Eqt Holdings Ltd. · ASX:EQT
Eqt — Merger or Acquisition (August 2022)
54 slides from Eqt's merger presentation, Aug 22, 2022
Slide 1: Acquisition of Australian Executor Trustees and Equity Raising
INVESTOR PRESENTATION ACQUISITION OF AUSTRALIAN EXECUTOR TRUSTEES AND EQUITY RAISING Mick O’Brien, Managing Director Philip Gentry, Chief Financial Officer and Chief Operating Officer NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES AUGUST 2022
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER @ This investor presentation (Presentation) is dated Monday, 22 August 2022 and has been prepared by EQT Holdings Limited (ABN 22 607 797 615) EQT or the Company). By attending an investor presentation or briefing, or accepting, accessing or reviewing this Presentatio
Slide 3: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER @ Financial information All financial information in this Presentation is in Australian dollars ($ or AUD) unless otherwise stated. This Presentation includes certain pro forma financial information. Any such pro forma historical financial information provided in this
Slide 4: Agenda
AGENDA (1) EXECUTIVE SUMMARY (2) OVERVIEW OF AET (3) STRATEGIC RATIONALE (4) FINANCIAL IMPACTS (5) TRANSACTION FUNDING AND OFFER (6) CONCLUSION (7) APPENDIX (4 )
Slide 5: Executive Summary
EXECUTIVE SUMMARY
Slide 6: Executive Summary
EXECUTIVE SUMMARY @ STRATEGICALLY ALIGNED ACCRETIVE ACQUISITION PARTIALLY FUNDED VIA $125M EQUITY RAISING (1) TRANSACTION DETAILS. . EQT has entered into a binding agreement to acquire 100% of Australian Executor Trustees Limited ("AET”) for total cash consideration of $135.0m Implied acquisition mu
Slide 7: Executive Summary
EXECUTIVE SUMMARY @ STRATEGICALLY ALIGNED ACCRETIVE ACQUISITION PARTIALLY FUNDED VIA $125M EQUITY RAISING * Acquistion expected to delve mid tobigh single digit EPS accretion in FY24 on a pro-forma basis' and double-digit accretion when Additional Investment Revenues in relation to the Trustee Servi
Slide 8: Overview of AET
OVERVIEW OF AET
Slide 9: Overview of AET
OVERVIEW OF AET @ AET IS A RESPECTED PROFESSIONAL TRUSTEE SERVICES PROVIDER, WITH A COMPREHENSIVE TRUSTEE PRODUCT OFFERING SPANNING ALL STAGES OF A CLIENT'S LIFE — Ee Australian Executor Trustees Provides a range of private client trustee products and services! Small APRA Funds (SAF) and Self Manage
Slide 10: AET and TWS Private Clients locations
• Legend*: AET TWS Private Clients * Size of dot indicatively represents presence in location • • •
Slide 11: Strategic Rationale
STRATEGIC RATIONALE
Slide 12: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS ® AET REPRESENTS A UNIQUE OPPORTUNITY TO STRENGTHEN EQT'S CORE TWS PRIVATE CLIENTS OFFERING pe PRIVATE CLIENTS BUSINESSES STRENGTHENS POSITION IN TWS LONG-TERM, ENDURING REVENUES ll ROBUST MARGINS + AET adds scale in Health and Personal Injury, e 7 * AET FY22 Standalone EBI
Slide 13: FY22 TWS Private Clients FUMAS with AET
• • 5.4 14.5 9.1 FY22 TWS Private Clients Acquisition of AET FY22 TWS + AET
Slide 14: Highly Complementary
HIGHLY COMPLEMENTARY INCREASES SCALE IN MOST TWS PRIVATE CLIENTS MARKETS AS AT 30 JUNE 2022 ($BN) Philanthropy STANDALONE AET? EQT + AET'.2 Estate Management Health & Personal Injury 0.5 27 Advice 07 0.3 Testamentary Trusts 07 0.6 Community Trusts 0.4 0.4 0.5 0.2 Estate Planning " Excludes EQT's Ass
Slide 15: Adding Transformative Scale for EQT
