acquisition of aleris care announcement presentation...2018/10/16 · egm, planned for h1 2019 to...

Acquisition of Aleris Care

Announcement presentation16 October 2018

Transaction summary

2

Transaction in brief

EV/EBITA

before synergies

14.0x

Enterprise value

SEK

2,600m

Bridge

financing in

place, rights

issue in 2019

The

acquisition

Ambea has entered into an

agreement to acquire Aleris Care at

an enterprise value of SEK 2.6bn,

corresponding to an equity value of

approx. SEK 3.0bn

Closing of the acquisition is expected

in Q1 2019, subject to customary

regulatory approvals

Financing

Ambea has secured bank financing for the acquisition, consisting of a SEK 1.4bn loan facility and a SEK 1.2bn bridge financing to be repaid by rights issue

Rights issue to be approved by the EGM, planned for H1 2019 to maintain financial strength and flexibility

Note: EBITA-multiples based on adjusted LTM September 2018 SEK 186m (Reported SEK 127m).

EV/EBITA

after direct cost

synergies and

operational

improvements

8.5x

3

The largest private care company in the Nordics,

with leading positions in Sweden, Norway and

Denmark

A robust platform in multiple countries with strong

organic growth pipeline

Significant synergies and margin improvement

opportunities

Cross-country learning opportunities and sharing of

best practice

The New Ambea Group

Strategic rationale

1,796

beds in the pipeline

SEK ~120m

annual direct cost synergies

and operational

improvement opportunitySignificant cross-country

learning and best practise

sharing

Note: Competitors include for-profit care service providers in segments where Ambea is present. Comparison based on LFY reported revenues,

adjusted for major acquisitions and divestments. Aleris Care pro forma group accounts K3. Attendo adjusted for divested healthcare operations and the

acquisition of Mikeva. Team Oliva Danish sales exclude sales related to Personal Assistance

Source: Company information, company filings

#1

#1

#1

#1 market

position in

the Nordics

Care

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IoF (SWE)

EC (SWE)

Two complementary companies with strong own management businesses

4

Ambea at a glance

Note: Aleris Care pro forma group accounts K3. Sales adjusted for discontinued businesses, terminated contracts and units in the process of being closed


Aleris Care at a glance

% sales

LTM H1

Sweden

Norway

% sales

LTM H1

Geography

Own vs. Contract

Segment

Own ManagementContract ManagementStaffing

% sales

LTM H1

Nytida

Vardaga

SEK 5,937m sales LTM H1

#3 in the Nordic market‒ #2 in Sweden

‒ #7 in Norway

‒ n.a. in Denmark

67% Own Management of sales

1,038 beds in pipeline

% sales

LTM H1

% sales

LTM H1

Geography

Own vs. Contract

Segment

Own Management

Contract Management

% sales

LTM H1

Norway



‒ #1 in Norway

‒ #1 in Denmark


758 beds in pipelineNorway

Klara Denmark

SwedenNorway

DenmarkCare

The new Ambea Group- the leading Nordic care provider

5

From #3 to #1 in the NordicsThe new Ambea Group


1,796 beds in pipeline



‒ #1 in Norway

‒ #1 in Denmark

Note: Competitors include for-profit care service providers in segments where Ambea is present. Comparison based on LFY reported revenues, adjusted

for major acquisitions and divestments. Aleris Care pro forma group accounts K3. Attendo adjusted for divested healthcare operations and the acquisition

of Mikeva. Team Oliva Danish sales exclude sales related to Personal Assistance


#1

#1

#1

Indicative market position

pre transaction

Indicative market position

post transactionIndicative market

position

Care







Active in attractive markets

6Note: Share of private provision (incl. non-profit providers) of elderly care services in selected European countries. Indicative share of market

Source: Socialstyrelsen, SCB, Konkurrensverket, Dansk Erhverv, SSB, DST

Favorable demographic development in elderly care, with number of +80 year olds expected to increase

Low private penetration in the Nordics compared to rest of Europe indicates future potential

% private providers

522 096

807 890

2018 2030

55%223 291

353 667

2018 2030

256 694

433 062

2018 2030

Individuals +80 years old

E E E

880

1,79688

644

65

114

5

Ambeapipeline

Aleris Carepipeline

New Ambea Grouppipeline

Vardaga Nytida beds Nytida placements Norway

Significant number of beds in pipeline driving short term organic growth

7

1,796 beds in combined pipeline

18% 39% 23%

Beds in pipeline as % of current OM beds/placements in operations


Operational excellence drives margin improvementSignificant cross-country learning opportunities

