Intertrust acquires Viteos - 18 June 2019

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Intertrust acquires Viteos - 18 June 2019
Intertrust acquires Viteos
Accelerating our strategy to become a global leader in tech-enabled
Corporate & Fund Solutions

18 June 2019
Intertrust acquires Viteos - 18 June 2019
Today’s presenters

      Stephanie Miller         Hans Turkesteen                  Shankar Iyer                      Chitra Baskar
   Chief Executive Officer   Chief Financial Officer       Chief Solutions Officer       Global Head of Transformation &
                                                                                                   Operations
                                                       (Co-founder and Chief Executive   (Co-founder and Chief Operations
                                                              Officer of Viteos)                 Officer of Viteos)

                                                                                                                            2
Intertrust acquires Viteos - 18 June 2019
Intertrust has acquired Viteos

 Acquisition of 100% of Viteos for $330m(a) in cash

 Bi-laterally negotiated transaction

 Funded through internal resources and new debt

 Completed on 17 June 2019, following receipt of regulatory approvals

 Viteos co-founders and key employees committed and re-investing 35% of their
      after-tax proceeds in Intertrust shares

(a)   €294m at closing EURUSD FX rate of 1.12 as of 14-Jun-19

                                                                                 3
Acquisition highlights
Competitive game-changer for Intertrust accelerating higher growth

                                                                                         Gain meaningful presence in US, increase Funds, and accelerate our growth potential
1                   Strong strategic                                                     Leverage Viteos' digitalisation and automation technology for incremental revenue growth and efficiencies
                    rationale
                                                                                         Build on Viteos' offshore Centres of Excellence to deliver estimated $22m (a) annual net run-rate cost synergies

                                                                                         Trusted technology outsourcing partner with professional relationships between teams spanning >10 years
2                   Strong alignment to                                                  Management equity re-investment of c.35% of after tax proceeds (c.$11m, phased 3 year lock-up)
                    drive integration
                                                                                         Detailed integration plan developed by Intertrust, Viteos and expert offshoring consultancy

                                                                                         8.0x FYE Mar-19 EBITDA including net run-rate cost synergies
3                   Attractive value                                                     ROIC > WACC by CY Dec-21(b), double-digit ROIC by CY Dec-22
                    creation
                                                                                         Mid single-digit EPS accretion in 1st full year of ownership(c), double-digit by CY Dec-21(b)

                                                                                         Financed by new TLA of $150m plus cash, RCF drawdown and equity re-investment
4                   Sound financing                                                      c.4.1x leverage ratio(d) at closing, strong cash generation expected to drive leverage ratio to
Accelerates our strategy to become a global leader in
tech-enabled Corporate & Fund Solutions

                 2015           €345m Revenue                                                 2018   €496m Revenue            Today   €543m Revenue(a)
                             Americas: n/a                                                           Americas: 16%                   Americas: 23%(b)
                             Funds: 23%                                                              Funds: 34%                      Funds: 40%(b)
                                                                                                      3-5% growth(c)                  Technology
                                                                                                                                       4-6% growth(c)

                                                                                                                        Tech-enabled Corporate &
        Pureplay T&CS(d)                                                            Expert administrative services
                                                                                                                             Fund Solutions
(a)     Illustrative revenue (Dec-18 Intertrust + Mar-19 Viteos, see p19)
(b)     Illustrative split based on LTM Mar-19 for Intertrust and Viteos (see p8)
(c)     Guidance for medium-term underlying revenue growth year-on-year
(d)     Trust & Corporate Services                                                                                                                         5
Note:   Viteos financials converted at closing EURUSD FX rate of 1.12 as of 14-Jun-19
Viteos: Leading-edge Technology Solutions for US Funds
Supported by offshore Centres of Excellence

            Viteos delivers end-to-end middle and back office administration services for Hedge Funds,
                  Private Equity, Real Estate, Private Debt and other alternative asset managers

Footprint and employees                                                                             Unique appeal

