Auction Technology Group Plc · LSE:ATG
Auction Technology — Merger or Acquisition (June 2021)
25 slides from Auction Technology's merger presentation, June 2021
Slide 1: Compelling opportunity to extend reach and efficiencies
ATG MEW. — liveauctioneers GROUP Compelling opportunity to extend reach and efficiencies June 2021
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION AND THE INFORMATION CONTAINED HEREIN ARE STRICTLY CONFIDENTIAL AND ARE NOT INTENDED FOR PUBLICATION, RELEASE OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, TO, OR USE BY, ANY PERSON OR ENTITY IN THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND D
Slide 3: Disclaimer (cont'd)
Disclaimer (cont’d) The Presentation is only being distributed to, and is only directed at, persons: (a) in member states of the European Economic Area that are “qualified investors” within the meaning of the Regulation (EU) 2019/1129 ("Qualified Investors"); (b) in the United Kingdom that are Quali
Slide 4: ATG's acquisition of LiveAuctioneers is transformational and adds momentum to growth
ATG’s acquisition of LiveAuctioneers in the North American A&A segment is transformational and adds momentum to ATG’s growth trajectory Values LiveAuctioneers at $525m enterprise value including $500m upfront consideration and up to $25m earn out consideration Improves the end-to-end Adds significan
Slide 5: Who is LiveAuctioneers?
Who is LiveAuctioneers? It is a leading curated online North American Text with image marketplace for art,feature antiques, jewellery and collectables Key stats Key highlights Revenue model Operates same business model as ATG: a curated • Founded in 2002 and headquartered in NY Marketplace, connecti
Slide 6: Key terms of the acquisition
Key terms of the acquisition ATG has agreed the acquisition of LiveAuctioneers at an enterprise value of up to $525m • $500m paid at completion plus up to $25m of earn out consideration, relating to 12 months Consideration ending Dec-21 revenue and adj. EBITDA targets • Cash consideration financed b
Slide 7: Financing the acquisition
Financing the acquisition • Cashbox placing via accelerated bookbuild Equity financing • Size: just less than 20.0% of ISC Settlement: T+3 • New debt facilities have been agreed for $253m ($183m acquisition debt facility and $70m RCF) • Up to $204m will be committed for the acquisition with the bala
Slide 8: The acquisition demonstrates commitment to ATG's growth strategy
The acquisition demonstrates commitment to ATG’s growth strategy, enhancing all of our key strategic pillars Value-add proposition Accretive Expanding M&A operating Increased leverage auctioneer and Rising online bidder base penetration Large and growing TAM 7
Slide 9: The acquisition is in line with our disciplined M&A strategy
The acquisition of LiveAuctioneers is in line with our disciplined M&A strategy Advancing ATG’s leading position in the auction industry Target criteria • Improves asset sale returns for auctioneers & their consignors • Increases demand for lots by growing the bidder base and Geographic improvin
Slide 10: The acquisition adds to ATG's TAM via geographic expansion
The acquisition adds to ATG’s TAM via geographic expansion by giving access to the large and growing US A&A segment US A&A auction THV1 US A&A online auction THV1 US A&A size ($bn, FY20) ($bn) ($bn) Forecast Forecast 6.6 A&A 5.9 $21.0bn Covid impact A&A THV 4.0 sold via auction2 A&A THV 3.0 $5.1bn s
Slide 11: LiveAuctioneers has seen significant growth and revenue retention
LiveAuctioneers has seen significant growth from new auction houses moving online and from revenue retention from historic cohorts LiveAuctioneers net revenue retention by annual auction house cohort (12 month trailing average, $m) 2015 and prior 2016 2017 2018 2019 2020 2021 Net revenue retention:
Slide 12: LiveAuctioneers is well-positioned in North American A&A
LiveAuctioneers is well-positioned in North American A&A and has carved out a differentiated proposition from its competitors Key differentiators of LiveAuctioneers’ offering Overview of US A&A marketplace models and positioning Number of • Largest volume of US auctioneers listed on its Retail Gener
Slide 13: LiveAuctioneers demonstrates impressive metrics and capacity to scale
LiveAuctioneers demonstrates impressive metrics1 and has proven its Text with capacity to image feature handling significant growth in FY20 scale - successfully Key stats Scaled platform… …driving strong financial results FY 20 metrics Bidders Sellers • THV: $2.4bn Strong performance • Revenue: $30.
