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Institutional Presentation 2019 Index Spice Private Equity 2018 - - PowerPoint PPT Presentation
Institutional Presentation 2019 Index Spice Private Equity 2018 - - PowerPoint PPT Presentation
Institutional Presentation 2019 Index Spice Private Equity 2018 highlights Investment Portfolio Spice Private Equity: Snapshot Global Investment Active Managers: Listed on SIX Swiss Company GP Investments Exchange (SPCE) USD 209 USD
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Spice Private Equity: Snapshot
USD 209
million in NAV¹
USD 134
million in mkt cap¹
+36%
Discount to NAV2
Global Investment Company Active Managers: GP Investments Listed on SIX Swiss Exchange (SPCE)
Source: Source: Spice Private Equity Ltd. (“Spice”, “Spice PE” or “Company”). Notes: (1) As of September 30, 2018, (2) “Net Asset Value”.
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Unique advantages to SPCE shareholders
Source: Spice.
Sharing in the value creation of high potential businesses during transformational periods No long-term lock-up or minimum investment required
Private equity exposure with public market liquidity
GP Investments as the lead shareholder and manager Full incentive alignment & clear long term commitment
Solid and stable shareholder base
Value creation via management & execution Flexible, patient approach based on permanent capital Proven expertise in complex cross-border transactions involving both developed and emerging markets
Differentiated strategy
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Strategy
Source: Spice.
Core investment strategy Primary objective: Generate superior returns to shareholders through capital growth
Support companies with global leadership ambitions Operate efficiently Pursue long term direct private equity investments Grow NAV / share Operate as relevant shareholders and apply an active, industrial approach Return capital to shareholders
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Board of Directors
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Source: Spice.
Fersen Lambranho
Vice-Chairman of the Board UK Chairman of the board at GP Investments. 20+ years as manager and board director in many companies across various sectors. Prior to joining GP in 1998, was CEO at Lojas Americanas
Alvaro L. Da Silva Neto
Member of the Board United States Board director and previously CFO at GP Investments. Served as board director at GP Advisors, BRZ Investimentos and Wiz Soluções, as well as CEO at Banco Bozano Simonsen
Christopher Wright
Member of the Board United States Chairman of EM Alternatives LLC, an asset management firm and of its former affiliate in China (Yimei Capital). Mr. Wright sits on the board of Merifin Capital, an European investment firm
David Emery
Member of the Board Singapore Founder & CEO of Reciprocus International PTE Ltd, a globally active M&A advisory boutique.
- Mr. Emery serves as
advisor and board director to several organizations
Christopher Brotchie
Chairman of the Board Switzerland Board director at Baring Private Equity, Firmdale Hotel Holdings and Bolero.
- Mr. Brotchie is an
Investment Committee and Advisory Council member in several investment firms
Rodrigo Boscolo
Investor Relations Manager CFO & Managing Director at GP Investments, he served as Board member in several companies (Magnesita, Allis and Sascar) and serves at LEON’s board. He holds an MBA degree from Wharton
Investor Relations
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NAV composition: Remarkable organizational transformation
Source: Spice. *Assumes Spice’s USD 60m commitment in The Craftory is fully invested.
Apr-16 Apr-17 Dec-17 Jun-18*
Legacy portfolio sold
+Receivables
Installments received
+Cash
New strategy execution
LEON Rimini Street FoodFirst The Craftory Direct Investments Legacy Investments Receivables Cash
0% 0% 0% 0% 0%
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81% 19%
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Spice Portfolio: Top 5 underlying assets by fair value to represent ~90% of total NAV
Source: Spice. Note: (1) Jun-18 figures reflect our committed capital (USD 60 million) in The Craftory. The current FMV for the company is USD 2 million. (2) Based on total NAV as of June 2018.
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SIZE RANK COMPANY NAME LOCATION SECTOR INVESTMENT DATE FAIR VALUE¹
(USD MILLION)
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FoodFirst Global Restaurants
US-based owner and operator of 2 Italian restaurant brands North America Consumer May-18 60 2
The Craftory
Holding co. created to back challenger brands UK Consumer May-18 60 3
LEON Restaurants
UK-Based healthy fast food chain UK Consumer Aug-17 32 4
Rimini Street
Enterprise software service & support provider North America Technology Oct-17 22 DIRECT INVESTMENTS 174 5
RHI Magnesita
Global leading supplier of refractory products UK/LatAm Industrial Apr-15 17 LARGEST LEGACY PORTFOLIO UNDERLYING INVESTMENT 17 TOP FIVE INVESTMENTS (% OF TOTAL NAV) 191 (89%)
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Source: Spice.