ADDING TRANSFORMATIVE SCALE FOR EQT PRO-FORMA FY22 INCLUDING NET SYNERGY POTENTIAL REVENUE! ($M) EBITDA'2 ($M) [ oy [ FY22 EQT FY22 EQT + AET FY22 EQB F22 EQT + AET 1 Excludes revenue contribution from SMSF and PMS businesses. Includes Additional Investment Revenuesin relation to the Trustee Service
Slide 16: Combination Analysis
COMBINATION ANALYSIS @ ACQUISITION INCREASES PRIVATE CLIENT CONTRIBUTION TO THE GROUP FY22 EQT TWS & AET KEY METRICS - 30 JUNE 2022 FY22 EQT TWS FY22 AET PRO-FORMA PRIVATE CLIENTS FUMAS ($BN) 9.1 5.41 14.5 (+59%) $111.5 + — million — GROUP REVENUE BY DIVISION! (FY22) 18% mPrivate Clients Superannuat
Slide 17: Significant Value Creation
SIGNIFICANT VALUE CREATION @ NET SYNERGY POTENTIAL AND OPPORTUNITY TO GROW INVESTMENT REVENUES NET SYNERGY POTENTIAL + Platform Services Restructure expected to produce a net EBITDA benefit of ~$3.5m p.a. (on a fully realised basis), and significantly reduces operational complexity + Primarily to be
Slide 18: Compelling Strategic Rationale
COMPELLING STRATEGIC RATIONALE ACQUISITION DELIVERS TO ALL STAKEHOLDERS, SUPPORTING ALL STRATEGIC TARGETS 1 BUSINESS GROWTH 2 CLIENT SERVICE 3 CAPABILITY 4G COMMUNITY Delivers 35% increase in FY22 EQT group revenue and 41% increase in FY22 EQT group underlying EBITDA including Net Synergy Potential’
Slide 19: Strategic Alliance
STRATEGIC ALLIANCE @ EQT AND INSIGNIA HAVE ENTERED INTO A STRATEGIC ALLIANCE AGREEMENT ol] ENABLE PARTIES to leverage their best of breed products and services ~ STRONG OPPORTUNITY to build out a broader product offering o]6 LEVERAGE COMBINED SCALE to reach a broader set of clients @$a COMMITTED TO
Slide 20: Financial Impacts
FINANCIAL IMPACTS
Slide 21: Financially Attractive Transaction
FINANCIALLY ATTRACTIVE TRANSACTION MATERIALLY ENHANCES =. Acquisition adds $5.4bn of TWS Private Client FUMAS (post Platform Services Restructure) EQT’S TWS PRIVATE CLIENT BUSINESS * Combined EQT + AET FY22 pro forma revenue of $151.1m and underlying EBITDA of $62.0m including Net Synergy Potential’
Slide 22: Profit and Loss Impact
PROFIT AND LOSS IMPACT ® PRO-FORMA FY22 FINANCIAL PROFILE + Net Synergy Potential reflects: — Revenue and cost impacts from the planned exit of PMS aap «SUAS AeINS NETSYNERGY —_PRO- (Audited) AET EQT+AET BOTENTIAL — FORMA? (Unaudited) 30 JUNE 2022 and SMSF businesses FUMAS (Sbn) 148s 59 — Cost impac
Slide 23: Transaction Funding and Offer Details
TRANSACTION FUNDING AND OFFER DETAILS
Slide 24: Funding Overview
FUNDING OVERVIEW @ COMBINATION OF NEW EQUITY AND DEBT * $125.0m fully underwritten equity raising comprising: — $40.4m institutional placement to new and existing investors — $84.6m 1 for 6 accelerated pro-rata non-renounceable entitlement offer + Equity raising will be conducted at a fixed price of
Slide 25: Offer and Funding
OFFER AND FUNDING @ FULLY FUNDED VIA EQUITY AND DEBT + Institutional placement to 5 provide opportunity for new SOURCES $m % DESCRIPTION shareholders to enter register and support liquidity Institutional Placement 40.4 25% Institutional placement to new and existing institutional investors * Predomi
Slide 26: Equity Raising Details
EQUITY RAISING DETAILS EQT IS UNDERTAKING A FULLY UNDERWRITTEN $125M EQUITY RAISING + Fully underwritten! $125.0 million equity raising ("Equity Raising” or “Offer) consisting of: - An institutional placement (“Placement”) to raise approximately $40.4 million; and OFFER SIZE AND STRUCTURE - A1for 6
Slide 27: Key Dates Timetable
Event Date Friday, 19 August 2022 Monday, 22 August 2022 Monday, 22 August 2022 Monday, 22 August 2022 Tuesday, 23 August 2022 Tuesday, 23 August 2022 7.00pm Wednesday, 24 August 2022 Monday, 29 August 2022 Monday, 29 August 2022 Wednesday, 31 August 2022 Thursday, 1 September 2022 5.00pm Wednesday,
