Landscape's Acquisition of AP WIP Investments Holdings, LP - Investor Presentation
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Landscape’s Acquisition of AP WIP Investments Holdings, LP Investor Presentation December 2019
Notice to Recipient
Important Notices
This document has been prepared by Landscape Acquisition Holdings, Ltd. (“LAHL”) solely for informational purposes in its presentation to prospective investors held in
connection with the acquisition by LAHL of AP WIP Investments Holdings, LP (“APW”), and should not be construed to be, directly or indirectly, in whole or in part, an offer
to buy or sell and/or a recommendation and/or a solicitation of an offer to buy or sell any security or instrument or to participate in any investment or trading strategy, nor
shall any part of it form the basis of, or be relied on in connection with, any contract or investment decision in relation to any securities or otherwise.
The information contained in this document is based on information received from APW and its affiliates and has not been independently verified by LAHL. Except where
otherwise indicated, the information speaks as of the date hereof. No representation or warranty, express or implied, is made as to, and no reliance should be placed on,
the fairness, accuracy, completeness or correctness of the information or any opinion contained herein. The information contained in this presentation should be considered
in the context of the circumstances prevailing at the time and will not be updated to reflect material developments that may occur after the date of the presentation. None of
LAHL, APW or any of their respective affiliates, officers, directors or advisors shall have any civil, criminal or administrative liability whatsoever (willful, in negligence or
otherwise) for any loss arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.
Non-GAAP Financial Measures
This presentation includes certain additional key performance indicators which are considered to be non-GAAP financial measures, including, but not limited to, Adjusted
EBITDA. Each of LAHL and APW believe these non-GAAP financial measures provide an important alternative measure with which to monitor and evaluate LAHL’s ongoing
financial results, as well as to reflect its acquisitions. The calculation of these financial measures may be different from the calculations used by other companies and
comparability may therefore be limited. You should not consider these non-GAAP financial measures an alternative or substitute for APW’s results.
Forward-Looking Statements
This presentation contains certain statements that constitute forward-looking statements within the meaning of the “safe harbor” provisions of the United States Private
Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “anticipate”, “believe”, “expect”, “estimate”, “plan”,
“outlook”, and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Similarly, statements
that describe LAHL’s expectations, intentions and projections regarding the combined company’s future performance, anticipated events or trends and other matters that
are not historical facts are forward-looking statements, including expectations regarding: (i) the ability of LAHL to consummate the private placement; (ii) the ability of LAHL
to effect the LSE re-listing and subsequent U.S. exchange listing; (iii) the future operating and financial performance of the combined company, (iv) the ability to drive
shareholder value and achieve target levels of organic growth and long term leverage ratios, (v) the anticipated sources and uses of funding the purchase price and (vi) the
expected pro forma capitalization table. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially
from those contemplated by the relevant forward-looking statement. There can be no assurance that the results and events contemplated by the forward-looking statements
contained herein will in fact occur. None of the future projections, expectations, estimates or prospects in this presentation should be taken as forecasts or promises nor
should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have
been prepared are correct or exhaustive or, in the case of assumptions, fully stated in the presentation. LAHL also cautions that forward-looking statements are subject to
numerous assumptions, risks and uncertainties, which change over time and which may be beyond LAHL’s control. LAHL assumes no duty to and does not undertake to
update any forward-looking statements to reflect actual results, changes in assumptions or changes in factors affecting these statements.
This presentation is strictly confidential, is being given solely for your information and for your use and may not be copied, reproduced, redistributed or
passed on, directly or indirectly, in whole or in part, by any medium to any other person in any manner. No part of these materials may be retained following
this presentation.
By attending this presentation, you are agreeing to be bound by the foregoing limitations. Any failure to comply with these restrictions may constitute a
violation of applicable securities laws.
