The KeyW — KeyW Holding — Merger or Acquisition (March 2017)
15 slides from The KeyW's merger presentation, Mar 8, 2017
Slide 1: Acquisition of Sotera Defense Solutions
Acquisition of Sotera Defense Solutions March 8, 2017
Slide 2: Forward-Looking Statements
2 This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding KeyW’s future prospects, projected financial results, estimated integration costs and acquisition related amortizati
Slide 3: Non-GAAP Financial Measures
3 Non-GAAP Financial Measures This presentation contains forward looking estimates of adjusted EBITDA, including adjusted EBITDA margin. Adjusted EBITDA, as defined by KeyW, is a financial measure that is not calculated in accordance with accounting principles generally accepted in the United States
Slide 4: Presenters
4 Presenters Bill Weber President & Chief Executive Officer, KeyW Mike Alber Executive Vice President, Chief Financial Officer, KeyW
Slide 5: Transaction Overview
5 Approvals and Timing Approved by KeyW and Sotera’s Board of Directors Expected transaction close during early part of Q2 2017, subject to customary regulatory approvals Overview Total cash purchase price of $235 million, subject to customary pre- and post-closing adjustments Represents 9.8
Slide 6: Sotera: Overview
6 Defense Intelligence Counterterrorism Other Fed. / Comm. National Intelligence 17% FBI CT 28% DHS CT 2% DoD Intel 31% DoD S&T 18% Other Federal & Commercial 4% Sotera: Overview A pure-play provider of innovative technology systems, solutions and services for critical U.S. national security mission
Slide 7: Transaction Rationale: Strategic
7 Transaction Rationale: Strategic Adds New and Complementary Capabilities Adds Significant Scale, Creating Unique, IC-focused Provider Provides Access to Large Portfolio of Prime Contracts and IDIQ Vehicles Provides New and Enhanced Access to Agencies within the IC
Slide 8: Provides New and Enhanced Access to Target Agencies within the IC
8 Provides New and Enhanced Access to Target Agencies within the IC Sotera Customers Increased Access to the IC FBI NAVY ARMY USMC NSA USASAC DISA ARCYBER DARPA DIA 25% 60%
Slide 9: Adds Significant Scale, Creating Unique, IC-focused Provider
9 Adds Significant Scale, Creating Unique, IC- focused Provider The acquisition of Sotera creates a pure-play, IC-focused services provider of scale – ~2,100 skilled employees, of which ~80% will have Top Secret or greater clearance Scale provides a more competitive cost model to drive additiona
Slide 10: Adds New and Complementary Capabilities
10 Adds New and Complementary Capabilities Agile Development Designs, develops, documents, tests, integrates and implements custom software modules and solutions focused on C4ISR and intelligence-related applications Services range from firmware development for weapons systems to web-based porta
Slide 11: Provides Access to Large Portfolio of Prime Contracts and IDIQ Vehicles
11 Provides Access to Large Portfolio of Prime Contracts and IDIQ Vehicles Enhanced BD engine will accelerate KeyW’s solutions growth strategy GSA Schedules ID/IQs & GWACs Prime / Sub Mix GSA Schedules Professional Engineering Services GSA Schedules MOBIS GSA Schedules IT Schedule 70 GSA Schedules S
Slide 12: Only public pure-play provider to the Intelligence Community
12 Only public pure-play provider to the Intelligence Community and its mission High-end portfolio of products and services in support of the most difficult and complex national security and counterterrorism missions Proprietary and highly-engineered solutions to address a larger segment of the Inte
Slide 13: Transaction Rationale: Financial
13 Highly-Achievable Cost Synergies $3.5 million of synergies expected to be realized in the 2nd half of 2017 Total expected long-term synergies of $7 – $10 million Transaction Rationale: Financial Enhanced Cash Flow Profile Projected cash flow profile of the combined business enables rapid de
Slide 14: Capitalization and Leverage
14 Capitalization and Leverage Commentary Pro Forma Capitalization Table The acquisition of Sotera is expected to be funded through existing balance sheet cash and a new $135 million 5-year Term Loan Committed financing in place Provides a well-balanced capital structure with flexibility for c
Slide 15: Summary
15 Summary Creates differentiated, pure-play intelligence services provider with pro forma 2017 $535 million of revenue and $62 million of adjusted EBITDA Accelerates KeyW management’s growth plan within the IC Balances and diversifies customer base and capabilities, adds substantial scale, and incr