for personal use only shareholder update · (uts) and qualified ca 11 for personal use only....
TRANSCRIPT
SHAREHOLDER UPDATE February 2016
Bailador Technology Investments Limited (ASX:BTI)
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Bailador provides investors with exposure to expansion-stage
information technology companies with global addressable markets and high
growth opportunities.!For
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Key investment highlights for BTI
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BTIinvestmentperformancehasmateriallyoutperformedleadingequityindices
TheNTAisata25%premiumtotheBTIOp@onexerciseprice,providinginvestorsexposuretotheinvestmentsintheunderlyingcompaniesatlessthantheirvalue
BTIemploysaconserva@vevalua@onapproach(thirdpartyinvestmentorcostplusaccruedinterest),resul@nginembeddedupsideintheporFolio
BTIprovidesexposuretoanexcep@onalporFolioofinforma@ontechnologyinvestmentsinhighquality,high-growth,globalcompanies
BTIisanabsolutereturninvestment;performancehaslowcorrela@onwithmacroeconomic-drivenmarketmovements
InvestmentOutperformance
AbsoluteReturn
NTAPremiumoverOp9onExercisePrice
Conserva9veValua9ons
OutstandingGlobalGrowthPorColio
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BTI investment outperformance against indices
Asat31-Dec AnnualReturn
BTIPorColio 24.5%p.a.
AllOrd 5.3%p.a.
ASX200 4.4%p.a.
S&P500 1.2%p.a.
Notes:BTIPor(olioReturn:NTAsinceIPOannualised(post-managementfees,pre-tax);auditedBTIValuaCon:ValuaConsarebasedonthird-partyinvestmentorcost+accruedinterest;auditedTotalReturn(Indices):BasedonthepricemovementsandassumesallcashdistribuConsarereinvested.AnnualisedfromBTIIPOto31December2015.
BTI investment performance has demonstrated superior returns to leading equity indices since its IPO in November 2014
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Incep9onDec2010
24.5%Annual
investmentreturnsfromASXlis@ngto31Dec
2015(1)
ASXlis9ngNov2014
CurrentDec2015
A demonstrated track record of premium returnsBailador has consistently produced premium returns over 5 years from investing expansion capital in the information technology sector
(1) Annual investment returns from ASX listing to 31 Dec 2015 are based on the Net Asset Value at 31 Dec 2015 as disclosed to the ASX and included in BTI audited financial statements. Returns are calculated after deducting performance fees and pre-tax
(2) Annual investment returns from inception to ASX listing are based on the Net Asset Value as disclosed in the BTI prospectus listed with ASIC in Oct 2014, which included independent review by BDO. Returns are calculated pre-performance fees and before tax
24.3%Annual
investmentreturnsfrom
incep@ontoASXlis@ng(2)
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BTI is an Absolute Return investmentBTI’s share price over the last 12 months shows minimal correlation to the ASX 200
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Dec2015NAVPerShare
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$1.00
Op9onExercisePrice $1.25
25%Significantfurtherupsidelikelyrealisedfrom:• Conserva@venatureof
valua@ons• Con@nuedgrowthin
porFoliocompaniesperformance
Valua@onsareatcostplusaccruedinterestorlatest
thirdpartyinvestmentvalua@on
Material upside to the BTI Option exercise priceThe existing BTI portfolio NAV per share represents significant upside to the exercise price, with further upside from continued portfolio growth
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Continued commitment from Partners
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BTI’s founding partners intend to exercise their options in full, investing $5.6m further cash to double their commitment to the fund to $11.3m
DavidKirk&PaulWilson
$5.7million
$11.3million
Ini9alInvestment
DavidKirk&PaulWilson
PostOp9onExercise
DavidKirk,Co-Founder
PaulWilson,Co-Founder
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BTI’s core investment approach
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Investincompanieswithaprovenbusinessmodel,
globaladdressablemarket,and$2-10mofrevenue
Engagewithcompaniesandmanagementfor3-6monthspriortoextensive