                                                                                                           Global Leader in                             Top 10 in
                                                                                                           Shadow Admin(c)                            US Fund Admin
                                                                                                                                       Leadership positions
         US:                                                                         APAC/Europe:
       94% of                                                                            6% of
      Revenue(a)                                                                       Revenue(a)             $350bn AuA(d)                         >80 Top Tier clients

                                              HQ: New York
                                                                   Centres of Excellence
      c.715 employees                                                                                             Blockchain                       Workflow automation
(>130 tech employees focused on                             Bangalore, Chennai
  development and innovation)                                  and Mumbai                                                        Leading-edge technologies

              Founded in 2003 by Shankar Iyer                                                                                                         Digitalisation/
                                                                                                                       RPA(e)
                   and Chitra Baskar(b)                                                                                                                   OCR(f)

(a)   Based on FYE Mar-19 revenue; FTE split c.3% US, c.97% India                                   (d)   AuA = Assets Under Administration
(b)   Owned by Public Pension Capital, FiveW Capital and Management                                 (e)   RPA = Robotic Process Automation
(c)   Shadow Administration = services provided to fund managers (as opposed to the fund)           (f)   OCR = Optical Character Recognition
                                                                                                                                                                           6
Strong financial track record
Double-digit organic growth with strong margins

      FYE Mar-19 Revenue split                                                               Revenue ($m, FYE-Mar)                                                              EBITDA ($m, FYE-Mar)

                    APAC/Europe                                                                                                                         >90% of Mar-
                        6%                                                                                                                              20E revenue
                                                                                                                                                         covered by                                    19.1
                                                                                                                                                         order book
                               $52m                                                                                                        52.4
                                                                                                                     41.1                                                                   14.1
                                                 US
                                                                                               35.3                                                                             12.8
                                                94%
                                                                                                                                                                                                      36.6%

                      Private Debt                                                                                                                                             36.2%       34.2%
                          12%
                    (a)
           PE/RE
            14%                                                                              Mar-17               Mar-18                Mar-19                                 Mar-17      Mar-18     Mar-19
                               $52m
                                                    Hedge Fund
   Other funds                                         56%
                                                                                       New customer wins                                                                    Investment in Technology opex to
      18%                                                                                                                                                                     drive growth during FYE Mar-18
                                                                                       Increased share of customer wallet

(a)    Private Equity / Real Estate
                                                                                                                                                                                        EBITDA margin (%)
Note: Viteos fiscal year running from 01-Apr to 31-Mar; margin and CAGR may be subject to rounding differences; figures shown on an IFRS-adjusted constant currency basis
                                                                                                                                                                                                                 7
1                   Strong strategic rationale

Gain meaningful presence in US, increase Funds
Increased exposure to higher growth markets

                                                                                      Intertrust(a)   Intertrust + Viteos (illustrative)(b)

                                                                                                                           23%

                                                                                            16%
                  Americas
                 (4 – 6% annualised
                   market growth)

                                                                                                                           40%
                        Funds                                                                34%
                 (7 – 9% annualised
                   market growth)

Source: External market studies
(a)    Mar-19 LTM split for Intertrust
(b)    Mar-19 LTM split for Intertrust and FYE Mar-19 for Viteos
Note: Viteos financials converted at closing EURUSD FX rate of 1.12 as of 14-Jun-19                                                           8
1                  Strong strategic rationale

Accelerate our growth potential
>€3.5bn expansion into higher growth (>7%) adjacencies

                                                 New client segments: Hedge Funds, Hybrid Funds and other alternative
                                                  asset managers
                                                 New specialised services: End-to-end administration for alternatives
                                                  market including middle office and back office administration, and
                                                  technology solutions

                                                                             >€3.5bn                                     >€10.0bn
                                                                               (>7% annual
                          €6.5bn                                                 growth)

                                                                                                                          (4-6% annual
                                                                                                                             growth)

                          (3-5% annual
                             growth)

                                                            (a)
           Intertrust stand-alone market                                 Expansion through Viteos                  Combined market potential

Source: External market studies and management estimates
(a)   As defined in 20 September 2018 Capital Markets Day
                                                                                                                                               9
1        Strong strategic rationale

