Alight, Inc. · NYSE:ALIT
Alight — Alight Solutions — SPAC Merger (January 2021)
46 slides from Alight's SPAC merger presentation, January 2021
Slide 1: Investor Presentation
Investor Presentation January 2021 1
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are provided for illustrative purposes only and are
Slide 3: Disclaimer (cont'd)
Disclaimer (cont’d) Participants in the Solicitation Foley Trasimene and Alight and their respective directors, executive officers and other members of their management and employees, under SEC rules, may be deemed to be participants in the solicitation of proxies of Foley Trasimene’s stockholders i
Slide 4: Presenters
Presenters Bill Foley Richard Massey Stephan Scholl Katie Rooney Chairman, Foley Trasimene Chief Executive Officer, Chief Executive Officer Chief Financial Officer Foley Trasimene • Bill serves as Founder and • Richard serves as CEO of Foley • Stephan is CEO of Alight • Katie is CFO of Alight Chairm
Slide 5: Transaction Overview
Transaction Overview Alight is a leading healthcare, benefits and payroll services provider Pro Forma Valuation ($M) Sources & Uses ($M) Sources SPAC Cash in Trust $1,035 Pro Forma Equity Value $5,385 Forward Purchase Agreement 300 PIPE Investment (incl. $250M from Cannae and $150M from FNF) 1,550 E
Slide 6: Bill Foley's Valuation Creation Playbook
Bill Foley’s Valuation Creation Playbook Foley has achieved great success acquiring industry utilities with large total addressable markets at attractive values and driving transformation and multiple expansion. Common characteristics include: 1 Data & Workplace Benefits Industry Served Real Estate
Slide 7: Foley's Tools that Created $100B+ in Value will be Applied to Alight
Foley’s Tools that Created $100B+ in Value will be Applied to Alight 7 6 5 4 M&A Strategy 3 Management 2 Cost Savings Drive vertical and 1 Go-to-market Mentor and lead horizontal M&A Data & Analytics Leverage Optimus management team strategy Technology Enhance go-to- (process Ubiquity Full
Slide 8: Foley + Alight Have The Tools To Accelerate Revenue and Margin Growth
Foley + Alight Have The Tools To Accelerate Revenue and Margin Growth Mission-critical Transformation Significant opportunity for business at Foley value creation through revenue Initiatives intersection of healthcare, benefits Playbook Underway growth, margin improvement and multiple expansion & pa
Slide 9: Agenda
Agenda 01. Alight Overview 02. Business Details 03. Financial Overview Alight Solutions
Slide 10: Confluence of Factors Influencing the Future of the Workplace
Confluence of Factors Influencing the Future of the Workplace Healthcare deductibles are growing 8x faster Health & Financial responsibility of healthcare shifting to employees while also than wages Personalization facing increasing decision complexity, driving need for personalization 25% of he
Slide 11: Our Vision: The Preeminent Employee Engagement Partner
Our Vision: The Preeminent Employee Engagement Partner Our Mission Critical Solutions Our Capabilities that Drive Engagement Total Addressable Market Deliver and Administer ~3.5B employees globally Benefits & Payroll U.S. healthcare spending: ~$3.8T Enable Financial Security Personalization Data
Slide 12: Alight is Positioned to Win
Alight is Positioned to Win Ubiquity Unparalleled Data & Analytics 140M inbound connections to 30M+ lives 14% of US working population ~200M customer interactions UPoint annually Insurance, payroll and benefits ~70% of Fortune 100 ~50% of Fortune 500 ~10M chatbot interactions data 100+ countries 50+
Slide 13: Focused on Technology Transformation to Drive BPaaS-led Offerings
