Ai-media Technologies Limited · ASX:AIM
Ai-media Technologies — Merger or Acquisition (April 2021)
42 slides from Ai-media Technologies's merger presentation, Apr 28, 2021
Slide 1: Acquisition of EEG and Capital Raising
Acquisition of EEG and Capital Raising 28 April 2021 Confidential
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer Important notice and disclaimer By receiving or attending this Presentation, each recipient warrants and represents that it understands the contents of this “Important notice and This investor presentation (Presentation) has been prepared by Access Innovation Holdings
Slide 3: Important Notice and Disclaimer
Important Notice and Disclaimer Foreign exchange Disclaimer The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated into Neither Bell Potter Securities Limited or Morgans Corporate Limited (the Underwriters), no
Slide 4: Transaction Overview
Transaction Overview
Slide 5: Key Transaction Highlights
Key Transaction Highlights Binding agreement to acquire 100% of EEG Enterprises, a market leading North American video and captioning technology company ‒ AIM has worked closely with EEG for over five years and is a reseller of their products outside North America Post-transaction, AIM will beco
Slide 6: Transaction overview
Transaction overview • Access Innovation Holdings Limited (Ai-Media or AIM) has entered into a binding agreement to acquire 100% of the shares on issue in EEG Enterprises, Inc (EEG) at an implied enterprise value of up to USD$34.0 million (Acquisition or the Transaction) on a cash-free and debt-free
Slide 7: Transaction overview
Transaction overview • The Transaction and associated costs will be funded via: ‒ the issue of approximately A$12.8 million worth of Consideration Shares to the EEG vendor at an effective issue price of $0.876 per share resulting in the issue of 14.6 million Consideration Shares Funding ‒ a fully un
Slide 8: Agenda
Agenda Topic Page reference Overview of EEG 9 Acquisition rationale and impact on Ai-Media 17 Transaction funding and financial impact 23 Offer summary 27 Appendices • Key risks 30 • Foreign selling jurisdictions 35 • Underwriting Agreement 38 8
Slide 9: Overview of EEG
Overview of EEG
Slide 10: Introduction to EEG
Introduction to EEG • EEG is a market leading North American video and captioning technology company Overview • Provides end-to-end customer solutions from encoding, delivery and display technologies – with open platform for service providers • Headquartered in Farmingdale, New York with ~30 employe
Slide 11: Company history
Company history 2000 2001 2006 2012 2015 2017 2019 2020 2021 SaaS/IaaS revenue becomes EEG EEG iCap™ EEG Lexi™ iCap™ Enterprise majority EEG introduces introduces usage introduces automatic Network: applications develops the the first the surpasses the iCap™, captioning and Strong growth first HD-SD
Slide 12: EEG's Live Broadcast Workflow
EEG's Live Broadcast Workflow Third Party Enhanced ASR Captioning (cloud hosted) EEG’s business Providers EEG’s infrastructure enables the flow of audio and video content to captioning providers / ASR engines - and on to customers EEG's infrastructure can either be stored Cloud physically at a c
Slide 13: EEG is profitable and growing SaaS / IaaS product lines strongly
EEG is profitable and growing SaaS / IaaS product lines strongly Revenue Split (USD$m) $4.8m $3.1m $2.9m High growth business with growing $1.2m proportion of repeatable revenue $4.4m $4.1m $3.3m $3.6m 2017 2018 2019 2020 Hardware SaaS / IaaS Consistent profitability with high EBITDA (USD$m) and
Slide 14: Core Services and Product Overview
Core Services and Product Overview Product lines Description Revenue Model CY20 revenue contribution Cloud-hosted and on premises automated captioning platforms that delivers over 90% accuracy in English SaaS service paid per SaaS and Spanish. Its self-learning 16% hour or per month algorithmic stru
Slide 15: Customers
Customers • The market leading closed caption technology platform supplier and delivery network across North America • iCap network delivers the majority of all live captioning in the US delivered over IP connections Customer numbers by year – 2016 to 2020 • The customer base can be categorised into
Slide 16: Key Management
Key Management • Combined management team provides broader and deeper leadership capability within the North American business • Retention arrangements for key EEG leadership – supports continuity and integration delivery Phil McLaughlin William McLaughlin Michael Doller Regina Vilenskaya Kate Doino
Slide 17: Acquisition rationale and impact on AIM
Acquisition rationale and impact on AIM
Slide 18: Strategic rationale
Strategic rationale Vertical integration - live US market leader & global Attractive revenue model 1 caption gateway product 2 growth opportunities 3 and margins o EEG provides the essential pieces o EEG touches the majority of o EEG’s IaaS and SaaS model of captioning enterprise, broadcast and repr
Slide 19: AIM + EEG = trusted one-stop shop for live captioning, globally
AIM + EEG = trusted one-stop shop for live captioning, globally Enhanced ASR Ai-Media’s current business (cloud hosted) Merged business Acquisition increases vertical integration and combined entity can offer true one- stop shop at any price/quality point for Cloud live captioning, in any language
Slide 20: Enhanced combined product suite
Enhanced combined product suite Product Line Live Enterprise Live Broadcast Recorded Services • Broadcast • Enterprise AIM Premium Live Broadcast • Closed Captions • Localisation • Audio Description IaaS / SaaS Revenue Type Smart ASR Smart ASR Hardware 20