8

Ambea care model… …results in margin improvements

4,6%

5,5%

6,9%

7,7%

8,5%9,0%

8,6% 8,4%

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2014 2015 2016 2017 2018

Leader in education of

high competence

Industry-leading quality system

KPI-driven unit performance

management

1

2

Operational excellence and

digitalisation

4

3


Adjusted EBITA-margin LTM

Attractive synergies to support further growth

9

Direct costs

Certain overlapping functions

High degree of control of implementation

Costs in connection to synergy realisation

and M&A-related costs

Overhead cost

synergies

Integration &

M&A costs

SEK 90m

SEK ~135m

~50% of synergies

achieved in 2019

100% of synergies

achieved in 2020

Majority of M&A

costs in 2018

Majority of

realisation costs in

2019

Annual financial impact

One-off effects

Ambea care model

Best practice and knowledge sharing

Procurement contracts

Operational

improvementsSEK 30m

100% of

improvements

achieved in 2020

Total

SEK 120m

Source: Company information

Ambea financial targets reconfirmed

10

Sales growth

Adjusted earnings per share accretive as of

Q2 2019 provided the proposed rights issue

Margin dilution short-term

Financial targets reconfirmed medium-term

Medium-term

further

potential

Reconfirmed

financial

targets

Targets reached

medium-term

Ambea financial targets

8-10%

Adjusted EBITA margin

Net debt / adjusted EBITDA

Annual growth ranging between 8-10% through a

combination of organic and acquisition driven

growth

An adjusted EBITA margin of 9.5% in the

medium-term

Net debt to adjusted EBITDA below 3.25x with

short-term deviations, e.g. in association with

acquisitions

9.5%

<3.25x

Earnings dividendGiven proposed rights issue in 2019, the Board

anticipates to recommend to the AGM to resume

dividend for fiscal year 2019, payable in 202030%

Note: Earning per share adjusted for M&A related amortisations and one-off costs


Transaction terms

11

The

acquisition

Financing

Timetable

Ambea has secured SEK 2.6bn in bank financing in order to finance the acquisition

− Danske Bank, DNB and Nordea are the arrangers and lenders of the bank financing, which

comprises (i) a revolving credit facility of SEK 1.4bn with an original term of 3 years, plus two

optional extensions of 1 year each, and (ii) a bridge facility of up to SEK 1.2bn with an original term

of 9 months, plus two optional extensions of 3 months each. The intention is to repay the bridge

facility through the rights issue.

Rights issue supported by largest shareholders, to be approved by the EGM, planned for H1 2019 to maintain financial strength and flexibility

− ACTR Holding AB and ACTOR SCA, which are controlled by KKR and Triton – jointly holding 50.1% of the shares in Ambea intend to vote in favour of the rights issue at a general meeting and to subscribe for their respective pro-rata shares in the rights issue.

Transaction costs for the acquisition are estimated at SEK 35m

Closing of the acquisition expected in Q1 2019, subject to customary regulatory approvals

Rights issue is expected to be completed during H1 2019

Note: EBITA-multiples based on adjusted LTM September 2018 SEK 186m (Reported SEK 127m).


Enterprise value

SEK

2,600m

EV/EBITA

before synergies

14.0x

EV/EBITA

after direct cost

synergies

9.4x

EV/EBITA

after cost synergies

and operational

improvements

8.5x

Deleveraging

to reach medium-

term financial target

Fully funded acquisition maintaining a strong financing structure

12

Rights issue

Shareholder

support

Loan and bridge facility available to finance the acquisition

Plan to raise approximatelySEK 1.2bn in a rights issue – to be approved by the EGM

Rights issue expected to be completed during H1 2019

The larger shareholders ACTR Holding AB and ACTOR SCA, controlled by KKR and Triton and representing approximately 50.1 per cent of the total number of shares and votes in Ambea, intend to vote in favour of the rights issue at a general meeting and to subscribe for their respective pro-rata shares in the rights issue. The rights issue is expected to be resolved and completed during the first half of 2019.

Illustrative Net debt / EBITDA development

New Ambea Group

Down to current level

after right issue,

trending towards

target end of 2019

4.0

5.4x

3,9x

3,25x

Leverage Q22018

Illustrativeleverage post

acquisition

Illustrativeleverage post

acquisition andrights issue

Long-termfinancial target


Time table

13

Next steps

Announcement of acquisition

Expected approval from competition filing

Closing of acquisition

EGM

Rights issue

Today, 16 October 2018

Q1 2019

Q1 2019

H1 2019

H1 2019

Appendix

New structure of Ambea Group

15

New Ambea Group

Norway KlaraNytida DenmarkVardaga

New

segment


New Ambea Group income statement

16Note: Aleris pro forma group accounts K3 adjusted for discontinued businesses, terminated contracts and units in the process of being closed.

OH attributable to Aleris Sweden has been allocated to Nytida and Vardaga based on the segments’ share of Aleris Sweden sales


Aleris Care LTM H1 2018

SEKm Vardaga Nytida Norw ay Denmark Klara Group

Adjusted sales 1 034 636 2 595 400 n.a. 4 665

OPEX and depreciation (1 030) (594) (2 504) (390) n.a. (4 519)

Adjusted EBITA 3 42 91 9 n.a. 146

% adjusted EBITA margin 0,3% 6,6% 3,5% 2,3% n.a. 3,1%

Reported EBITA n.a. n.a. n.a. n.a. n.a. 96

Ambea LTM H1 2018


Sales 2 234 2 938 444 n.a. 321 5 937

OPEX and depreciation (2 087) (2 576) (427) n.a. (306) (5 439)

Adjusted EBITA* 147 362 17 n.a. 15 498

% adjusted EBITA margin* 6,6% 12,3% 3,8% n.a. 4,7% 8,4%

New Ambea LTM H1 2018


Sales 3 268 3 574 3 039 400 321 10 602

OPEX and depreciation (3 117) (3 170) (2 931) (390) (306) (9 958)

Adjusted EBITA* 150 404 108 9 15 644

% adjusted EBITA margin* 4,6% 11,3% 3,6% 2,3%n.a. 4,7% 6,1%

* EBITA for each Ambea sub-segment standalone. Group includes unallocated and group adjustments

17

Specification of costs related to the Transaction

Transaction costs

SEKm

M&A-related costs 35

Rights issue costs To be confirmed

Synergy realisation costs 100

Total transaction costs 135


acquisition of aleris care announcement presentation...2018/10/16 · egm, planned for h1 2019 to...

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