duediligence
Putinplacecapitalstructureandcontractual
termsthatprovidedownsideprotec@onwhilegivingfullupsideexposure
Mandatoryboardrepresenta@on;provideextensivehelpthroughcontacts,org.design,capitalraisingetc.F
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‘Downside’ Example ‘Upside’ Example
$40m
$10m
$200m
$40m
$10m
$50m
InvestmentEntry
InvestmentEntry
InvestmentExit
InvestmentExit
Capital Structure Protections & UpsideAll principal invested is protected as long as the whole business is sold for > BTI cost, with conversion rights enabling full upside participation
$10m
BailadorInvestment(Conver@blePreferenceShares)
OrdinaryEquity
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A team of specialist technology investors
David KirkCo-Founder & Managing Partner
• Former CEO of Fairfax Media, where he led the acquisition of Trade Me and Stayz.com
• IPO investor in Xero• Chairman of Trade Me and
Kathmandu• Director of Forsyth Barr• Captain of the All Blacks• Rhodes scholar to Oxford
Paul WilsonCo-Founder & Managing Partner
• Former Director of CHAMP Private Equity, and previously Metlife (London)
• Executive Director of Illyria Pty Ltd (Lachlan Murdoch)
• Director of Yellow Pages (New Zealand), the Rajasthan Royals (IPL cricket) and Vita Group
• B. Bus from QUT; • FINSEA Fellow and
qualified CA
Andrea KowalskiInvestment Director
• 10 years Venture Capital and Investment Banking
• Principal at London-based BOOST&Co (EUR 250m), managing investments in Germany (based in Berlin)
• Associate Director with UBS in London
• MBA from INSEAD (D’09)• B. Comm from McGill
(Montreal, Canada)
James JohnstoneInvestment Director
• Founding Director of Mozo (online marketplace) that won multiple Deloitte Fast 50 and BRW Fast Starter Awards
• Strategy consulting and corporate development with Virgin Travel and Virgin Financial
• Bachelor of Accounting (UTS) and qualified CA
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Portfolio & Valuation
UpsidePotential
BTI Options (BTIO)
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Portfolio & Valuation
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A snapshot of BTI’s portfolioSaaSHighgrowthGlobal
SaaS>75%growthGlobal
Scalable>35%growthGlobal
Leadingtech>25%growthHugemarket
SaaSHighgrowthGloballeader
Channelmanagementanddistribu@onsolu@onsforonlinehotel&accommoda@onbookings
SaaS>60%growthAUSLeader
ScalableStrategicHugemarket PorFolio
RevenueGrowthCY15:
42%EnterprisecloudplaFormforvideo,storage,transcodingandbroadcas@ngthroughweb,iPTVandmobile
Independentaggregatorofauniquesourceofadver@singdatain53countries
Specialistproviderofcloudbasedvendormanagementsohware
Hybridmachine&crowd-sourcedhumantransla@onplaForminmorethan80languages
Socialmarke@ngplaFormthataggregates&integratesuser-generated-contentacrossthemarke@ngstack
OnlineplaFormforToursandAc@vi@es&B2Bmarketplaceaggrega@ngforresellers
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A portfolio with a demonstrated global market
RezdyStacklaSiteMinder
iPROSMIViocorpStraker
BTI’s portfolio is headquartered in 3 countries, with offices in 10 countries, across 18 cities, employing a total of 625 people*
* as at 31 December 2015
EMEA:9employees
SEAsia:66employees
N.America:90employees
UK:131employees
S.Africa:5employees
Australia:289employees
NZ:35employees
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Blue chip customer wins in 2015Examples of the outstanding quality of customers within BTI’s portfolio
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Recent news from the portfolioF
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Our portfolio in the newsF
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BTI employs a conservative valuation approach
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Carryingvalueofinvestmentsreflectseither:
§ Cost+accruedinterest,or
§ Valua@onatwhichthird-partyinvestmenthasbeenmade
Carryingvaluesupportedbyindependentexpertsandpubliccompanyaudit
Par@alrealisa@onofSiteMinder
Uplihinvalua@onforStraker
• InDec-15,BTIacceptedathird-partyoffertoselldown$5mofit’sposi@onatavalua@onof$36.3m,45%abovethecarryingvalueof$25.0m.