Increased revenue growth guidance to 4-6%
Further long-term potential through cross-sell/up-sell and technology innovation

         Current                        Viteos                     Increased
        Intertrust                      impact                    medium term
       medium term                                                  guidance
        guidance

                                       +c.1%                      4 – 6%
         3 – 5%
                                                                                    Further long-term
                                                                                        potential
                                                                                 Cross-sell and up-sell
                              Double-digit growth track record                    revenue synergies
                              Increased exposure to higher                      Technology-enabled
                               growth Funds and US markets                         innovation and addition of
                                                                                   new services for existing
                              >€3.5bn market potential
                                                                                   and new clients
                               expansion into higher growth
                               adjacencies

                        Underlying revenue growth (Y-o-Y)
                                                                                                                10
1                  Strong strategic rationale

 Leverage Viteos' digitalisation & automation technology
 Significant long-term potential for incremental revenue growth and efficiencies

                                                                                                                              Capital Markets
                                                                                                                                Blockchain
                                                                                                                                Automation

                                                                                                                                   Fund
                                 Fund                                                                                           Accounting
                              Accounting
                                                                                                                  Payment                Transaction
                                                                                                                 Processing              monitoring
 Payment                                                      Transaction                               Next                                            AML/KYC
Processing                                                    monitoring                                 Gen                                             Utility
                                                                                                       RegTech                                  AML /
                                                                                                                   Client         IRIS           KYC
                                                                                                                 onboarding
                                                                 AML /
                                                                  KYC                                                           Treasury
                                                                                                                               Management
  Client
onboarding

                             Treasury                                                                                         Web portal
                            Management                                          technology solutions                          Outsourcing

                 Manually intensive                                                     +                 SOC2, connected and automated solutions
 Note: AML = Anti-Money Laundering, KYC = Know Your Customer,
       RegTech = Regulatory Technology, SOC2 = Service Organisation Control 2          IRIS                                                                        11
1          Strong strategic rationale

Enhanced client solutions
Improves speed, quality and breadth of services and solutions

Technology benefits                                         Funds               Full end-to-end capability

 Advanced technology with
 diverse deployment options
 Client-centric solutions and
 innovation from additional              Our clients                                      Enhanced sub-services
 technology developers (>130)                                     Corporates              (e.g. payments)
 Data analytics, shared
 environments and high
 transparency

                                                                                          Private debt/ credit
Centre of Excellence                                                  Capital
                                                                                          expertise and post-
      benefits                                                        Markets             transaction lifecycle
 Centralisation and standardisation
 improving quality of service

 Enable 24 hour client support
                                                            Private             Access to broader, more
 SOC2 certified                                             Wealth              global service offerings

                     Seamless delivery enhancing broader solutions
                                                                                                                  12
1                   Strong strategic rationale

Build on Viteos' offshore Centres of Excellence
$22m net run-rate cost synergies expected

            Annual cost synergies – EBITDA                                                      Centralisation / Standardisation / Shared Services
                     impact ($m)                                                                 through offshoring of selected support functions
                                                                                                 for client-facing teams, back office and IT support
              40                                                                  Cost
                                                                                Sources
                                                                               synergies        India Centres of Excellence will balance existing
                                                                                                 jurisdictions and enable 24 hour support for our
                                                                                                 clients, improving the efficiency and quality of our
                                                                                                 services

                                                                    22
                                                                                                c.90% net run-rate delivered by CY Dec-21
                                                                                 Timing         c.20% net run-rate delivered by CY Dec-20 given
                                             (18)                                                some duplication of recurring cost base to ensure
                                                                                                 smooth transition

                                                                                                Aggregate one-off costs of c.$30m
                                                                             CostTuning
                                                                                  to deliver      - Largely P&L cost (c.$5.5m capex)
          Gross                          Recurring                  Net                           - Peak in CY Dec-20
         Run-rate                         Opex to                 Run-rate
                                          achieve

Note:   Based on closing EURUSD FX rate of 1.12 as of 14-Jun-19
                                                                                                                                                        13
2            Strong alignment to drive integration

