Target Hospitality Corp. · NASDAQ:TH
Target Hospitality — Platinum Eagle Acquisition — SPAC Merger (February 2019)
27 slides from Target Hospitality's SPAC merger presentation, Feb 7, 2019
Slide 1: Proposed Business Combination Between Platinum Eagle and Target Hospitality
Confidential Information Proposed Business Combination Between P LATINUM E AGLE AND T ARGET H OSPITALITY
Slide 2: Disclaimer: Important Information
2 Disclaimer Important Information This investor presentation (“Investor Presentation”) is for informational purposes only and does not constitute an offer to sell, a s olicitation of an offer to buy, or a recommendation to purchase any equity, debt or other financial instruments of Platinum Eagle A
Slide 3: Disclaimer: No Offer or Solicitation
3 Disclaimer No Offer or Solicitation This Investor Presentation does not constitute a solicitation of a proxy, consent or authorization with respect to any securi tie s or in respect of the Business Combination. This Investor Presentation also does not constitute an offer to sell or the solicitatio
Slide 4: Entrepreneurial Team with Proven Execution Capabilities
4 Troy Schrenk Chief Commercial Officer Andy Aberdale Chief Financial Officer Entrepreneurial Team with Proven Execution Capabilities TL’s Core Management Team has been together since the “ beginning ” TL has the most experienced team in the industry Hospitality, overall accommodations operations, s
Slide 5: Nation's Largest Network of Flexible Accommodation Space
5 Nation’s Largest Network of Flexible Accommodation Space… Business Model Combining Most Attractive Elements of Lodging, Catering and Specialty Rental Sectors to Produce Adj. EBITDA Margins Over 50% • Turnkey solutions with integrated design and installation, catering, security, recreational and ot
Slide 6: Target Hospitality Investment Highlights
6 6 Target Hospitality Investment Highlights (1) Click to edit footnote text Largest Network of U.S. Communities Serving Most Attractive Shale Basins 1 • Represents ~13,000 beds serving premier customer base through industry’s largest network • $ 470.1mm of Gross Book Value as of September 2018 in a
Slide 7: Three Way Merger Creating Powerful Public Platform for Growth
7 Click to edit footnote text Three Way Merger Creating Powerful Public Platform for Growth • 22 Facilities (Including 15 in Permian) • ~13,000 Beds • Unmatched Network scale blanketing Permian and Bakken Basins Platinum Eagle (PEAC) Target Hospitality (TH) • High margin services which enhance value
Slide 8: Consolidated Financial Performance – Growth Accelerating
8 8 $85.5 $80.1 $134.3 $149.3 $177.5 2016A 2017A LTM September 2018 2018F 2019E Consolidated Financial Performance – Growth Accelerating Confidential Information • Consolidated Adj. EBITDA CAGR from 2016 - 2019E of ~28% • 2019E Adj. EBITDA forecast solely from current total contract value and full -
Slide 9: Multi-Billion Dollar U.S. Market Opportunity
9 Multi - Billion Dollar U.S. Market Opportunity Delaware Shale Midland Shale Multi - Billion Dollar U.S. Market $1.0 Billion in Permian Alone Carlsbad, NM Odessa, TX Midland, TX • 15 facilities blanketing the Permian Basin, a $1.0 billion opportunity alone • Power of network effect provides geograp
Slide 10: Government and Hospitality End-Markets; Expanding Catering and Managed Services
10 10 • Growing catering and managed services platform across diversity of end - markets, both organically and through acquisitions − Government, Pipelines, Corrections and Education • Currently identified organic growth opportunities include: Government and Hospitality End - Markets • With approved
Slide 11: Why We Win – Customer-Centric Focus
11 Why We Win – Customer - Centric Focus and The Target 12 Meeting Customer Needs Through Differentiated and Unparalleled Suite of Solutions 01 FOOD 02 REST 03 CONNECTION 04 WELLNESS 05 COMMUNITY 06 HOSPITALITY ENGAGEMENT 07 PERFORMANCE 08 SAFETY 09 LOYALTY 10 PRODUCTIVITY 11 PREPAREDENESS 12
Slide 12: Premier Customer Base and Durable Commercial Contracts
12 Premier Customer Base and Durable Commercial Contracts Serving the Largest O&G Companies in the United States Business Underwritten by Strong Commercial Contracts • Diversified across O&G value chain • Focus on large Upstream customers underpins stability and growth • Integrated into customer pla
Slide 13: Resilient and Strengthened Platform Addressing Growth Opportunities
