Alta Equipment Group Inc. · NYSE:ALTG
Alta Equipment — B. Riley Principal Merger — SPAC Merger (December 2019)
40 slides from Alta Equipment's SPAC merger presentation, Dec 13, 2019
Slide 1: Investor Presentation December 2019
ALTA ctmrany B RILEY Investor Presentation December 2019
Slide 2: Disclaimer
ALTA thant Disclaimer mana This investor presentation (this “presentation”) is for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any equity or debt or other financial instruments of B. Riley Principal Merger C
Slide 3: Disclaimer (cont'd)
ALTA ttiieant Disclaimer (cont’d) No Offer or Solicitation. This presentation shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Transaction. This presentation shall also not constitute an offer to sell or the solicitation of
Slide 4: Disclaimer (cont'd)
ALTA ttiieant Disclaimer (cont’d) Additional Information About the Transaction and Where to Find It. In connection with the proposed Transaction, BRPM intends to file preliminary and definitive proxy statements with the SEC. The preliminary and definitive proxy statements and other relevant document
Slide 5: Presenters
Presenters ALTA tiweant B RILEY AL EQUIPMENT COMPANY Ryan Greenawalt, CEO = Joined Alta in 2008; executed buy-out of other shareholders in 2017 recapitalization = Serves on Hyster-Yale Dealer Council and Volvo Construction Equipment’s Dealer Advisory Council = BA, University of Michigan; MBA, Broad
Slide 6: Transaction Overview
ALTA tiweant Transaction Overview = B. Riley Principal Merger Corp. (NYSE:BRPM) to merge with Alta Equipment Holdings, Inc. (“Alta”) = The combined company will be capitalized with ~$310MM of debt and ~$280MM of equity, which represents 5.9x 2019E Adj. EBITDA! and 5.0x 2020E Adj. EBITDA? - Implies 7
Slide 7: B RILEY
ALTA tiweant B RILEY I. Investment Thesis II. Company Overview III. Industry Dynamics IV. Financial Overview V. Business Combination VI. Appendix
Slide 8: Investment Highlights
\ EQUIPMENT Investment Thesis ALTA courant Investment Highlights B RILEY High quality business - Dealership model highlighted by material barriers to entry and a stable, recurring cash flow stream through the Parts and Service operations - Skilled technicians represent a material intangible asset of
Slide 9: Track Record of Value Creation — Ryan Greenawalt
ALTA tiweant B RILEY Investment Thesis Track Record of Value Creation — Ryan Greenawalt = Ryan Greenawalt joined family-owned Alta Lift Truck Services Inc. in 2008, which had ~$60MM of revenue focused on industrial equipment (forklifts) in Michigan = Mr. Greenawalt immediately focused on business op
Slide 10: Track Record of Value Creation — B. Riley Financial
ALTA tiweant B RILEY Investment Thesis Track Record of Value Creation — B. Riley Financial (Nasdaq:RILY) = B. Riley Financial, Inc. (Nasdaq: RILY) is a diversified B RILEY holding company consisting of multiple operating subsidiaries in addition to on-balance sheet investments worth $900MM+ and focu
Slide 11: B RILEY
ALTA tiweant B RILEY I. Investment Thesis III. Industry Dynamics IV. Financial Overview V. Business Combination VI. Appendix
Slide 12: Leading Equipment Dealership Platform
Company Overview ALTA titrant Leading Equipment Dealership Platform mE tp Best-in-Class Brand Portfolio Creates Cross-Selling Opportunities AANT E46“) ravar Goygea Yfetch Oper o HYSTER-YALE GSELLICK §=MOTREC Gore) BALYo ERA Minuteman Genie KPLJCI unity ae UCB Et @prc.ans QNilfisk MANITOU nICO Pesto
Slide 13: Dealership Network Provides Diversified Product and Service Offerings
EQUIPMENT Company Overview ALTA ttieany B RILEY Dealership Network Provides Diversified Product and Service Offerings Product and Services Diversification 2019E Product and Services Diversification = Alta’s business model consists of populating its geographies with new, used, and rental equipment an
Slide 14: Financial Breakdown
ALTA tiweant B RILEY Company Overview Financial Breakdown (Excluding Acquisitions Under LOT) 2019E Revenue Breakdown 2019E Gross Profit Breakd New Equipment Used 15% equipment 3% 2019E Adj. EBITDA-Net Maint. CapEx Equipment $645MM $171MM Parts and Service 66% Used equipment 2018 Equipment Sales by B
