Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - HOOPER HOLMES INC | ex992pressrelease.htm |
| EX-10.1 - EXHIBIT 10.1 - HOOPER HOLMES INC | ex101securitiespurchaseagr.htm |
| EX-4.1 - EXHIBIT 4.1 - HOOPER HOLMES INC | ex41warrant.htm |
| EX-2.1 - EXHIBIT 2.1 - HOOPER HOLMES INC | ex21hhmergeragreement.htm |
| 8-K - 8-K - HOOPER HOLMES INC | hhform8-kremergerand2017pr.htm |
(NYSE Mkt: HH)
Hooper Holmes and Provant to Merge
Combination to Benefit Shareholders, Customers, and Wellness Industry
March 8, 2017
Safe Harbor
2
Special Note Regarding Forward-Looking Statements
This presentation contains forward-looking statements, as such term is defined in the Private Securities Litigation Reform Act of 1995,
concerning the Company’s plans, objectives, goals, strategies, future events or performances, which are not statements of historical
fact and can be identified by words such as: “expect,” “continue,” “should,” “may,” “will,” “project,” “anticipate,” “believe,” “plan,”
“goal,” and similar references to future periods. The forward-looking statements contained in this presentation reflect our current
beliefs and expectations. Actual results or performance may differ materially from what is expressed in the forward looking statements.
Among the important factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-
looking statements contained in this presentation are our ability to realize the expected benefits from the acquisition of Accountable
Health Solutions and our strategic alliance with Clinical Reference Laboratory; our ability to close the merger transaction with Provant
Health Solutions and to realize the expected synergies and other benefits from the merger; our ability to successfully implement our
business strategy and integrate Accountable Health Solutions’ and Provant Health Solutions’ business with ours; our ability to retain
and grow our customer base; our ability to recognize operational efficiencies and reduce costs; uncertainty as to our working capital
requirements over the next 12 to 24 months; our ability to maintain compliance with the financial covenants contained in our credit
facilities; the rate of growth in the Health and Wellness market and such other factors as discussed in Part I, Item 1A, Risk Factors, and
Part II, Item 7, Management’s Discussion and Analysis of Financial Conditions and Results of Operations of our Annual Report on Form
10-K for the year ended December 31, 2015. The Company undertakes no obligation to update or release any revisions to these
forward-looking statements to reflect events or circumstances, or to reflect the occurrence of unanticipated events, after the date of
this presentation, except as required by law. This presentation contains information from third-party sources, including data from
studies conducted by others and market data and industry forecasts obtained from industry publications. Although the Company
believes that such information is reliable, the Company has not independently verified any of this information and the Company does
not guarantee the accuracy or completeness of this information. Any references to documents not included in the presentation itself
are qualified by the full text and content of those documents. During our prepared comments or responses to your questions, we may
offer incremental metrics to provide greater insight into the dynamics of our business or our quarterly results, such as references to
EBITDA, adjusted EBITDA and other measures of financial performance. Please be advised that this additional detail may be one-time
in nature and we may or may not provide an update in the future. These and other financial measures may also have been prepared on
a non-GAAP basis.
3
Creating one of the
largest pure-play
Health & Wellness
companies
Merger quickly enhances
financial model and increases
competitiveness
On-site screenings, risk
assessments, and immunizations
Technology platform capabilities
and coaching
Engagement and advanced data
management
4
Transaction Overview
› Merger of two leading health & well-being
companies
› Committed financing enhances capital position
to support integration and growth
› All-stock transaction increasing scale and
enhancing scope
› Expected transaction closing in 2Q 2017
Hooper Holmes to merge with Provant
› Combined pro-forma revenues of $67 million in 2016
› Annualized synergistic savings of $7+ million
› Transaction expected to be accretive to
adjusted EBITDA, projected to be $3 million
in last 9 months of 2017, once combined
› No overlap of existing customer base
› Increases to scale as a combined entity with
complementary strengths in both operations and
technology
› Significant operational synergies and improved
financial performance
Merger creates a compelling
financial model
› 3 directors from existing HH board
› 3 directors from Provant board
› 1 independent director
Support of Board of Directors
› Provant shareholders and existing HH shareholders
to contribute $3.5 million of additional capital on
an equal basis
Commitment from existing shareholders
5
Management Team
Henry Dubois Chief Executive Officer
› Track record of accelerating value creation through improved
business performance
› Extensive public company experience
Heather Provino Chief Strategy Officer
› Deep healthcare and well-being domain expertise
› Well-being industry thought leader with significant innovation
& product development experience
Mark Clermont President
› Experienced architect of high performance corporate cultures
› Proven leadership success with expertise in global growth,
operational integration and transformation
Steven Balthazor Chief Financial Officer
› Analytical expertise specializing in complex integrations
› Significant executive-level financial, operational and consulting
experience
Shared culture
to drive growth
through
improving
participants’
health.
