OpCo - Algeco Assumption

P&L, M€ 2004 2005 2006 2007 2008 2009

Sales 400 433 470 509 548 588

Growth 8.3% 8.3% 8.4% 7.6% 7.4% Sensitivity, % 0.0%
Base Case 8.3% 8.3% 8.4% 7.6% 7.4%

EBITDA 127 139 151 166 184 202

Margin 31.8% 32.0% 32.1% 32.7% 33.6% 34.4% Sensitivity, % 0.0%
Base Case 32.0% 32.1% 32.7% 33.6% 34.4%

D&A -55 -60 -64 -72 -81 -91

EBIT 72 79 86 95 103 112

Margin 18.0% 18.2% 18.4% 18.6% 18.8% 19.0%
18.0% 18.2% 18.4% 18.6% 18.8% 19.0%

Financial Expense 0 0 0 0 0 0

Income before tax 72 79 86 95 103 112

Corporate Tax -24 -26 -29 -31 -34 -37

Rate 33.0% 33.0% 33.0% 33.0% 33.0% 33.0%

Net Income 48 53 58 63 69 75

Cashflow, M€ 2005 2006 2007 2008 2009

EBITDA 139 151 166 184 202

Tax -26 -29 -31 -34 -37
Capex -86 -94 -104 -109 -119
Change in WC -1 0 0 -5 -5
Cash financial expense 0 0 0 0 0
Debt repayment 0 0 0 0 0
Cashflow before dividend 26 28 31 36 41
Dividend paid to HoldCo -26 -28 -31 -36 -41
Cash available 0 0 0 0 0

Sources & Uses, M€

Uses Sources

Purchase of shares 430.0 Senior debt A 200.0 Shares fully diluted, M 4,778,000
Price, € 90
Debt refinancing 141.0 => 所以opcolevel就已经没有debt了
Senior debt B 100.0
=>只有holdcolevel有debt
Transaction costs 28.6 Mezzanine 125.0

Equity 174.6
of which shareholder loan 0.0 Shareholder loan 0%
of which equity 174.6 Rate 10%
Fund 171.1 Pourcentage of equity owned 98%
Mgt 3.5 2%

Total 599.6 Total 599.6

Debt repayment schedule, M€ 2005 2006 2007 2008 2009

10% 12.50% 12.50% 15% 20% Maturity, years
Tranche A - yearly repayment 6 years 20.0 25.0 25.0 30.0 40.0 7
Tranche B - bullet 7 years 0.0 0.0 0.0 0.0 0.0 8 => bullet, 第八年时付清
Total 20.0 25.0 25.0 30.0 40.0
HoldCo

P&L, M€ 2005 2006 2007 2008 2009

Dividends received 26 28 31 36 41
Operating costs -0.8 -0.8 -0.8 -0.8 -0.8 => given by the material
Transaction costs amortisation -14 -14 0 0 0 => amortized through 2 years, given by the material
EBIT 11 13 30 35 41 Euribor 4.5%

Interest -38 -39 -40 -41 -43 Spread Cash rate PIK rate
of which tranche A (cash) -14 -13 -11 -9 -7 2.5% 7.0%
of which tranche B (cash) -8 -8 -8 -8 -8 3.0% 7.5%
of which mezzanine (cash) 0 0 0 0 0 0.0% => mezzanine的interest是capit
of which mezzanine (PIK) -17 -19 -22 -25 -28 9.0% 13.5%
of which shareholder loan (PIK) 0 0 0 0 0

Tax received from Algeco 26 29 31 34 37 => opco付的tax 算到holdco上面来？怎么做？

Income before tax -2 2 22 28 35

(Tax paid) / tax credit -9 -11 -18 -21 -23 => 实际pay 的tax 见下面的计算

Net income -11 -9 3 7 12

Tax really paid, €M 2005 2006 2007 2008 2009

Algeco tax paid if Algeco were alone -26 -29 -31 -34 -37 % taxed Tax Rate
Tax on dividend -0.4 -0.5 -0.5 -0.6 -0.7 5% 33%

