Intrum Ab · OMXSTO:INTRUM
Intrum Ab — Intrum Justitia — Merger or Acquisition (November 2016)
36 slides from Intrum Ab's merger presentation, Nov 22, 2016
Slide 1: Intrum Justitia and Lindorff to Combine
This presentation is not a prospectus. Its purpose is to serve as information to shareholders in Intrum Justitia regarding the proposed combination between Intrum Justitia and Lindorff. For more information about the proposed combination, please see the press release disclosed on 14 November 2016. T
Slide 2: Disclaimer
Disclaimer IMPORTANT INFORMATION This presentation is not and does not form a part of any offer for sale of securities. Copies of this presentation are not being made and may not be distributed or sent into the United States, Australia, Canada, Japan or any other jurisdiction in which such distribut
Slide 3: Table of contents
Table of contents Transaction Highlights Overview of Intrum Justitia and Lindorff Strategic Rationale Synergies and Financial Impact Timetable Conclusion Appendix
Slide 4: Intrum Justitia and Lindorff - a highly compelling combination
Intrum Justitia and Lindorff - a highly compelling combination… Industry leader with unparalleled scale and diversification Excellent strategic fit with a well-balanced business mix and integrated service offering Complementary geographical footprint, sector expertise and debt purchasing platforms S
Slide 5: …creating significant value for shareholders
…creating significant value for shareholders Considerable Significant financial Capital structure synergies benefits optimization ● Estimated SEK 0.8bn of cost ● Transaction accretive to ● Transaction allows both synergies per annum to be Intrum Justitia’s EPS from first parties to achieve a more fu
Slide 6: Snapshot of the combined entity
Snapshot of the combined entity | ● Net Revenue: SEK 5.8bn ● Net Revenue: SEK 12.2bn ● Net Revenue: SEK 6.4bn2 Key financial ● EBITDA: SEK 2.0bn ● EBITDA: SEK 4.9bn ● EBITDA: SEK 2.9bn2 metrics1 ● Portfolio Carrying Value: SEK 8.1bn ● Portfolio Carrying Value: SEK 18.5bn ● Portfolio Carrying Value:
Slide 7: Transaction summary
Transaction summary ● All stock transaction – Lindorff shareholders to receive 64.2m newly issued shares in Intrum Justitia Consideration ● Transaction implies an enterprise value of Lindorff of SEK 40.5bn, representing an EV/EBITDA multiple of 13.2x1 ● Intrum Justitia and Lindorff shareholders to o
Slide 8: Background to the transaction
Background to the transaction Industry background Transaction rationale ● The dynamic market environment provides a strong strategic ● The European CMS industry is presented with an rationale for the combination of Intrum Justitia and Lindorff unprecedented opportunity to address the estimated EUR 1
Slide 9: Benefits for all stakeholders
Benefits for all stakeholders ● Strengthened collection performance Clients ● Significant investments in IT, product development and compliance infrastructure ● Commitment to highest ethical standards and fair collection practices Customers ● Investments in digitalization and simplified customer ser
Slide 10: Extraordinary General Meeting to be held on 14 December 2016
Extraordinary General Meeting to be held on 14 December 2016 ● The Board of Directors of Intrum Justitia has convened an Extraordinary General Meeting and proposes that the shareholders approve the combination with Lindorff and authorise the Board to issue new Intrum shares to Lindorff shareholders.
Slide 11: Proposal for resolution at the Extraordinary General Meeting
Proposal for resolution at the Extraordinary General Meeting To: (i) approve the combination with Lindorff, and (ii) authorise the Board to resolve on a new issue of shares to be issued as consideration in the acquisition of Lindorff, whereby the Lindorff shareholders will receive Intrum Justitia sh
Slide 12: Table of contents
Table of contents Transaction Highlights Overview of Intrum Justitia and Lindorff Strategic Rationale Synergies and Financial Impact Timetable Conclusion Appendix
Slide 13: Snapshot of Intrum Justitia
Snapshot of Intrum Justitia Intrum Justitia highlights Purchased Debt portfolio carrying value mix1 12% ● Founded in Sweden in 1923 and listed on Nasdaq Stockholm since 11% 2002 ● A European leader offering a complete range of credit management services 59% 18% ● Operating across 20 European countri
Slide 14: Snapshot of Lindorff
Snapshot of Lindorff Lindorff highlights Purchased Debt portfolio carrying value mix1 2% 5% 5% ● Founded in Oslo in 1898 with over 100 years of growth and value creation ● A leading integrated credit management partner for financial institutions in Europe ● Operating across 13 European countries wit
Slide 15: Lindorff – a journey of growth and value creation
Lindorff – a journey of growth and value creation 2003–2007 2007–2013 2013–2016 Nordic European expansion European leadership expansion 1898 2001 2003 2005 2007 2009 2010 2011 2012 2013 2014 2015 2016 x3 Founded by x3 Eynar 1 Lindorff Unique track ● 10 large transactions in last 5 years record ● 1,3
Slide 16: Lindorff – proven financial performance
Lindorff – proven financial performance Strong performance from Purchased Debt portfolios… …with attractive returns 17% 16% 15% 15% 105% 2013 2014 2015 LTM Q3'16 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 Return on Purchased Debt (per Lindorff's definition)
Slide 17: Table of contents
Table of contents Transaction Highlights Overview of Intrum Justitia and Lindorff Strategic Rationale Synergies and Financial Impact Timetable Conclusion Appendix
Slide 18: Combined group uniquely positioned to capture market opportunity
Combined group uniquely positioned to capture market opportunity Strong NPL sale growth primarily driven by banks’ continued deleveraging European NPL sale scenarios (EURbn) Acceleration of Banks’ NPL sales drivers Regulatory Accounting ● AQR1 driven increase in ● IFRS 92 – Expected loss bank provis