Combining Management Strengths
Combines strategic, operational and financial expertise
6
Provant Overview
Founded in 2001,
Provant improves the
health, well-being, and
productivity of
employees while
helping employers make
healthcare affordable.
Scale
› 4,400 active providers and health coaches
› Over 13,000 available health professionals in
network
› 6,700 event locations served in 2016
› Serves 10% of Fortune 100, including 3 in
Fortune 50
Services
› Biometric Screenings, Health Assessments, &
Vaccinations
› Well-Being Platform & Advanced Data Management
› Health Coaching & Advocacy
› Additional Consulting & Custom Communications
7
A New Comprehensive, Pure-Play Wellness Leader
Value and Growth Drivers
Biometric screenings,
complex blood analysis
Health coaching &
condition management
Well-being portal,
personalized nutrition, sleep,
finance, trackers, challenges
Advanced data
management, analysis,
reporting
› Innovation capabilities – Driving
evidence-based, actionable
screenings and digital interventions
› Scale – Large portfolio of clinical
screenings and next-generation
digital technologies
› Growth in adjacent sales
opportunities – Tools and resources
to take advantage of potential sales
opportunities across customer
categories
› Leverage client and channel
relationships – Complementary
sales channels and revenue sources
Combination of Hooper Holmes
and Provant will create a
wellness leader across four
high growth segments:
› Biometric screenings
› Flu vaccinations
› Client management
› Member platform
› Advanced data
management
› Health coaching
› Implementation
management
› Data & reporting, plus
other ancillary services
› Call center / Customer
service
8
Accelerate Strategy
On-site,
face-to-face
employee
engagement
Remote, ongoing
employee
engagement
Deep expertise as a pure-play, comprehensive well-being service provider
› Strategic expertise
› Highly flexible and configurable solutions
› Fully integrated well-being capabilities
Meaningful scale with a network of thousands of health professionals across the
country servicing tens of thousands of participants at more than 3,000 end-clients
Enabled by proprietary technology and tech-enabled high-touch services that expand
customer value proposition and increase margins
› Well-being platform
› Advanced data
management
› Integrated data analytics
› Personalized interventions
› Telephonic and digital
therapeutics
› Remote screening and flu
vaccinations network
› Aggregated best-in-class
partners
National Service Delivery
Complementary Core Competencies
Proprietary Technology
9
Value Creation for Shareholders
Merger
Expected to be
Accretive to
Adjusted
EBITDA in Year 1
Delivers advanced and scalable data hub technology
Diversifies sales channels
Expands management team
Infrastructure to Accelerate Growth
Improves cost structure with shift towards higher
margin, recurring revenue mix (e.g., Portal & Coaching)
Increases scale to provide operating leverage
Enhances innovation and speed to market
Road Map to Profitability
10
Cost Synergies
Annualized cost synergies
$7+ million
Through service
offering overlap and
enhanced scale
Duplicative SG&A
Screening, clinical, and coaching efficiencies
Realization of technology platform capacity
Annualized cost efficiencies
Improves borrowing costs and structure
Expands purchasing power
Increased Value Proposition
Optimizes facility utilization
11
Financial Overview (in millions, at December 31, 2016)
Revenue
Enhanced Scale and Offerings
› $50 million in revenue per year from screening alone
› Pure-play, comprehensive, nationwide wellness provider
› Well-being platform & advanced data management
› Health coaching & advocacy
EBITDA
In Millions
HH
2016
Provant
2016 Combined
Q4 2016 ($0.5) $2.6 $2.1
› Provant revenues heavily
concentrated in Q4
› Both companies had combined
improvement over Q4 2015 by
~$1.0mm
›+$800K HH & +$200K Provant
2016 ($3.1) ($3.1) ($6.2)
› Hooper improved over 2015 by
~$1.2mm, 27% improvement
Pro-forma
Adjustments
$2.0
$7.0
› 2016 Provant Right-Sizing One-
Time Costs
› Merger Synergies
› Improved scale
› Improvement net of
estimated integration costs
Pro-forma
combined EBITDA
$2.8
* Footnote: Provant's revenue adjusted for pass-through revenue that has no margin
12
Commitment to Customers
Combined company will have
335 customers
serving over 3,000
organizations
Includes channel partners,
direct customers, and clinical
research organizations.
