We will build on Fairmount's long-term horse racing management team − Casino – Engaged industry-leading partnerships to dr
Slide 11: Strong Fundamentals on an Absolute and Relative Basis
Strong Fundamentals on an Absolute and Relative Basis Free cash flow expected to inflect in 2025+ following an elevated investment cycle supporting capital return to shareholders Despite lower Adjusted EBITDA(R) Accel posts comparable FCF …and ROIC3 margins1… conversion2… 56% 13% 53% 11% 43% 7% L St
Slide 12: However, Fundamentals are not Reflected in Valuation
However, Fundamentals are not Reflected in Valuation Accel trades at a discount to peers On both EV/EBITDA(R)1… … and Free Cash Flow 1 8.9x 12.1% 11.1% 7.2x 6.1x 5.8% LV Strip Regional Accel LV Strip Regional Accel Gaming Gaming 1. Peer Enterprise Value (defined as market capitalization plus debt le
Slide 13: Acquisition Benefits from Accel’s Core Strengths
Acquisition Benefits from Accel’s Core Strengths • We are an experienced Local Gaming operator with a strong track record of organic and inorganic growth, generating attractive free cash flows and Adjusted EBITDA returns • We are owned and operated by founders that are governed by and aligned with i
Slide 14: Appendix
Appendix
Slide 15: Definition of Non-GAAP Financial Measures
Definition of Non-GAAP Financial Measures Accel uses non-GAAP measures as a key performance measure of the results of operations for purposes of evaluating performance internally. Management believes that these non-GAAP measures of financial results enhance the understanding of Accel’s underlying dr
Slide 16: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation $ in millions, except %s Twelve Months Ended Twelve Months Ended December 31, December 31, 2019 2023 2019 2023 Reported Net Income (Loss) ($37) $46 Reported Net Income (Loss) ($37) $46 (+) Amortization of intangible assets and route and customer acquisition costs 18 2
Slide 17: Balance Sheet
Balance Sheet $ in millions, except ratios Decem ber 31, 2019 Decem ber 31, 2023 Assets Current Assets: Cash and cash equivalents $125 $262 Other current assets 26 51 Total current assets $151 $313 Property and equipment, net 119 261 Route and customer acquisition costs, net 17 19 Location contracts
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