EX-99.(C)(3) 4 d585745dex99c3.htm EX-99.(C)(3) EX-99.(C)(3)

Exhibit (c)(3)

LOGO

 

Deutsche Bank CONFIDENTIAL Corporate Banking & Securities

Discussion materials

May 2, 2013

Deutsche Bank Securities Inc., a subsidiary of Deutsche Bank AG, conducts investment banking and securities activities in the United States.

DRAFT


LOGO

 

“IMPORTANT: This presentation (the “Presentation”) has been prepared by Deutsche Bank’s investment banking department exclusively for the benefit and internal use of the recipient (the “Recipient”) to whom it is addressed. The Recipient is not permitted to reproduce in whole or in part the information provided in this Presentation (the “Information”) or to communicate the Information to any third party without our prior written consent. No party may rely on this Presentation without our prior written consent. Deutsche Bank and its affiliates, officers, directors, employees and agents do not accept responsibility or liability for this Presentation or its contents (except to the extent that such liability cannot be excluded by law).

Statements and opinions regarding the Recipient’s investment case, positioning and valuation are not, and should not be construed as, an indication that Deutsche Bank will provide favourable research coverage of the Recipient or publish research containing any particular rating or price target for the Recipient’s securities.

This Presentation is (i) for discussion purposes only; and (ii) speaks only as of the date it is given, reflecting prevailing market conditions and the views expressed are subject to change based upon a number of factors, including market conditions and the Recipient’s business and prospects. The Information, whether taken from public sources, received from the Recipient or elsewhere, has not been verified and Deutsche Bank has relied upon and assumed without independent verification, the accuracy and completeness of all information which may have been provided directly or indirectly by the Recipient. No representation or warranty is made as to the Information’s accuracy or completeness and Deutsche Bank assumes no obligation to update the Information. The Presentation is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Deutsche Bank. The analyses contained in the Presentation are not, and do not purport to be, appraisals of the assets, stock, or business of the Recipient. The Information does not take into account the effects of a possible transaction or transactions involving an actual or potential change of control, which may have significant valuation and other effects.

The Presentation is not exhaustive and does not serve as legal, accounting or tax advice. Nothing herein shall be taken as constituting the giving of investment advice and this Presentation is not intended to provide, and must not be taken as, the basis of any decision and should not be considered as a recommendation by Deutsche Bank. Recipient must make its own independent assessment and such investigations as it deems necessary. In preparing this presentation Deutsche Bank has acted as an independent contractor and nothing in this presentation is intended to create or shall be construed as creating a fiduciary relationship between the Recipient and Deutsche Bank.”

Deutsche Bank DRAFT Corporate Banking & Securities


LOGO

 

($ in millions, except per share data)

Transaction assumptions

Purchase price $12.50 Float shares(a) 38.0 Share purchase cost $474

Indicative rate assumptions

Existing revolver L + 325 Existing term loan B L + 325 LIBOR floor 1.00% Incremental term loan B L + 325 LIBOR floor 1.00% OID 99 New senior notes 7.50% New preferred equity Cash dividend 12.00%

WACD 5.01%

Illustrative sources & uses and pro forma capitalization

Scenario 1: 5.0x net leverage / ~$140mm preferred equity

Pro forma capitalization

As of Adjustments Pro forma 3/31/13E +—3/31/13E

Cash $147 $147 Revolver ($180 million) $97 ($97) —Existing term loan 675 675 Incremental term loan B — 110 110

Total secured debt $772 $785

New senior notes — 200 200 Other debt 24 24

Total debt $796 $1,009 Net debt $648 $861

New preferred equity — 141 141 Common equity 776 594 (776) 594

Total capitalization $1,572 $1,745 Net capitalization $1,424 $1,597 Credit statistics:

Interest expense, net 27 51 EBITDA / net int exp 6.3x 3.4x Total debt / EBITDA 4.6x 5.9x Net debt / EBITDA 3.8x 5.0x

(a)

 

Pro forma for $200 million share repurchase.

Deutsche Bank DRAFT 1 Corporate Banking & Securities


LOGO

 

($ in millions, except per share data)

Transaction assumptions

Purchase price $12.50 Float shares(a) 38.0 Share purchase cost $474

Indicative rate assumptions

Existing revolver L + 325

Existing term loan B L + 325

LIBOR floor 1.00%

Incremental term loan B L + 325

LIBOR floor 1.00%

OID 99

New senior notes 7.50%

WACD 5.48%

Illustrative sources & uses and pro forma capitalization

Scenario 2: 5.8x net leverage / no preferred equity

Pro forma capitalization

As of Adjustments Pro forma 3/31/13E +—3/31/13E

Cash $147 ($1) $146 Revolver ($180 million) $97 (97) —Existing term loan 675 675 Incremental term loan B — 50 50

Total secured debt $772 $725

New senior notes — 400 400 Other debt 24 24

Total debt $796 $1,149 Net debt $648 $1,003

Common equity 776 594 (776) 594

Total capitalization $1,572 $1,743 Net capitalization $1,424 $1,597 Credit statistics:

Interest expense, net 27 63 EBITDA / net int exp 6.3x 2.7x Total debt / EBITDA 4.6x 6.7x Net debt / EBITDA 3.8x 5.8x

(a)

 

Pro forma for $200 million share repurchase.