1
The Team
Landscape Acquisition Holdings, Ltd. (“LAHL”) AP WIP Investments Holdings, LP (“AP Wireless” or “APW”)
Noam Gottesman Mike Fascitelli Bill Berkman Scott Bruce Richard Goldstein Glenn Breisinger
Founder & Managing Co-Founder of Imperial CEO of APW President of APW COO of APW CFO of APW
Partner of TOMS Capital Companies
Currently on the board of
Currently on the Board of Former Managing Former Chief Financial
Uniti Group (NASDAQ:
Co-Founder and Co- Former President and APW and Empire State Director, Associated Officer, Associated
UNIT)
Chairman of Nomad Chief Executive Officer Realty Trust (NYSE: Partners and Liberty Partners and Liberty
Foods (NYSE: NOMD) and current Trustee of the ESRT) Former Managing Associated Partners Associated Partners
Board at Vornado Realty Director, Associated
Co-Founder, former Trust (NYSE: VNO) Former Co-Managing Partners and Liberty Former Director, PEG
Associated Partners Former Director, PEG Bandwidth
Chairman and Co-CEO of Partner of Associated
Bandwidth, CURRENT
GLG Partners Partners Former Board member of Group, and Intellon Former VP, Associated
CURRENT Group, Group and CFO,
Former Board member of Lifeshield, Jingle, and
Former VP and General Associated
IAC (NASDAQ: IACI), PEG Bandwidth
Manager, Associated Communications Cellular
Liberty Satellite
Former VP and General Communications Cellular Telephone Operations
(NASDAQ: LSAT A/B)
and CMGI (NASDAQ: Counsel of Associated Telephone Operations
CMGI) and Teligent Communications Former CFO, CURRENT
(NASDAQ: TGNTA/B) (NASDAQ: ACCMA/B) Group
and the Associated
Group, Inc. (NASDAQ:
AGRP)
Extensive experience managing and growing portfolios of long-term, diversified,
real property and critical infrastructure assets and businesses
2
Why AP Wireless is an Attractive Opportunity for Landscape
After an extensive search, APW stands out as a growth-oriented real estate opportunity
characterized by favorable secular tailwinds and limited cyclical risk
Landscape’s
investment criteria: Rationale:
Market leadership Pure play portfolio of property leases underlying critical communications infrastructure
Platform for growth
Origination platform in highly fragmented landlord market with ~$100bn addressable
opportunity with multiple avenues for growth and corresponding value creation
Robust durable cash flow
Predictable triple-net rental streams supported by a diversified, largely investment
grade tenant base
Resilient position
Significant switching costs for mission-critical cell sites and easements in a global,
recession-resistant industry as shown by a minimal churn rate
Strong management
Bill Berkman-led management team with 30+ year track record of public company and
private investing value creation
Substantial inorganic and
APW’s team generates other compelling opportunities to expand into adjacent digital
organic expansion
infrastructure which are beneficiaries of continuing growth in broadband demand
opportunity
3
AP Wireless – The Company
What we do Our origination platform Our portfolio Our tenants
We are one of the largest global APW’s ~300 person team Holds underlying real property Property right establishes long-
aggregators of real property acquires existing tower and interests and attached revenue term resilient “toll road” to collect
interests and attached rents rooftop antennae rent streams streams critical for wireless telecom cash flows
(“ground rents”) underlying from highly fragmented set of communication
Our top 20 tenants are
wireless telecommunications cell property owners
Triple-net leases are typically low predominantly investment grade
sites with mobile network
Sites underwritten based on risk and generally originated at MNOs and tower companies
operators (“MNOs”) and tower
multiple tenants, strategic location, 10% unlevered yields(1) with
companies
and tenant credit quality favorable lease characteristics
Tenants
~60% ~4,100
escalating rent 7-year Sites(2)
Revenue CAGR
Landlord / APW ~5,400
Lease streams(2)
$1.7mm $45.5mm
2011 2018
Revenue Revenue
~$680 mm
invested to-date
$60 99.6% 33% 81% 19
million
ground cash flow(4) 5-year lease investment grade countries in
in-place run rate revenue CAGR tenants(5) present footprint
margin
rent revenue(3) (counterparties)
Note: Financial and operating statistics as of 30 June 2019, unless otherwise noted.
(1) Comprised of initial all-in weighted average unlevered yields of 7% - 8% with 2% - 3% annual inflation-linked growth.
(2) Represents total sites and lease streams acquired by the Company since inception, net of churn.
(3) As of November 30, 2019.
(4) Ground cash flow (“GCF”) is similar to concept of tower cash flow (“TCF”) concept and includes only revenues and expenses related to ground lease sites. GCF = Ground lease revenue – site specific costs (as applicable).
(5) Based on in-place rent as of 30 June 2019 and corporate rating of obligor to extent available (if not available, parent rating used). Top 20 customers represent 86% of 30 June 2019 in-place rent.
