Alight, Inc. · NYSE:ALIT
Alight — Foley Trasimene Acquisition — SPAC Merger (January 2021)
46 slides from Alight's SPAC merger presentation, Jan 25, 2021
Slide 1: Investor Presentation January 2021
1 Investor Presentation January 2021
Slide 2: Disclaimer: Forward-Looking Statements
2 Disclaimer Forward - Looking Statements This presentation includes “forward - looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward - looking statements are provided for illustrative purposes only
Slide 3: Disclaimer (cont'd)
3 Disclaimer (cont’d) Participants in the Solicitation Foley Trasimene and Alight and their respective directors, executive officers and other members of their management and employees, under SEC ru les, may be deemed to be participants in the solicitation of proxies of Foley Trasimene’s stockholder
Slide 4: Presenters
4 Presenters Richard Massey Chief Executive Officer, Foley Trasimene Stephan Scholl Chief Executive Officer Chairman, Foley Trasimene Bill Foley • Richard serves as CEO of Foley Trasimene • Over 30 years of industry experience • Stephan is CEO of Alight Solutions • Over 24 years of industry experien
Slide 5: Transaction Overview
5 Transaction Overview Shares to SPAC 19.2% Shares to FPA 5.6% Shares to Pipe 28.8% Shares to Sponsor 4.3% Rollover Shares to Existing Shareholders 42.1% Today Long Term Revenue Growth Today Long Term Revenue per Employee 20%+ 30%+ Today Long Term Adjusted EBITDA Margin Pro Forma Valuation ($M) Sour
Slide 6: Bill Foley's Valuation Creation Playbook
6 Bill Foley’s Valuation Creation Playbook $3M $ 11.7B $2.5B $ 80.9B $1.6 B $13.4B $4.2B $ 16.0B $2.0B $10.6B 1984 LBO Current Mkt Cap 2006 Spin-Off Current Mkt Cap 2015 IPO Current Mkt Cap 2018 IPO Current Mkt Cap 2019 LBO Current Mkt Cap William P. Foley II Founder Foley has achieved great success
Slide 7: Foley's Tools that Created $100B+ in Value will be Applied to Alight
7 Foley’s Tools that Created $100B+ in Value will be Applied to Alight ▪ Alight is a market leading enterprise employee benefits platform ▪ Alight provides mission critical services to its customers ▪ 70% of the Fortune 100 are Alight clients ▪ 30M+ participants & family members served Ubiquity ▪ Al
Slide 8: Foley + Alight Have The Tools To Accelerate Revenue and Margin Growth
8 Foley + Alight Have The Tools To Accelerate Revenue and Margin Growth Mission - critical business at intersection of healthcare, benefits & payroll Foley Playbook Transformation Initiatives Underway Significant opportunity for value creation through revenue growth, margin improvement and multiple
Slide 9: Alight Solutions Agenda
Alight Solutions Agenda 01. Alight Overview 03. Financial Overview 02. Business Details
Slide 10: Confluence of Factors Influencing the Future of the Workplace
10 10 Confluence of Factors Influencing the Future of the Workplace Worksite trends have been magnified due to the pandemic reverberating across all dimensions of wellbeing Health & Personalization Financial responsibility of healthcare shifting to employees while also facing increasing decision com
Slide 11: Our Vision: The Preeminent Employee Engagement Partner
11 Our Vision: The Preeminent Employee Engagement Partner Our Capabilities that Drive Engagement Our Mission Critical Solutions Personalize Benefits & Payroll Enable Financial Security and Wellness BPaaS SaaS Technology Services Personalization Data & AI Achieve ~50% or more of bookings TCV 1 starti
Slide 12: Alight is Positioned to Win
12 Alight is Positioned to Win Cloud - based, scalable software to drive mission critical services Highly secure and scalable cloud infrastructure AI - driven omni - channel engagement to prioritize the right communications to the right employees at the right time Integrate with 350+ outside platfor
