Attached files
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EX-99.1 - EX-99.1 - EURONET WORLDWIDE, INC. | d360728dex991.htm |
8-K - FORM 8-K - EURONET WORLDWIDE, INC. | d360728d8k.htm |
Exhibit 99.2
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Exhibit 99.2
EURONET WORLDWIDE
Euronets Proposal to Acquire MoneyGram
MARCH 14, 2017
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Forward Looking Statements
This document contains forward-looking statements related to the proposed transaction between
Euronet and MoneyGram, including, but not limited to, statements regarding the benefits of the transaction and the timing of the transaction as well as statements regarding the companies services and markets. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including the following, among others: MoneyGram and Euronet may not sign a definitive merger agreement on the terms outlined in the document or at all; MoneyGrams stockholders may not approve the transaction; closing of the transaction may not occur or may be delayed; expected synergies and other financial benefits of the transaction may not be realized; integration of the acquisition post-closing may not occur as anticipated; litigation related to the transaction or limitations or restrictions imposed by regulatory authorities may delay or negatively impact the transaction; unanticipated restructuring costs may be incurred or undisclosed liabilities assumed; attempts to retain key personnel and customers may not succeed; actions by competitors may negatively impact results; and, there may be negative changes in general economic conditions in the regions or the sectors in which Euronet and MoneyGram operate. In addition, please refer to the documents that Euronet and MoneyGram have filed with the SEC on Forms 10-K, 10-Q and 8-K. These filings identify and address other important risks and uncertainties that could cause events and results to differ materially from those contained in the forward-looking statements set forth in this document. Any forward-looking statements made in this document speak only as of the date of this document. Readers are cautioned not to put undue reliance on forward-looking statements, and Euronet assumes no obligation and does not intend to update these forward-looking statements, whether as a result of new information, future events or otherwise.
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Defined Terms
Unless specifically noted otherwise within this presentation, the following terms are hereby defined as follows:
Adjusted EBITDA is a non-GAAP measure that is defined as net income excluding interest, income tax expense, depreciation, amortization, share-based compensation expenses and other non-operating or non-recurring items that are considered expenses or income under U.S. GAAP. Adjusted EBITDA represents a performance measure and is not intended to represent a liquidity measure.
Adjusted earnings per share (Adjusted EPS) is a non-GAAP measure that is defined as diluted U.S. GAAP earnings per share excluding, to the extent incurred in the period, the tax-effected impacts of: a) foreign currency exchange gains or losses, b) goodwill impairment charges, c) gains or losses from the early retirement of debt, d) share-based compensation, e) acquired intangible asset amortization, f) non-cash interest expense, g) non-cash income tax expense, and h) other non-operating or non-recurring items. Adjusted earnings per share represents a performance measure and is not intended to represent a liquidity measure.
The reconciliation of non-GAAP items to their most directly comparable U.S. GAAP financial measure is included in the attached supplemental data. The non-GAAP measures may not be comparable to similarly titled non-GAAP measures used by other companies and should be used in addition to, and not a substitute for, measures computed in accordance with U.S. GAAP.
The Company does not provide a reconciliation of its forward-looking non-GAAP measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for GAAP and the related GAAP to non-GAAP reconciliation, including adjustments that could be made for currency exchange rate fluctuations and other charges reflected in the Companys reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.
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Euronet Worldwide Overview
Founded: 1994
Leading electronic payments processor and distributor
Market Cap: ~$4.3 Billion
Employees: 6,200 worldwide
Market: NASDAQ (EEFT) since 1997
2016 Revenue: $2.0 Billion
2016 Adjusted EBITDA: $345.2 Million
Adjusted EPS: >20% CAGR since 2011
EFT Segment
epay Segment
Operates in 53 countries(1)
~$38 billion in cash dispensed from ATMs annually(2)
1.9 billion transactions processed(2)
>35,000 ATMs under management(1)
Provides services on ~125,000 ATMs(1)
Driving ~163,000 POS terminals(1)
Operate independent ATM networks in 21 countries (1)
Processing in 35 countries across Europe, Asia and the Americas(1)
~661,000 POS terminals(1)
~305,000 retailer locations(1)
~$13 billion prepaid volume(2)
1.3 billion transactions(2)
Money Transfer Segment
146 Money Transfer delivered countries(1)
32 Money Transfer originating countries(1)
~317,000 transfer locations(1)
$33 billion transfers processed(2)
82.3 million transactions processed(2)
53 million XE App Downloads(1)
(1) As of Q4 2016
(2) As of 2016 3
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Our Proposal
Consideration $15.20 in cash for each share of MoneyGram common stock and preferred
stock on an as-converted basis
MoneyGram stockholder approval and approval from competition authorities in
Regulatory Approvals & all required jurisdictions, including the U.S.
Expected Close Expected close by end of calendar year 2017
No financing condition
Financing
Committed financing from Wells Fargo Bank, N.A.