4
AP Wireless – Our Asset Origination Platform
Data-Driven Sourcing and Underwriting
Proprietary Screening On-the-Ground Proven Execution
19 Countries First-Mover Advantage
Process and Database Presence and Scale
Annual originations since inception(1)
700k+
700k+ ($ in millions)
Opportunities with a landlord address
Opportunities with a landlord address
110k+
Landlord dialogues
30k+
In process (Leases received) $80
$75
$67 $67
3,616 $64
Active negotiations
$53 $56
337 $37
Underwritings
5,630 Estimated
Lease streams
closed to
AP Wireless – Our Portfolio Characteristics
Select MNOs / Carriers Select MNOs / Carriers
Mobile Operator
Rooftop
Tower
escalating rent
escalating rent,
contracted directly
Select TowerCos TowerCo with easement owner
escalating rent
Ground Lease Property Right Rooftop easement
AP W ir eless Ground lease / Easement AP W ir eless
− “Mission-critical” infrastructure with significant switching costs
− Property Right term ranges from 25 years to perpetuity/99 years (fee simple)
− Weighted average lease term with tenants is ~8 years
Rent Attributes − Rent streams are typically triple-net with zero required maintenance capex, attractive operating margins and
limited operational risk
− Growth from contractual annual rent escalations (2% – 3%), plus additional revenue enhancement opportunities
(e.g., renewals, new tenants)
− Gross churn has averaged approximately 1.5% annually during the last 3 years
Note: Diagram for illustrative purposes only.
6Global Broadband Demand Generates Wide Ranging
Property & Infrastructure Opportunities
Ground leases under towers are fundamental infrastructure building blocks
Explosive data growth… Leads to... Sector beneficiaries
Data usage per capita driving need for
network coverage and densification to Large percentage of the world
meet speed and capacity demands
transitioning from 2G / 3G mobile
networks to 4G / 5G mobile networks
2018A 2024E
9 50
GB(1) GB(1)
There is a need for enhanced network
coverage and densification to meet
speed and capacity demands
Ground leases
AP W ir eless
TowerCos MNOs / Carriers
Small cell sites expected to grow
23% globally by 2023(2) TowerCos, fiber networks and power
Telecom spend by network
4G 5G
$522 $1.15 Importance of strategically located MNOs / Carriers
wireless easements has never
billion(3) trillion(4) been greater
Source: Ericsson Mobility Report (November 2018), Fierce Wireless Group, Morgan Stanley Research.
(1) Mobile data traffic per active smartphone per month. “Ericsson Mobility Report,” November 2018.
(2) “Small Cell Network Market 2019 Global Trends, Size, Industry Segments, and Growth by Forecast to 2023.”
(3) Morgan Stanley, “5 Drivers of 5G Value”, includes estimated spectrum, base transceiver station, transmission, and tower spend in the U.S. between 2011 - 2018.
(4) Morgan Stanley, “5 Drivers of 5G Value”, assumes the bull range of Morgan Stanley’s 5G capex spend between 2019 – 2030 in the four largest 5G markets: U.S., Korea, China, and Japan.
7Digital Infrastructure / Property Segments Represent Multiple
Paths for Long-term Sustainable Growth
What makes digital infrastructure a compelling investment opportunity
Revenue streams are generated from tenants “mission critical” requirements and typically have long-term contracts minimizing churn
High grade credit of tenant counterparties limit the risk of default and subsequent disruptions to revenue
Revenues are recession-resilient and have minimal correlation to the macro economy
Access to historically low cost leverage
Wireless Real Properties’ Multiple Growth Drivers
Today Core origination
− Local presence in high opportunity countries
Portfolio acquisitions
Wireless Real − Early stage discussions with a number of portfolio
Properties acquisitions of smaller leases around the globe
Expansion into other existing durable,
recession-resistant rental streams under Revenue enhancements
critical communications infrastructure − Sustained effort to add co-location tenants
Wireless Towers Small Cells Fiber, Coax, etc. Data & Switching Opportunistic
Centers
Wireless Towers Small Cells Fiber Optic Networks Data & Switching Centers Other Opportunities
Typically ground anchored steel Typically deployed indoors and Glass wire equivalent transmitting Structures providing space, security, Identified other digital property
structures that range in size from outdoors to add capacity and / or data streams as laser signals cooling systems and high availability right lease streams with similar
~100 feet to 400 feet coverage in small geographic electric power (megawatts) to house characteristics, including wireless
Seek long-term contracts servicing
areas mobile equipment, computer servers spectrum and satellites
Rent space to MNOs, public point-to-point connections to
Rent electronics and connectivity and storage
safety, other government agencies wireless towers (backhaul), data Development of Build to Suit
and more to small cell typically provided by centers and other customers
fiber optics Development of Build to Suit opportunities
Development of Build to Suit Development of Build to Suit opportunities
Development of Build to Suit Acquisitions and investments in
opportunities opportunities opportunities
Acquisitions and investments in single assets as well as portfolios
Acquisitions and investments in Acquisitions and investments in Acquisitions and investments in single assets as well as portfolios
single assets as well as portfolios single assets as well as portfolios single assets as well as portfolios
8Transaction Overview
Pro forma enterprise value Estimated sources and uses
($ in mm)
Sources $ %
− $890 million(1)
Cash on hand at Landscape $500 58.8%
(2)
Cash from private placement 300 35.3%
− Multiple of 16.2x Q2 2019 LQA in-place rent of Roll-over equity 50 5.9%
$55 million Total Sources $850 100.0%
Uses $ %
Equity purchase value Cash to sellers (3)
$333 39.1%
Roll-over equity 50 5.9%
Cash to balance sheet 433 51.0%
− LAHL founders and Bill Berkman to own
approximately $60 million of equity in the pro forma Fees and expenses 34 4.0%
business Total Uses $850 100.0%
Pro forma capitalization as of Q2 2019
− Private placement of up to $300 million(2) including ($ in mm)
$100 million committed from Centerbridge Partners, L.P.
