FOX FACTORY TO ACQUIRE SCA PERFORMANCE HOLDINGS, INC. FEBRUARY 2020 - - PowerPoint PPT Presentation
FOX FACTORY TO ACQUIRE SCA PERFORMANCE HOLDINGS, INC. FEBRUARY 2020 - - PowerPoint PPT Presentation
FOX FACTORY TO ACQUIRE SCA PERFORMANCE HOLDINGS, INC. FEBRUARY 2020 SAFE HARBOR STATEMENT This presentation does not constitute an offer or invitation for the sale or purchase of securities and has been prepared solely for informational
This presentation does not constitute an offer or invitation for the sale or purchase of securities and has been prepared solely for informational purposes. This presentation contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “might,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “likely,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by the Company and its management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, future economic or market conditions and the other risks and uncertainties described in “Risk Factors” contained in the Company’s Annual Report on Form 10-K or Quarterly Reports on Form 10-Q or
- therwise described in the Company’s other filings with the Securities and Exchange Commission.
New risks and uncertainties emerge from time to time and it is not possible for the Company to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this presentation. Nothing in this presentation should be regarded as a representation by any person that the forward- looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Company undertakes no duty to update these forward-looking statements. This presentation contains certain non-GAAP financial measures determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). We use non-GAAP financial measures, including “Adjusted EBITDA,” as useful measures of the Company’s core operating performance and trends and period-to-period comparisons of the Company’s core business. These non-GAAP financial measures have limitations as analytical tools and should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
SAFE HARBOR STATEMENT
TRANSACTION SUMMARY
3
PURCHASE PRICE
- FOX to acquire SCA Performance Holdings, Inc. (SCA) for $328 million
- Transaction expected to close in late Q1 2020, subject to customary
closing conditions FINANCING
- Will complete an expanded and syndicated credit facility led by Bank of
America as part of this transaction which includes both term and revolving debt upon closing. Financing and cash on hand will fund the purchase price SYNERGIES
- Accretive to financial results with opportunity to drive additional long
term, top line growth
- Full SCA integration to generate ~$3 million of annual cost synergies
- Creates an opportunity to add FOX products, including lift kits and
suspension components, to SCA’s vehicles
STRATEGIC RATIONALE
4
BOLSTERS FOX’S LEADERSHIP POSITION IN AN ATTRACTIVE MARKET SIGNIFICANT GROWTH POTENTIAL CONTINUES FOX’S SUCCESSUL TRACK RECORD OF STRATEGIC M&A EXPERIENCED LEADERSHIP TEAM WITH STRONG TRACK RECORD COMPELLING FINANCIAL BENEFITS
SCA OVERVIEW
5
SCA Group
Founded 1979
1986 1978
- Location
Birmingham, AL
Franklin Springs, GA Fort Collins, CO
- Bailment
Pools
Complementary Brands for Up-Fitting Pickup Trucks
Remaining 9 Months 2020E FOX Financial Projections
Brand Overview Sales
- Adj. EBITDA 1
$83 - $89
Million
$22 - $24
Million
(1) Net of integration related investments.
- Leading OEM authorized specialty vehicle manufacturer for
light duty trucks in North America, operating through three brands
- Offers proprietary premium design packages, OEM warranty
and high-quality installations
General Motors Ford Fiat Chrysler General Motors Ford Fiat Chrysler General Motors Ford Fiat Chrysler Nissan General Motors Ford Fiat Chrysler Nissan
EXPANDED NATIONWIDE GEOGRAPHY
6
- Combined footprint of
nearly 2,000 automotive dealerships with significant nationwide geographic diversity
- Logistically efficient
manufacturing base, provides better product delivery to dealers
SCA Facility
FOX HQ Tuscany Facility Tuscany Dealership
SCA Dealership
SPECIALTY VEHICLE MFG. MARKET LEADERSHIP
7
*Note: Volume figures derived from Fox Factory management estimates.
COMBINATION OF SCA AND TUSCANY CREATES A CLEAR AFTERMARKET CATEGORY LEADER
SCA Platform Expands Tuscany TAM and Enhances Segmentation
Pro Weekend Warrior Ultra Enthusiast Outdoor / Performance Enthusiast
OEM Specialty Vehicle Manufacturing Market(1)
General Consumer
(1) Represents Tuscany and SCA’s peer group of upfitters with direct OEM relationships and does not include independent upfitters or dealers.
Others Competitor A Competitor B
ATTRACTIVE INDUSTRY DYNAMICS DRIVE SECULAR GROWTH
8
- SCA acquisition solidifies FOX’s strategic presence in the light-duty
truck and SUV end-markets which have experienced strong secular growth
Light Trucks & SUVs Passenger Cars
2006 2019
74% 51% 49% 26%
*Note: Pie charts generated by Jefferies, LLC.