Slide 15: Entry Valuation
ALTA tiweant B RILEY Company Overview Entry Valuation ($MM, Except Per Share) 2019E? - Illustrative Metric ($MM) Valuation | New Asset-Based Loan (ABL) $140.0° Adj. EBITDA $94.0 5.9x New Term Loan 170.0 Adj. EBITDA-Net Maint. CapEx 46.2 12.0x Total Debt $310.0 Levered FCF (% Yield) 22.5 7% Excess Ca
Slide 16: Deep Relationships with Key Stakeholders
Company Overview Deep Relationships with Key Stakeholders IPMENT ALTA? MPANY B RILEY Customer Relationships = Alta provides equipment solutions to the leading industrial and construction businesses in its territories = Customers take long-term view of dealer relationship and seek “one- stop-shop” =
Slide 17: Company History
Company Overview Company History ALTA? MPANY B RILEY Founded: 1984 Headquarters: Livonia, Michigan Locations: 31 Headcount: 1,3541 2019E PF Revenue: $899.9MM2 2019E PF Adj. EBITDA: $94.0MM2 @ 2008 - Ryan Greenawalt joins Alta in chief decision- making capacity @ 2010 - Alta begins relationship with
Slide 18: Highly Diversified Base of Long-Term Customers
Company Overview ALTA ttieany Highly Diversified Base of Long-Term Customers mE tp 2018 Top 5 Industrial Customers? Industrial Customers 2018 Revenue Revenue as a Percentage Customer Acquisition and Retention Strategy = One-stop-shop dealership model creates multiple customer acquisition points and
Slide 19: Expanding Footprint in Key Geographic Markets
EQUIPMENT Company Overview ALTA ttieany B/RILEY Expanding Footprint in Key Geographic Markets Strate Expansion Footprint * 31 locations throughout Michigan, Indiana, Illinois, Hi Current Locations Acquisition Territories Under LOI Massachusetts, Maine, New Hampshire, and Connecticut with signed LOIs
Slide 20: B RILEY
ALTA tiweant B RILEY I. Investment Thesis II. Company Overview III.Industry Dynamics IV. Financial Overview V. Business Combination VI. Appendix
Slide 21: Competitive Landscape
IPMENT Industry Dynamics ALTA ttieany B/RILEY Competitive Landscape (Pre NY and Florida Expansion) 3 ase Number of Industrial Construction Competitive Competitive igcations in Bad oment Eauioment Parts & Product Brand heen a Service the Region Sales Sales Milled Ns Crown Lift Trucks Morrison Industr
Slide 22: Regional Market Share
EQUIPMENT Industry Dynamics ALTA titrant B RILEY Regional Market Share (Pre NY and Florida Expansion) Industrial Market Share in Operating Geographies East Michigan West Michigan Chicago New England Te Fr” , Ne Construction GPE! Market Share in Operating Geographies Michigan Illinois New England Sou
Slide 23: B/RILEY
ALTA tiweant B/RILEY I. Investment Thesis II. Company Overview III. Industry Dynamics V. Business Combination VI. Appendix
Slide 24: Historical and Projected Financial Summary
ALTA ttiieant Financial Overview . . . . . B RILEY Historical and Projected Financial Summary ($MM) 2016PF 2017PF 2018PF 2019E 2020E 2021E New $177.9 $197.5 $222.5 $245.6 $259.7 $271.1 Used 31.5 34.4 36.8 36.1 38.4 40.4 Parts 73.1 77.4 92.1 102.9 111.8 120.4 Service 85.1 92.3 114.4 127.4 138.2 148.6
Slide 25: Capital Allocation Policy
. . . ALTA: UIPMENT Financial Overview COMPANY B RILEY Capital Allocation Policy Cash generative nature of the business allows the Board and Management to allocate capital between growth capex, deleveraging, returning capital to shareholders, and funding M&A = The opportunity set will fluctuate over
Slide 26: Illustrative 2018-2021E Adjusted EBITDA Bridge
Financial Overview Illustrative 2018-2021E Adjusted EBITDA Bridge ALTA tiweant B RILEY \ Forecasted Financial Bridge Illustrative Operating Model ($MM) New Used Parts Service Rental Acquisitions Revenue New Used Parts Service Rental Acquisitions Gross profit New Used Parts Service Rental Admin Acqui
Slide 27: Aftermarket Growth through Field Population
Fin Aftermarket Growth through Field Population ALTA tiweant B RILEY ancial Overview Parts and Service Revenue Follows Id Population: A Michigan Construction Case Study Since 2010, Alta has aggressively populated the field with serviceable construction equipment, and is now capitalizing on the after