Holding operating costs -1 -1 -1 -1 -1

Financial Expense -38 -39 -40 -41 -43
Amortisation of transaction costs -14 -14 0 0 0
Deductibles expenses of HoldCo -53 -54 -41 -42 -43
Tax Rate 33% 33% 33% 33% 33%
Tax saved HoldCo 18 18 13 14 14

Tax Credit/ (Tax paid) -9 -11 -18 -21 -23

Cashflow, M€ 2005 2006 2007 2008 2009

Dividends received 26 28 31 36 41
Operating costs -1 -1 -1 -1 -1
Tax received from Algeco 26 29 31 34 37
Tax really paid -9 -11 -18 -21 -23
Cash financial expense -22 -20 -18 -17 -15 => PIK居然不包括在里头？
Debt reimbursement -20 -25 -25 -30 -40
Cashflow before dividend 1 0 0 2 0 =>这是holdco的CF，是holdco在问银行借acquisition debt

Available cash 1 0 0 2 2

Balance sheet, M€ 2004 2005 2006 2007 2008 2009

Algeco shares 430.0 430 430 430 430 430

Capitalised costs 28.6 14 0 0 0 0
Loan to OpCo 141.0 141 141 141 141 141
Cash 0 1 0 0 2 2
Total Assets 599.6 585.9 571.3 571.4 573.3 573.0

Share capital 174.6 164 155 159 166 178

Shareholder loan 0.0 0 0 0 0 0
Senior debt tranche A 200.0 180 155 130 100 60
Senior debt tranche B 100.0 100 100 100 100 100
Mezzanine 125.0 142 161 183 207 235
Total Liabilities 599.6 585.9 571.3 571.4 573.3 573.0
check 0.0 0.0 0.0 0.0 0.0 0.0

Covenants monitoring
2004 2005 2006 2007 2008 2009
Senior debt/LTM EBITDA 2.4x 2.0x 1.7x 1.4x 1.1x 0.8x
Net debt/LTM EBITDA 3.3x 3.1x 2.8x 2.5x 2.2x 2.0x
EBITDA-capex/cash interest 2.4x 2.8x 3.4x 4.5x 5.7x
 Exit at end of 2009, amounts in M€

EV at entry Jan 1st, 20 571.0 Proceeds to the Fund

= Vequity + Vd 89% of shares 437.5
LTM Multiple paid 7.9x Exercise of options by mgt 5.2 => mgmt按期初strike price执行
/2004 EBIT of 72M€ Exercice of options by mezza 10.5
Total end of 2009 453.2 => proceed 不仅来源于期末的eq
Exit EBIT multiple 8.0x For an initial investment in 2005 of: 171.1
EV 31 Dec 2009 894.0 CoC 2.6x
External net debt -393.4 IRR 21.5%
Shareholder loan 0.0
Exit costs -8.9 Proceeds to management
Proceeds to shareholder 491.6 5% of shares 24.6
(value of equity) Exercise of options -5.2
Total end of 2009 19.3
Sharing of sale proceeds by shareholders =>这个有意思 For an initial investment in 2005 of: 3.5
Before mgt pac Options Post exercise CoC 5.5x
Fund 98.0% 89.0% IRR 40.8%
Management 2.0% 3.0% 5.0%
Mezzanine investor 0.0% 6.0% 6.0% Proceeds to mezzanine investors
Reimbursement of mezzanine 235
6% of shares 29.5
Exercise of options -10.5
Total end of 2009 254.5
For an initial investment in 2005 of: 125.0
CoC 2.0x
IRR 15.3%

Sensitivities

Sensitivity - Growth
21.5% 0% -1% -2% -3%
0%
Sensitivity -1%
EBITDA margin -2%
-3%

Price paid per share, €

21.5% 85 90 95 100
Amount of 100