to provide incremental cash to balance sheet $ Adj. Pro forma
Domestic debt facility $157 $157
International debt facility 383 383
Estimated $500 million(5) of pro forma cash on balance Gross debt (4) $539 $539
sheet and leverage capacity to fund growth strategy
Cash ($67) ($433) ($500)
Net debt $473 $39
To seek readmission onto the London Stock Exchange x Q2 '19 in-place rent 8.6x 0.7x
followed by a listing on a US-based exchange
(1) Based on purchase consideration of $859.5 million, plus estimated fees and expenses of $30 million, net of seller’s share of fees and expenses. Assumes $10.00 per share based on approximately 85 million shares and share-
equivalents (including 50 million shares from LAHL, 30 million from the anticipated private placement and 5 million of rollover equity) and net debt from APW credit facility of approximately $39 million. Excludes long-term
incentive plan subject to both time- and performance-based vesting (approximately 8.7 million common share-equivalents).
(2) Analysis does not assume exercise of Landscape’s existing 50 million warrants (16.7 million common share-equivalents) struck at $11.50 / share.
(3)
(4)
Cash to sellers reduced by $4 million share of fees and expenses.
Includes accrued interest and installments payable.
9
(5) Pro forma as of Q2 2019 including $300 million of incremental cash from expected private placement.AP W ireless Company Overview
Investment Highlights
Strong tailwinds from global growth in mobile data consumption and infrastructure upgrades
1 due to continued transition to 5G networks ensure that cell site ground rents remain
fundamental building blocks of digital infrastructure
AP W ireless
Properties underlying “mission critical” infrastructure with high barriers to entry due to
2 required expertise, zoning restrictions and “NIMBY” (“not in my backyard”) considerations
Proven wireless ground rent origination platform based on data-driven, underwriting to
3 continue consolidating fragmented wireless easement market
Predictable and durable escalating rent annuity with no maintenance capital expenditures
4 from high credit quality tenants generates compelling risk-adjusted yields
Seasoned management team led by Bill Berkman and supported by Noam Gottesman and
5 Mike Fascitelli
11Opportunity to Consolidate Growing Fragmented Market
Tremendous white space to continue APW’s roll-up strategy across the globe
54%
of APW portfolio in
Europe
28%
of APW portfolio in
North America
17%
of APW portfolio in
South America
435,000
368,000 APW penetration: APW penetration: APW penetration:
~0.3% ~0.5% ~0.6%
116,000
1,161 2,218 705
Total sites APW sites Total sites APW sites Total sites APW sites
North America (1) Europe (1) South America (1)
Note: APW statistics based on 4,084 APW sites as of 30 June 2019.
(1) Europe includes sites in Turkey and Australia. Total sites based on internal APW estimates.
