Upbound Group, Inc. · NASDAQ:UPBD
Upbound — Merger or Acquisition (November 2020)
14 slides from Upbound's merger presentation, November 2020
Slide 1: Accelerating Rent-A-Center's long-term growth in virtual lease-to-own
Accelerating Rent-A-Center's long-term growth in virtual lease-to-own Rent-A-Center’s Announced Acquisition of Acima
Slide 2: Important Notices
IMPORTANT NOTICES Forward-Looking Statements This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding the anticipated benefits of the proposed transaction, the anticipated impact o
Slide 3: Today's Participants
TODAY’S PARTICIPANTS Mitch Fadel Maureen Short Jason Hogg Aaron Allred Director, CEO Executive Vice President, CFO Executive Vice President Founder, Chairman Rent-A-Center Rent-A-Center Preferred Dynamix Acima 2
Slide 4: Executive Summary
EXECUTIVE SUMMARY Strategic rationale and benefits of the transaction Key Acima standalone metrics Accelerates Rent-A-Center’s position as a premier platform across both traditional & virtual lease-to-own (“LTO”) solutions $1.25bn $225mm Revenue Adj. EBITDA Further diversification of retail part
Slide 5: Transaction Overview
TRANSACTION OVERVIEW Overview: ~$1.65bn purchase price representing ~7.3x Acima’s 2020E Adj. EBITDA1 Associated tax step-up provides estimated NPV of $200mm+, amortized over 15 years Financing considerations: Consideration mix of 77% cash / 23% stock2 on an equity value basis, with cash portio
Slide 6: Acima at a Glance
ACIMA AT A GLANCE Summary Total revenue Founded in 2013, Acima is a leading platform offering customers virtual lease-to-own $1.25bn solutions at POS via mobile technology $866mm $488mm Provides virtual lease-to-own solutions for a wide variety of products across both traditional and emerging le
Slide 7: Acima's Unique Capabilities
ACIMA’S UNIQUE CAPABILITIES Innovative technology platform ensures an excellent user experience for both consumers and merchants Application Approval Invoice Sign & Pay Funding Application submission Application to approval in a Invoice creation with Lease agreements are Multiple funding options thr
Slide 8: Our Journey to Grow the Virtual LTO Business
OUR JOURNEY TO GROW THE VIRTUAL LTO BUSINESS AcceptanceNOW Merchant’s Preferred Preferred Dynamix Acima + + + Foundational Technology driven Proprietary platform A leading virtual third-party virtual offering and transforming the platform with superior program enhanced back business from technology
Slide 9: Poised to Capitalize on a Massive Market Opportunity
POISED TO CAPITALIZE ON A MASSIVE MARKET OPPORTUNITY Total Addressable Market for LTO $40bn - 50bn New verticals Ecommerce / E-commerce LTO Expansion into broader marketplace marketplace merchant verticals at Provide virtual LTO the POS solutions available in Digital / Omni- brick and mortar to Chan
Slide 10: Accelerated Growth Through a Proprietary Digital Platform
ACCELERATED GROWTH THROUGH A PROPRIETARY DIGITAL PLAFTORM Low-friction third-party LTO Cutting edge identity verification Frictionless front-end virtual program driven by technology and fraud detection techniques retail shopping experience Seamless LTO across mobile, web & store + Diversified mercha
Slide 11: Acima Rapidly Accelerates the Preferred Lease Business
ACIMA RAPIDLY ACCELERATES THE PREFERRED LEASE BUSINESS 2020E Revenue ($mm) 2020E Adj. EBITDA ($mm) Active Locations4 $1,250 $2,067 $225 $294 ~15,000 ~18,000 18% $817 $69 14% ~3,000 8% 1 Combined 1,2 3 Combined Combined Business Business Business Pro forma 2020E growth: 28%5 Pro forma 2020E growth: 3
Slide 12: Adding Acima Expected to Significantly Improve Our Financial Profile
ADDING ACIMA EXPECTED TO SIGNIFICANTLY IMPROVE OUR FINANCIAL PROFILE 2020E Consolidated Revenue ($mm) 2020E Consolidated Adj. EBITDA ($mm) $2,067 $4,060 $294 $541 $1,250 $225 $817 $1,993 $247 $69 Pro forma combined business will represent Pro forma combined ~51% of total revenue business will repres
Slide 13: Balance Sheet & Capital Allocation Priorities Post-Close
Investing in working capital to fuel organic growth of the #1 largely untapped virtual LTO business BALANCE SHEET & CAPITAL Reducing net leverage to <2.0x within 18 months ALLOCATION #2 post-close, with a long term leverage target of 1.5x, while maintaining robust liquidity PRIORITIES POST-CLOSE Dri
Slide 14: Communication Plan
COMMUNICATION PLAN #1 #2 2021 guidance for Rent- A Pro Forma combined A-Center Inc. will be forecast will be provided provided when Q4 2020 following close of financials are reported transaction 13
Upbound Group — Merger or Acquisition (November 2020) on 6ix