Ipc Corporation Ltd · SGX:AZA
Ipc — Merger or Acquisition (July 2009)
20 slides from Ipc's merger presentation, Jul 9, 2009
Slide 1: Validus Agreed Amalgamation with IPC
Investor Presentation Validus Agreed Amalgamation with IPC July 9, 2009
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements Cautionary Note Regarding Forward-Looking Statements: This presentation may include forward-looking statements, both with respect to us and our industry, that reflect our current views with respect to future events and financial performance. State
Slide 3: Non-GAAP Financial Measures and Proposed Acquisition
Non-GAAP Financial Measures and Proposed Acquisition In presenting Validus' results, management has included and discussed certain financial measures that are not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined
Slide 4: An Attractive Transaction for IPC and Validus Shareholders
An Attractive Transaction for IPC and Validus Shareholders Creates a leading Bermuda carrier in the short-tail reinsurance and insurance market with a global underwriting platform Superior long-term growth and return prospects Quality diversification in profitable lines Strong value proposition for
Slide 5: Overview of the Agreed Transaction: Structure and Consideration
Structure Amalgamation under Bermuda Law Consensual transaction supported by Boards of IPC and Validus Consideration $7.50 of cash per IPC common share 0.9727x Validus voting common shares per IPC common share Fixed exchange ratio, not subject to adjustment Valuation and Premium Overview of the Agre
Slide 6: Overview of the Agreed Transaction: Transaction Value
Transaction Value1 Total value of $1.67 billion Cash consideration of approximately $424 million Issuance of $1.24 billion in Validus voting common shares Pro Forma Ownership (Fully-Diluted Basis) 62% by Validus Shareholders 38% by IPC Shareholders Key Approvals and Conditions IPC and Validus shareh
Slide 7: Overview of the Agreed Transaction: Expected Closing and Support
Overview of the Agreed Transaction Expected Closing and Support of Validus Sponsor Shareholders As soon as practicable after IPC and Validus shareholder meetings Anticipate closing to occur in 7 to 10 weeks Validus sponsors, which collectively own 38% of Validus' outstanding voting common shares as
Slide 8: Reconstitution of $31.73 "Best and Final" Offer
Substitution of cash for stock consideration: Validus to issue 8.4mm fewer shares Incrementally accretive to diluted book value per share Equivalent to a share repurchase at discount to diluted book value Expect to maintain cushion over rating agency standards 1 Including hybrid junior subordinated
Slide 9: A Validus / IPC Combination Has a Clear Strategic Rationale
A Validus / IPC Combination Has a Clear Strategic Rationale Reinsurance industry capital and capacity has been materially depleted U.S. Statutory surplus was down 11%, or ~$60 billion in 20081 Limited access to replacement capital and new capacity Disrupted capital markets and depressed valuations m
Slide 10: Transaction Yields Capital Efficiencies and Other Benefits
Transaction Yields Capital Efficiencies and Other Benefits More effective use of IPC aggregate Shift business away from nationwide accounts IPC generated $221.9 million in GPW from $1.25 billion of U.S. aggregate in 2008 Validus generated $431.3 million of GPW from $1.44 billion of U.S. aggregate in
Slide 11: Significant Increase in Scale and Market Presence
Significant Increase in Scale and Market Presence A Pro Forma Comparison of 3/31/09 Shareholders' Equity 1 Excludes effects of Paris Re acquisition Source: SNL, Validus pro forma analysis 1 67% Increase
Slide 12: Validus Historic Value Creation - Since Validus IPO
Source: 1 2005-Q109 CAGR of Diluted BVPS, including accumulated dividends CAGR: 13.6% 1 Evolution in Diluted Book Value Per Share Plus Accumulated Dividends Validus Historic "Value Creation" - Since Validus IPO
Slide 13: Annualized Total Value Creation - Since Validus IPO
Annualized Total Value Creation - Since Validus IPO1 Q3 2007A - Q2 2009E 1 Total value creation is defined as growth in tangible book value plus cumulative dividends Source: Dowling estimates (50%)
Slide 14: Pro Forma 3/31/09 Balance Sheet
Pro Forma 3/31/09 Balance Sheet 1 Consists of hybrid junior subordinated deferrable debentures
Slide 15: Increased Float and Liquidity
Increased Float and Liquidity 1 As of May 11, 2009 2 Issued for IPC common shares, RSUs, PSUs, restricted shares and in-the-money options 3 All common shares excluding shares held by Founding Investors 1 2 Market value of float = $1.9bn pro forma (68% of market capitalization) Continues trend of inc
Slide 16: An Attractive Transaction for IPC and Validus Shareholders
An Attractive Transaction for IPC and Validus Shareholders Creates a leading Bermuda carrier in the short-tail reinsurance and insurance market with a global underwriting platform Superior long-term growth and return prospects Quality diversification in profitable lines Strong value proposition for
Slide 17: Appendix: Non-GAAP Financial Measures
Appendix: Non-GAAP Financial Measures Book Value Per Share Analysis Capitalization Analysis 17 18
Slide 18: Book Value Per Share Analysis
Book Value Per Share Analysis
Slide 19: Capitalization Analysis
Capitalization Analysis Historical Validus | Pro Forma (Sin thousands) Holdings Ltd. Consolidated Total Debt Borrowings under credit facity Debentures payable Total Debt Total Capitalization Total shareholders equity S 2022988 $$ 3.972.493 Borrowings under creitfaciity . Debentures payable 304.300 3
Slide 20: Validus Agreed Amalgamation with IPC
Investor Presentation Validus Agreed Amalgamation with IPC July 9, 2009