Eml Payments Ltd. · ASX:EML
Eml Payments — Merger or Acquisition (September 2014)
18 slides from Eml Payments's merger presentation, Sep 26, 2014
Slide 1: Proposed Acquisition of Store Financial Services UK (SFUK)
For personal use only Proposed Acquisition of Store Financial Services UK (SFUK) September 2014 1
Slide 2: Important Notice and Disclaimer
For personal use only Important Notice Important Notice and Disclaimer This investor presentation (Presentation) has been prepared by Emerchants Limited ABN 93 104 757 904 (EML) in relation to EML’s proposed acquisition of Store Financial Services UK Ltd (SFUK), which involves an institutional place
Slide 3: Contents
Contents 1. Executive summary For personal use only 2. Overview of SFUK 3. Acquisition terms and funding 4. EML post-acquisition 5. Conclusion Appendices 3
Slide 4: Executive Summary
Executive Summary • EML has agreed to acquire 100% of Store Financial Services UK Ltd (“SFUK”) • Acquisition price of A$24.9 million(1) – 9.3x pro forma EBITDA(2) For personal use only Acquisition • Acquisition consideration comprises 50% cash and 50% EML scrip • Acquisition subject to approval by o
Slide 5: Executive Summary: Funding
Executive Summary • Acquisition costs of $24.9m plus $1.5m for transaction costs and working capital • Funded by: For personal use only Funding • Placement to institutional and sophisticated investors to raise $14.0m at $0.50 per share • $12.45m equity placement to the vendors at $0.50 per share (20
Slide 6: Introduction to SFUK
Introduction to SFUK • SFUK is Europe’s largest shopping mall gift card provider For personal use only • Over 100 gift card programs in 9 European countries • 15 malls in current pipeline for launch in next 3 months • 70% of clients representing 91% of volume have extended their agreements for 5 yea
Slide 7: Key SFUK Customers
Key SFUK Customers For personal use only • Kleppierre (Spain, Portugal & Italy) • Devimo (Belgium) • Lend Lease Portfolio • Land Securities Portfolio • McArthur Glen Portfolio (6 Countries) • Corio (Germany) • Gentalia (Spain) • British Land Portfolio • Regent Street • Standard Life Portfolio • BTWS
Slide 8: SFUK Sources of Revenue Are Similar to EML
SFUK Sources of Revenue Are Similar to EML Customer info system authorises transaction and adjusts cardholder account balance For personal use only SFUK issues prepaid card SFUK/Store Circa 15% of Revenues software Set up fee Card Production Transaction request sent to Transaction authorised SFUK Tr
Slide 9: SFUK track record of growth
SFUK track record of growth For personal use only Card Activation Value (£ million) 84.6 Number of Programs 16% CAGR 90 120 107 43% CAGR 80 100 100 70 80 55.4 77 60 80 44% CAGR 50 91% CAGR 41.6 59 60 40 33.0 40 30 40 35 22.6 25 20 12.0 14.2 8.1 20 9 10 0.9 0 0 CY07 CY08 CY09 CY10 CY11 CY12 CY13 CY14
Slide 10: Pro forma Performance Metrics
Pro forma* Performance Metrics FY14 vs. FY13 and trading update to August 2014 For personal use only Total dollars loaded ($m) Total number of Active Accounts (m) 300 1.20 1.09m 1.12m 253.36m 1.02m 0.97m 250 1.00 200 194.14m 0.80 150 0.60 100 0.40 69.15m 50 30.29m 0.20 0 0.00 FY13 FY14 Jul - Aug 13
Slide 11: Pro forma Performance Metrics
Pro forma* Performance Metrics FY14 vs. FY13 and trading update to August 2014 For personal use only Key Transactions (# m) Store Value ($m) 7.00 60 6.24m 50.66m 6.00 50 47.80m 4.78m 5.00 38.89m 40 35.85m 4.00 30 3.00 2.04m 20 2.00 1.03m 1.00 10 0.00 0 FY13 FY14 Jul - Aug 13 Jul - Aug 14 FY13 FY14 J
Slide 12: Key Transaction Details
Key Transaction Details • Purchase price of A$24.9 million(1) to be paid 50% cash and 50% EML scrip • Represents 9.3x pro forma EBITDA(2) For personal use only • Cash component to be funded via a $14 million placement to institutional and sophisticated investors • Equity component satisfied through
Slide 13: Why acquire a European non-reloadable prepaid provider?
Why acquire a European non-reloadable prepaid provider? • EML has reviewed opportunities for growth beyond Australia For personal use only • Europe is the most attractive option to target first • Greenfield market entry into Europe not a practical or viable option • Valuations for re-loadable compan
Slide 14: Strategic Rationale
Strategic Rationale • SFUK has been operating in Europe since 2008 and is operational in 9 countries, including the UK For personal use only • Profitable since 2012 Established and profitable business • Over 100 programs with 70% of clients representing 91% of volume contracted for 5 years • Affilia
Slide 15: Equity raising
Equity raising • Placement to institutional and sophisticated investors For personal use only Structure • Conditional on shareholder approval at AGM to be held 13 November 2014 • $14 million Placement Size • 28.0 million new shares (~15.8% of pro forma issued capital, including the issue of 24.9 mil
Slide 16: Key Risks
Key Risks There are a number of risks, both specific to EML and of a general nature, which may affect the future operating and financial performance of EML, its investment returns and the value of its securities. Many of the circumstances giving rise to these risks are beyond the control of EML. For
Slide 17: Key Risks
Key Risks Specific Risks (continued) For personal use only • Customer loss: SFUK has not lost a customer since inception but it is possible that customer loss could result from the acquisition or other external factors. SFUK has a high client concentration (as its top ten shopping centre clients acc
Slide 18: Key Risks
Key Risks Specific Risks (continued) For personal use only • Integration risk: Although it is intended that SFUK will remain operationally independent from EML in the short term the acquisition will necessitate financial integration of the SFUK business, which had previously operated independently f
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