• Theresul@ngholdinginSiteMinderis$31.3m.• The3rdpartyinvestorwasabluechipinvestorwithmore
than$5billionofassetsundermanagement.
• BTI’sinvestmentinStrakerwasheldat$3.7m.• InDec-15,StrakerraisedafurtherNZ$1mfromaHK-based
investor,tofocusonacquisi@onopportuni@es.• TheNZ$1mwasraisedata20%upliWtoBTI’scarrying
valueaher4months,whichisnowat$4.5m.
Third-party investment and realisations demonstrate a significant uplift on the valuation at which investments are held
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Current Portfolio Valuation
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Company CurrentValue($m)* Valua9onMethodology
31.3 Third-partyinvestment(Dec-15)
20.2 Cost+accruedinterest
5.5 Cost+accruedinterest
6.2 Cost+accruedinterest
4.5 Third-partyinvestment(Dec-15)
2.6 Cost+accruedinterest
2.6 Cost+accruedinterest
With the exception of SiteMinder and Straker (both have received recent 3rd party investment), all others are held at cost plus interest
$72.9m* as at 31 December 2015
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Upside Potential
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Shareholder value is created by 3 primary levers
I.GrowthoftheExis@ngPorFolio
II.Inves@nginNewOpportuni@es
III.NarrowingDiscounttoNTA
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I. Growth of Existing PortfolioFor
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Potential upside prospects in the next 24 months
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Company CurrentValue ValueRange UpliWorExitRa9onale
$31.3m $60m-$100m Currentvalua@onmul@plesappliedtoconsistentgrowthrates;possiblepremiumavailableforstrategictradebuyers.
$20.2m $30m-$85m LargeSystemIntegrators’growinginterestinenterprisevideosolu@ons.
$5.5m $7m-$10m Newproductlaunchandstrategicposi@oning.
$6.2m $10m-$20m Recentinterestfrommul@-billiondollarcorporateventurearm.
$4.5m $12m-$40m Inboundinterestfromglobalprivateequityfirmandstrategictradebuyers.
$2.6m $5m-$30m Indica@veofferat30%uplihtoday.Explosivegrowthindustry.
$2.6m $6m-$15m Through-the-cyclemul@pleappliedtorevenuegrowthrates.
$72.9m $130m-$300m1.8x-4.1xNAVpershare:$1.25*
* pre-tax NAV per share after including cash and after performance fee
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II. Investing in New OpportunitiesFor
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New Investment Opportunities
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★ Worldleader★ Superiortechnology★ Scalable★ Recurringrevenue
Sector:SaaS,B2B
★ $8minrevenue★ 50%frominterna@onal
markets(mostlyUS)★ Highrecurringrevenue★ Bignamelogos★ PremiumSaaSmetrics
Bailador continues to see high quality opportunities in the Australian and New Zealand market. Examples below*:
Raising$5-10mtosupportconCnuedgrowthinternaConally
Sector:SaaS,B2B
* BTI is evaluating these opportunities and is not committed to making any investment
★ >$4minrevenue★ $50bnglobalmarket★ VeryhighGrossMargin★ ProprietaryplaForm★ EBITDAprofitable
Raising$4-5mtoexpandtointernaConalmarkets
★ Worldleader★ Superiortechnology★ Scalable★ Recurringrevenue
Sector:SaaS,B2B
★ $7mrevenuerun-rate★ HQinSanFrancisco★ Aprac@veuniteconomics★ Listofblue-chipenterprise
customers;verylowchurn★ Bootstrappedtodate
Raising$5-10mtofurtherrampintheUSandexpandtoEMEA
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III. Narrowing Discount to NTA
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BTI currently trades at a discount to NTA
DiscounttoNTA GainonExercisedOp9on*
Discountof15% 6.3%
Discountof10% 12.5%
Discountof5% 18.8%
Discountof0% 25.0%
Premiumof5% 31.3%
Premiumof10% 37.5%
Premiumof15% 43.8%
If the discount narrows between the share price and NTA, significant gain can be achieved by option holders who exercise at $1.00
*Basedonanexercisepriceof$1.00
TheexercisepriceofBTIOp@ons($1.00)isata20%discounttothecurrentNTAof$1.25KeepingtheNTAconstantforthisexample(i.e.assumingnogrowthintheexis@ngporFolioandnonewinvestment),op@onholderswhoconvertat$1.00canbenefitsolelyfromanarrowinginthediscounttoNTAover@me
Giventhenatureofinvestments(privatecompanies)andtheconserva@vevalua@onapproach(costplusinterestorthird-party),BTIisdifferen@atedfromotherLICsontheASX.ThereisastrongcaseforBTItotradeatapremiumtoNAV,asisthecaseforalargecomparableinvestmentcompanyintheUK(ImperialInnova9ons),whichregularlytradesat>50%premiumtoNAV.