12Underlying APW-owned Leases Support Mission Critical
Infrastructure
Mission Criticality of Tower and Cell Sites
Network
Topology
Location and height designed for optimal coverage and
wireless signal range
Demand for ubiquitous coverage outdoors and indoors
Cost of
High Financial
Costs of Switching
Contractual requirement for tenant to return ground to
original state
Significant decommissioning costs and upfront cost to
Decommission
$20,000 -
rebuilding wireless infrastructure
$50,000 (1)
Labor and Time
Intensive
Difficulty identifying underlying land / easement owner
resulting in long lease execution processes
Cost of
Replenishment
Limited
Alternatives
Not In My Backyard attitude (“NIMBY”) and restrictive
zoning laws results in difficulty replicating APW’s
$150,000 -
$275,000 (1)
global portfolio
Underwriting Characteristics
Proximity to other competitors and tenant’s pre-existing
Coverage and cell sites
Capacity Physical location (e.g., height, land for expansion,
airspace, plans for obstructive construction)
Infrastructure
“Backhaul” connectivity (e.g., fiber, microwave, coax)
Existing equipment on site
Terms
Term of underlying lease with tenant
Asset term available for acquisition
Financial terms (e.g., right of first refusal, price,
magnitude of annual escalator, pre-existing mortgage)
Source: AltmanVilandrie & Co. Analysis
Note: Diagram for illustrative purposes only, not to scale.
(1) Depends on country and type of tower. Cost of decommission is typically the obligation of the tower owner.
13Attractive High Credit Quality Tenant Base
Top 20 tenants Rent by tenant type (1) Top 20 tenants by corporate credit rating (2)
Other Non-IG
5% 19%
TowerCos
27%
Investment
Carriers
Grade
68%
81%
Rent by property right / lease type (1) Tenant rent concentration (3)
Tenant 1
Fee simple Other 9%
9% 16%
Tenants 16-
20 Tenants
9% 2-5
29%
Tenants 11-
15
Triple-net 15%
91% Tenants
6-10
22%
Source: Bloomberg, S&P and Moody's website.
(1) Based on in-place rent as of 30 June 2019.
(2) Based on in-place rent as of 30 June 2019 and corporate rating of obligor to extent available (if not available, parent rating used). Top 20 customers represent 86% of 30 June 2019 in-place rent.
(3) Tenant base diversification calculated as a percentage of 2018 revenue.
14Portfolio Attributes
Asset type (Domestic)(1) Asset type (International)(1) Transaction type(1)
(2) (2) Assignment Other
Other Other
4% 3% of Rents 4% Easement
10% Interest
Rooftop 28%
24%
Usufruct
Rooftop 14%
40%
Tower
57% Fee Simple
Interest
Tower
9%
72%
Leasehold
Interest
35%
Weighted average remaining property
right term (years) Rent payment frequency(1) Annual escalator(1)
Index /
OMV (3) None
1% 1%
49.5 49.5
Fixed
Annual 33%
Monthly
41%
27.3 43%
Index
50%
Higher of
Bi-Annually Index /
North America Europe South America 5%
Quarterly OMV (3) OMV (3)
12% 5% 10%
(1) Based on in-place rent as of 30 June 2019.
(2) Includes Water Tank, Church Spire, Chimney, HUB, Pylon, Wind Turbine and Utility Pole.
(3) OMV represents Open Market Value.
15Favorable Lease Characteristics
Typical duration of 5 years at lease commencement
− Multiple 5 year renewal terms at option of tenant
Tenant Lease Tenor
− No changes to lease terms without mutual agreement
~13 year average customer tenure of existing contracts
97% triple-net leases in the U.S.
Triple-Net Leases
89% triple-net leases internationally
88% fixed escalators in the U.S.; portfolio average of 3%
Built-in Growth 66% inflation index-based escalators internationally
Additional revenue enhancement opportunities (e.g. uplift from mark-to-market, co-tenancy)
Gross churn of approximately 1.5% annually during the last 3 years
− “Mission critical” nature of infrastructure and wireless coverage impact from decommissions or moving
Limited Churn sites limits churn
− Indirect financial burden of tower removal contractually placed with tenant, further limits churn
16Sample Economics of Originating a Single Site
Acquired sites offer attractive yield with built-in organic growth over a
multi-decade long period, with minimal ongoing operating costs
Metric Statistic
All-in acquisition cost(1) ~$144,000
In-place escalator CPI
Landlord / Property right term 30 years
Lease type Easement
Organic annual revenue growth 2 – 3%
Annualized rent $12,000
Operating expenses Nominal
Ground cash flow $12,000
Unlevered initial yield, fully burdened ~8%
Levered initial yield, fully burdened(2) ~13%
Unlevered IRR, fully burdened(3) ~10%
Levered IRR, fully burdened(2)(3) ~15%
(1) Blended all-in acquisition cost represents an average of both international and domestic sites.
(2) Assumes 8.0x leverage on annualized rent at 5.5% interest rate.
(3) Hold yield benefits from 2% - 3% annual inflation-linked growth.
