Ama Group Limited · ASX:AMA
Ama — Merger or Acquisition (October 2019)
41 slides from Ama's merger presentation, Oct 1, 2019
Slide 1: Acquisition of Capital S.M.A.R.T and ACM and Equity Raising
For personal use only Acquisition of Capital S.M.A.R.T and ACM and Equity Raising Investor presentation 1 October 2019 Not for release to US wire services or distribution in the United States of America
Slide 2: Important notice and disclaimer
America Not for release to US wire services or distribution in the United States of Important notice and disclaimer For personal use only The purpose of this presentation is to provide general information about AMA Group Limited ("AMA" or the "Company"). This presentation relates to a proposed accel
Slide 3: Important notice and disclaimer
America Not for release to US wire services or distribution in the United States of Important notice and disclaimer For personal use only This presentation is presented for informational purposes only. It is not intended to be, and is not, a prospectus, product disclosure statement, offering memoran
Slide 4: Agenda
America Not for release to US wire services or distribution in the United States of Agenda For personal use only 1. Executive summary 2. Overview of S.M.A.R.T 3. Overview of ACM 4. Acquisition rationale and impact on AMA Group 5. Acquisition funding and financial impact 6. Offer summary Appendices A
Slide 5: Executive summary
America Not for release to US wire services or distribution in the United States of Executive summary For personal use only • AMA Group (AMA) has entered into a binding agreement with Suncorp Insurance Ventures Pty Ltd (Suncorp) to acquire 90% of the shares on issue in Capital Smart Repairs Australi
Slide 6: Executive summary
America Not for release to US wire services or distribution in the United States of Executive summary For personal use only • ACM is a national automotive parts supplier selling original, recycled and independently certified parts to both the motor repair industry as well as directly to the general
Slide 7: S.M.A.R.T overview
For personal use only S.M.A.R.T overview Not for release to US wire services or distribution in the United States of America
Slide 8: Introduction to S.M.A.R.T
America Not for release to US wire services or distribution in the United States of Introduction to S.M.A.R.T For personal use only Second largest smash repair business in Australia • Specialises in low (S.M.A.R.T) to medium (S.M.A.R.T Plus) severity repairs in metropolitan areas in Australia and Ne
Slide 9: Current service offering
America Not for release to US wire services or distribution in the United States of Current service offering For personal use only Business segment S.M.A.R.T – low severity repairs S.M.A.R.T Plus – medium severity repairs Description • Significant damage to structural panels • Minor panel damage • R
Slide 10: Site network
America Not for release to US wire services or distribution in the United States of Site network For personal use only Strong track record of network expansion via greenfields and single site acquisitions • Sites primarily in greater metropolitan areas and tier 2 cities • Historical rollout of sites
Slide 11: S.M.A.R.T's unique business model
America Not for release to US wire services or distribution in the United States of S.M.A.R.T’s unique business model For personal use only S.M.A.R.T’s proprietary process Strategic partnership with Suncorp S.M.A.R.T’s integration with insurer’s system bypasses a number of administrative steps in th
Slide 12: ACM overview
For personal use only ACM overview Not for release to US wire services or distribution in the United States of America
Slide 13: Introduction to ACM
America Not for release to US wire services or distribution in the United States of Introduction to ACM For personal use only Principal activities • ACM is Australia’s largest recycler of panels and mechanical parts for the automotive industry Product sourcing Procurement Infrastructure Customer • A
Slide 14: ACM product snapshot
America Not for release to US wire services or distribution in the United States of ACM product snapshot For personal use only • ACM’s main product line is the provision of selected recycled OE parts ranging from panels to tail lights and engines sourced from retired / end-of-life vehicles Recycled
Slide 15: Transaction rationale and impact on AMA Group
For personal use only Transaction rationale and impact on AMA Group Not for release to US wire services or distribution in the United States of America
Slide 16: Transaction rationale
America Not for release to US wire services or distribution in the United States of Transaction rationale For personal use only 1 Strong strategic fit with AMA’s existing Vehicle Panel Repair division 2 Long term strategic agreement with Suncorp in place in Australia and New Zealand Substantial syne
Slide 17: Strong strategic fit with AMA's existing Vehicle Panel Repair division
America Not for release to US wire services or distribution in the United States of 1. Strong strategic fit with AMA’s existing Vehicle Panel Repair division For personal use only Combined AMA and S.M.A.R.T service offering Severity of repair Low to medium Scratch and dents Non-drivable Premium seve
Slide 18: Long term strategic agreement with Suncorp in place
America Not for release to US wire services or distribution in the United States of 2. Long term strategic agreement with Suncorp in place in Australia and New Zealand For personal use only Suncorp AMA existing relationship S.M.A.R.T service agreement • Second largest motor vehicle • 10+ years exist
Slide 19: Substantial synergies available
America Not for release to US wire services or distribution in the United States of 3. Substantial synergies available For personal use only $17.0m run-rate synergies estimated to be implemented over the next 18 months Synergies available Synergy implementation timeline Paint • Optimise paint procur
Slide 20: Significant opportunity for further growth
America Not for release to US wire services or distribution in the United States of 4. Significant opportunity for further growth For personal use only Large metropolitan drivable repair market • Following the Acquisition, the Australian metropolitan drivable repair market(1) combined market share o