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BTI Options (BTIO)
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Actions available for your BTI Options
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1 ExerciseBTIOp@ons 2 PurchaseBTIOp@ons
Quotation of BTI Options on the ASX will cease on 22 March 2016, 5 business days prior to the expiry date of 31 March 2016
• EachBTIOp@onisexercisableintoone(1)fullypaidordinaryshareinBTI,atanexercisepriceof$1.00
• Op@onexercisecanbedoneonline*,viathepostorwiththeassistanceofBailador
• IfyouelecttoexerciseallorsomeofyourBTIOp@ons,BTImustreceivepaymentby5:00pm(AEST)onThursday,31March2016
• BTIOp@onscanbepurchased‘onmarket’(BTIO.AX)viaASXtradingplaFormsorthroughindividualbrokers
* at www.bailador.com.au/investor-relations
3 SellBTIOp@ons
• BTIOp@onscanbesold‘onmarket’viaASXtradingplaForms
Howtoexerciseyourop9ons:• Visitwww.bailador.com/au/investor-rela@ons
• Completethe‘No9ceofExerciseofOp9onsform’specifyingthenumberofop@onstobeexercised(canbeallorsomeoftheop@onsheld)andreturntoBailador
• Example:ifyouelecttoexercise46,000op@ons,thecosttoexerciseis$46,000($1.00x46,000op@ons).Followingexercise,youwillown46,000newlyacquiredsharesofBTIthatrankparri-passutoallexis@ngshares
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Thank You
Bailador Technology Investments Limited (ASX:BTI)
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Disclaimer
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Thispresenta@onisconfiden@alandmaynotbereproducedinwholeorinpart,ordistributedexceptbyBailadorTechnologyInvestmentLtd(“Bailador”)orbyauthorizedrepresenta@vesofBailador(“Affiliates”).Thispresenta@ondoesnotcontainacompletedescrip@onofthetransac@onandtherisksassociatedwithaninvestmenttherein.Bailadordoesnotacceptliability to any person, organisa@on or company for any loss or damage suffered as a result of reliance on this document. All statements other thanstatementsofhistoricalfactare,ormaybedeemedtobe,forward-lookingstatements,andaresubjecttovaria@on.Allforward-lookingstatementsinthisdocumentreflectthecurrentexpecta@onsofBailadorconcerningfutureresultsandevents.Anyforward-lookingstatementscontainedorimplied,eitherwithinthisdocumentorverbally,involveknownandunknownrisks,uncertain@esandotherfactors(includingeconomicandmarketcondi@ons,changesinopera@ngcondi@ons,currencyfluctua@ons,poli@calevents,labourrela@ons,availabilityandcost of labour,material and equipment) thatmay cause actual results, performance of achievements to differmaterially from the an@cipated results,performanceorachievements,expressed,projectedorimpliedbyanyforward-lookingstatements.Certain informa@oncontained [email protected] informa@on isbelievedtobereliableforthepurposesusedherein,norepresenta@onsaremadeastotheaccuracyorcompletenessthereofandneitherBailadornoritsAffiliatestakeanyresponsibilityforsuchinforma@on.
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