Enel Americas S.A. · BCS:ENELAM
Enel Americas — Merger or Acquisition (November 2015)
26 slides from Enel Americas's merger presentation, Nov 5, 2015
Slide 1: Project Carter II
Project Carter II Presentation to the Board of Directors November 5th, 2015
Slide 2: Disclaimer - Notice to Recipient
Disclaimer - Notice to Recipient Confidential BofA Merrill Lynch provided these materials to the Board of Directors of Enersis S.A. (“Enersis”) (in its capacity as such) for the exclusive benefit and use of the Board of Directors of Enersis (in its capacity as such) in connection with and for purpos
Slide 3: Disclaimer - Additional Notice to Recipient
Disclaimer - Additional Notice to Recipient Confidential “Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliat
Slide 4: Table of Contents
Project Carter II Presentation to the Board of Directors Table of Contents 1. Transaction Description 1 2. Summary of Expected Benefits 8 Appendix 16
Slide 5: 1. Transaction Description
1. Transaction Description Bank of America a Merrill Lynch
Slide 6: Transaction Description: Introduction
Transaction Description Introduction Summary Transaction Overview and BofAML Mandate On April 22, 2015, the Board of Directors of Enel (Enersis’ controlling shareholder) proposed that the Board of Directors of Enersis (“ENI” or the “Company”), Endesa Chile (“EOC”) and Chilectra (“CHI”) explore the p
Slide 7: Transaction Workstreams
Transaction Description Introduction (cont’d.) Transaction Workstreams 7-May 19-May 27-Jul 30-Oct 5-Nov Nov. Financial Advisor Preliminary Transaction Summary of Final Valuation Report Rationale for Transaction and Kick-off Meeting Transaction Review Summary Transaction Analysis Non-Deal Roadshow (“
Slide 8: Transaction Description: Overview
Transaction Description Overview Through a series of spin-offs and mergers, Enersis would be separated into two entities: 1 Enersis Chile: Chile-only footprint. Would include assets currently under Enersis, Chilectra and Endesa Chile 2 Enersis Americas: Umbrella Company for Enel's pan-Latam investme
Slide 9: Transaction Steps
Transaction Description Transaction Steps Spin-Offs Merger Transactions 1 Split Endesa Chile’s and Chilectra’s 2 Split the Chilean assets of Enersis into a 3 Consolidate the international activities international perimeters into two Chilean Chilean NewCo (Enersis Chile) through the merger of EOC Ame
Slide 10: Main Milestones (Tentative Dates)
Transaction Description Main Milestones (Tentative Dates) 2015 2016 1 Enersis, EOC and CHI 6 ENI, EOC and CHI 4 -Americas BoDs call 7 Verification of for ESMs to approve BoDs define an ENI, EOC and CHI Enersis, EOC and conditions the Merger indicative ESMs approve Spin- CHI Americas ESMs precedent a
Slide 11: ENI's Key Events Timeline & Share Price Performance vs IPSA
Transaction Description ENI’s Key Events Timeline & Share Price Performance vs IPSA July 25, 2012: December 7, 2013: March 31, 2014: April 30, 2014: Enersis July 31, 2014: Enel September 17, March 19th, 2015 April 22nd, 2015 April 28th, 2015: June 30, 2015 Enersis announces Enersis’s Shareholder End
Slide 12: Building Blocks of Valuation
Transaction Description Building Blocks of Valuation Enersis Equity Value (US$ bn) The Company has provided a business plan that assumes $16.0(2) Carter II takes place and includes operational $1.7 (1) efficiencies. Additionally $2.7 $0.3 the Company has $13.9 specified tax benefits ($0.03) (3) and
Slide 13: 2. Summary of Expected Benefits
2. Summary of Expected Benefits
Slide 14: Expected Benefits of the Transaction
Expected Benefits of the Transaction A Strategic Fit Enhancement of Enersis’ current competitive advantages and alignment with ENI’s strategy in recent years with a Geographic Streamline decision making channels by allowing managers to focus more effectively on pursuing their own distinct Business p