Slide 19: Combined group uniquely positioned to capture market opportunity (cont’d)
Combined group uniquely positioned to capture market opportunity (cont’d) Set to capture a market >5x larger than historical core target market Significant potential from large untapped market segments Expanded capabilities in the NPL market European stock of NPLs (EURbn) as of 2015 647 1,058 Unsecu
Slide 20: European market leader with increased scale and range of services
European market leader with increased scale and range of services Largest CMS player… …with the broadest service offering EBITDA LTM1 (SEKbn) Value Add Services Product Expertise Solutions Information Payment Debt Debt Real Estate BPO / Co- # of Services Services Purchase Collection3 Services Carve-
Slide 21: A truly pan-European credit management services platform
A truly pan-European credit management services platform Revenue split by region1 (%) Complementary pan-European presence 7% Intrum Justitia and Lindorff 16% Intrum Justitia only 47% Lindorff only 30% 18% 8% | 54% 20% 27% 62% 11% Northern Europe Central and Eastern Europe Western Europe Southern Eur
Slide 22: Strong strategic fit maintaining a balanced business model…
Strong strategic fit maintaining a balanced business model… Business mix by revenue1 (%) | 3% 2% 4% 46% 44% 49% 54% 51% 47% Purchased Debt Debt Collection Other Net Revenue: Net Revenue: Net Revenue2: SEK 5.8bn SEK 12.2bn SEK 6.4bn Note: (1) Based on LTM Q3’16 net revenues. Aktua consolidated since
Slide 23: …and enhancing synergies between Purchased Debt and Debt Collection
…and enhancing synergies between Purchased Debt and Debt Collection High complementarity between PD and DC… …resulting in tangible benefits Flexibility ● Full service offering to meet clients’ evolving needs Origination ● Large portion of portfolio purchases originated Origination strength from exis
Slide 24: Highly complementary Purchased Debt portfolios and capabilities
Highly complementary Purchased Debt portfolios and capabilities Purchased Debt by vendor1 (%) | 8% 6% 2% 5% 12% 5% 11%2 10% 59% 18% 88% 76% Financial Institutions Telecom Retail Other PD Carrying Value: PD Carrying Value: PD Carrying Value: SEK 7.0bn SEK 16.8bn SEK 9.8bn Average Ticket Size: Average
Slide 25: Combined group uniquely positioned to drive profitable growth
Combined group uniquely positioned to drive profitable growth ● Ongoing momentum at both companies to develop largely untapped profitable segment SME ● Capitalise on Intrum Justitia’s recent acquisitions ● Deploy secured market and valuation expertise (incl. from Aktua) across combined geographic fo
Slide 26: Table of contents
Table of contents Transaction Highlights Overview of Intrum Justitia and Lindorff Strategic Rationale Synergies and Financial Impact Timetable Conclusion Appendix
Slide 27: Significant cost and revenue synergies to accelerate earnings growth
Significant cost and revenue synergies to accelerate earnings growth Cost synergies Revenue synergies ● Combination of datasets and business ● Estimated SEK 0.8bn of cost synergies per annum, fully intelligence driving improved collection phased in 3-4 years following closing of the transaction perf
Slide 28: Significant financial benefits
Significant financial benefits ● Transaction is accretive to Intrum Justitia’s EPS from the first year after closing, excluding synergy implementation and EPS transaction costs1 growth ● Intrum Justitia’s EPS is estimated to grow in excess of 75% on a cumulative basis in three to four years as the s
Slide 29: Fully underwritten financing providing certainty and financial flexibility
Fully underwritten financing providing certainty and financial flexibility ● All share transaction ● New financing structure will be put in place to partially refinance existing debt structures1 ● EUR 3.4bn bridge facility and EUR 850m super senior revolving credit facility (RCF)2 fully underwritten
Slide 30: Financing, advisory and potential bond redemption costs
Financing, advisory and potential bond redemption costs Financing and advisory costs estimated at approximately SEK 1bn, or 1.5% of combined entity's enterprise value, broken down as follows: 1. Financing Costs: c. SEK 0.7bn ● Costs to secure the combined group's future refinancing needs through c.
Slide 31: Table of contents
Table of contents Transaction Highlights Overview of Intrum Justitia and Lindorff Strategic Rationale Synergies and Financial Impact Timetable Conclusion Appendix
Slide 32: Indicative timetable
Indicative timetable 14-Dec 14-Nov Q2 2017 Intrum Justitia Announcement Closing EGM Nov-2016 Dec-2016 Jan-2017 Jun-2017 15-Nov to 6-Dec Investor Roadshow Note: The anticipated completion of the transaction is dependent on the timing of decisions from the relevant competition and regulatory authoriti
Slide 33: Table of contents
Table of contents Transaction Highlights Overview of Intrum Justitia and Lindorff Strategic Rationale Synergies and Financial Impact Timetable Conclusion Appendix
Slide 34: Intrum Justitia and Lindorff - a highly compelling combination
Intrum Justitia and Lindorff - a highly compelling combination Industry leader with unparalleled scale and diversification Excellent strategic fit with a well-balanced business mix and integrated service offering Complementary geographical footprint, sector expertise and debt purchasing platforms St
Slide 35: Table of contents
Table of contents Transaction Highlights Overview of Intrum Justitia and Lindorff Strategic Rationale Synergies and Financial Impact Timetable Conclusion Appendix
Slide 36: Overview of Nordic Capital
Overview of Nordic Capital ● A leader in Northern European private equity, established in 1989 ● Lead investor in 90 acquisitions with a consistent track record of successful investments • Over EUR 10bn invested in 90 portfolio companies and 150+ material add-on acquisitions ● Currently investing No
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