Uni-Select — Merger or Acquisition (June 2017)
28 slides from Uni-Select's merger presentation, Jun 1, 2017
Slide 1: Acquisition of The Parts Alliance
ACQUISITION OF THE PARTS ALLIANCE Investor Presentation June 1, 2017
Slide 2: Disclaimer
Disclaimer Important notice: This presentation does not constitute an offer to sell or a solicitation of an offer to buy any security in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation in such jurisdiction. Forward-looking statement: This presentation cont
Slide 3: Disclaimer
Disclaimer External Information: Where this presentation quotes any information or statistics from any external sources, it should not be interpreted that the Corporation has adopted or endorsed such information or statistics as being accurate. We advise you that some of the information presented he
Slide 4: Agenda
Agenda ● Transaction Overview ● Transaction Rationale ● Financial Considerations ● Conclusion The Parts Alliance Acquisition – June 1, 2017 p4
Slide 5: Transaction Overview
Transaction Overview Acquisition & ● Uni-Select has agreed to acquire 100% of PA Topco Limited doing business as The Parts Alliance, a UK leader in the distribution of automotive aftermarket parts, for a Purchase transaction value of approximately £205 million (US$265 million), on a cash-free debt-
Slide 6: Agenda
Agenda ● Transaction Overview ● Transaction Rationale ● Financial Considerations ● Conclusion The Parts Alliance Acquisition – June 1, 2017 p6
Slide 7: This transaction is the result of a thorough strategic analysis
This transaction is the result of a thorough strategic analysis 1 Look outside North America ● To access a new market with high consolidation potential ● To create a third growth pillar for Uni-Select Europe ● To achieve geographic diversification and improve the business risk profile 2 Select the U
Slide 8: Large and Growing UK Automotive Aftermarket Parts Market
Large and Growing UK Automotive Aftermarket Parts Market Top 6 European Markets (Car park size in millions of vehicles) Positive Market Dynamics Germany Top 3 Market Share: 57% 47 • Increasing car park age Older cars drive demand for aftermarket parts • Mandatory regulations Italy Top 2 Market Share
Slide 9: The Parts Alliance Overview
The Parts Alliance Overview A Profitable ● Proven growth platform with 2-year revenue CAGR of 37% Growth ● Strong M&A and Organic growth track record and strong organic growth Company ● 2-year adjusted EBITDA(1) CAGR of 89% ● Leading UK distributor of automotive aftermarket parts ● Operates a nation
Slide 10: Strategic Fit and Business Synergies
Strategic Fit and Business Synergies National • #1 Paint, Body & Equipment Distributor in the #2 Automotive Aftermarket Leadership USA – circa 30% market share Distributor in the UK – circa 7% • #2 Automotive Aftermarket Parts Distributor in market share of £4.1B market, Canada and the leading PBE D
Slide 11: #2 UK Automotive Aftermarket Parts Distributor
#2 UK Automotive Aftermarket Parts Distributor A winning technology-enabled growth platform Major Players in the UK Parts Alliance’s Unique Position in the UK Market Estimated Mechanical • 85% (including affiliates) coverage across the UK No. of Own UK Market Rank Company Parts Distribution within a
Slide 12: The Parts Alliance Network – Branch Locations
The Parts Alliance Network – Branch Locations ● Network of close to 200 locations including 161 corporate stores ● Serving more than 23,000 repair centres ● 2 distribution centres ● 1,000+ service vehicles Corporate Stores Associate Members The Parts Alliance Acquisition – June 1, 2017 p12
Slide 13: Product Lines and National & Private Brands
Product Lines and National & Private Brands Corporate Stores Uniform branding under The Parts Alliance with localized identification Affiliated Partners Private Brands The Parts Alliance Acquisition – June 1, 2017 p13
Slide 14: Proprietary Customer-Focused Technology
Proprietary Customer-Focused Technology ● The Parts Alliance’s ability to outperform competitors is largely built upon the technology platform that the business has developed. ● Today, The Parts Alliance has a comprehensive technological platform that enables the company to differentiate itself on t
