Slide 1: Overview of REPAY Business Combination with Thunder Bridge Acquisition, Ltd.
1 Overview of REPAY Business Combination with Thunder Bridge Acquisition, Ltd. April 2019
Slide 2: Disclaimer
2 Disclaimer This presentation (the “ Presentation ”) contemplates the purchase by Thunder Bridge Acquisition, Ltd. (“ Thunder Bridge ”) of Hawk Parent Holdings LLC (“ REPAY ” or the “ Company ”) by which REPAY will become a subsidiary of Thunder Bridge (the “ Transaction ”). No Offer or Solicitatio
Slide 3: Table of Contents
3 Table of Contents I. Introduction & Transaction Overview II. REPAY Overview III. REPAY Financial Overview Appendix
Slide 4: I. Introduction & Transaction Overview
4 I. Introduction & Transaction Overview
Slide 5: Attendees
5 Attendees Tim Murphy CFO John Morris CEO & Co - Founder ▪ As CEO, John Morris oversees the strategic direction of REPAY, including overall market strategy, new product development, sales and marketing, acquisitions and financial oversight ▪ Prior to REPAY, Mr. Morris served as the EVP of Sales and
Slide 6: Who We Are
6 Low Chargeback Rates (7) 0.20% Historical Net Revenue CAGR (2)(3) 27% Who We Are 1) Source: Stax – REPAY Market Sizing Report, commissioned by REPAY; Stax prepared surveys, secondary research, and analysis. Janu ary 2018. 2) Source: Management metric for 2018A. 3) CAGR is from 2016A – 2018A; Net R
Slide 7: Proposed Transaction Overview
7 Proposed Transaction Overview 1) See “Transaction Summary” on slide 31 and “Proposed Capitalization and Ownership” on slide 32. 2) See “Proposed Capitalization and Ownership” on slide 32 for calculation. 3) See “Income Statement” on slide 34. Transaction Structure (1) Valuation Cap Structure / PF
Slide 8: II. REPAY Overview
8 II. REPAY Overview
Slide 9: REPAY's Business Strengths and Strategies
9 REPAY’s Business Strengths and Strategies A Leading, Omni - Channel Payment Technology Provider Capitalizing on the Large, Underserved Market Opportunities in Existing and New Verticals Card and Debit Payments Underpenetrated in Existing Verticals REPAY Has Built a Leading Platform Based on Vertic
Slide 10: Capitalizing on the Large, Underserved Market Opportunities in Existing and New Verticals
10 Capitalizing on the Large, Underserved Market Opportunities in Existing and New Verticals 1) Source: Stax – REPAY Market Sizing Report; Based on Stax web survey, secondary research, and analysis. January 2018. 2) Source: Management metric for 2018A. REPAY’s three existing verticals represent ~$53
Slide 11: Card and Debit Payments Underpenetrated in Existing Verticals
11 Card Payment Penetration Card and Debit Payments Underpenetrated in Existing Verticals Note: Credit generally not accepted as payment option in REPAY’s existing end markets. 1) Source: The Nilson Report – December 2016. Represents debit and credit as a percentage of all U.S. consumer payment syst
Slide 12: REPAY Has Built a Leading Platform Based on Vertical Expertise
12 Attractive value proposition to both merchants and end consumers drives strong client growth and penetration REPAY Has Built a Leading Platform Based on Vertical Expertise Merchants in Existing and New Verticals Consumers Pay Anywhere, Any Way, Any Time ▪ Accelerated payment cycle (ability to len
Slide 13: REPAY Has Built a Leading Platform Based on Vertical Expertise (cont.)
13 • Payment Processing Platform provides significant value proposition • Opportunity across payment / billing management Payment Channels Debit REPAY Instant Funding Consumer Merchant Receives REPAY Has Built a Leading Platform Based on Vertical Expertise (cont.) 3 REPAY’s model empowers both merch
Slide 14: REPAY Has Built a Leading Platform Based on Vertical Expertise (cont.)
