Exela Technologies, Inc. · OTC:XELA
Exela Technologies — Quinpario Acquisition Corp. 2 — SPAC Merger (May 2017)
40 slides from Exela Technologies's SPAC merger presentation, May 2, 2017
Slide 1: Disclaimer: Forward Looking Statements
Disclaimer Forward Looking Statements Certain statements included in this presentation are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompani
Slide 2: Management Presenters
Management Presenters Years at SourceHOV / Novitex(1) Years of Experience Presenter Title Chief Executive Officer – Exela Technologies 30 24 Chief Financial Officer – Exela Technologies 25 16 SVP, Business Strategy – Exela Technologies 10 10 Principal – Apollo Management 9 3 (1) Includes experience
Slide 3: Presentation Agenda
Presentation Agenda 1 Transaction Overview 2 Exela Technologies Overview 3 Combination Rationale and Key Investment Highlights 4 Financial Performance 5 Conclusion and Q&A 4
Slide 4: Presentation Agenda
| Presentation Agenda e Transaction Overview © kxela Technologies Overview e Combination Rationale and Key Investment Highlights @© Financial Performance ©@ conctusion and Q&A
Slide 5: Transaction Overview
Transaction Overview On February 21, 2017, SourceHOV Holdings, Inc., Novitex Holdings, Inc. and Quinpario Acquisition Corp. 2, announced a combination to form Exela Technologies (“Exela” or the “Company”) Formation of Exela creates category leader in the Business Process Outsourcing (“BPO”) industry
Slide 6: Sources & Uses and Pro Forma Capitalization
Sources & Uses and Pro Forma Capitalization ($ in millions) $1,350 275 806 306 $1,497 1,112 90 38 Committed Debt Financing QPAC2 / PIPE Equity(1) SourceHOV Rollover Value Novitex Rollover Value Refinanced Debt Equity Rollover Value Fees, Expenses & OID Cash to Balance Sheet Number of Shares ($ in mi
Slide 7: Exela Technologies Overview
Exela Technologies Overview 8
Slide 8: Exela Technologies – At a Glance
Exela Technologies – At a Glance Leading provider of platform-based enterprise information management and transaction processing solutions Leading provider of document management and digital business process services Leading global information and transaction processing platform in the BPO industry
Slide 9: Exela Technologies Will Be a Leading Global Information and Transaction Processing Company
Exela Technologies Will Be a Leading Global Information and Transaction Processing Company Exela uses a combination of data-driven processes, technology, and human capital, delivered through integrated, Enterprise Information Management and Transaction Processing Solutions platforms to enable missio
Slide 10: Exela Technologies Ecosystem
Exela Technologies Ecosystem Specialized knowledge platforms rooted through decades of industry experience Transaction Processing Solutions Delivering innovative industry solutions and specialized technology which incorporate data validation, exception management, business automation, and outcome re
Slide 11: Select Examples of Exela's Offerings: Mortgage Loan Processing
Select Examples of Exela’s Offerings Across Mortgage loan processing for a large global bank Diverse End-Markets Customer Problem Unstructured data needs to be indexed, validated, summarized, and analyzed for decisioning Compliance requires accurate organization, tracking, and analysis Traditionally
Slide 12: Select Examples of Exela's Offerings: Accounts Payable Processing
Select Examples of Exela’s Offerings Across Diverse End-Markets Accounts Payable (“AP”) processing and management for a large grocery retail chain Customer Problem Disparate supplier connectivity Unorganized invoice inflow in multiple formats Cash flow management and forecasting Lack of expense mana
Slide 13: Select Examples of Exela's Offerings: Tax Return Processing
Select Examples of Exela’s Offerings Across Diverse Tax return processing for the department of revenue for a U.S. state End-Markets Customer Problem Need to serve constituents more efficiently Reduce turnaround time and overall cost of processing returns Fraud, waste and abuse detection Exela Solut
Slide 14: Select Examples of Exela's Offerings: Healthcare Insurance Back-Office