13 - 1,250,000 2,500,000 3,750,000 5,000,000 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Barrels Per Day Permian Basin and Williston Basin Production (1) Permian Basin Production Permian Basin Forecast Williston Basin Production Williston Basin F
Slide 14: TH's Powerful Unit Economics
14 14 ($25,000,000) ($5,000,000) $15,000,000 $35,000,000 $55,000,000 $75,000,000 $95,000,000 $115,000,000 $135,000,000 $155,000,000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 TH’s Powerful Unit Economics… Click to edit footnote text TH Overview • Rigorous process for vetting projects and d
Slide 15: Consolidated Adj. EBITDA Bridge LTM September 2018 to 2019E
15 15 $134.3 $160.9 $177.5 $6.6 $10.5 $11.1 $11.7 $16.6 Consolidated Adj. EBITDA Bridge LTM September 2018 to 2019E Confidential Information (1) Reflects Public Company c osts, increased commission expense and other SG&A related items. (2) Assumes COGS PPPD improves from $39.58 September 2018 LTM to
Slide 16: Exceptional Free Cash Flow Profile
16 16 $149.3 $32.7 $2.7 $21.0 $125.6 $64.3 $27.1 $1.5 2018F Adj. EBITDA TL Maintenance Capex Deferred Revenue 2018F Discretionary Free Cash Flow TL Growth Capex SH Growth Capex SH Capex Facilities Improvement 2018F Free Cash Flow $177.5 $138.5 $3.0 $17.5 $157.0 $18.5 2019E Adj. EBITDA TL Maintenance
Slide 17: United States: Outlook and Focus
17 United States: 206 Outlook and Focus Upside Beyond Forecast: Organic Growth in Core Business (all new beds) Size (~# of Beds) First Revenues Capex ($mm) Minimum Contract Term Minimum Contracted Adj. EBITDA ($mm) 250 Mid 2019 $3.5 3 years $4 – $5 500 Mid 2019 $25 3 years $27 320 Mid 2019 $16 3 yea
Slide 18: Incremental Upside – Major Projects and M&A
18 18 LOI Awarded for U.S. Refinery Project • LOI executed in 2018 with anticipated 2019 start date • Existing 596 bed community to support ~24 month project • Supporting the construction of a state - of - the - art crude oil refinery sited on approximately 150 acres in Belfield, North Dakota – the
Slide 19: Appendix
19 Appendix
Slide 20: Entrepreneurial Team Supported by Experienced Board
20 Entrepreneurial Team with Proven Execution Capabilities Supported by Experienced Board • TL’s Core Management Team has been together since the “ beginning ” • TL has the most experienced team in the industry • Hospitality, overall accommodations operations, sales and construction are industry lea
Slide 21: Growth and Stability Capitalizing on Long-Term Investment in U.S. Shale
21 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 0% 20% 40% 60% 80% 100% 120% 140% Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 M
Slide 22: TH's Upside: Data Analytics Driving the Business
22 22 TH’s Upside: Data Analytics Driving the Business Sales and Operational Planning Process Commercial Processes (Systems) Management (People) • Revenue optimization tactics • Review weekly rates & utilization trends • Monitor and coach sales performance • Weekly sales/BD call to review − Regional
Slide 23: Illustrative Transaction Framework
23 Illustrative Transaction Framework Click to edit footnote text P F equity value breakdown Ownership PF Shares SPAC shareholders 30.8% 32.5mm SPAC sponsor promote shares 5.8% 6.1mm PIPE shareholders 7.6% 8.0mm Sellers rollover equity 55.9% 59.1mm Total shares outstanding 100.0 % 105.7mm $1,397 $1,
Slide 24: Valuation Multiples by Sector
24 Catering & Services 9.0x - 12.0x 2019E EBITDA Hotel/Lodging 9.0x - 13.0x 2019E EBITDA Specialty Rental 8.5x - 10.5x 2019E EBITDA ▪ Lodging and accommodations businesses – Room occupancy and ADR key metrics for revenue generation – High margin profiles at owned locations ▪ Core business of long -
Slide 25: Target Comparables Universe
25 Click to edit footnote text (1) EBITDA figures are all restated for extraordinary items. (2) Latest Thomson/ FirstCall /Bloomberg estimates and Wall Street Research . (3) Market Value calculated using treasury stock method to quantify impact of Founder Shares and Warrants. Enterprise Value, Reven
Slide 26: Reconciliation of Net Income to Adjusted EBITDA
26 Click to edit footnote text Reconciliation of Net Income to Adjusted EBITDA For the trailing twelve months from October 1, 2017 to September 30, For the Year Ended December 31, For the Year Ended December 31, Net Income $ 22,366 $ 15,533 $ 30,012 Income tax expense 20,536 25,768 17,442 Interest e
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Platinum Eagle Acquisition — SPAC Merger (February 2019) on 6ix