Differentiated approach to value creation…
- 1. Active management
via significant governance and focus on
- perational & growth levers
- 3. Expertise across wide range of sectors
markets and value creation plans
- 2. Emphasis on complex transactions
where we can unlock substantial value through
- ur execution capabilities
- 4. Permanent capital perspective
supporting the compounded growth of companies with resilient business models that can thrive across economic cycles
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Source: Spice and GP Investments.
… executed by a leader in private equity and alternative investments
- 1. Active management
- 3. Expertise across wide
range of sectors
- 2. Emphasis on complex
transactions
- 4. Permanent capital
perspective
USD 1.1 billion in proprietary capital invested USD 5 billion raised from investors worldwide Industrial approach: focus on
- perational and growth
- pportunities
56 private equity deals across 16 sectors
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GP Investments’ partners have had extraordinary success as active managers
Source: GP Investments.
Companies IRR 1,339% 47% 47% 26% 23% 19% Cash on Cash 34.1x 3.2x 9.7x 4.0x 2.2x 2.3x
In all of these investments, GP Investments appointed a partner to run the business as CEO: Octavio Lopes Carlos Medeiros Antonio Bonchristiano Alexandre Behring Marcio Trigueiro Eduardo Alcalay
Appointed CEOs
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Index Spice Private Equity 2018 highlights Investment Portfolio
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1H18 highlights
Source: Spice.
Proposed 3-year program with minimum target pay-outs
- f USD 5.0m, 5.5m and 6.0m in 2019, 2020 and 2021
New Dividend Policy
Total expenses reduced to USD 3.0m in 1H18, from USD 3.4m in 1H17
Operating Efficiency
2017: Leon Restaurants & Rimini Street 2018: The Craftory & FoodFirst Global Restaurants
New Investment Portfolio
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Note: Any specific annual dividend payments will be brought to shareholders for approval at the appropriate Annual General Meeting, to be decided based upon Spice PE’s liquidity position, the performance of its investment portfolio and the board’s assessment of new potential investments or divestments.
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New Investment Portfolio
Source: Spice.
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2017 2018
USD 55m successfully deployed in Leon & Rimini under new strategy
Spice direct investments USD 31m invested USD 60m invested USD 60m commitment USD 24m invested
USD 120m invested in FFGR & The Craftory, with substantial governance
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Looking ahead: Focus on new portfolio & selective, disciplined investment approach
Source: Spice.
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Challenging market backdrop: intense competition & high asset valuations Supportive debt markets, high volumes of PE capital and active corporate buyers Our approach: leverage our permanent capital base & avoid competitive auction processes
Capable and experienced Investment team in place Strong balance sheet; positive early signs of portfolio performance
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Continuous assessment of pipeline of new investment
- pportunities
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Index Spice Private Equity 2018 highlights Investment Portfolio
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Building a world class portfolio
Source: Spice.
Global leader Tech innovator Scalable growth Platform Turnaround Disruptive CPG holdco
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Investment date Apr-15 Oct-17 Aug-17 May-18 May-18
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35 facilities in 16 countries 14,000+ employees 10,000 customers Listed on the LSE The company is the global leader in the refractory solutions market and operates in a unique vertically integrated model RHI Magnesita is the largest asset in our Legacy Portfolio, and it is managed directly by GP
- Investments. The investment is an successful example
- f value creation through a transformational merger
Source: Spice and company reports.
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RHI Magnesita: Global footprint
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Source: Spice and company reports.
Europe 28%
South America 20%
APAC 17% MEA-CIS 13%
North America 22%
Raw material sites Production facilities
RHI Magnesita’s revenue breakdown and global facilities
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Source: Spice.
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900+ employees 1,500+ active clients +90% retention rate The SPAC was listed before the merger and, as soon as the combination was completed, Rimini Street began trading on the Nasdaq Exchange as “RMNI” Rimini Street (“Rimini”), a leading independent provider
- f
enterprise software support, was acquired in 2017 through a complex transaction involving the combination of GPIAC (GP Investments Acquisition Corp.), a Special Purpose Acquisition Company (SPAC), and Rimini
Source: Spice and company reports.