Select Examples of Exela’s Offerings Across Diverse End-Markets Full life-cycle of back-office processes for a large healthcare insurance company Customer Problem Complex documentation and unstructured data Need to improve service and customer experience Regulatory requirements for rapid turnaround
Slide 15: Exela's Global Footprint and Whitespace Opportunities
Exela’s Global Footprint is Poised to Pursue Significant Whitespace Opportunities 120+ delivery centers globally and customers in 50+ countries 1,250 on-site customer locations PF Revenue by Geography(1) Europe 9% Delivery Locations Partner Locations Americas 91% Enhanced bid capabilities and global
Slide 16: Combination Rationale and Key Investment Highlights
Combination Rationale and Key Investment Highlights 17
Slide 17: Exela Technologies Key Investment Highlights
Exela Technologies Key Investment Highlights Leading information and transaction processing company within the broader BPO industry 18 Favorable operating metrics and highly attractive valuation relative to peer group Highly experienced management with track record of successful integrations, realiz
Slide 18: Global Single-source Provider of Technology-enabled Industry Solutions
Global Single-source Provider of Technology-enabled, Mission-critical Industry Solutions …Provided Through a Comprehensive Full Cycle Service Offerings… Suite of Tech-Enabled Platforms Enterprise Information Management Unified Communications Services Document Logistics Services Business intelligence
Slide 19: Well-Positioned in Large and Growing, Information-Intensive Industries
Well-Positioned in Large and Growing, Information-Intensive Industries Such as Financial Services and Healthcare Global addressable BPO market stands at ~$420 billion, growing at ~6% annually ($ in billions) More automation coupled with industry-specific solutions and domain expertise offers higher
Slide 20: Well Diversified Across Clients and End-markets
Well Diversified Across Clients and End-markets Industry leading solutions delivered to 3,500+ customers around the world End Market Representative Customers Commercial & Other (2) 25% 10/10 Top U.S. Banks 120+ Global Banks 9/10 Top U.S. Insurance Companies 50+ Global Insurance Companies Financial S
Slide 21: Significant Growth Opportunities
Significant Growth Opportunities SourceHOV and Novitex have invested significantly in their operations over the last years and have reached an inflection point in growth which will be magnified by the combination Leverage full cycle service offering to cross-sell and up-sell Expand existing customer
Slide 22: Strong Financial Model
Strong Financial Model Key Trends & Highlights ~90% of 2017E pro forma revenues already under contract Significant new contract wins, strong pipeline and high renewal rates drive revenue visibility Attractive Adj. EBITDA margins (~24%)(1) with further opportunity through identified cost savings acti
Slide 23: Significant and Highly Achievable Cost Synergies
Significant and Highly Achievable Cost Synergies There are significant combination cost synergies between SourceHOV and Novitex across COGS, G&A and facility overlap; expected to be executed by Year 2 Information Technology 15% Consolidation of IT Management Savings related to consolidation of IT se
Slide 24: Highly-Experienced Management Team
Highly-Experienced Management Team Proven track record of merger integration, realizing cost savings and margin improvement Ron Cogburn Chief Executive Officer – Exela Technologies Jim Reynolds Chief Financial Officer – Exela Technologies Leads overall business strategy and mission to provide high-v
Slide 25: Favorable Operating Metrics Relative to Peer Group
Favorable Operating Metrics Relative to Peer Group 5.4% 35.6% 35.3% Peer median Peer median 14.5x 14.0x 91.4% 86.9% 83.7% Peer median Peer median Source: Company materials, public filings and Factset as of 4/28/17 Note: Peers include Open Text, Broadridge Financial Services, Computershare, DST Syste
Slide 26: Highly Attractive Valuation Relative to Peer Group
Highly Attractive Valuation Relative to Peer Group 2017E EBITDA Margin, Revenue Growth and EV / EBITDA Multiple Cognizant Systems – (6%) (4%) (2%) – 2% 4% 6% 8% 10% 2017E Revenue Growth Source: (1) (2) Factset as of 4/28/17, Company filings and press releases. Revenue and EBITDA shown pro forma for
Slide 27: Highly Attractive Valuation Relative to Peer Group