Focused on Technology Transformation to Drive BPaaS-led Offerings Phase II: Engagement Platform Next Gen Cloud Launch and Integration Phase I: Outcome & ROI (2021+) Aggregate products and services to BPaaS Offers Software and AI-focused solutions Phase 0: Foundation (2020-2021) Build breadth and s
Slide 14: Our Next Generation Cloud Platforms
Our Next Generation Cloud Platforms Modular platforms designed to provide a seamless experience across web, desktop, and mobile for any use case and workflow Alight Engagement Platform Global presence and scale unlocks the power Next Generation Platforms of data and analytics Health Cloud Wealth Clo
Slide 15: BPaaS Bookings and Commercial Investments Support Revenue Acceleration
BPaaS Bookings and Commercial Investments Support Revenue Acceleration 1 Success of BPaaS Evident in Bookings BPaaS revenue projections 2017-2023E ($M) $166M Key Wins include a number of large-cap energy and TCV of 2H’20 technology clients 1 BPaaS Bookings 2 TCV of Total Bookings2 $743M $743M +37% $
Slide 16: Attractive Financial Profile
Attractive Financial Profile Long term Highly recurring Profitable and Transformation Established embedded and diversified sustainable growth drives significant Platform with contracts revenue profile with significant operating leverage Upside from M&A and clear BPaaS Employer Solutions Gross Projec
Slide 17: Significant Operating Leverage to Drive Scale
Significant Operating Leverage to Drive Scale Gross Margin 38.7% 1.4% 34.6% 2.0% (1.5%) 33.4% 2.0% (1.6%) 3.7% (1.9%) 2019 1 Investments 2 M&A 3 Covid Impact 4 Optimus & 2021E New BPaaS BPaaS Conversions Optimus & 2023E Operating Sales (existing book) Operating Leverage Leverage 5 6 Revenue 7% 2% 10
Slide 18: Improved Growth and Margins Through Transformation
Improved Growth and Margins Through Transformation BPaaS Bundle Revenue Uplift1 BPaaS Bookings (% Total Bookings) Revenue Growth (%) 1.5x 50%+ 10% Increased 1.0x Growth 25% 6% Potential Client Revenue Client Revenue 2020 Long Term 2020 Long Term Without BPaaS With BPaaS Revenue Per Employee2 ($K) Em
Slide 19: Transformation Will Drive Multiple Expansion
Transformation Will Drive Multiple Expansion Comparable Companies: FV / 21E Adjusted EBITDA 27.1x 18.0x 18.5x 16.5x 13.8x 14.2x 12.2x Alight BPO Brokers Broadridge ADP Paychex HealthEquity Reference Only Primary Comparables Key Metrics Today LT BPO Brokers Revenue per employee: $175K $250K $44K $220
Slide 20: Agenda
Agenda 01. Alight Overview 02. Business Details 03. Financial Overview Alight Solutions
Slide 21: Mission-Critical Services That Help Employers Manage ~70% of Their Spend
Mission-Critical Services That Help Employers Manage ~70% of Their Spend1 Employer Solutions Professional Services Solutions to manage health & wealth benefits, and payroll for employers and Solutions to manage the workforce from the employees cloud (84% of revenue2) (13% of revenue2) Benefits Admin
Slide 22: Case Studies – Payroll & Health
Case Studies – Payroll & Health Big box grocery – Payroll Alight Solution Big tech – Health Alight Solution ~$10M in total payroll cost of Best-in-class, proven payroll processing in 46% of team not confident they Personalized concierge solution utilizing compliance and penalties collaborati
Slide 23: Long-term, Trusted Partner of Employers Across Diverse Industry Verticals
Long-term, Trusted Partner of Employers Across Diverse Industry Verticals Other ~650 ~3,700+ 13% Large enterprise clients Mid-market clients Consumer (>10k lives) (<10K lives) 21% 59% Tech & 50% of the Top 100 Employer 100+ Media 13% Fortune 500 Broker and strategic Solutions clients added a relatio
Slide 24: Technology, Data, and AI Drive Engagement