Slide 21: Experienced management team will remain to lead and drive growth
America Not for release to US wire services or distribution in the United States of 5. Experienced management team will remain to lead and drive growth For personal use only Dave Marino Stephen Fullarton Brian Thiele CEO CFO COO/CTO, Capital S.M.A.R.T Capital S.M.A.R.T Capital S.M.A.R.T • Over 25 ye
Slide 22: Attractive shareholder value
America Not for release to US wire services or distribution in the United States of 6. Attractive shareholder value For personal use only • Low single digit EPS accretion in FY20 (inclusive of synergies)(1), (2) EPS accretive • Double digit EPS accretion expected in the first full year of ownership
Slide 23: Transaction funding and financial impact
For personal use only Transaction funding and financial impact Not for release to US wire services or distribution in the United States of America
Slide 24: Transaction funding and financial impact
America Not for release to US wire services or distribution in the United States of Transaction funding and financial impact For personal use only Terms AMA has entered into binding agreements to acquire 90% of S.M.A.R.T at an implied enterprise value of $420 Purchase price million (100% basis) and
Slide 25: Financial impact
America Not for release to US wire services or distribution in the United States of Financial impact For personal use only FY20 EBITDA FY21 EBITDA Commentary Forecast • FY20 and FY21 forecast revenue growth: Revenue ~$370m ~$400m – Capturing additional Suncorp repair volumes of higher severity (curr
Slide 26: Pro forma historical combined Balance Sheet
America Not for release to US wire services or distribution in the United States of Pro forma historical combined Balance Sheet For personal use only Pro forma Balance Sheet as at 30 June 2019 Impact of the Impact of the Offer ad Pro forma combined $ millions (unless otherwise stated) AMA(1) Transac
Slide 27: Offer summary
For personal use only Offer summary Not for release to US wire services or distribution in the United States of America
Slide 28: Sources of funding
America Not for release to US wire services or distribution in the United States of Sources of funding For personal use only • Fully underwritten equity raising comprising a placement and entitlement offer (the Offer): Placement and - a 1 for 4.5 pro-rata, accelerated, non-renounceable entitlement o
Slide 29: Offer details
America Not for release to US wire services or distribution in the United States of Offer details For personal use only • Fully underwritten placement and 1 for 4.5 pro-rata, accelerated, non-renounceable Entitlement Offer to Offer structure and size raise gross proceeds of approximately $215.6 mill
Slide 30: Offer timetable
America Not for release to US wire services or distribution in the United States of Offer timetable For personal use only Event Date(1) Trading halt and announcement of the Transaction, Placement and Entitlement Offer Tuesday, 1 October 2019 Placement and Institutional Entitlement Offer opens Tuesda
Slide 31: Appendix A Key risks
For personal use only Appendix A Key risks Not for release to US wire services or distribution in the United States of America
Slide 32: Key risks: Transaction and Offer risks
America Not for release to US wire services or distribution in the United States of Key risks For personal use only Transaction and Offer risks Topic Summary Transaction and • The Transaction may consume a large amount of management time and attention during integration, and the Transaction integrat
Slide 33: Key risks: Transaction and Offer risks (cont'd)
America Not for release to US wire services or distribution in the United States of Key risks For personal use only Transaction and Offer risks (cont’d) Topic Summary Change of • The Transaction will result in a change of control of S.M.A.R.T and ACM. There are a number of contractual arrangements c
Slide 34: Key risks: Transaction and Offer risks (cont'd)
America Not for release to US wire services or distribution in the United States of Key risks For personal use only Transaction and Offer risks (cont’d) Topic Summary S.M.A.R.T • Achievement of synergies – A key determinant of the long-term benefits AMA expects to derive from the Acquisition is the
Slide 35: Key risks: Risks related to an investment in AMA
America Not for release to US wire services or distribution in the United States of Key risks For personal use only Risks related to an investment in AMA Topic Summary Competition • AMA operates in a competitive market environment. AMA’s financial performance could be affected if the actions of comp
Slide 36: Key risks: Risks related to an investment in AMA
America Not for release to US wire services or distribution in the United States of Key risks For personal use only Risks related to an investment in AMA Topic Summary Business • The acquisition of the businesses involve either an assignment of, or a change of control in relation to, the various cus
Slide 37: Key risks: General market risks
America Not for release to US wire services or distribution in the United States of Key risks For personal use only General market risks Topic Summary Risks associated • There are risks associated with any investment in a company listed on the ASX. The value of shares may rise above or below with in
Slide 38: Appendix B International offer jurisdictions
For personal use only Appendix B International offer jurisdictions Not for release to US wire services or distribution in the United States of America
Slide 39: International offer restrictions
America Not for release to US wire services or distribution in the United States of 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,
Slide 40: International offer restrictions
America Not for release to US wire services or distribution in the United States of International offer restrictions For personal use only Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinanc
Slide 41: International offer restrictions
America Not for release to US wire services or distribution in the United States of International offer restrictions For personal use only Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with