Experience Co Ltd · ASX:EXP
Experience — Merger or Acquisition (December 2017)
33 slides from Experience's merger presentation, Dec 4, 2017
Slide 1: Big Cat Green Island Reef Tours and Tropical Journeys Acquisition and Entitlement Offer
BIG CAT GREEN ISLAND REEF TOURS AND TROPICAL JOURNEYS ACQUISITION AND ENTITLEMENT OFFER December 2017 ACN 167 320 470 ASX: EXP
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by Experience Co Limited ACN 167 320 470 (”EXP”) Summary information This presentation contains summary information about EXP and its related bodies corporate and their activities, current as at 4 December 2017. The information in this presentation is a
Slide 3: Agenda
AGENDA • Acquisition Summary • Business Overview • Acquisition Rationale • Impact of Acquisition • Transaction Funding and Impact • Timetable • Key Risks • Foreign Jurisdictions and Eligibility Criteria 3
Slide 4: Acquisition Summary
ACQUISITION SUMMARY EXP has entered into agreements to acquire two successful businesses: Big Cat Green Island Reef Cruises (BC) and Tropical Journeys (TJ) TRANSACTION OVERVIEW • BC & TJ are established Reef and Rainforest experiences located in Cairns and Port Douglas, Far North Queensland. • Opera
Slide 5: Acquisition Summary: Strategic Rationale and Funding
ACQUISITION SUMMARY COMPELLING STRATEGIC RATIONALE • Enhances diversified portfolio of adventure tourism assets and activities. • Key BC & TJ activities are growing strongly, expected to add in excess of A$11.1m EBITDA (annualised) to EXP in the first full financial year (FY19). • Executes on EXP’s
Slide 6: Acquisition Summary: Financial Rationale and Timetable
ACQUISITION SUMMARY ATTRACTIVE FINANCIAL RATIONALE • Anticipated to deliver significant value to EXP shareholders through: • Significant synergies including cost-savings • Cross-selling opportunities • Additional revenue through new products and add-ons such as photo and video product. • Proposed tr
Slide 7: Business Overview
BUSINESS OVERVIEW ~~ Reef Cruises TROPICAL JOURNEYS AQUARIUS DISCOVER THE WORLDS LARGEST “ REEF & RAINFOREST ECOSYSTEM SAILING PORT DOUGLAS DAINTREE CALYPSO TOURS” og PEX*”yeFo 2 a Exnerieniceuus | 7
Slide 8: Big Cat Green Island Reef Cruise
BIG CAT GREEN ISLAND REEF CRUISE • Big Cat Green Island Reef Cruise offer full day and half day cruises to Green Island, Queensland, from Cairns. Of the 300 coral kays in the Great Barrier Reef, Green Island is the only one with a rainforest. • The Wallace Group was established in December 1989 and
Slide 9: Big Cat Green Island Reef Cruise
BIG CAT GREEN ISLAND REEF CRUISE • The Group generates the majority of their income from running tours and cruises to Green Island and in Cairns Harbour. The Group receives additional income from chartering of vessels and coaches, together with commissions on the sales of products and services suppl
Slide 10: Cairns Sunset Cruise
CAIRNS SUNSET CRUISE The Wallace Group also offer a Cairns Harbour and Sunset cruise, a two-hour cruise on Cairns Harbour and through the Trinity Inlet. 10
Slide 11: Tropical Journeys - Calypso
TROPICAL JOURNEYS - CALYPSO • Calypso was established in 1999 by the Jones Group, with the current owners building their first vessel in 1999 called Calypso 1. • The business generates its earnings from snorkelling and diving tours to Low Isles and the Outer Reef departing from Port Douglas, Queensl
Slide 12: Tropical Journeys - Aquarius
TROPICAL JOURNEYS - AQUARIUS • The company also operates under the trading name of Aquarius, a lagoon 62 luxury sailing catamaran, providing twilight sailing tours around Port Douglas. • 1 vessel. 12
Slide 13: Daintree Tours
DAINTREE TOURS • Daintree Tours was acquired in 2008. The business generates its earnings from personalised tours to the Daintree National Park. • 4 vehicles. 13
Slide 14: Financials
FINANCIALS FY15 FY16 FY17 FY18* FY19** Revenue ($Am) 23.8 26.4 27.6 28.8 30.9 Normalised EBITDA 7.3 9.0 9.5 10.1 11.1 ($Am) Normalised EBITDA 30.6% 34.1% 34.4% 35.0% 35.9% (%) *Estimated full year projections noting EXP will not own for full year. **These Financials are EXP’s estimated consolidated
Slide 15: Financials: Acquisition Multiple
FINANCIALS ACQUISITION MULTIPLE A$m Acquisition Price 56.07 Land and Buildings (1.5) Business Acquisition Price 54.57 FY19 EBITDA (EXP 1st full year ownership) (*) 11.1 Multiple 4.9x *These Financials are EXP’s estimated consolidated financial forecasts for FY19 that presuppose EXP’s management and
Slide 16: Acquisition Rationale
ACQUISITION RATIONALE This expands EXP’s footprint in the growth corridor of FNQ, where the company has existing significant strength. Prior to these acquisitions, EXP could offer customers an array of reefs to visit throughout the Great Barrier Reef (refer to the highlighted yellow reefs in the map
Slide 17: Acquisition Rationale
ACQUISITION RATIONALE Post these acquisitions, EXP will be in a position to offer so many more experiences to customers throughout the Great Barrier Reef (refer to the highlighted yellow reefs in the map here).