Strong alignment to drive integration
Detailed plan developed by Intertrust, Viteos and an expert offshoring consultancy

                      Aligned interests                                              Detailed integration plan

    Viteos is our trusted technology outsourcing partner             Developed by Intertrust, Viteos and an expert offshoring
                                                                       consultancy
    Professional relationships between teams span >10 years
                                                                      20 workstreams mapped out – preparation completed
    Co-founders and key employees have re-invested c.35% of
     after tax proceeds in Intertrust shares (c.$11m, phased 3        Clear governance and lines of responsibility
     year lock-up)
                                                                      Project Management Office reports weekly into Steering
    Intertrust client-facing teams will benefit from greater back     Committee (Stephanie Miller, Hans Turkesteen, Theo
     office support from India                                         Splinter, Shankar Iyer)

              Co-founders join Intertrust Executive Committee to deliver a successful integration

                           Shankar Iyer                                                Chitra Baskar

                           Chief Solutions Officer                                     Global Head of Transformation & Operations

                                                                                                                                    14
3                  Attractive value creation

Attractive value creation
Acquisition at $330m Enterprise Value(a)

                                               Acquisition multiple of 17.3x EV / FYE Mar-19A EBITDA excluding synergies – comparable to
                                                   relevant high growth Fund Admin valuation benchmarks
      Acquisition
       multiples
                                               Acquisition multiple of 8.0x EV / FYE Mar-19A EBITDA including run-rate net cost synergies
                                                   of $22m

                                               ROIC > WACC in CY Dec-21(b)
  ROIC > WACC
                                               Double-digit ROIC in CY Dec-22 (3rd full year of ownership)(b)

                                               Mid single-digit EPS accretion expected in CY Dec-20 (1st full year of ownership)(b)
          Accretion
                                               Double-digit EPS accretion expected in CY Dec-21(b)

(a)       Simultaneous signing and closing on 17-Jun-19; €294m at closing EURUSD FX rate of 1.12 as of 14-Jun-19
(b)       Including phased cost synergies, excluding one-off costs
                                                                                                                                             15
4                   Sound financing structure

Sound financing structure
Aligned to Intertrust’s capital allocation strategy focused on investing for growth

                                      Uses & Sources ($m)                                                                                                       Leverage ratio evolution

                            Uses                                                      Sources                                                                                    Adequate
                                                                                                                                                                               covenant and
                                                                                                                                                                             liquidity buffers
  Enterprise value                                  330           Equity reinvestment                             11

                                                                                                                                                               c.4.1x
      o/w equity                                    303           New 3 year TLA(a)                             150

                                                                                                                                           (b)
                                                                                                                                           Leverage ratio
      o/w debt & debt-like                             27         RCF drawdown                                    99
4                   Sound financing structure

Capital allocation strategy focused on investing for growth
Clear prioritisation framework

                                                                                                                         Operational excellence
                                                                                           Opex
                          Invest in
      1                organic growth
                                                                                                                        Cross-selling / up-selling

                                                                                           Capex
                                                                                                                         Technology innovation

                                                                        Acquisitions, joint ventures and partnerships
      2
                                                                 If leverage ratio > 3.0x(a) prioritise de-leveraging

      3                                                           Dividends of at least 40% of adjusted net income

                                                             Return surplus capital to shareholders through share
      4                                                        buybacks to operate at leverage ratio of ~3.0x(a)

(a)       Based on Senior Facilities Agreement definition which includes cost synergies
                                                                                                                                                     17
5                   Increased medium term guidance

Increased medium term guidance
Improved growth and margin profile

                                                                                             Previous                                                                                       Upgraded

    Underlying(a) revenue
                                                         ›    3 – 5%                                                                                           ›    4 – 6%
      growth (Y-o-Y)

                            CY Dec-19                    ›    At least 36%                                                                                     ›    At least 36%
   Adjusted
    EBITA
    margin
                            CY Dec-21                    ›    More than 38%                                                                                    ›    At least 40%

                                                                                                                                                               ›    Around 2% in medium term
            Capex as
                                                         ›    Around 2% of revenue                                                                             ›    Up to 3% in early years to deliver
           % of revenue
                                                                                                                                                                    Centres of Excellence