Deutsche Bank DRAFT 2 Corporate Banking & Securities


LOGO

 

Recent consumer sector LBO capitalization (pg 1 of 2)

Jo-Ann Academy BJ’s 99 Cents

($ in millions)

Del Monte J. Crew Stores Sports Wholesale Only Stores P.F. Chang’s

Date Priced 2/3/2011 3/1/2011 3/15/2011 7/27/2011 9/23/2011 12/14/2011 5/31/2012

Ratings:

Corp B1 / B+ B2 / B B2 / B B2/B B1/B+ B2/B B2 / B

Capitalization:

Cash $15 $50 $33 $5 $69 $12 $5 Revolver 100 — 50 — 438 — — 1st Lien Term Loan 2,700 1,200 650 840 1,075 525 305 2nd Lien — — — — 200 — —

Total Secured Debt $2,800 $1,200 $700 $840 $1,713 $525 $305

Senior Notes 1,300 400 450 450 — 250 300

Total Senior Debt $4,100 $1,600 $1,150 $1,290 $1,713 $775 $605

Sr. Sub. Notes/Mezzanine — — — — — — —

Total Debt $4,106 $1,600 $1,150 $1,290 $1,713 $775 $605

Equity 1,624 1,269 410 1,135 630 636 526

Total Capitalization $5,730 $2,869 $1,560 $2,425 $2,343 $1,411 $1,131

Equity as % of Total Cap. 28% 44% 26% 47% 27% 45% 47%

LTM Revenues $3,713 $1,711 $2,079 $2,830 $10,111 $1,424 $1,240 LTM EBITDA 637 326 229 207 385 149 133

EBITDA Margin 17% 19% 11% 7% 4% 10% 11% FCF / Total Debt 8% 12% 9% 4% 7% 2% 6%

Credit Statistics:

First Lien Leverage 4.4x 3.7x 3.1x 4.1x 3.9x 3.5x 2.3x Total Leverage 6.5x 4.9x 5.0x 6.2x 4.4x 5.2x 4.5x

KKR/Vestar/ TPG/Leonard Leonard

Sponsor: KKR LG&P/CVC Ares, CPPIB Centerbridge Centerview Green Green

Final Pricing:

First Lien TL At Issue Yield 4.563% 4.750% 5.000% 6.250% 5.250% 7.500% 6.500% Second Lien TL At Issue Yield — — — — 11.250% — —

3

 


LOGO

 

Notes Coupon: 7.625% 8.125% 8.125% 9.250% — 11.000% 10.250% Average Cost of Debt 5.516% 5.594% 6.131% 7.134% 4.772% 8.290% 8.233%

Recent consumer sector LBO capitalization (pg 2 of 2)

Amscan / AOT David’s Smart & H.J. Heinz

($ in millions)

Savers Party City Bedding Bridal Final Albertson’s Company

Date Priced 6/28/2012 7/23/2012 9/19/2012 10/5/2012 11/8/2012 2/26/2013 3/27/2013

Ratings:

Corp B2/B B2/B B2/B B3/B B3/B NR/B Ba3/BB-

Capitalization:

Cash $8 $17 $10 $2 — $59 $1,250 Revolver 8 100 — 2 — 230 — 1st Lien Term Loan 655 1,125 1,310 520 525 1,150 9,500 2nd Lien — — — — 195 — 3,100

Total Secured Debt $663 $1,244 $1,310 $525 $720 $1,629 $12,600

Senior Notes — 700 650 270 — — 868

Total Senior Debt $663 $1,944 $1,960 $795 $720 $1,629 $13,468

Sr. Sub. Notes/Mezzanine 295 — — — — — —

Total Debt $958 $1,944 $1,960 $795 $720 $1,629 $13,468

Equity 764 841 1,130 304 295 550 16,240

Total Capitalization $1,722 $2,785 $3,090 $1,099 $1,015 $2,179 $29,708

Equity as % of Total Cap. 44% 30% 37% 28% 29% 25% 55%

LTM Revenues $1,014 $1,899 $2,208 $741 $3,000 $10,697 $11,508 LTM EBITDA 155 298 292 121 132 389 2,362

EBITDA Margin 15% 16% 13% 16% 4% 4% 21% FCF / Total Debt 4% 6.4% 7.2% 7% 4% 10% 13%

Credit Statistics:

First Lien Leverage 4.3x 4.2x 4.5x 4.3x 4.0x 4.2x 4.0x Total Leverage 6.2x 6.5x 6.7x 6.5x 5.4x 4.2x 5.7x

Berkshire Leonard Sponsor: THL Advent CD&R Ares Cerberus Hathaway, Green

Final Pricing: 3G First Lien TL At Issue Yield 6.500% 6.000% 5.250% 5.250% 6.000% 5.875% 3.375% Second Lien TL At Issue Yield — — — — 11.250% — 3.563%

4

 

Notes Coupon: — 8.875% 8.125% 7.750% — — 4.250% Average Cost of Debt 6.250% 6.949% 6.036% 5.940% 4.794% 5.750% 3.026%