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A Clearly Superior Offer
Substantial premium to current offer by Ant in all cash offer
~15% to agreed upon purchase price per share with Ant
Compelling Value ~28% to MoneyGramslast trading share price on January 25, 2017
~38% to MoneyGrams three-month Volume Weighted Average Price (VWAP) ending
on January 25, 2017
Provides clear path to closing
No CFIUS review
Significantly Improved No closing condition requiring consents to change of control of money transmitter
Certainty & Speed licenses
Confident in ability to secure antitrust approval following detailed analysis by
outside advisors
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Significantly Improved Certainty
Competition Review CFIUS
Engaged third party for review confident in CFIUS review and investigation will be substantial, with
approval in due course and at reasonablesignificant uncertainty as to its outcome
Federal speed Members of Congress and independent third-parties
Increased breakup fee reflective ofhave raised national security concerns that CFIUS must
Approvals confidenceevaluate
Records of personal information required by regulators
will complicate approval
Substantial time needed to vet ownership, including
beneficial ownership, and necessary changes of control
Merger agreement provides little flexibility for
mitigation to address national security risks
Money Transmitter Licenses Change of Money Transmitter Licenses Change of Control
State Control NOT a Condition to Close
Approvals New applicant process for foreign entities required
All licenses in good standing Significant time to vet ownership
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Compelling Value for Euronet Stockholders
Scale in a Highly
Complementary
Fragmented Market Platforms
Proven Management Immediately
Team Accretive
Creating a Leader Positioned for Growth
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Euronet & MoneyGram
Operates in over 160 countries
with offices in 41 different countries
Leading electronic payments processor and distributor
Global payment network includes:
Over 35,000 ATMs
Over 305,000 retailer locations
Over 800,000 POS terminals
Over 317,000 money transfer agent locations
XE mobile app with 53 million downloads
XE website with >275 million unique users annually
Operates in over 200 countries with 350,000+ agent locations
Globally recognized and trusted brand
Second largest global provider of consumer money transfer products
Robust digital/self-service money transfer presence with 2 billion bank, mobile, and virtual accounts and >33,000 ATMs and kiosks worldwide
Also provides official check, money orders, and bill payment services
Revenue(1) LTM Performance(1) Revenue(2), (3)LTM Performance(2)
Revenue: $1,959 MillionOther 11%Revenue: $1,502 Million
epay Money
35% Transfer
41% Adj. EBITDA: $345 MillionAdj. EBITDA: $241Million
Money
EFT Transfer
24% 89%
(1) For the twelve months ended December 31, 2016
(2) For the twelve months ended September 30, 2016 8
(3) Other consists of revenue derived from official check outsourcing services, money orders, and bill payment services
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Opportunity in a Fragmented Market
Access to cash continues to be vital to the
global economy
Estimated Market Share According to The World Bank Group(1), the
for Global Remittances money transfer industry expected to grow
at a 4% CAGR from 2016-2018
Top 3
Global Adds important scale in a highly fragmented
Remittance
Providers industry
Strengthens competitive position to compete
with legacy leaders
Increased efficiency improves ability to
compete with new digital entrants through
enhanced digital investments
(1) Migration and Remittances Recent Developments and OutlookMigration and Development Brief 26 published in April 2016 by The World Bank Group
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Highly Complementary Platforms
Complementary Greater diversification to accelerate growth
Distribution Euronet has a primary focus on independent agents
MoneyGram has a primary focus on large retailers and post offices
Augments Incremental revenue opportunities and additional operational scale
Product Suite Bill payment services, addition of official check and money order products
enhance the value proposition to the independent agents
Euronets EFT and ePay segments enhance value proposition to large
retailers
Best-in-class compliance organization will help the company to capitalize on
Enhanced Compliance future growth opportunities and increased compliance demand in global
Organization market
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World-Class Distribution Network
Product Distribution through More Than One Million Customer Touchpoints
ATM deployment & outsourcing
POS acquiring and processing
Prepaid mobile-top up
Digital content distribution
Prepaid debit card issuing and management
Consumer-to-Consumer money transfer
ATM-to-ATM money transfer
Digital foreign payments
Foreign currency management products
Currency exchange
Currency information services
Check cashing
Business-to-Business money transfer and forwards
Globally Recognized and Trusted Brand Name with Strong Retail Presence
Consumer-to-consumer money transfer
Bill payment, including expedited
Official check processing
Money orders
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Proven Global Management Team
