Slide 1: Strategic Acquisitions of Franklin Web and AIW and Capital Raising
For personal use only Strategic Acquisitions of Franklin Web and AIW and Capital Raising / 5 DECEMBER 2016 Not for distribution or release in the United States
Slide 2: Important notices
Not for distribution or release in the United States | 2 Important notices For personal use only This investor presentation (Presentation) has been prepared by IVE Group Limited (ABN 62 606 252 644) (IVE). This Presentation has been prepared in relation to a pro-rata accelerated non-renounceable ent
Slide 3: Important notices (cont.)
Not for distribution or release in the United States | 3 Important notices (cont.) For personal use only Investment risk: An investment in IVE shares is subject to known and unknown risks, some of which are beyond the control of IVE. IVE does not guarantee any particular rate of return or the perfor
Slide 4: Important notices (cont.)
Not for distribution or release in the United States | 4 Important notices (cont.) For personal use only Except as required by law or regulation (including the ASX Listing Rules), IVE undertakes no obligation to provide any additional or updated information whether as a result of new information, fu
Slide 5: Contents
For personal use only CONTENTS 6 01 / Transaction overview 10 02 / Overview of Franklin and AIW 14 03 / Transaction rationale and impact on IVE 22 04 / Transaction funding, pro forma financials and terms 26 05 / Offer summary 30 A / Key risks 36 B / Offer jurisdictions Not for distribution or releas
Slide 6: Transaction overview
For personal use only 01 / Transaction overview Not for distribution or release in the United States
Slide 7: Overview
Not for distribution or release in the United States | 7 Overview For personal use only IVE is expanding into the LFWO sector via the strategic acquisitions of Franklin and AIW • IVE Group Limited (IVE) has entered into binding agreements to acquire: - Franklin Web (Franklin) for $100 million as the
Slide 8: Strategic rationale and highlights
Not for distribution or release in the United States | 8 Strategic rationale and highlights For personal use only Combining IVE, Franklin and AIW will create a competitive advantage and opportunities for future growth LFWO sector is an attractive and complementary sector for IVE 1 • Catalogues conti
Slide 9: Transaction summary
Not for distribution or release in the United States | 9 Transaction summary For personal use only • Franklin is the third largest LFWO operator in the Australian market by revenue(1) with pro forma revenues of $151.2 million(2) and EBITDA of $21.2 Overview of million(2) in FY16 (FY16 EBITDA margin
Slide 10: Overview of Franklin and AIW
For personal use only 02 / Overview of Franklin and AIW Not for distribution or release in the United States
Slide 11: Overview of Franklin
Not for distribution or release in the United States | 11 Overview of Franklin For personal use only Franklin is a market leading specialist catalogue producer and the cornerstone acquisition Business overview Services • Established in 1936, Franklin is a third generation business owned by Phil Tayl
Slide 12: Financial performance of Franklin
Not for distribution or release in the United States | 12 Financial performance of Franklin For personal use only Franklin is a low cost and highly efficient specialist catalogue producer Revenue Pro forma revenue and gross margin(1) • Revenue growth of 12.4% from FY14A to FY16A was primarily 160 40
Slide 13: Overview of AIW
Not for distribution or release in the United States | 13 Overview of AIW For personal use only AIW will be integrated with Franklin to deliver significant integration and synergy benefits Business overview Pro forma revenue and gross margin(2) • Established in 2001, AIW specialises in catalogue pro
Slide 14: Transaction rationale and impact on IVE
For personal use only 03 / Transaction rationale and impact on IVE Not for distribution or release in the United States
Slide 15: Strategic rationale
Not for distribution or release in the United States | 15 Strategic rationale For personal use only Consolidating the LFWO sector is a strategic move by IVE to unlock value for shareholders Combines Franklin’s market leading Broader customer base and significant 1 Attractive and complementary sector
Slide 16: Attractive and complementary sector
Not for distribution or release in the United States | 16 Attractive and complementary sector For personal use only The LFWO sector produces catalogues which are a core media distribution channel Sector overview Industry volumes by distribution(1) • The LFWO sector specialises in the production of r
Slide 17: Attractive and complementary sector (cont.)