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Rimini Street: An attractive opportunity
Global presence and leadership position North America represents ~75% of revenues, demonstrating further internationalization potential
Growth Ambitions
Despite small stake, Spice has significant representation with 2 out of 9 board seats
Corporate Governance
Main support services Balance sheet restructuring opportunity Successful track record with
Expertise Alignment
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Source: Spice and company reports.
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53 restaurants 700+ employees 20,000+ people served daily 30 seconds average transaction time target Global expansion opportunity LEON is a UK-based natural fast food chain. The menu includes the flavors, variety and natural healthiness of Mediterranean cooking, at reasonable prices In 2017, Spice acquired a significant minority stake in LEON Restaurants for approximately GBP 25 million
Source: Spice and company reports.
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LEON: A perfect match
Source: Spice and company reports.
LEON sought an investor to support the company’s global growth plans US expansion opportunity. Long term vision
Growth ambitions
Spice became the largest shareholder in LEON, holding 2 board seats Partnership with CEO & Co-founder John Vincent
Operational improvements
Product overview Cash on Cash: 3.4x IRR: 24%
Sector expertise
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Source: Spice.
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110 locations across 32 states in the US Listed on NASDAQ since 2010 ~ 9,500 employees BBRG is a leading US-based owner and operator of two distinct Italian restaurant brands, BRAVO! Cucina Italiana and BRIO Tuscan Grille. BBRG was rebranded by Spice’s team: FoodFirst Global Restaurants In 2018, Spice took Bravo Brio Restaurant Group (“BBRG”) private, becoming the majority
- shareholder. The investment presents a turnaround
- pportunity at an attractive entry valuation
Source: Spice and company reports.
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FFGR: Clear opportunity to leverage our operational expertise
FFGR needed capital restructuring and an operational turnaround, allowing for an attractive entry valuation for Spice
Special situation
FFGR had been underperforming its peers due to
- perational and strategic issues, making it a clear
target for our active management
Operational improvements
GP has a proven track record in the space (Fogo de Chão), and Brad Blum, a recognized restaurant executive, is the company’s CEO
Sector knowledge Brands
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Source: Spice and company reports.
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FFGR: Ownership Breakdown
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Source: Spice. Note: assumes Brad fully exercises his investment option. Ownership figures do not take into account dilution from stock option pool to be issued to the executive team
Shareholders Ownership Spice Private Equity 56% Co-investors 31% Brad Blum 13% Total 100%
As controlling shareholder, Spice has the necessary influence to lead the turnaround
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“We back the world’s boldest challenger brands” The Craftory was created with the objective of acquiring a portfolio of controlling interests in challenger brands within the Consumer Packaged Goods sector In 2018, Spice committed to invest in a next generation holding company, The Craftory, alongside accredited investors with unique expertise in the space
Source: Spice and company reports.
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The Craftory: Backing challenger brands
Disruptive brands are emerging as a global trend and revolutionizing the entire consumer products category The Craftory came about as strategy to explore the unlimited growth potential of this trend
Source: Spice.
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The Craftory: What, how, why?
Source: Spice.
An investment house as revolutionary as the challengers they
- back. The anti-corporate and anti-VC model
What is The Craftory?
Levelling the playing field with ~USD 300m capital to deploy Hands-on strategic and creative - experts in branding, storytelling, growth platforms and supply chain
How will The Craftory ensure success?
Because consumers have grown tired of phony brands that waste our time and the planet’s resources
Why’s The Craftory doing this?
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Source: Spice.
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Where we go from here
This is just the beginning…
Growing our capital base should help increase: Share liquidity Asset diversification Being almost fully invested,
- ur next steps are:
To drive value in our underlying assets To grow our capital base New direct investments represent ~80% of total NAV We still have tremendous growth potential
1. 2. 3.
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Contacts
Spice Private Equity Ltd
Industriestrasse 13c CH-6302 Zug Phone +41 41 710 70 60 Fax +41 41 710 70 64 info@spice-private-equity.com
Spice Private Equity (Bermuda) Ltd
Clarendon House 2 Church Street Hamilton, HM 11 Bermuda www.spice-private-equity.com
Investor Relations
Rodrigo Boscolo investor.relations@spice-private-equity.com
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