14 REPAY has 3 different web - based solutions, depending on whether merchants are interested in a Virtual Terminal, Online Customer Portal, or a Hosted Payment Page customized to their brand Web REPAY Has Built a Leading Platform Based on Vertical Expertise (cont.) REPAY’s omni - channel payment an
Slide 15: Next-Generation Technology Supported by Robust Infrastructure
15 Next - Generation Technology Supported by Robust Infrastructure 4 Proprietary Technology and Agile Development Integrations with Customers’ Software Systems Underwriting / Regulatory / Industry Compliance Expertise Strong Relationships with Card Associations Proprietary Bank Partnerships Robust P
Slide 16: Key Software Integrations Supplement REPAY's Differentiated Sales Strategy
16 REPAY leverages a vertically tiered sales strategy supplemented by software integrations to drive new merchant acquisitions Software Integrations Key Software Integrations Supplement REPAY’s Differentiated Sales Strategy ▪ Direct sales model that is structured by vertical and by production tier ▪
Slide 17: Attractive and Diverse Client Base
17 x 3,400+ merchants (2) x 11,000+ merchant locations (1) x 98% volume retention (3) x ~$3.0 mm annual payment volume per card merchant (4) x ~4 - year average tenure for top 10 merchants (5) Attractive and Diverse Client Base 1) Source: Management estimate. 2) Source: Management estimate as of Dec
Slide 18: Demonstrated Ability to Acquire and Integrate Businesses
18 Demonstrated Ability to Acquire and Integrate Businesses 7 REPAY’s proven acquisition strategy illustrates the value of the platform across verticals 2017 2016 Represents a significant opportunity to enhance organic growth in existing verticals and accelerate entry into new markets and services D
Slide 19: Multiple Growth Opportunities
19 Multiple Growth Opportunities REPAY’s leading platform and attractive market opportunity position it to build on its record of robust growth and profitability Expand Usage and Increase Adoption Future Market Expansion Opportunities Strategic M&A Acquire New Merchants in Existing Verticals ▪ Lever
Slide 20: Successful Leadership Team With Deep Industry Expertise
20 Successful leadership Team With Deep Industry Expertise John Morris CEO & Co - Founder Shaler Alias President & Co - Founder Tim Murphy CFO Jason Kirk CTO Susan Perlmutter CRO Mike Jackson COO Kristen Merrill VP of Finance Jake Moore Head of Corporate Development REPAY’s leadership team has signi
Slide 21: III. REPAY Financial Overview
21 III. REPAY Financial Overview
Slide 22: Financial Highlights
22 Financial Highlights Source: Management estimates. 1) Source: Management metric for 2018A. Predominantly represents debit transaction volume. 2) Volume retention for YTD period as of December 2018 calculated as 1 – (Lost Volume / Total Volume Processed in Prior Year Period); “Lost Volume” represe
Slide 23: History of Strong and Continued Payment Volume Growth
23 $4.4 $5.2 $7.5 $9.2 2016A 2017A 2018A 2019B 2020E $11.0 – $11.2 History of Strong and Continued Payment Volume Growth REPAY has generated strong, consistent volume growth, resulting in ~$7.5 bn in annual payment processing volume in 2018 Total Payment Volume ($ in bn) Volume Retention REPAY’s int
Slide 24: Historical and Forecasted Financials
24 $29.1 $36.3 $55.0 $71.6 57% 64% 67% 71% 2016A 2017A 2018A 2019B 2020E Historical and Forecasted Financials Gross Profit (3) / Gross Margin ($ in mm) Gross margins are improving due to a decrease in processing costs Source: Management estimates for 2019 and 2020. Note: Historical CAGR is from 2016
Slide 25: Operational Benchmarking
25 Operational Benchmarking Source: Capital IQ as of 3/15/2019, modified to reflect certain publicly available information. Note: Average metric is the mean of the peer group, excluding Square. Note: First Data was omitted from the list of peers because of its announced merger with Fiserv on 1/16/20
Slide 26: Valuation Benchmarking
26 Valuation Benchmarking Source: Capital IQ as of 3/15/2019, modified to reflect certain publicly available information. Note: Average metric is the mean of the peer group, excluding Square. Note: First Data was omitted from the list of peers because of its announced merger with Fiserv on 1/16/2019
Slide 27: Valuation Benchmarking (cont.)