17AP Wireless is Led by an Experienced Team of Industry
Veterans
Core management team
has worked together for
~30 years managing digital
telecommunications
Bill Berkman Scott Bruce Richard Goldstein
companies, including two
Glenn Breisinger
Co-Chair & CEO President of COO of CFO of previously public entities
of AP Wireless AP Wireless AP Wireless AP Wireless
APW’s operating team
includes 300 local, on-the-
ground professionals
identifying and sourcing
CB Mulhern Jay Birnbaum high ROI properties
Managing Director of General Counsel of
AP Wireless AP Wireless
Select prior digital infrastructure operating businesses Select prior investments
18AP W ireless Financial Summary
Operating KPI Summary (as of 30 June 2019)
Revenue Ground cash flow(1)
($ in millions) ($ in millions)
Weighted average
portfolio remaining
$50.5 $50.3 property right of
$45.5 $45.2 ~45 years(2)
$36.2 $36.0
$28.8 $28.7
$23.1 $23.0
$16.9 $16.8
Weighted average
2014A 2015A 2016A 2017A 2018A LTM 2014A 2015A 2016A 2017A 2018A LTM
6/30A 6/30A
remaining tenant
lease tenor of ~11
Number of sites Number of lease streams years
(actuals) (actuals)
5,381
4,904
4,084
3,717 3,971
2,969 3,234 Revenue growth
2,336 2,522 supported by
1,770 1,804 origination activity
1,273 and 2% to 3%
embedded organic
growth
2014A 2015A 2016A 2017A 2018A 6/30A 2014A 2015A 2016A 2017A 2018A 6/30A
(1) Ground cash flow is equal to revenue less taxes, utilities, maintenance and insurance related to fee-simple sites.
(2) Remaining lease term as of 30 June 2019.
20Ground Cash Flow(1) and Growth Capital
GCF
CAGR Ground cash flow represents long-term, resilient
2014 2015 2016 2017 2018 LTM 6/30 '14 - '18 cash flow generation capability of portfolio
Revenue (Rent) $16.9 $23.1 $28.8 $36.2 $45.5 $50.5 28.0% Embedded 2% - 3% contractual rent escalations
Less: Cost of Service 0.1 0.1 0.1 0.2 0.2 0.2 Additional revenue enhancement opportunities (e.g.,
GCF $16.8 $23.0 $28.7 $36.0 $45.2 $50.3 28.0% renewals and / or lease-ups from existing tenants, co-
% of Revenue 99.6% 99.6% 99.6% 99.6% 99.5% 99.7% tenancy)
Base rent increase at lease renewals
Gross churn of approximately 1.5% annually
Typically, zero maintenance capex
Adjusted EBITDA (Fully Burdened for Origination Expense)
CAGR Adjusted EBITDA is burdened by 100% of Origination
2014 2015 2016 2017 2018 LTM 6/30 '14 - '18 and Portfolio SG&A (“O&P SG&A”), of which an
GCF $16.8 $23.0 $28.7 $36.0 $45.2 $50.3 28.0% estimated 80% is directly related to originating assets
and 20% relates to portfolio property management
Less: Origination and Portfolio SG&A ("O&P SG&A") 17.8 19.2 19.5 21.5 24.8 29.1 NM
Adjusted EBITDA ($0.9) $3.8 $9.2 $14.5 $20.4 $21.2 NM
Investments in incremental FTEs are driving origination
Memo: Growth Capex (2) $63.9 $66.8 $66.6 $75.2 $79.8 $83.0 growth
Implied yields
2014 2015 2016 2017 2018 LTM 6/30 Growth capital comprised of both purchase price of rent (capex),
as well as in-house origination team cost
(2)
Growth Capex $63.9 $66.8 $66.6 $75.2 $79.8 $83.0 Since inception, consistent ability to originate new assets at
O&P SG&A 17.8 19.2 19.5 21.5 24.8 29.1 attractive, all-in weighted average unlevered yields of 7% - 8%
(3)
Total Growth Capital $81.7 $86.1 $86.1 $96.6 $104.7 $112.2 Opportunity to
O&P SG&A as a % of Total Growth Capital 21.8% 22.4% 22.6% 22.2% 23.7% 26.0%
− Increase investments in SG&A to increase origination activity in
Acquired Annualized Rents $6.2 $6.6 $7.0 $8.2 $8.6 $8.9
existing countries as well as open new countries
Implied yields − Expect SG&A efficiencies with greater scale
Unlevered Asset Purchase Only Initial Yield (Capex) 9.7% 9.8% 10.5% 11.0% 10.8% 10.7% − Improve fully-burdened yields over time through increasing
Less: Impact of O&P SG&A 2.1% 2.2% 2.4% 2.4% 2.6% 2.8% scale and operating leverage
Unlevered Initial Yield, Fully Burdened 7.6% 7.6% 8.1% 8.5% 8.2% 7.9%
SG&A impact inflated due to seasonality; typically 60% of originations occur in
the second half of the year
(1) GCF is similar to tower cash flow (“TCF”).