Slide 13: Focused on Technology Transformation to Drive BPaaS-led Offerings
13 Standardization & Automation of Services Data & AI Capabilities SaaS Capabilities Consumer Engagement Focused on Technology Transformation to Drive BPaaS - led Offerings Financial Impact of Transformation Phase Revenue Growth: % BPaaS Revenue: 2 EBITDA Margin: Low - single - digits 7% 3 Low 20% M
Slide 14: Our Next Generation Cloud Platforms
14 Our Next Generation Cloud Platforms Global presence and scale unlocks the power of data and analytics Consumer centric, single access point to full spectrum of services Consultative guidance and strategy realization for clients Continuous optimization and automation for service Leading benefits n
Slide 15: BPaaS Bookings and Commercial Investments Support Revenue Acceleration
15 BPaaS Bookings and Commercial Investments Support Revenue Acceleration Success of BPaaS Evident in Bookings 1 2 3 Signed largest ever contract on 11/20 with Federal Thrift Savings Plan (6.1M employees) 2020 E 2017 A 2022 E 2018 A 2023 E 2019 A 2021 E Future $743M BPaaS revenue projections 2017 -
Slide 16: Attractive Financial Profile
16 Attractive Financial Profile Long term embedded contracts 3 - 5 year Contract length 97% Revenue retention 1 ~15 years Avg. client tenure 2 Profitable and sustainable growth with significant and clear BPaaS upside 50% 50% BPaaS Non - BPaaS Bookings by 2023 Average uplift of 1.5x annual recurring
Slide 17: Significant Operating Leverage to Drive Scale
17 3.7% 2.0% 2.0% 1.4% Significant Operating Leverage to Drive Scale 2023E 2021E 33.4% 2019 ( 1.5% ) Investments 34.6% 38.7% Optimus & Operating Leverage ( 1.6% ) M&A Covid Impact New BPaaS Sales BPaaS Conversions (existing book) Optimus & Operating Leverage ( 1.9% ) Phase I ▪ Investments: Technolog
Slide 18: Improved Growth and Margins Through Transformation
18 Improved Growth and Margins Through Transformation Increased Growth Potential Higher Margins $ 175K Long Term $ 250K 2020 Revenue Per Employee 2 ($K) ____________________ Source: Alight Solutions. Note: See Appendix for non - GAAP reconciliation. 1 Based on sold BPaaS bundles, 2 Revenue per emplo
Slide 19: Transformation Will Drive Multiple Expansion
19 Transformation Will Drive Multiple Expansion 12.2x 13.8x 14.2x 16.5x 18.0x 18.5x 27.1x Alight BPO Brokers Broadridge ADP Paychex HealthEquity Revenue per employee: Revenue growth (CY21): EBITDA margin (CY21): Comparable Companies: FV / 21E Adjusted EBITDA ____________________ Source: Company fili
Slide 20: Alight Solutions Agenda
Alight Solutions Agenda 01. Alight Overview 03. Financial Overview 02. Business Details
Slide 21: Mission-Critical Services That Help Employers Manage ~70% of Their Spend
21 Mission - Critical Services That Help Employers Manage ~70% of Their Spend 1 ____________________ 1 As per Deloitte (2017), 50% - 60% of total spend by Fortune 500 companies is on benefits and management estimates that an addition al 10% is on payroll, 2 Based on FY20E Revenue. Excludes Hosted bu
Slide 22: Case Studies – Payroll & Health
22 Case Studies – Payroll & Health Big box grocery – Payroll ~$10M in total payroll cost of compliance and penalties High volume of payroll overpayments Complex, manual payroll processes Compliance risk Alight Solution x Best - in - class, proven payroll processing in collaboration with Workday x El
Slide 23: Long-term, Trusted Partner of Employers Across Diverse Industry Verticals
23 14% Long - term, Trusted Partner of Employers Across Diverse Industry Verticals ____________________ Source: Alight Solutions (December 31, 2020) . Note: Revenue chart for financial year ended December 31, 2019 . 1 Group revenue retention of 97% or greater in each of the last seven years. Retenti