Slide 15: Strategic Fit
A Strategic Fit The Proposed Transaction Fits with Enersis’ Strategy Enersis’ Current Competitive Advantages In the last years, Enersis has been following an integrated geographical strategy which is supported by the following competitive advantages, risk mitigating factors and/or development opport
Slide 16: Business Focused by Geography
A Strategic Fit Business Focused by Geography Enersis Chile v. Enersis Americas: EBITDA Analysis(1) ENI's management believes that de-merger makes sense from scale, strategic, and managerial standpoints • Scale: Chilean and Americas operations are each sizeable enough to 802 474 421 373 sustain stan
Slide 17: Simplification of Corporate Structure
B Simplification of Corporate Structure Enersis’ Current Structure is Complex and Inefficient 11 ____________________ Source: ENI’s Management
Slide 18: Target Structure Increases Direct Ownership of Operating Companies
B Simplification of Corporate Structure Target Structure will Increase Direct Ownership of Operating Companies 1 Enersis Chile: Chile-only footprint. Would include Chilean Assets currently under Enersis, EOC and Chilectra 2 Enersis Americas: Umbrella company for Enel's pan-Latam investments. Would i
Slide 19: Building Pure-Play Investment Vehicles
C Building Pure-Play Investment Vehicles… …With Attractive Equity Stories Pure Chilean player with stable cash flow generation Latam growth platform Steady growth in energy demand, in line with GDP Significant growth potential in per capita energy consumption Mixed credit ratings throughout countrie
Slide 20: Should Remain Among the Top 10 IPSA Members
C Building Pure-Play Investment Vehicles… …And That Should Remain Among the Top 10 IPSA Members Illustrative Benchmarking: Enersis Chile and Enersis Americas vs. Current IPSA Members 12.0 Falabella $9.9 0.1% Top 10 IPSA Members ENI Americas Post Merger $8.5 0.1% (+) 11.0 Falabella Enersis $7.1 0.1%
Slide 21: Appendix
Appendix Bank of America a Merrill Lynch
Slide 22: Enersis Multiples-Based SOTP Valuation – Backup
Appendix Enersis Multiples-Based SOTP Valuation – Backup Company EV / EBITDA 2016E EV Net Debt Other EV. Total Equity Value Equity Value to Enersis % of Total EBITDA 2016E Min Mean Max Min Mean Max Jun-15 Adj. Jun-15 Min Mean Max Min Mean Max Value Chile Dx: Chilectra + Subsidiaries 9.7x 10.2x 10.7x
Slide 23: Criteria for Selection of Comparable Companies
Appendix Criteria for Selection of Comparable Companies and Other Considerations CHI Chile (Gx) Since there are no listed pure-play Chilean Dx companies, Aguas Andinas was considered as the closest comparable due to business profile similarities: regulated business, tariff setting mechanism, limited
Slide 24: Criteria for Selection of Comparable Companies (cont'd.)
Appendix Criteria for Selection of Comparable Companies and Other Considerations (cont’d.) Fortaleza Tractebel and AES Tiete, both among the most relevant private power generators in the country, were considered as the closest comparables (Gx) Other listed companies in the sector were not considered
Slide 25: Trading Comparables - Generation
Appendix Trading Comparables - Generation Market Cap Enterprise EV / EBITDA P/E Country (US$) Value (US$) LTM 15' 2015E 2016E LTM 15' 2015E 2016E Generation Endesa Chile Chile $10,461 $13,888 8.5x 7.3x 6.4x 15.6x 15.6x 12.5x Colbun Chile 4,798 5,724 11.3 10.4 9.5 21.5 21.5 17.8 AES Gener Chile 4,082
Slide 26: Trading Comparables – Distribution and Transmission
Appendix Trading Comparables – Distribution and Transmission Market Cap Enterprise EV / EBITDA P/E Country (US$) Value (US$) LTM 15' 2015E 2016E LTM 15' 2015E 2016E Distribution Chilectra Chile $3,182 $2,476 9.6x n.a. n.a. n.a. n.a. n.a. Aguas Andinas Chile 3,111 4,326 10.6 10.7 10.2 16.4 16.4 15.7
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