(2) Represents cash purchase price, plus deferred consideration, if any. Growth Capex excludes de minimis fixed asset purchases (e.g., computers) and OP-SG&A.
(3) All-in cost required to acquire lease stream properties; also can be viewed as total growth capex.
21Framing the Transaction Valuation
A Portfolio B Origination platform We view AP Wireless as (i) a current
portfolio of yielding assets that are
5,400 in-place rent streams(1) In-country dedicated
Expert team also growing organically and (ii) an
generating steady, escalating teams identifying,
cash flows with low required underwriting and acquiring origination platform acquiring assets
SG&A lease streams one by one at attractive rates of return on invested
capital
Primarily valued based on Valuation based on
traditional valuation implied yields on A Portfolio
metrics and NTM rent invested capital
Database
AP Wireless generated $50.5 million of
rent over the last twelve months –
Illustrative valuation approach (based on Q2 ’19 LTM performance)
which will grow via escalators; $55.0
($ in millions) A Portfolio B Origination Consolidated million of rent in Q2’19 (annualized)
Memo: Q2’19 LQA Rent $55.0 – $55.0 Approximately $5.8 million of O&P-
SG&A (20% of total O&P SG&A) is
Q2’19 LTM Rent $50.5 – $50.5
related to maintaining the platform
(–) Site specific costs (TUMI)(2) 0.2 – 0.2
Assuming full allocation of the pro
LTM Ground cash flow ("GCF") $50.3 – $50.3
forma enterprise value ($890.0 million)
O&P-SG&A(3) $5.8 $23.3 $29.1 to the in-place portfolio implies a 16.2x
Capex – 83.0 83.0 LQA rent multiple or a 20.0x LTM
Adjusted EBITDA multiple
LTM Growth Capital $5.8 $106.3 $112.1
LTM Adjusted EBITDA $44.5 ($23.3) $21.2
B Origination platform
Memo: Acquired rent – $8.9 $8.9
Over the last twelve months, AP
Implied valuation Acq. Rent / Acq. Rent / Growth
Wireless invested $83.0 million in
multiples Growth Capital Capital
direct capex and approximately $23.0
EV ($890mm) / LQA 6/30 Rent 16.2x million in origination-related SG&A
EV ($890mm) / LTM 6/30 Rent 17.6x With approximately $8.9 million in
EV ($890mm) / LTM GCF 17.7x 8.4% 7.9% acquired rents, the origination platform
yields assets at ~8.4%
EV ($890mm) / LTM Adj. EBITDA 20.0x
Note: Based on LTM metrics.
Market data as of 20 November 2019.
(1) As of 30 June 2019.
(2) TUMI = Taxes, Utilities, Maintenance and Insurance expense as applicable.
(3) An estimated 80% of OP – SG&A is related to origination and 20% to maintaining the portfolio.
22Diversified Funding Strategy
Revenue currency matching APW Balance Sheet (30 June 2019) Financing goals
Revenues(1) Flexible and scalable funding base Borrow locally to match asset with
corresponding currency, reducing FX
Domestic − International borrowing shelf of up to
29% volatility
£1.0bn through listed Irish Credit
Vehicle (pass through note program)
− Drawn borrowings in GBP and EUR Increased scale of rent base will drive
presently down the cost of debt
− Ability to borrow in CAD and AUD
International
71%
− Leverage at 8-9x annual rent on a Seek to scale unsecured international
senior secured basis debt
Debt outstanding(2) Outstanding debt is 100% fixed rate with a
blended c. 7 year remaining term and
Domestic Transaction and anticipated private
approximately one-third in USD, GBP and
30%
EUR denominations, roughly matching placement will provide significant
core ground-lease rent currencies incremental cash to the balance sheet
creating additional flexibility and liquidity
U.S. debt facility
− Fixed rate loans outstanding of
International ~$150mm
70%
− Fixed rate coupon of 6.50% for
Rent by Currency ~$50mm maturing in 2020
Other
− Fixed rate coupon of 4.25% for the
28% USD ~$100mm maturing in 2023
30%
International debt facility
− Fixed rate loans outstanding of
~$360mm(2)
EUR
14% − Matures in 8 years
GBP
28% − Fixed rate coupon of 4.25%
(1) As of 30 June 2019.