Slide 24: Technology, Data, and AI Drive Engagement
24 Technology, Data, and AI Drive Engagement Participant data • Demographics • Attitudinal • Payroll • Plan data • Savings and investments • Alight activity • Claims • Partner data • Medical recor ds Provider data • Cost • Quality • Experience Opportunity data • Centralized profile • Cost savings op
Slide 25: Proven Track Record of Disciplined M&A
25 Strategic Fit Proven Track Record of Disciplined M&A Strategic focus on innovation, scale, and market adjacencies that drive engagement and meaningful value for clients ▪ ~$20B in new TAM added ▪ ~2,500 new clients and ~ 2.5M+ participants added ▪ New geographies – APAC, EMEA ▪ Enhanced & new cap
Slide 26: Experienced Management Team with a Proven Track Record
26 Experienced Management Team with a Proven Track Record Years of Industry / Functional Experience Stephan Scholl Chief Executive Officer 24 Katie Rooney Chief Financial Officer 20 Cathinka Wahlstrom President & Chief Commercial Officer 25 Colin Brennan Chief Product Strategy & Services Officer 24
Slide 27: Alight Solutions Agenda
Alight Solutions Agenda 01. Alight Overview 03. Financial Overview 02. Business Details
Slide 28: Strong Recurring Revenue Mix with Diversified Base
28 3% 15% 12% 32% 37% 45% 20% 19% 13% 3% Strong Recurring Revenue Mix with Diversified Base $1,635 $1,712 $1,830 $2,044 $2,075 $2,230 $2,509 $302 $284 $271 $238 $245 $238 $240 $141 $198 $284 $360 $400 $441 $486 $2,079 $2,193 $2,385 $2,641 $2,720 $2,909 $3,235 2017A 2018A 2021E 2019A 2020E Profession
Slide 29: One Alight BPaaS Driving Growth
29 One Alight BPaaS Driving Growth Go - to - Market with five current BPaaS solutions: • Health Bundle • Cloud Application Services • Global Payroll • Payroll & Cloud Services • Customer Care as a Service Client 1 – Health Client 2 – Payroll Client 3 – Health Current Future Current Future Current Fu
Slide 30: BPaaS Opportunity Drives Long-Term Revenue Growth
30 $2,378 $2,552 $2,710 (1%) 1H $2,945 $3,235 5 % 2H 2018 2019 2020E 2021E 2022E 2023E $2,760 BPaaS Opportunity Drives Long - Term Revenue Growth Total Revenue ($M) Phase 0 (Foundation) Phase I Phase II Transformation Phase ▪ Focused on separation from Aon and portfolio expansion • Slower sales, del
Slide 31: Strong EBITDA and Free Cash Flow
31 Strong EBITDA and Free Cash Flow ____________________ Note: See Appendix for non - GAAP reconciliation. 1 Represents Adjusted EBITDA margin on a Group basis. 2 Free cash flow on a Group basis and defined as Adj. EBITDA – Capex; conversion defined as (Adj. EBITDA – Capex) divided by Adj. EBITDA. S
Slide 32: M&A Case Study: Healthcare Navigation with Compass
32 M&A Case Study: Driving Success in Healthcare Navigation with Compass ▪ Acquired in 2018 ▪ ~$35M in revenue at acquisition, across 1,700+ clients, 2M+ members ▪ Best - in - class healthcare navigation capabilities that deliver a unique, high - tech, and high - touch solution ▪ Enhanced Alight’s s
Slide 33: Business Model Alignment vs. Comparables
33 21.7% 28.4% $ 175k Business model alignment HCM Solutions / Processors Brokers BPO ____________________ Sources: Management estimates, company filings and FactSet as of January 15, 2021. Note: See Appendix for non - GAAP reconciliation; Brokers include AON, MMC and BPO includes ACN, G, WNS, EXLS;
Slide 34: Valuation Upside Relative to Peers
34 2021E P/E Multiple 19.3x 34.5x 20.4x 26.9x 2021E P / E / G 1.5x 3.7x 2.2x 3.0x 12.2x 20.0x 14.2x 13.8x 11.4x 18.6x 13.3x 12.6x 1 2 3 4 2021E FV / Adjusted EBITDA 2022E FV / Adjusted EBITDA Valuation Upside Relative to Peers ____________________ Source: Management information, Factset as of Januar
Slide 35: In Conclusion