Slide 28: Conclusion
CONCLUSION
Slide 29: Conclusion
CONCLUSION @ A TRANSFORMATIVE ACQUISITION THAT DELIVERS FOR ALL STAKEHOLDERS * Aunique opportunity to enhance EQT's private client offering * Earnings accretive’ and adds scale and geographic diversity * Increased scale will support investment in products, services and IT and operational systems * C
Slide 30: Appendix
APPENDIX
Slide 31: Appendix A: Supporting Financials
APPENDIX A SUPPORTING FINANCIALS
Slide 32: Financial Position
FINANCIAL POSITION PRO-FORMA JUNE 2022 FINANCIAL POSITION AS AT 30 JUNE 2022 ($M) EQT AET ADJUSTMENTS PRO-FORMA Cash and cash equivalents 87.31 91 22.02 ORFR cash 31.0 2.7 - Goodwill & other intangibles 205.2 - 140.13 Other assets 47.6 10.1 1.0 Total assets 371.2 21.9 163.1 Borrowings 10.0 - 40.05 O
Slide 33: Appendix B: Summary of Share Sale Agreement
APPENDIX B SUMMARY OF SHARE SALE AGREEMENT
Slide 34: Summary of Share Sale Agreement
SUMMARY OF SHARE SALE AGREEMENT @ ACQUISITION or “Seller EQT will acquire 100% of the issued share capital in AET from SFG Australia Limited ("Seller"), a wholly owned subsidiary of Insignia Financial Limited ("Insigni Guarantor”) (together, “Seller Group”) SAF trusteeship to transfer from IOOF Inve
Slide 35: Appendix C: Summary of Underwriting Agreement
APPENDIX C SUMMARY OF UNDERWRITING AGREEMENT
Slide 36: Summary of the Underwriting Agreement
SUMMARY OF THE UNDERWRITING AGREEMENT @ The Underwriting Agreement contains representations and warranties, and indemnities in favour of the Joint Lead Managers. Each Joint Lead Manager may, in certain circumstances, terminate its obligations under the Underwriting Agreement on the occurrence of cer
Slide 37: Summary of the Underwriting Agreement
SUMMARY OF THE UNDERWRITING AGREEMENT @ (h) fi) 0 (kK) 0) (m) (n) {o) (p) ASX announces that EQT will be removed from the official list or that the shares will be: (1) removed from official quotation; or (2) suspended from quotation by ASX for two or more trading days for any reason other than a tra
Slide 38: Summary of the Underwriting Agreement
SUMMARY OF THE UNDERWRITING AGREEMENT @ In addition, each Joint Lead Manager may terminate its obligations under the Underwriting Agreement if any of the following events has had, or is likely to have, a materially adverse effect on the marketing, settlement or success of the Offer (or any aspect of
Slide 39: Appendix D: Key Risks
APPENDIX D KEY RISKS
Slide 40: Key Risks
KEY RISKS @ RISKS RELATING TO EQT This Appendix includes some of the key risks associated with an investment in EQT and its group companies (together "Group"). Some of these risks are specific to EQT’s business activities, while others are of a more general nature or relate to listed securities gene
Slide 41: Key Risks
KEY RISKS RISKS RELATING TO EQT PEOPLE OUTSOURCING INVESTMENT GOVERNANCE AND COMPLIANCE The success of EQT relies on its ability to attract, motivate and retain people who have the necessary skills and experience to help achieve the Group's goals. The loss of key personnel could disrupt EQT's operat
Slide 42: Key Risks
KEY RISKS RISKS RELATING TO EQT TAXATION ACCOUNTING INSURANCE REPUTATIONAL DAMAGE REGULATORY CHANGE Any change to Australian taxation laws (or their interpretation) including the current rate of company income tax or to the rates of indirect taxes could materially impact EQT’s financial performance.