Technology, Data, and AI Drive Engagement Participant data Provider data • Cost • Demographics • Quality • Experience • Attitudinal • Payroll Opportunity data • Plan data • Centralized profile • Savings and investments • Cost savings opportunities Prioritizes personalized actions through • Gaps in c
Slide 25: Proven Track Record of Disciplined M&A
Proven Track Record of Disciplined M&A Strong Experience in M&A Significant Acquisition Opportunities Across Segments Moving from Health • Adding Clinical Navigation capabilities Benefits to Total • Engagement and digital wellness Health • Medical cost containment and reference-based pricing • Expan
Slide 26: Experienced Management Team with a Proven Track Record
Experienced Management Team with a Proven Track Record Chief Executive Chief Financial President & Chief Chief Product Strategy & Chief Product & Officer Officer Commercial Officer Services Officer Technology Officer Stephan Scholl Katie Rooney Cathinka Wahlstrom Colin Brennan Greg Goff 24 20 25 24
Slide 27: Agenda
Agenda 01. Alight Overview 02. Business Details 03. Financial Overview Alight Solutions
Slide 28: Strong Recurring Revenue Mix with Diversified Base
Strong Recurring Revenue Mix with Diversified Base Revenue ex-Hosted ($M)1 Solution Breakdown4 (% total revenue) Hosted6 % recurring Professional 80% 80% 79% 81% 81% 82% 84% 3% revenue2 Services 13% $3,235 Benefits % retention3 97% 98% 97% $2,909 (Health) $486 45% $2,641 $2,720 Payroll 19% $441 $240
Slide 29: One Alight BPaaS Driving Growth
One Alight BPaaS Driving Growth Go-to-Market with five current BPaaS solutions: BPaaS Bookings (TCV) Trajectory 2021E 2023E 1• Health Bundle BPaaS Bookings ~46% CAGR $843M 2• Cloud Application Services Bookings (excl. BPaaS) $395M 3• Global Payroll 4• Payroll & Cloud Services $1.4B $1.7B 5• Customer
Slide 30: BPaaS Opportunity Drives Long-Term Revenue Growth
BPaaS Opportunity Drives Long-Term Revenue Growth Revenue Growth (%) 3% 7% 6% 2% 7% 10% Slow down $2,760 Expansion in 1H 2020 due to next sales due to gen 5% 2H Covid platforms Total $2,945 $3,235 $2,378 $2,552 $2,710 Revenue ($M) (1%) 1H 2018 2019 2020E 2021E 2022E 2023E Transformation Phase 0 (Fou
Slide 31: Strong EBITDA and Free Cash Flow
Strong EBITDA and Free Cash Flow Sustained Steady EBITDA and Margins ($M, %) Adj. EBITDA Growth 20% 3% (8%) 9% 7% 20% $768 $640 $596 $600 $576 $550 Adj. EBITDA $479 +12% 2017A 2018A 2019A 2020E 2021E 2022E 2023E Adj. EBITDA margin1 21% 24% 23% 20% 22% 22% 24% Free Cash Flow 88% 85% 85% 80% 77% 77% 7
Slide 32: M&A Case Study: Driving Success in Healthcare Navigation with Compass
M&A Case Study: Driving Success in Healthcare Navigation with Compass Background Success in Integrating Solutions and Cross-Selling to Clients Critical to delivering ROI savings from Alight’s Health BPaaS Bundle Acquired in 2018 25-35% 75-90% Higher engagement with more touchpoints ~$35M in re
Slide 33: Business model alignment
Business model alignment Primary Comparables Reference Only HCM Solutions / Processors Brokers BPO Proprietary Technology Enabled Deep Domain Expertise Recurring Revenue / Transaction Based Model Revenue per Employee $175k $269k $220k $44k (Last FY Mean) Free Cash Flow Yield 6.4% 4.8% 6.6% 6.2% (CY2
Slide 34: Valuation Upside Relative to Peers
Valuation Upside Relative to Peers Primary Comparables Reference Only Brokers BPO 2021E FV / Adjusted EBITDA 2022E FV / Adjusted EBITDA 20.0x 18.6x 14.2x 13.3x 13.8x 12.2x 12.6x 11.4x 1 2 3 4 1 2021E P/E Multiple 19.3x 34.5x 20.4x 26.9x 2 2021E P / E / G 1.5x 3.7x 2.2x 3.0x ____________________ Sour
Slide 35: In Conclusion