Slide 15: A Seasoned Management Team
A Seasoned Management Team Peter Sephton Andrew Field Chief Executive Officer Chief Information Officer • 16+ years as President of EMEA, Brady • 18 years of industry experience and with Corporation (listed on NYSE) The Parts Alliance • 4 years as CEO at The Parts Alliance • Co-founder of DDS (provi
Slide 16: Management Team completed 7 acquisitions over the last 4 years
Management Team completed 7 acquisitions over the last 4 years representing more than £120M in sales 2014 2015 2016 2017 Locations 4 15 12 69 6 3 4 Has been acting as a key consolidator of this market over the past 4 years The Parts Alliance is regarded by potential UK targets as a winning consolida
Slide 17: Proven ability to grow earnings faster than revenues
Proven ability to grow earnings faster than revenues by optimizing existing business and realizing synergies The Parts Alliance financial track record (in millions of £ and in UK GAAP) Revenues (1) Adjusted EBITDA (1)(2) 37% 89% CAGR CAGR 280 265 21 18 218 12 142 5 FY2015 FY2016 FY 2017 Run rate FY2
Slide 18: Agenda
Agenda ● Transaction Overview ● Transaction Rationale ● Financial Considerations ● Conclusion The Parts Alliance Acquisition – June 1, 2017 p18
Slide 19: Combined View of Uni-Select Post-Acquisition
Combined View of Uni-Select Post-Acquisition Unaudited - In millions of US dollars IFRS UK GAAP Combined (3) (except percentages and otherwise specified) LTM 03/31/2017 FY ended 04/30/2017 (2) Sales $1,230.5 $342.5 £264.9 $1,573.0 (1) EBITDA $108.3 $20.9 £16.1 $129.2 Adjusted EBITDA (1) $109.1 $23.0
Slide 20: Transaction Financing
Transaction Financing ● Fully-funded debt transaction of US$265 million, including: (Millions of US$) ● US$100 million through a new term facility; and 100 ● Up to US$525 million operating facility. 265 125 ● Opening leverage ratio at signing anticipated to be approximately 3.5X funded debt to adjus
Slide 21: Agenda
Agenda ● Transaction Overview ● Transaction Rationale ● Financial Considerations ● Conclusion The Parts Alliance Acquisition – June 1, 2017 p21
Slide 22: In Summary
In Summary 1 Uni-Select conducted a thorough strategic analysis to identify a third growth pillar. 2 The UK automotive aftermarket is a promising market to diversify and grow into. 3 The Parts Alliance with 7% market share has an opportunity to rapidly grow in a fragmented and consolidating UK marke
Slide 23: Three pillars to drive Uni-Select's growth through market consolidation and organically
Three pillars to drive Uni-Select’s growth through market consolidation and organically Canadian Automotive Group UNS Market Share (%) 7% 19% 32% #1 #2 #2 68% 81% 93% US$2.7B C$2.6B £4.1B Automotive Paint and Paint Warehouse Distribution Segment in UK Aftermarket Material Market the Canadian Automot
Slide 24: Appendix
Appendix The Parts Alliance Acquisition – June 1, 2017 p24
Slide 25: The Parts Alliance Historical Data
The Parts Alliance Historical Data (Under UK GAAP - in thousands of £) Fiscal periods ended April 30, 2017 2016 2015 Unaudited Audited Audited Net loss (5,965) (4,680) (9,783) Income tax expense (recovery) 2,234 (2,110) (272) Depreciation and amortization 5,831 5,755 3,898 Finance costs, net 14,045
Slide 26: Combined Financial Information
Combined Financial Information (Unaudited - in thousands of US dollars) Uni-Select Inc. PA Topco Limited Combined IFRS UK GAAP (2) LTM (4) LTM Fiscal YR (03/31/2017) (04/30/2017) Net earnings (loss) 57,780 (7,714) 50,066 Income tax expense (recovery) 27,035 2,889 29,924 Depreciation and amortization
Slide 27: Non-IFRS (Non-UK GAAP) Measures
NON-IFRS (NON- UK GAAP) MEASURES ● EBITDA – this measure represents net earnings excluding finance costs, depreciation and amortization as well as income taxes. ● Adjusted EBITDA – this measure represents EBITDA as defined above excluding certain items which may affect the comparability of the entit
Slide 28: Contact info
Contact info: Investorrelations@uniselect.com