Not for distribution or release in the United States | 17 Attractive and complementary sector (cont.) For personal use only The Acquisitions further enhance IVE’s unparalleled marketing offering IVE Group Creative services Direct marketing Retail display Promotional Logistics and Fundraising Managed
Slide 18: Combining Franklin and AIW
Not for distribution or release in the United States | 18 Combining Franklin and AIW For personal use only Integrating AIW into Franklin and leveraging its low cost production environment Industry leading specialist Franklin Integration catalogue producer Cornerstone of new LFWO strategy Detaile
Slide 19: Broader customer base and cross sell
Not for distribution or release in the United States | 19 Broader customer base and cross sell For personal use only The Acquisitions further enhance IVE’s diverse customer base, adding a range of long term, blue chip customers IVE standalone (% of FY16 pro forma revenue)(1) IVE post transaction (%
Slide 20: Financially compelling
Not for distribution or release in the United States | 20 Financially compelling For personal use only Expected operational synergies of approximately $11.5 million per annum (full run rate) expected to be realised within 12 months post completion. In addition, there is potential for additional unqu
Slide 21: Expected financial impact
Not for distribution or release in the United States | 21 Expected financial impact For personal use only Expected EPS accretion of over 20%(1) through unlocking operational synergies Description • Expected EPS accretion of more than 20% once synergies are fully realised (excluding one off restructu
Slide 22: Transaction funding, pro forma financials and terms
For personal use only 04 / Transaction funding, pro forma financials and terms Not for distribution or release in the United States
Slide 23: Acquisition funding and terms
Not for distribution or release in the United States | 23 Acquisition funding and terms For personal use only Acquisition terms IVE has entered into binding agreements to acquire the assets of Franklin for $100 million and the shares of AIW for Purchase price $16 million Closing conditions The Acqui
Slide 24: Pro forma historical combined Profit and Loss
Not for distribution or release in the United States | 24 Pro forma historical combined Profit and Loss For personal use only FY16 pro forma Profit and Loss(1) $ millions Adjustments for the Pro forma combined (unless otherwise stated) IVE Franklin(2) AIW (2) Acquisitions(3) group Revenue 382.0 151.
Slide 25: Pro forma historical combined Balance Sheet
Not for distribution or release in the United States | 25 Pro forma historical combined Balance Sheet For personal use only FY16 pro forma Balance Sheet (1) $ millions (unless otherwise IVE pro forma Impact of Offer and Impact of the Pro forma combined stated) IVE FY16 Statutory adjustment new banki
Slide 26: Offer summary
For personal use only 05 / Offer summary Not for distribution or release in the United States
Slide 27: Sources of funding
Not for distribution or release in the United States | 27 Sources of funding For personal use only • A fully underwritten equity raising comprising a placement and entitlement offer (the Offer): Placement and – a 1 for 8.9 pro-rata, accelerated, non-renounceable Entitlement Offer to raise approximat
Slide 28: Offer details
Not for distribution or release in the United States | 28 Offer details For personal use only • Fully underwritten placement and 1 for 8.9 pro-rata, accelerated, non-renounceable Entitlement Offer to raise gross proceeds of Offer structure and size approximately $40 million • Approximately 20 millio
Slide 29: Offer timetable
Not for distribution or release in the United States | 29 Offer timetable For personal use only Event Date(1) Trading halt and announcement of the Acquisitions, Placement and Entitlement Offer Monday, 5 December 2016 Placement and Institutional Entitlement Offer opens Monday, 5 December 2016 Institu
Slide 30: Key risks
For personal use only Appendix A / Key risks Not for distribution or release in the United States
Slide 31: Key risks
Not for distribution or release in the United States | 31 Key risks For personal use only Acquisition and Offer Risks Topic Summary Topic Summary Reliance on IVE undertook a due diligence process in respect of Franklin and AIW, Acquisition While the acquisition agreements do not contain any mate
Slide 32: Key risks (cont.)
Not for distribution or release in the United States | 32 Key risks (cont.) For personal use only Acquisition and Offer Risks (cont.) Topic Summary Topic Summary Franklin and AIW Reduced demand for catalogue products – The post-acquisition Underwriting Risk o there are certain delays in the timeta
Slide 33: Key risks (cont.)
Not for distribution or release in the United States | 33 Key risks (cont.) For personal use only Acquisition and Offer Risks (cont.) Topic Summary Topic Summary Integration Risk The Acquisitions involves the integration of Franklin and AIW, which have Risks Associated Entitlements cannot be tra
Slide 34: Key risks (cont.)
Not for distribution or release in the United States | 34 Key risks (cont.) For personal use only Operational risks Topic Summary Topic Summary Competition in the The marketing and print communications industry in Australia is highly Acquisition strategy IVE intends to selectively pursue acquisi
Slide 35: Key risks (cont.)
Not for distribution or release in the United States | 35 Key risks (cont.) For personal use only Operational risks (cont.) Topic Summary Topic Summary Availability of inputs IVE relies on various procurement relationships for the steady supply of Core technology and IVE relies heavily on its in
Slide 36: Key risks (cont.)
Not for distribution or release in the United States | 36 Key risks (cont.) For personal use only General market risk Topic Summary Topic Summary Risks Associated There are risks associated with any investment in a company listed on Taxation Future changes in taxation law, including changes in i
Slide 37: International offer restrictions
For personal use only Appendix B / International offer restrictions Not for distribution or release in the United States
Slide 38: International offer restrictions
Not for distribution or release in the United States | 38 International offer restrictions For personal use only 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 di
Slide 39: International offer restrictions (cont.)
Not for distribution or release in the United States | 39 International offer restrictions (cont.) For personal use only United Kingdom Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the Unit
Slide 40: Not for distribution or release in the United States
For personal use only Not for distribution or release in the United States