Slide 28: Grow Illinois Construction Using Michigan Playbook
Financial Overview Grow Illinois Construction Using Michigan “Playbook” IPMENT ALTA? MPANY B RILEY Illinois Construction Forecast | Higterigal Pie fornia » Entered the Illinois Construction market in 2018 through ——— acquisition of Elite Heavy Equipment 2018 —Bridge_ _2021E - Executing a service-fir
Slide 29: M&A Objectives
IPMENT Et Financial Overview ALTA ttiteant M&A Objectives B| RILEY = Alta platform has been created through 16 acquisitions in the last 10 years and expect acquisitions to accelerate based on public currency and expanding pipeline = Alta is benefitting from multiple structural trends in the equipmen
Slide 30: Capital Structure and De-Leveraging Over Time
ALTA tiweant B RILEY Financial Overview Capital Structure and De-Leveraging Over Time Capital Structure! ($MM, except per share) ABL Provides Flexibility and Firepower = Closing capital structure includes $105MM of undrawn ABL capacity ($MM, Except Per Share) New Asset-Based Loan (ABL) 140.0 New Ter
Slide 31: Bridge for Stock Returns
Financial Overview Bridge for Stock Returns ALTA tiweant B RILEY Illustrative Bridge Model Commentary Closing Pro forma 2019E Bridge 2021E EBITDA $94.0 $53.0 $147.0 Exit Multiple 5.9x 0.6x 6.5x Enterprise value $553.0 $402.6 $955.6 Net Debt (247.4) (86.9) (334.4) Equity Value $305.6 $315.7 $621.2 Fu
Slide 32: B RILEY
ALTA tiweant B RILEY I. Investment Thesis II. Company Overview III. Industry Dynamics IV. Financial Overview VI. Appendix
Slide 33: Transaction Overview
ALTA tiweant B RILEY Business Combination Transaction Overview Transaction Highlights Post-Transac Ownership? = $145MM BRPM cash held in trust and $35MM PIPE will be used to support the acquisition pipeline, provide liquidity to existing investors, pay transaction expenses, and provide excess cash t
Slide 34: Attractive Valuation
EQUIPMENT Business Combination ALTA titrant Attractive Valuation B RILEY Ev / 2019E Adj. EBITDA! Ev / 20E Adj. EBITDA! 9.4x 9.6x x 8.8x 8.8x 6.8x 5.3x 5.0x 51x 2 Alta Specialty Heavy Heavy Auto Alta Specialty Heavy Heavy Auto Rental Equipment Equipment Dealers Rental Equipment Equipment Dealers Deal
Slide 35: Attractive Valuation (cont'd)
Business Combination ALTA ciweany Attractive Valuation (cont’d) BT pul Me EV / 2019E Adj. EBIT 18.3x 14.9x 14.0x 12.0x 11.8x 10.9x 11.4x 2 Alta Specialty Heavy Heavy Auto Specialty Heavy Heavy Rental Equipment Equipment Dealers Rental Equipment Equipment Ceslers Dealer Rental Dealer Rental Source: C
Slide 36: Dealerships are More Resilient than Pure Rental
ALTA tiweant B RILEY Business Combination Dealerships are More Resilient than Pure Rental Rental Rates: North American Dealers vs. URI* 10% Correlation: 0.92 5% ay 2 0% TTTTITTITITtrrriiit TTTTTiTyr1 no oO ws a B (5%) 2 (10%) (15%) Nh... PPB... MN MB. HB. .M P1S NAN VAY 25 2 ade nd 0 49 1 1 A DADID
Slide 37: B RILEY
ALTA tiweant B RILEY I. Investment Thesis II. Company Overview III. Industry Dynamics IV. Financial Overview V. Business Combination
Slide 38: Adjusted EBITDA Reconciliation
Appendix Adjusted EBITDA Reconciliation ALTA ttiieant B RILEY ($MM) GAAP Net Income Depreciation and Amortization Interest Expense (Excluding Floor Plan Interest) EBITDA Adjustments: Change in Fair Value of Warrants’ Additional Depreciation of New Equipment Rental’ Transaction Personnel Non-Recurrin
Slide 39: CapEx Reconciliation
Appendix CapEx Reconciliation ALTA ttiieant B RILEY ($MM) 2016PF 2017PF 2018PF Rental Gross Maintenance Capex‘ $43.6 $53.7 $62.9 Rental Fleet Disposal Proceeds (25.4) (33.3) (40.9) Gain on Sale of Rental Equipment 3.3 5.2 6.1 Rental Net Maintenance Capex $21.5 $25.6 $28.1 PP&E Capex 3.2 4.4 4.2 Tota
Slide 40: FCF Reconciliation
Appendix FCF Reconciliation ALTA ttiieant B RILEY ($MM) 2016PF 2017PF 2018PF Adjusted EBITDA $42.1 $52.6 $67.2 Rental Net Maintenance Capex (21.5) (25.6) (28.1) PP&E Capex (3.2) (4.4) (4.2) Adjusted EBITDA-Net Maintenance Capex $17.3 $22.6 $34.9 Tax Expense 0.0 0.0 0.0 Unlevered FCF $17.3 $22.6 $34.
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