Slide 18: Acquisition Rationale
ACQUISITION RATIONALE • Widening our catchment area by exposure to new distribution channels, entering into the Port Douglas market. • It provides substantial synergies with our FNQ group of tourism assets: vessel maintenance, call centre and reservations, IT and accounts. • Further enhances our abi
Slide 19: Impact of Acquisition
IMPACT OF ACQUISITION PREVIOUS FY18 NEW FY18 GUIDANCE GUIDANCE Revenue ($Am) 124 - 129 135 – 140 Normalised EBITDA ($Am) 31 - 33 35 - 37 Bookings, passenger numbers and revenue continue to track ahead of management expectations as at todays date 19
Slide 20: Transaction Funding and Impact
TRANSACTION FUNDING AND IMPACT FUNDING USE OF FUNDS • cA$60.9m fully underwritten pro-rated 3 • Acquisition of BC and TJ and payout of for 17 accelerated non-renounceable existing loans for cash consideration of entitlement offer (ANREO) announced A$54.57m, acquisition of associated 4th December 201
Slide 21: Timetable
TIMETABLE EVENT DATE Institutional Entitlement Offer opens 4 December 2017 Institutional Offer results 5 December 2017 Record date (for eligibility for the Retail Entitlement Offer) 6 December 2017 Retail offer booklet dispatched to Eligible Retail Shareholders 11 December 2017 Retail Entitlement Of
Slide 22: Key Risks
KEY RISKS Acquisition Specific Risks (risks specific to the Acquisitions that are the purpose for raising capital pursuant to this Entitlement Offer) If the Acquisitions complete, the EXP Group will offer additional adventure tourism activities including without limitation the following: Great Barri
Slide 23: Key Risks
KEY RISKS There can be no guarantee that the conditions precedent to the completion of the Acquisitions will be met or otherwise waived. For instance, in light of the Completion Risk change of control of the companies the subject of the Acquisitions, there may be regulatory approvals required for co
Slide 24: Key Risks
KEY RISKS EXP Specific Risks (risks specific to the EXP Group’s business and the industry which it operates) Reputation risk The success of the EXP Group is dependent on it maintaining a positive reputation. Unforeseen issues or events which place the reputation of the EXP Group at risk may impact o
Slide 25: Key Risks
KEY RISKS The ability of the EXP Group to provide its recreation and tourism services is, in many cases, weather dependent. Outdoor recreation and tourism activities, including those activities undertaken by the businesses the subject of the Acquisitions and, for example, EXP's skydiving business, c
Slide 26: Key Risks
KEY RISKS The EXP Group's business has significant reliance on equipment. For example, its skydiving business relies on aircraft, parachutes and associated parachute equipment, vehicles and systems necessary for tandem skydiving. Many aspects of the activities conducted by the businesses the subject
Slide 27: Key Risks
KEY RISKS Government and Changes in government, fiscal, monetary environmental, taxation, regulatory policies and other laws may also affect the business of the EXP Group. The market in which the EXP Group provides products and services is anticipated to become subject to increasing regulation. Chan
Slide 28: Key Risks
KEY RISKS The EXP Group's success is dependent upon the successful management and execution of its growth strategy. To manage this growth effectively, EXP will need to maintain efficient control and supervision of its operations and financial systems and continue to expand, train and manage its empl
Slide 29: Key Risks
KEY RISKS Dividend risk There is no certainty that EXP will continue to pay dividends in the future. The operation of the EXP Group's business involves hazards and risks that could result in the EXP Group incurring losses or liabilities that could arise from its operations. The EXP Group has, and in
Slide 30: Key Risks
KEY RISKS Loss of goodwill There is an inherent risk of loss of business goodwill in the event of an accident occurring involving the EXP Group. Investment Specific Risks (general risks associated with an investment in EXP) Income and An investment in EXP is speculative in nature and the capital con
Slide 31: Key Risks
KEY RISKS There is no guarantee that Shares will trade at a particular price or a particular volume. There is no guarantee that there will be an ongoing liquid market for Liquidity Risk Shares. Accordingly there is a risk that, should the market for shares become illiquid, Shareholders will be unabl
Slide 32: Key Risks
KEY RISKS Financial The operating results of the EXP Group may be difficult to predict and are subject to a number factors which change from time to time. There can be no performance guarantee that EXP will achieve its stated objectives or that any forward-looking statements will eventuate. The perf
Slide 33: Foreign Jurisdictions and Eligibility Criteria
FOREIGN JURISDICTIONS AND ELIGIBITY CRITERIA Eligible Retail Shareholders This Information contains an offer of New Shares to Eligible Retail Shareholders with a registered address on the EXP Share register in Australia or New Zealand and has been prepared in accordance with section 708AA of the Cor