Overview: Provide white label support services
Services: Screenings, Flu Shots & Data Management
Customers: Health Plans & Wellness Providers
Channel Partners
Overview: Comprehensive Well-Being Programs
Services: Screenings, Coaching, Technology & Data
Customers: Fortune 100 including 3 Fortune 50
Direct Customers
Clinical Research Organizations
Overview: Sample & Data Collection
Customers: University of Michigan & NIH PATH
Services: Screenings & Sample and Data Collection
13
$7.4 Billion Addressable Market
Source: IBIS 2016 Corporate Wellness Services Industry Report
2016 TAM: $7.4bn
› Total Addressable Market is expected to grow 27% in coaching services and when paired with technology
platform growth expected growth at 11% and with screenings and immunizations at expected growth 8%
› A combined organization of Hooper Holmes and Provant results in one of the largest pure-play well-being
providers, which can capture an outsized share of this growing market by selling additional high-tech portal
and coaching/disease management solutions on top of their existing screening footprint
40%
Large private sector
businesses
20%
Mid-size private sector businesses
17%
Public sector
13%
Small private sector
businesses
10%
Nonprofit organizations
TAM
Screenings and HRAs $1.09
Nutrition & Weight
Management
$1.12
Smoking Cessation $1.09
Fitness Services $1.02
Immunizations $0.98
Alcohol and Drug Abuse $0.74
Stress Management $0.73
Health Education $0.51
Other $0.08
$7.35
14
Capital Structure/Expected Transaction Timing
Shares Outstanding Shares (mm)
Pre-Transaction 10.5
› Shares Issued to Provant shareholders 10.5
› $3.5mm Capital Raise from various investors 4.3
› Transaction fees expected to be paid in equity 1.2
Pro-forma shares outstanding post transaction close 26.5
Revolver $ mm
Total availability $15.0
› Expected amount drawn at close $4.4
› Expected excess availability based on combined receivables at close $3.6
Term Debt $ mm
Total $6.5
› Repay existing term facility, provide working capital
SIGNING OF MERGER AGREEMENT
SEC APPROVAL
INTEGRATION EXECUTION
CLOSING
S-4 FILING
SHAREHOLDER VOTE AND APPROVAL
MAR – 2017 APR – 2017 MAY – 2017 JUNE 2017 AND BEYOND
15
Conclusion
› All-stock, accretive transaction increasing scale
› Expected to improve gross margins due to
combined revenues
› Expected to increase operational synergies;
decreases cost of goods sold
› Anticipated strong growth within business
verticals
› Anticipated $54 million in combined revenues in
last 3 quarters of 2017
› Targeting $5+ million of EBITDA and positive
net income in 2018
› Full spectrum of expertise combining
high-touch interventions, high-value technology
and comprehensive clinical services
› Greater personalization, enhanced member
experiences, increased engagement, and
improved outcomes
› Faster innovation
› Advanced technology platforms
› Expanded nationwide health professional network
Creating Shareholder Value Enhancing Direct & Channel Partner Value