Significant collective industry experience and
a proven track record of growth
Successfully integrated 35+ transactions
Since 2011, Euronet has recorded:
>20% adjusted earnings per share growth 11% revenue growth 10% growth in transactions
Rapid expansion of Euronets Money Transfer segment growing from
$205 million in pro forma revenue to $802 million, representing a CAGR of revenue of 16%, since 2007
Integrated several acquisitions in the money transfer industry (Ria, IME, HiFX, and XE)
Growing headcount at a >12% CAGR to support a 7x increase in agents
Expanding pro forma Adjusted EBITDA margin by >325 basis points for Euronets Money Transfer segment since 2007
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Immediate Value Creation
Significant Cost Synergies
Achieve synergies simply through maintaining current SG&A levels in the combined business
Savings through the combination of transaction networks
Reduction in capital expenditures through elimination of redundancies
Strong Financial Position
Meaningful accretion to Adjusted EPS in first full year post close
At closing expected pro forma debt to LTM Adjusted EBITDA <4.0x (including $60 million of cost synergies)
Significant free cash flow to maintain capital structure flexibility for investment and leverage reduction
Targeted leverage of less than 3x Adjusted EBITDA within 24 months of closing
Cost Synergies of $60 Million Estimated in the Second Year
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Expected Next Steps
MoneyGrams Board of Directors makes Company Superior Proposal determination as defined by the merger agreement executed with Ant
MoneyGram terminates merger agreement with Ant in favor of a transaction with Euronet
Euronet and MoneyGram enter into a merger agreement
Receipt of MoneyGram stockholder and customary regulatory approvals
Transaction expected to close by end of calendar year 2017
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Supplemental Data
Reconciliation of Net Income to Operating Income and Adjusted EBITDA and
Calculation of Revenue For the Most Recent Reported 12 Month Periods
($ in millions)
MoneyGramEuronetCombined
3 Months Ended 9 Months Ended12 Months Ended12 Months EndedMost Recent
12/31/15 9/30/169/30/1612/31/1612 Months(²)
Revenue $377 $1,125$1,502$1,959$3,461
Net Income $3 $9$12$174$186
Add: Income Tax (1) 23225981
Add: Total Other Expense, net 12 34451762
Operating Income $14 $66$79$250$329
Add: Depreciation and Amortization 17 607881158
Add: Stock-Based Compensation 7 15221537
Add: Amortization of Agent Signing Bonuses 15 4156-56
Add: Severance and Related Costs - 11-1
Add: Reorganization and Restructuring Costs 3 -3-3
Add: Legal and Contingent Matters 0 12-2
Adjusted EBITDA(1) $56 $184$241$345$586
Source for MoneyGram figures: MoneyGrams Form 8-Ks filed with the Securities Exchange Commission on February 11, 2016 and October 28, 2016
(1) MoneyGrams Adjusted EBITDA includes impact of expenses related to the companys compliance enhancement program and direct monitor costs of $9 million, $15 million, and $24 million for the three months ended December 31, 2015, nine months ended September 30, 2016, and twelve months ended September 30, 2016, respectively
(2) Includes financial results for Euronet for the twelve months ended December 31, 2016 and MoneyGram for the twelve months ended September 30, 2016
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Supplemental Data
Reconciliation of Net Income to Adjusted Earnings and Calculation of Diluted Adjusted Cash Earnings Per Share
For the 12 Month Periods Ended December 31, 2011 and December 31, 2016
($ in millions, except share and per share data) Euronet
12 Months Ended 12 Months Ended
12/31/11 12/31/16
Net Income (Loss) Attributable to Euronet Worldwide, Inc . $37 $174
Foreign Exchange Loss $1 $10
Intangible Asset Amortization 18 26
Share- Based Compensation 10 15
Other Non- Operating Gains - (20)
Income Tax Effect of Above Adjustments - (1)
Change in Value of Acquisition Contingent Consideration (0) -
Gain on Settlement (1) -
Loss on Early Retirement of Debt 2 -
Non- Cash Interest Accretion 8 10
Non- Cash GAAP Tax Expense (Benefit) 3 4
Adjusted Earnings $77 $218
Adjusted Earnings Per ShareDiluted $1.48 $4.02
Diluted Weighted Average Shares Outstanding 51,729,513 54,001,079
Effect of Unrecognized Share- Based Compensation on Diluted Shares Outstanding 596,625 293,470
Adjusted Diluted Weighted Average Shares Outstanding 52,326,138 54,294,549
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Supplemental Data
Reconciliation of Euronets Money Transfer Segment Operating Income to Pro Forma Adjusted EBITDA and Calculation of Pro Forma Revenue For the 12 Month Periods Ended December 31, 2007 and December 31, 2016
($ in millions) Euronet Money Transfer Segment
12 Months Ended 12 Months Ended
12/31/07 12/31/16
Revenue $159 $802
Add: Pro Forma Adjustment 46 -
Pro Forma Revenue $205 $802
Operating Income (loss) $7 $102
Add: Depreciation and Amortization 14 29
Adjusted EBITDA $21 $131
Add: Pro Forma Adjustment 6 -
Pro Forma Adjusted EBITDA $27 $131
Euronet acquired RIA Envia, Inc. (RIA ) in April 2007. Pro Forma numbers assume RIAs results were included in Euronets consolidated results of operations beginning January 1, 2007 17
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Euronet WORLD WIDE