Slide 21: Enhanced live captioning and translation product suite
Enhanced live captioning and translation product suite Quality Caption Type Ai-Media Product Description Quality & Confidence Level Target Markets HIGHEST - Education - Corporate High-quality live captions - Enterprise Premium generated by Ai-Media’s live Extremely High - Government curation - Live
Slide 22: Multiple quality and price points offered
Multiple quality and price points offered Standard ASR Smart ASR Premium Algorithmic dictionaries Human curated dictionaries Real-time human curation Increased data requires more rules Human curated in real-time Algorithmic dictionaries increases Human curated dictionaries and less accuracy delivers
Slide 23: Transaction funding and financial impact
Transaction funding and financial impact
Slide 24: Transaction funding and financial impact
Transaction funding and financial impact Terms Total consideration AIM has entered into a binding agreement to acquire 100% of EEG at an implied enterprise value of up to USD$34.0 million - USD$20.0m in cash and 14.6 million Consideration Shares, subject to AIM shareholder approval for ASX Listing R
Slide 25: Pro forma financial impact – FY21F Income Statement
Pro forma financial impact – FY21F Income Statement $ millions AIM FY21 (unless otherwise CaptionAccess & EEG FY21 forecast3 Pro forma prospectus stated) Caption IT2 combined group forecast1 IaaS / SaaS Revenue 6.9 6.9 Hardware Revenue 4.9 4.9 Services Revenue 43.8 1.5 45.3 Total revenue 43.8 1.5 11
Slide 26: Pro forma historical combined Balance Sheet
Pro forma historical combined Balance Sheet Pro forma Balance Sheet as at 31 December 2020 $ millions (unless otherwise stated) AIM1 EEG2 Impact of the Offer3 Pro forma combined group Cash and cash equivalent 8.8 3.1 1.4 13.3 Trade and other receivables 9.4 2.0 - 11.4 Property, plant and equipment 1
Slide 27: Offer summary
Offer summary
Slide 28: Offer details
Offer details Offer structure and • Fully underwritten placement and 1 for 5.79 pro-rata, accelerated, renounceable Entitlement Offer to raise gross proceeds of A$40.0 million size • 50.0 million new fully paid ordinary shares (New Shares) to be issued • Placement and Entitlement Offer will be offer
Slide 29: Offer timetable
Offer timetable Event Date (2021)(1) Announcement of Offer (in trading halt) Wednesday, 28 April Placement and Institutional Entitlement Offer opens Wednesday, 28 April Placement and Institutional Entitlement Offer closes Wednesday, 28 April Institutional Entitlement Offer shortfall bookbuild closes
Slide 30: Appendix A Key risks
Appendix A Key risks
Slide 31: Key risks – Acquisition
Key risks – Acquisition The Acquisition requires AIM to pay to the EEG vendor a cash amount of US$20.0 million and issue the Consideration Shares (see below). The Acquisition will complete when AIM pays the cash consideration of US$20.0 to the EEG vendor. AIM is required to pay the cash consideratio
Slide 32: Key risks – Company
Key risks – Company A number of Ai-Media’s customers (including those operating in the media and education sectors) have been significantly impacted by disruption caused by COVID-19. Ai-Media has a concentration of customers in the media and education sectors. Counterparty risk Any financial distres
Slide 33: Key risks – Company
Key risks – Company Inability to attract new customers Ai-Media is reliant upon attracting new customers to achieve its stated growth objectives. There is a risk that one or more of Ai-Media’s competitors, or a new entrant to the market, will increase competitive position, or companies that require
Slide 34: Key risks – General
Key risks – General Foreign exchange risk Ai-Media reports its results in Australian dollars. It records revenues in a range of currencies. Given the acquisition of EEG, the proportion of revenue that it generates in United States dollars will increase significantly. In the event that there is an ad
Slide 35: Appendix B Foreign selling jurisdictions
Appendix B Foreign selling jurisdictions
Slide 36: International offer restrictions
International offer restrictions This document does not constitute an offer of entitlements ("Entitlements") or new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the Entitlements
Slide 37: International offer restrictions
International offer restrictions United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 20
Slide 38: Appendix C Underwriting Agreement
Appendix C Underwriting Agreement
Slide 39: Underwriting Agreement
Underwriting Agreement Bell Potter Securities Limited and Morgans Corporate Limited (Lead Managers) are acting as joint lead managers, underwriters and bookrunners of the Capital Raising. AIM has entered into an underwriting agreement with the Lead Managers in respect of the Capital Raising (Underwr
Slide 40: Underwriting Agreement
Underwriting Agreement j) any of the following occurs: i. any of Deanne Weir, John Martin, Jonathan Pearce or Alison Loat ceases to be a Director of the Company; or ii. Tony Abrahams ceases to be the chief executive officer of the Company; or iii. John Bird ceases to be chief financial officer of th
Slide 41: Underwriting Agreement
Underwriting Agreement d) the Company or an entity in the AIM Group, any Offer Document or any aspect of the Capital Raising, does not or fails to comply with the AIM Constitution, the Corporations Act, the Listing Rules or any other applicable law or regulation; e) a default by the Company in the
Slide 42: Thank you
‘aii media ai-media.tv Thank you in
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