35 In Conclusion We are well positioned in a large and growing addressable market Our ability to drive an engagement platform with employers and employees provides visible and growing revenue, EBITDA, and cash flow Our partnership — Foley + Blackstone + Alight — set up to drive transformation and de
Slide 36: Appendix
Appendix alight
Slide 37: Financial Summary
37 Financial Summary Summary Revenue Build 2017 - 2023E ($M) Historical Projected $M, unless otherwise stated 2017A 2018A 2019A 2020E 2021E 2022E 2023E Subscription 1,635 1,712 1,830 2,044 2,075 2,230 2,509 Project 302 284 271 238 245 238 240 Employer Solutions revenue 1,938 1,996 2,101 2,281 2,320
Slide 38: Financial Summary: Gross Profit and Adjusted EBITDA
38 Historical Projected $M, unless otherwise stated 2017A 2018A 2019A 2020E 2021E 2022E 2023E Memo: Total revenue 2,301 2,378 2,552 2,710 2,760 2,945 3,235 Employer Solutions 756 773 771 802 889 1,099 Professional Services 51 67 97 124 139 154 Gross profit (ex-Hosted) 807 840 868 926 1,028 1,252 mar
Slide 39: Reconciliation of Historical Adjusted EBITDA
39 Historical $M, unless otherwise stated 2017A 2018A 2019A Net Income (Loss) $41 ($21) $22 Interest expense, net 114 208 224 Income tax expense 34 17 16 Depreciation 50 49 68 Intangible amortization 142 180 185 GAAP EBITDA $381 $433 $515 Adjustments to EBITDA Share - based compensation 10 14 9 Adju
Slide 40: Reconciliation of Projected Adjusted EBITDA
40 Reconciliation of Projected Adjusted EBITDA Key Commentary 1. Projections exclude SBC; LTIP compensation program will continue to impact earnings per share going forward 2. Expenses related to the Optimus restructuring program, including: • Consolidation of case management tools driving improved
Slide 41: Operational Benchmarking
41 ____________________ Source: Management information, Factset as of January 15, 2021. Note: See Appendix for non - GAAP reconciliation; calendarized to a 12/31 year end; EBITDA metrics shown on a pre - SBC basis; comps excluded from average if metric is N/M; Brokers include AON, MMC and BPO includ
Slide 42: Valuation Benchmarking
42 Valuation Benchmarking FV/Adj. EBITDA 2021E FV/Adj. EBITDA 2022E 11.4x 16.5x 17.2x 15.2x N/M 25.6x 13.3x 12.6x Alight ADP Paychex Broadridge Ceridian HealthEquity IB / PS BPO Average: 20.0x Average: 18.6x 1 12.2x 18.0x 18.5x 16.5x N/M 27.1x 14.2x 13.8x Alight ADP Paychex Broadridge Ceridian Healt
Slide 43: Integrated Solutions Across the Health Value Chain
43 ____________________ Source: Management information. 1 Point solutions defined as Alight services and technology products beyond core administration. Integrated Solutions Across the Health Value Chain Health Benefits Administration Manage health benefits accurately and efficiently all year long H
Slide 44: Strong Heritage and Recognized Leadership in Wealth
44 Strong Heritage and Recognized Leadership in Wealth Defined Contribution Administration Focused on achieving the best financial outcomes for our clients and their people Defined Benefit Administration Industry - leading expertise, technology and support to help people retire with confidence Manag
Slide 45: Leading Provider of Cloud-Based Payroll & HR Services Globally
45 Leading Provider of Cloud - Based Payroll & HR Services Globally Comprehensive Payroll Global Payroll HR Data Management HR & Financial Application Management Services (AMS) HR & Financial Cloud Services Recognized for Our Market Leading Capabilities Payroll & HR Solutions Payroll & HR Competitor
Slide 46: Glossary
46 Glossary ACA – Affordable Care Act Advisory – Personal financial advisory solution to aid in retirement planning CAS – Cloud Application Services: cloud - based application support CBA – Core Benefits Administration: proprietary health administration platform focused on the mid - market; back end
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