Highly Attractive Valuation Relative to Peer Group 2017E EBITDA Margin, Revenue Growth and EV / EBITDA Multiple 2017 EBITDA Margin 50% 20% 21/2017 2104 mane ~ 2% 6 2017€ Revenue Growth cat sof 28717, Cay fogs ones Srv and OA on poe bot axons nd des a pee Sea ‘ed on mi pan of manne re 87 Som En ea ea
Slide 28: Exela Business Segment Snapshot
Exela Business Segment Snapshot Legal & Loss Prevention Services Healthcare Solutions Enterprise Information Management (“EIM”): data aggregation, eContent management, and data archival / retrieval Banking, Finance & Accounting (“F&A”), Payment, and Public Sector Solutions: clearing, sanctions, and
Slide 29: Exela Historical Financial Summary and 2017E Guidance
Exela Historical Financial Summary and 2017E Guidance ($ in millions) ($ in millions) PF Adj. EBITDA Margin: 24.4% $1,450 – $1,550 $365 – $390 $1,435 $350 2016 SourceHOV Adj. EBITDA Implemented Cost Savings 2017E Novitex Adj. EBITDA Combination Synergies 2016 2017E SourceHOV Revenue Novitex Revenue
Slide 30: Exela Long-term Financial Objectives
Exela Long-term Financial Objectives Strong signings and pipeline Cross-selling and up-selling Run-off of non-core revenue ~3 – 4% Business mix shift to higher margin Synergy realization Operating leverage Improving capacity utilization ~4 – 5% Low ongoing capex requirement given large historic inve
Slide 31: Exela Long-term Financial Objectives
| Exela Long-term Finan: Organic Revenue Growth EBITDA Growth mete | Objectives 19s and pipeline Cross-selling and up-selling Run-off of non-core revenue Business mix shift to higher margin + Synergy realization + Operating leverage + Improving capacity utilization Capex Low ongoing capex requiremen
Slide 32: Exela Technologies Key Investment Highlights
Exela Technologies Key Investment Highlights Leading information and transaction processing company within the broader BPO industry 33 Favorable operating metrics and highly attractive valuation relative to peer group Highly experienced management with track record of successful integrations, realiz
Slide 33: Exela Technologies Key Investment Highlights
Exela Technologies Key Investment Highlights Leading information and transaction processing company within the broader BPO industry 9999900090 Global single-source provider of technology-enabled, mission-critical industry solutions \Well-positioned in large and growing, information-intensive industr
Slide 34: SourceHOV Historical Financials
SourceHOV Historical Financials ($ in millions) Core business has grown from 2014 to 2016 driven primarily by strong growth in the healthcare business line The Information and Transaction Processing Solutions segment (“) is stable with moderate growth, excluding the impact of FX, legacy lines, and p
Slide 35: SourceHOV EBITDA Reconciliation
SourceHOV EBITDA Reconciliation ($ in millions) 1 Adjustment represents net salary and benefits associated with positions that were terminated, including severance, retention bonuses, and related fees and expenses; also includes charges incurred by SourceHOV to terminate existing lease contracts as
Slide 36: Novitex Historical Financials
Novitex Historical Financials ($ in millions) The core business for Novitex is stable with flat revenues Novitex has experienced significant headwinds in the Federal business and today the segment represents less than 7% of revenues. Novitex lost several lower margin Federal accounts due to a change
Slide 37: Novitex EBITDA Reconciliation
Novitex EBITDA Reconciliation 1 ($ in millions) Various one-time costs incurred for the restructuring initiative, consolidation of 9 regional document serving centers into 2 new mega-centers, and establishment of a new technology platform 2014 2015 2016 Novitex Net Income Interest Expense, Net Depre
Slide 38: Exela Revenue and Adj. EBITDA Reconciliation
Exela Revenue and Adj. EBITDA Reconciliation ($ in millions) 2016 Revenue SourceHOV ITPS SourceHOV HS SourceHOV LLPS Novitex $440 248 102 543 Pro Forma Revenue $1,333 Adjustment for Acquisition of TransCentra 102 Adj. EBITDA Pro Forma Net (Loss) Interest Expense, Net Income Tax Benefit Depreciation
Slide 39: Technology | Insight | Innovation
Technology | Insight | Innovation 40
Slide 40: Exela
exela Technology | Insight | Innovation
Quinpario Acquisition Corp. 2 — SPAC Merger (May 2017) on 6ix