Slide 14: LiveAuctioneers has a strong financial profile
LiveAuctioneers has a strong financial profile THV ($m) Online share (%) % growth 13% 17% GMV $221m $261m $375m $1.8bn $2.4bn $2.1bn 12% 13% 15% FY 18 FY 19 FY 20 FY 18 FY 19 FY 20 Revenue ($m) Adj. EBITDA ($m) Take-rate 8.4% 8.3% 7.5% % growth 13% 30% Margin % 58% 51% 54% $30.7m $21.1m $23.7m $16.5
Slide 15: The combined entity further diversifies ATG's revenue streams
The combined entity further diversifies ATG’s industry specific revenue streams Text with image feature Key stats revenue Segmental FY 20 revenue FY20 revenue FY20 combined revenue Content Content 5% 4% A&A A&A 26% 100% A&A 49% I&C 47% I&C 68% Source: Bloomberg Note: ATG’s KPIs and revenue reflect t
Slide 16: ATG + LiveAuctioneers positions ATG to compete with eCommerce giants
ATG + LiveAuctioneers positions ATG to establish the standards that enable auctions to compete with the eCommerce giants Incremental inventory and premium white Incremental auctioneers attracted to label offering and enhanced end-to-end platform due to provision of more customer experience will incr
Slide 17: LiveAuctioneers accelerates ATG's integrated payments solution
LiveAuctioneers accelerates ATG’s ability to offer an integrated payments solution, a key component in the Auction ecosystem for auctioneers and bidders Simplifies complicated payments process for auctioneers and allows them to focus on core business Provides bidders the functionality to pay aucti
Slide 18: Enhanced shared success value proposition for all participants
ATG + LiveAuctioneers enhances ATG’s shared success value proposition with real value delivered to all participants in the marketplace Auctioneers Consignors Bidders • Incremental bidder base increases • Incremental bidder base increases • Access to 1.3 million lots in a secure, competition for each
Slide 19: The combined entity is expected to deliver strong financial results
The combined entity is expected to deliver strong financial results for shareholders LiveAuctioneers enhances the growth and profitability profile of ATG • Clear increase in revenue and EBITDA Enhanced • Provides new reach in North American A&A segment, adding 1m+ new registered bidders1 and efficie
Slide 20: Outlook
Outlook: • Standalone ATG outlook in line with latest guidance announced at H1 FY21 results • Medium term revenue acceleration: Expected to deliver mid teens + growth CAGR1 Combined • Continuing operating leverage predominantly driven by ATG group (ex • Strong free cash flow growth future M&A) • Pro
Slide 21: LiveAuctioneers meets all the criteria ATG could hope for
LiveAuctioneers meets all the criteria ATG could hope for in a major acquisition Strategic Diversification Complementary Acceleration Expansive Depth Efficiency enhancing Differentiation Operating leverage Enhanced proposition 20
Slide 22: Appendix
Appendix
Slide 23: LiveAuctioneers – Financials
LiveAuctioneers – Financials $m FY 18 FY 19 FY 20 Revenue 21.1 23.7 30.7 % growth 13% 30% Adj. EBITDA 12.2 12.1 16.5 % margin 58% 51% 54% Capex (including capitalised software) 0.2 0.0 1.8 % of sales 1% 0% 6% OpFCF 12.0 12.1 14.8 % cash conversion 98% 100% 89% Source: LiveAuctioneers Group’s availab
Slide 24: US GAAP to IFRS reconciliation
US GAAP to IFRS reconciliation LiveAuctioneers, LLC is the trading entity of the LiveAuctioneers Group. Prior to 21st May 2019, LiveAuctioneers, Inc was the majority owner of LiveAuctioneers, LLC. On 21st May 2019, Platinum Parent, Inc., through its subsidiary Platinum Intermediate, Inc., purchased
Slide 25: US GAAP to IFRS reconciliation (cont'd)
US GAAP to IFRS reconciliation (cont’d) ATG has identified what it believes to be the material difference between ATG’s IFRS policies and LiveAuctioneers' accounting policies below. As the IFRS transition exercise is incomplete there may be additional differences not noted below: • Income Statement,
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