(2) Excludes installments payable.
.
23AP W ireless Appendix
Income Statement(1)
LTM
2014 2015 2016 2017 2018
6/30/19(2)
Revenue $16.9 $23.1 $28.8 $36.2 $45.5 $50.5
Less: Cost of Service(3) 0.1 0.1 0.1 0.2 0.2 0.2
Ground Cash Flow $16.8 $23.0 $28.7 $36.0 $45.2 $50.3
SG&A 18.7 20.0 20.3 22.7 26.9 29.9
Depreciation and Amortization 11.6 15.7 19.1 23.8 28.9 30.9
Non-cash Impairment 0.3 1.6 0.9 1.9 0.3 1.3
Total Operating Expense $30.6 $37.2 $40.2 $48.4 $56.1 $62.1
Operating Loss ($13.8) ($14.3) ($11.6) ($12.4) ($10.9) ($11.8)
Other, net 0.7 0.6 0.3 1.7 (1.8) (1.2)
Realized / Unrealized Gain / (Loss) on Foreign Currency Debt 0.0 0.0 9.7 (10.4) 13.8 9.2
Non-cash Management Carve-out Plan Expense 0.0 0.0 0.0 0.0 (5.2) (6.0)
Loss on Extinguishment of Debt (1.2) 0.0 (1.3) 0.0 0.0 0.0
Interest Expense (11.5 ) (14.7 ) (21.4 ) (26.4) (28.0) (30.2)
Net Loss Before Taxes ($25.8) ($28.4) ($24.2) ($47.5) ($32.1) ($40.0)
Prov. Income Taxes 0.0 0.0 0.0 0.0 (0.8) (0.9)
Net Income / Loss ($25.8) ($28.4) ($24.2) ($47.5) ($32.9) ($40.9)
(1) Figures exclude an estimated $8.5 million of cash expense resulting from the internalization of the management team.
(2) Management is in the process of assessing the impact of FASB ASC 606 (Revenue Recognition from Contracts with Customers) and FASB ASC 842 (Lease Accounting Standard). At this time it is not anticipated that the
impact, if any, of the adoption of ASC 606 and ASC 842 to the 30 June 2019 figures above will be material.
(3) Cost of Service includes taxes, utilities, maintenance and insurance related to fee-simple sites.
25EBITDA Reconciliation
EBITDA Reconciliation(1)
LTM
2014 2015 2016 2017 2018
6/30/19(2)
Net Loss ($25.8) ($28.4) ($24.2) ($47.5) ($32.9) ($40.9)
Depreciation and Amortization 11.6 15.7 19.1 23.8 28.9 30.9
Interest Expense 11.5 14.7 21.4 26.4 28.0 30.2
Tax Expense 0.0 0.0 0.0 0.0 0.8 0.9
EBITDA ($2.7) $2.0 $16.3 $2.7 $24.8 $21.1
Non-cash Impairment 0.3 1.6 0.9 1.9 0.3 1.3
Loss on Extinguishment of Debt 1.2 0.0 1.3 0.0 0.0 0.0
Realized / Unrealized (Gain) / Loss on Foreign Currency Debt 0.0 0.0 (9.7) 10.4 (13.8) (9.2)
Non-cash Management Carve-out Plan Expense 0.0 0.0 0.0 0.0 5.2 6.0
Non-cash foreign currency adjustments 0.3 0.2 0.5 (0.5) 3.9 2.0
Adjusted EBITDA ($0.9) $3.8 $9.2 $14.5 $20.4 $21.2
Origination & Portfolio Overhead / SG&A(1)
SG&A 18.7 20.0 20.3 22.7 26.9 29.9
Other, net (0.7) (0.6) (0.3) (1.7) 1.8 1.2
Non-cash Foreign Currency Movements (0.3) (0.2) (0.5) 0.5 (3.9) (2.0)
Origination and Portfolio Overhead / SG&A $17.8 $19.2 $19.5 $21.5 $24.8 $29.1
(1) Figures exclude an estimated $8.5 million of cash expense resulting from the internalization of the management team.
(2) Management is in the process of assessing the impact of FASB ASC 606 (Revenue Recognition from Contracts with Customers) and FASB ASC 842 (Lease Accounting Standard). At this time it is not anticipated that the
impact, if any, of the adoption of ASC 606 and ASC 842 to the LTM 30 June 2019 figures above will be material.
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