Crown Capital Partners, Inc. · TSXV:CRWN
Crown Capital Partners — Investor Presentation (June 2017)
24 slides from Crown Capital Partners's investor presentation, June 2017
Slide 1: Crown Capital Partners Inc. Investor presentation June 2017
CROWN CAPITAL PARTNERS INC. TSX: CRWN Investor presentation June 2017
Slide 2: Forward looking statements
Forward looking statements This presentation contains certain “forward looking statements” and certain “forward looking information” as defined under applicable Canadian securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”, “
Slide 3: There is a major funding gap in Canada's middle market
There is a major funding gap in Canada’s middle market 6,000 Canadian companies public / private bank debt equity Poorly structured to service mid-market Dilutive Less active due to increased regulation Ownership control & capital requirements 3
Slide 4: Canada's mid-market: The unsung hero of our economy
Canada’s mid-market: The unsung hero of our economy 31% of Canada’s GDP 1.9mm 6,000 Canadian jobs Canadian companies $ $670B annual sales The middle market has significantly outpaced the growth of large cap companies 4
Slide 5: Customized solutions for the mid-market
Customized solutions for the mid-market Their Our situation solution Fast growing and capital constrained Minimal to no dilution Dilution averse Customized transactions Need flexibility and customization Owners retain vast majority of economic rewards, plus operating control Want a financial partner
Slide 6: Crown Capital Partners: Financing Canada's middle market
Crown Capital Partners: Financing Canada’s middle market 16+ year track 41 transactions $575 million in loans record to date 6
Slide 7: How we choose investments
How we choose investments Successful Companies Market allows 2 3 of Premium Pricing Asset Rich Great companies, great pricing drives our model 7
Slide 8: Our simple strategy
Our simple strategy Double impact on Loan to Value Cash flow = Enterprise value Debt levels = Equity upside Greatly limits default risk 8
Slide 9: Alternative capital for mid-market companies
Alternative capital for mid-market companies Transitory capital with High-value portfolio comprised of high returns stable, sustainable cash flows Type Special situations Long term Fixed rate long-term loans / participating Form Senior / subordinated debentures loans / perpetual debt structures / re
Slide 10: Crown's solutions at work: Medicure Inc.
Crown’s solutions at work: Medicure Inc. About Situation Option to increase interest in Apicore Specialty pharmaceutical company focused on cardiac therapeutics for Dilution sensitive U.S. hospital market Priority on certainty and speed of execution Lead product is Aggrastat® for non- ST elevation a
Slide 11: Crown's solutions at work: Source Energy Services
Crown’s solutions at work: Source Energy Services About Situation Leading supplier of frac sand to Currently supplies approximately 50% of the proppant key oil and gas producers in market in Western Canada Western Canada Well positioned to capitalize on intensification of usage of frac sand as well
Slide 12: Crown's solutions at work: CRH Medical
Crown’s solutions at work: CRH Medical $12.00 $11.00 $10.00 Crown Capital invests $22.5M $9.00 in CRH Medical to fund $8.00 acquisition $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 2015 2016 2017 Crown’s solution resulted in $300+ million difference in value (vs. equity) 12
Slide 13: Established track record of success
Established track record of success 16 14 14 Number of investments 12 10 Consistent strong returns 8 7 with low volatility 6 6 4 3 2 2 Average IRR of ~15% 0 <0% 0-10% 10-20% 20-30% >30% Range of IRR 13
Slide 14: Hybrid business model
Hybrid business model Management Contract Direct Investor Fund Manager & Co-Investor (Long-Term Financing) (Special Situations Financing) 100% owned, on balance sheet NCOF II/NCOF II Institutional $25mm currently invested CCF IV Investors/LPs (Parallel) Long-term, recurring cash flows Up to $300mm i
Slide 15: Current portfolio
Current portfolio [long term] $22.5 million $25.0 million $15.0 million $30.0 million Acquisition Financing Growth Financing Refinancing Acquisition Financing December 2014 December 2015 May 2016 November 2016 $15.0 million $15.0 million $15.0 million $25.0 million $30.0 million Refinancing Refinanc
Slide 16: Portfolio diversification
Portfolio diversification Invested capital by transaction type Invested capital by geography Acquisition Recap/ Refinancing 27% 12% 52% 44% 15% 21% 29% Growth Capital 16
Slide 17: Proven team delivering results
Proven team delivering results Senior Management Board of Directors George Fowlie Chairman of the Board Chris Johnson CFA Michael Overvelde CA, CPA, CFA Former Deputy Chairman & Head of President & CEO SVP, Finance & CFO Responsible for directing Crown Capital’s Investment Banking, Westwind Partners
Slide 18: Specialists in the core fundamentals
Specialists in the core fundamentals Robust Disciplined Proven portfolio origination underwriting management Extensive experience and Portfolio risk minimized broad contact base across through close working Canada and the U.S. relationships and rigorous ~12-week process reporting requirements Source
Slide 19: How we make money
How we make money Interest Bonus features Fees IR>14% Additional Interest Deal fees Phantom IR 12-14% Warrants Equity No Kicker IR 10-12% Base management fees IR<10% Gifted Equity Performance fees Targeted % of total revenue 80% 10% 10% Cash flow diversification 19
Slide 20: Growing revenue base
Growing revenue base Total Revenue Interest Revenue Net Income $8.0 $7.0 $6.0 $5.0 Millions $4.0 $3.0 $2.0 $1.0 $0.0 Portfolio expansion driving recurring interest revenue 20
Slide 21: Q1 2017 operating and financial highlights
Q1 2017 operating and financial highlights $50mm upsizing of CCF IV $6.8mm $3.0mm Increased quarterly dividend to Total revenue Adjusted EBIT $0.12/share $15.0mm loan to Solo Liquor Corrosion Service repayment (~25% IRR) Michael Overvelde joined team $1.7mm $0.18 Net income Income per share Total eq
Slide 22: Delivering returns for Crown shareholders
Delivering returns for Crown shareholders Growth Yield $ 100MM annual deployments 80% target payout ratio Grow portfolio/book value Regular dividend increases Grow capital base Grow distributable cash Portfolio growth and diversification drive valuation re-rating 22
Slide 23: Market facts
Market facts Ticker CRWN Chris Murray Stephen MacLeod Market cap ~$100 million Scott Chan 52-week high / low $11.90 – $8.55 Analyst Jeff Fenwick Shares coverage 9.5 million outstanding (FD) (10.16 million) Stephen Boland Quarterly dividend $0.12 per share Trevor Johnson Yield ~4.6% Brenna Phelan 23
Slide 24: Contact
TSX: CRWN Contact Craig Armitage [email protected] 416.347.8954
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