      Effective tax rate(b)                              ›    Around 19%                                                                                       ›    Around 21%

(a)   Underlying: Current and prior period at constant currency and, if applicable, including pro forma figures for acquisitions, based on closing EURUSD FX rate of 1.12 as of 14-Jun-19
(b)   Based on current tax laws
Note: Based on closing EURUSD FX rate of 1.12 as of 14-Jun-19
                                                                                                                                                                                                         18
Illustrative combined financial metrics
Highly accretive to growth, margins and EPS

                                                                 Intertrust                                        Viteos                           Synergies   Illustrative Combination
            (in €m)                                              (Dec-18 YE)                                   (Mar-19 YE)

                                                                                                                                                                         543(c)
         Revenue                                                        496                                             47                             n/a
                                                                                                                                                                 (4-6% annual growth)(d)

           EBITDA                                                       197                                             17
                                                                                                                                                      20(a)               234
         % margin                                                       40%                                           37%

            EBITA                                                       186                                             16                                                220
                                                                                                                                                      19(b)
         % margin                                                       37%                                           33%                                            At least 40%(c)

          Tax rate                                                     19%                                           30%                                                  21%

            EPS                                                                                                                                                 Mid single-digit accretion
         CY Dec-20
                                                                                                                                                                  Double digit accretion
         CY Dec-21
(a)     EBITDA run-rate net cost synergies of $22m
(b)     EBITA run-rate net cost synergies include c.€(1)m of depreciation on capex cost to achieve synergies
(c)     Revenue does not reflect the 4-6% underlying revenue growth year-on-year as the synergies phase in which would impact illustrative margin
(d)     Guidance for medium-term underlying revenue growth year-on-year
Note:   Viteos financials converted at closing EURUSD FX rate of 1.12 as of 14-Jun-19                                                                                                        19
Acquisition of Viteos: accelerates our strategy, as set out in
   the Capital Markets Day
   “M&A back on agenda focusing on US, Fund Administration and Capital Markets"

                              Strategic ambitions for 2021                                              M&A focus areas

1
              Clients &                                 Top 10 US Fund Admin
              Services                                  Completes Fund Admin
                                                         capabilities
                                                                                             1       Increase scale
                                                                                                                           

2
              Innovation &
              Technology
                                                        Blockchain, RPA, Workflow
                                                         automation, Digitalisation/OCR      2   Complementary services
                                                                                                                           

3
              People
                                                        Strong alignment to drive
                                                         integration                         3      Expand footprint
                                                                                                                           
                                                        Offshore Centres of Excellence
Operational Excellence
Standardisation | Centralisation | Shared Services
                                                         for standardisation,
                                                         centralisation and shared
                                                         services
                                                                                             4    Technology enablers
                                                                                                                           
                                                                                                                               20
Key take-aways
Game-changer for Intertrust accelerating higher growth

         Accelerates our strategy to become a global leader in tech-enabled Corporate & Fund Solutions

                  Gain material presence in US, increase Funds, and accelerate our growth potential
                  Leverage Viteos' digitalisation and automation technology for incremental revenue growth and efficiencies
                  Build on Viteos' offshore Centres of Excellence to deliver $22m net run-rate cost synergies

                  Enhanced client solutions

                  Strong alignment to drive integration

                  Attractive value creation

                 Sound financing structure

             Increased medium term growth and margin guidance

                                                                                                                               21
Disclaimer

Forward looking statement disclaimer for presentation:

This presentation contains forward-looking statements. These forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements.
Many of these risks and uncertainties relate to factors that are beyond Intertrust’s ability to control or estimate precisely,
such as future market and economic conditions, the behaviour of other market participants, the ability to successfully
integrate the business of Viteos and achieve anticipated synergies, interest-rate and exchange-rate fluctuations, changes in
tax rates and changes in laws and regulations. You are cautioned not to place undue reliance on these forward-looking
statements, which speak only of the date of this presentation. Intertrust does not undertake any obligation to update these
forward-looking statements.

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