Slide 43: Key Risks
KEY RISKS RISKS RELATING TO THE ACQUISITION ACQUISITION MAY NOT COMPLETE DUE DILIGENCE - INFORMATION PROVIDED BY THE SELLER ANALYSES OF THE ACQUISITION FINANCIAL CAPACITY ‘OF, AND RECOURSE TO, THE SELLER There is a risk that the AET acquisition does not complete, including if the Share Sale Agreemen
Slide 44: Key Risks
KEY RISKS RISKS RELATING TO THE ACQUISITION ‘SEPARATION RISK. INTEGRATION RISK While EQT is developing a detailed integration plan to transition AET employees, customers and key suppliers to EQT, separating AET out from Insignia following completion of the AET acquisition is expected to be a complex
Slide 45: Key Risks
KEY RISKS RISKS RELATING TO THE ACQUISITION HISTORICAL LIABILITIES SARGON CORPORATE ‘TRUST BUSINESS Following the AET acquisition, EQT will become directly or indirectly liable for any liabilities that AET has incurred in the past, including liabilities that were not identified during its due dilige
Slide 46: Key Risks
KEY RISKS RISKS RELATING TO THE ACQUISITION ACQUISITION ACCOUNTING UNDERWRITING EQT is required to undertake an assessment of the fair value of the tangible and intangible assets acquired as well as the actual and contingent liabilities of AET at the date of the AET acquisition. EQT will engage exte
Slide 47: Key Risks
KEY RISKS RISKS RELATING TO AN INVESTMENT IN SHARES RISKS ASSOCIATED WITH AN INVESTMENT IN SHARES There are general risks associated with investments in equity capital such as EQT shares. The trading price of EQT shares may fluctuate with movements in equity capital markets in Australia and internat
Slide 48: Key Risks
KEY RISKS RISKS RELATING TO AN INVESTMENT IN SHARES LIQUIDITY RISK OF DILUTION TAXATION CHANGES, LAWS AND REGULATIONS MAY CHANGE CHANGES TO ACCOUNTING POLICY AND VALUATIONS DIVIDENDS There can be no guarantee of an active market for EQT shares or that the price of EQT shares will increase. There may
Slide 49: Appendix E: International Offer Restrictions
APPENDIX E INTERNATIONAL OFFER RESTRICTIONS
Slide 50: International Offer Restrictions
INTERNATIONAL OFFER RESTRICTIONS ® This Presentation does not constitute an offer of New Shares in any jurisdiction in which it would be unlawful. In particular, this Presentation may not be distributed to any person, and the New Shares may not be offered or sold, in any country outside Australia ex
Slide 51: International Offer Restrictions
INTERNATIONAL OFFER RESTRICTIONS ® Singapore This Presentation and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this Presentation and any other document or mater
Slide 52: Appendix F: Glossary
APPENDIX F GLOSSARY
Slide 53: Glossary
GLOSSARY Additional Investment Revenues AET Adjusted EBITDA AET Adjusted FUMAS EPS DORA DTA EBITDA EPS FUMAS Leverage Ratio Management Rights Net Synergy Potential Opportunity to increase investment management revenue in relation to the Trustee Services business by internally managing selected AET F
Slide 54: EQT Holdings Limited
EQT Holdings Limited ABN 22 607 797 615 Level 1, 575 Bourke Street Melbourne VIC 3000 1300 133 472 www.eqt.com.au