In Conclusion We are well positioned in a large and growing addressable market Our ability to drive an engagement platform with employers and employees provides visible and growing revenue, EBITDA, and cash flow Our partnership — Foley + Blackstone + Alight — set up to drive transformation and deliv
Slide 36: Appendix
Appendix alight
Slide 37: Financial Summary
Financial Summary Summary Revenue Build 2017-2023E ($M) Historical Projected $M, unless otherwise stated 2017A 2018A 2019A 2020E 2021E 2022E 2023E Subscription 1,635 1,712 1,830 2,044 2,075 2,230 2,509 Project 302 284 271 238 245 238 240 Employer Solutions revenue 1,938 1,996 2,101 2,281 2,320 2,468
Slide 38: Financial Summary (cont'd)
Financial Summary (cont’d) Key Financial Items 2017-2023E ($M) Historical Projected $M, unless otherwise stated 2017A 2018A 2019A 2020E 2021E 2022E 2023E Memo: Total revenue 2,301 2,378 2,552 2,710 2,760 2,945 3,235 Employer Solutions 756 773 771 802 889 1,099 Professional Services 51 67 97 124 139
Slide 39: Reconciliation of Historical Adjusted EBITDA
Reconciliation of Historical Adjusted EBITDA Reconciliation of Historical Financials Historical Key Commentary $M, unless otherwise stated 2017A 2018A 2019A Net Income (Loss) $41 ($21) $22 11. Share based compensation awarded to employees Interest expense, net 114 208 224 Income tax expense 34 17 16
Slide 40: Reconciliation of Projected Adjusted EBITDA
Reconciliation of Projected Adjusted EBITDA Reconciliation of Projected Financials Projections Key Commentary $M, unless otherwise stated 2020E 2021E 2022E 2023E Net Income (Loss) pre-SBC 1 ($101) $9 $121 $221 11. Projections exclude SBC; LTIP compensation Interest expense, net2 237 112 112 111 prog
Slide 41: Operational Benchmarking
Operational Benchmarking Primary Comparables Reference Only HCM Solutions / Processors Brokers BPO 18% Revenue 9% growth 7% 6% 6% 5% 6% 5% 2022E Average: 8% Adj. EBITDA 28% Growth 7% 9% 7% 9% 6% 7% 10% 2022E Average: 12% Adj. 43% 33% 27% 25% 29% EBITDA 22% 21% 22% Margin 2022E Average: 30% 40% FCF 2
Slide 42: Valuation Benchmarking
Valuation Benchmarking Primary Comparables Reference Only HCM Solutions / Processors Brokers BPO 1 27.1x 18.5x 18.0x 16.5x 13.8x 14.2x 12.2x FV/Adj. EBITDA 2021E N/M Alight ADP Paychex Broadridge Average: 20.0x Ceridian HealthEquity IB / PS BPO 25.6x 16.5x 17.2x 15.2x 13.3x 12.6x 11.4x FV/Adj. EBITD
Slide 43: Integrated Solutions Across the Health Value Chain
Integrated Solutions Across the Health Value Chain Access to a Significant Base of Potential Members Health Solutions Strong Position Across the Health Value Chain in the Health Ecosystem Health Benefits Administration Integrated solutions that help consumers, enroll in, navigate, and 200+ large mar
Slide 44: Strong Heritage and Recognized Leadership in Wealth
Strong Heritage and Recognized Leadership in Wealth Wealth Solutions Market Differentiators DC Market Segments Defined Contribution Administration Ability to handle size & complexity Participants size/sector # of Sponsors # of Participants Focused on achieving the best financial outcomes <10K ~110
Slide 45: Leading Provider of Cloud-Based Payroll & HR Services Globally
Leading Provider of Cloud-Based Payroll & HR Services Globally Payroll & HR Solutions Strong and Unique Competitive Position Importance of Payroll • The only truly international Payroll & HR service provider, Payroll is one of the two highest expenses serving 100+ countries for companies and is th
Slide 46: Glossary
Glossary ACA – Affordable Care Act HRMS – Human Resources Management Systems Advisory – Personal financial advisory solution to aid in retirement HSA – Health Savings Account planning LM – Large Market, generally >10,000 employees CAS – Cloud Application Services: cloud-based application support Nav