27 -5% 5% 15% 25% 35% Valuation Benchmarking (cont.) Source: Capital IQ as of 3/15/2019, modified to reflect certain publicly available information. Source: REPAY 2020E midpoint of projection range was used for Net Revenue and Adjusted EBITDA. Range was derived from Managem ent estimates. Note: Firs
Slide 28: Leverage Benchmarking
28 4.3x 3.3x 2.4x 3.7x 3.6x 2.7x 2.5x 1.9x Leverage Benchmarking March 2019E (2) 2019E (3) 2020E (4) LTM Net Debt / Adjusted EBITDA (1) NM Source: Capital IQ as of 3/15/2019, modified to reflect certain publicly available information. Note: First Data was omitted from the list of peers because of it
Slide 29: Investment Thesis
29 Investment Thesis 1) Low Chargeback rates of 0.20% based on Management data of volume processed through a primary processor, representing approxim ate ly 80% of total volume. Chargeback rate is YTD as of December 2018. Chargebacks, represented as a % of volume, are debited from the merchant’s acc
Slide 30: Appendix
30 Appendix
Slide 31: Transaction Summary
31 Transaction Summary Transaction ▪ Thunder Bridge Acquisition, Ltd. has entered into a definitive agreement to acquire REPAY ▪ The transaction is intended to utilize an up - C structure and is expected to close Q2 2019 ▪ Thunder Bridge will become a Delaware corporation and as the post - closing c
Slide 32: Proposed Capitalization and Ownership
32 Proposed Capitalization and Ownership Note: Merger consideration is $600 million subject to adjustment for REPAY debt, excess transaction expenses, working capital ad justments, employee transaction bonuses, cash and certain contingent obligations. The presentation on this slide reflects adjustme
Slide 33: Post-transaction Structure
33 Post - transaction Structure Voting Rights; No Economic Rights LLC Units (Exchangeable for Thunder Bridge Class A) Voting and Economic Rights Existing REPAY Shareholders SPAC Public and Sponsor Shareholders Class A Class V
Slide 34: Income Statement – Historical and Forecasted
34 Income Statement – Historical and Forecasted Source: Management estimates for 2019 and 2020. Note: This Presentation includes forecasted 2019 Adjusted EBITDA and ranges of forecasted 2020 Adjusted EBITDA for REPAY. Thi s P resentation does not provide a reconciliation of this forward - looking no
Slide 35: Adjusted EBITDA Reconciliation – Historical
35 Adjusted EBITDA Reconciliation – Historical Note: This Presentation includes forecasted 2019 Adjusted EBITDA and ranges of forecasted 2020 Adjusted EBITDA for REPAY. Thi s P resentation does not provide a reconciliation of this forward - looking non - GAAP financial measure to the most directly c
Slide 36: Personal Loan Market is Stable
36 - 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013
Slide 37: Enterprise Multiples and Operating Statistics
37 Enterprise Multiples Operating Statistics Margins Leverage Value EV / Revenue EV / EBITDA Net Revenue % Growth EBITDA % Growth EBITDA Ratio Company Name ($ mm) CY 19E CY 20E CY 19E CY 20E CY 19E CY 20E CY 19E CY 20E CY 19E CY 20E CY 19E CY 20E CY 19E CY 20E CY 18E $653 6.5x 5.4x - 5.5x 14.8x 12.1
Slide 38: Thunder Bridge Management
38 Thunder Bridge Management Gary Simanson Chief Executive Officer, Thunder Bridge Peter Kight Executive Chairman, Thunder Bridge ▪ Peter Kight was the Founder, Chairman, and CEO of CheckFree until selling to Fiserv in December 2007 ▪ After the merger, Peter served as the Vice - Chairman for three y
Slide 39: R Espa
R Espa Realtime Electronic Payments