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 134 +36% Discount to NAV 2 million in NAV¹ million in mkt cap¹ 3 Source: Source: Spice Private Equity Ltd. (“Spice”, “Spice PE” or “Company”). Notes: (1) As of September 30, 2018, (2) “Net Asset Value”.
Unique advantages to SPCE shareholders Sharing in the value creation of high potential businesses during Private equity exposure with transformational periods public market liquidity No long-term lock-up or minimum investment required GP Investments as the lead shareholder and manager Solid and stable shareholder base Full incentive alignment & clear long term commitment Value creation via management & execution Differentiated Flexible, patient approach based on permanent capital strategy Proven expertise in complex cross-border transactions involving both developed and emerging markets 4 Source: Spice.
Strategy Primary objective: Generate superior returns to shareholders through capital growth Grow NAV / share Operate efficiently Return capital to shareholders Core investment strategy Pursue long term direct Support companies with global Operate as relevant shareholders private equity investments leadership ambitions and apply an active, industrial approach 5 Source: Spice.
Investor Board of Directors Relations Christopher Brotchie Fersen Lambranho Alvaro L. Da Silva Neto Christopher Wright David Emery Rodrigo Boscolo Chairman of the Board Vice-Chairman of the Board Member of the Board Member of the Board Member of the Board Investor Relations Manager Switzerland UK United States United States Singapore CFO & Managing Director at Board director at Baring Chairman of the board at Board director and previously Chairman of EM Alternatives Founder & CEO of GP Investments, he served Private Equity, Firmdale GP Investments. 20+ years CFO at GP Investments. LLC, an asset management Reciprocus International as Board member in several Hotel Holdings and Bolero. as manager and board Served as board director at GP firm and of its former affiliate PTE Ltd, a globally active companies (Magnesita, Allis Mr. Brotchie is an director in many companies Advisors, BRZ Investimentos in China (Yimei Capital). Mr. M&A advisory boutique. and Sascar) and serves at Investment Committee and across various sectors. Prior and Wiz Soluções, as well as Wright sits on the board of Mr. Emery serves as LEON’s board. He holds an Advisory Council member to joining GP in 1998, was CEO at Banco Bozano Merifin Capital, an European advisor and board director MBA degree from Wharton in several investment firms CEO at Lojas Americanas Simonsen investment firm to several organizations 6 Source: Spice.
NAV composition: Remarkable organizational transformation Legacy portfolio sold Installments received New strategy execution FoodFirst +Receivables +Cash LEON The Craftory Rimini Street 19% 81% 0% 0% 0% 0% 0% Apr-16 Apr-17 Dec-17 Jun-18* Cash Receivables Legacy Investments Direct Investments 7 Source: Spice. *Assumes Spice’s USD 60m commitment in The Craftory is fully invested.
Spice Portfolio: Top 5 underlying assets by fair value to represent ~90% of total NAV SIZE INVESTMENT FAIR VALUE¹ COMPANY NAME LOCATION SECTOR RANK DATE (USD MILLION) FoodFirst Global Restaurants 1 North America Consumer May-18 60 US-based owner and operator of 2 Italian restaurant brands The Craftory 2 UK Consumer May-18 60 Holding co. created to back challenger brands LEON Restaurants 3 UK Consumer Aug-17 32 UK-Based healthy fast food chain Rimini Street 4 North America Technology Oct-17 22 Enterprise software service & support provider DIRECT INVESTMENTS 174 RHI Magnesita 5 UK/LatAm Industrial Apr-15 17 Global leading supplier of refractory products LARGEST LEGACY PORTFOLIO UNDERLYING INVESTMENT 17 TOP FIVE INVESTMENTS (% OF TOTAL NAV) 191 (89%) 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. 8 (2) Based on total NAV as of June 2018.
Differentiated approach to value creation… 1. Active management via significant governance and focus on operational & growth levers 4. Permanent capital perspective 2. Emphasis on complex transactions supporting the compounded growth of where we can unlock substantial value through companies with resilient business models that our execution capabilities can thrive across economic cycles 3. Expertise across wide range of sectors markets and value creation plans 9 Source: Spice.
… executed by a leader in private equity and alternative investments USD 1.1 billion in proprietary 56 private equity deals across capital invested 16 sectors 1. Active management 4. Permanent capital 2. Emphasis on complex perspective transactions 3. Expertise across wide USD 5 billion raised from Industrial approach: focus on range of sectors investors worldwide operational and growth opportunities 10 Source: Spice and GP Investments.
GP Investments’ partners have had extraordinary success as active managers Companies IRR 1,339% 47% 47% 26% 23% 19% Cash on 34.1x 3.2x 9.7x 4.0x 2.2x 2.3x Cash In all of these investments, GP Investments appointed a partner to run the business as CEO: Appointed CEOs Antonio Octavio Carlos Alexandre Marcio Eduardo Bonchristiano Lopes Medeiros Behring Trigueiro Alcalay 11 Source: GP Investments.
Index Spice Private Equity 2018 highlights Investment Portfolio
1H18 highlights New Dividend Proposed 3-year program with minimum target pay-outs of USD 5.0m, 5.5m and 6.0m in 2019, 2020 and 2021 Policy Operating Total expenses reduced to USD 3.0m in 1H18, from USD 3.4m in 1H17 Efficiency 2017: Leon Restaurants & Rimini Street New Investment Portfolio 2018: The Craftory & FoodFirst Global Restaurants Note: Any specific annual dividend payments will be brought to shareholders for approval at the appropriate Annual General Meeting, to be decided based upon 13 Source: Spice. Spice PE’s liquidity position, the performance of its investment portfolio and the board’s assessment of new potential invest ments or divestments.
New Investment Portfolio Spice direct investments USD 24m invested 2017 USD 55m successfully deployed in Leon & Rimini USD 31m invested under new strategy 2018 USD 120m invested in FFGR & USD 60m invested The Craftory, with substantial governance USD 60m commitment 14 Source: Spice.
Looking ahead: Focus on new portfolio & selective, disciplined investment approach Challenging market backdrop: intense competition & high asset valuations Supportive debt markets, high volumes of PE capital and active corporate buyers 1 2 3 Continuous Strong balance Capable and assessment of experienced sheet; positive early pipeline of new Investment signs of portfolio investment performance team in place opportunities Our approach: leverage our permanent capital base & avoid competitive auction processes 15 Source: Spice.
Index Spice Private Equity 2018 highlights Investment Portfolio
Building a world class portfolio Global Tech Scalable Platform Disruptive CPG leader innovator growth Turnaround holdco Investment date Apr-15 Oct-17 Aug-17 May-18 May-18 17 Source: Spice.
RHI Magnesita is the largest asset in our Legacy Portfolio, and it is managed directly by GP Investments. The investment is an successful example of value creation through a transformational merger The company is the global leader in the refractory solutions market and operates in a unique vertically integrated model 35 facilities in 16 countries 14,000+ employees 10,000 customers Listed on the LSE Source: Spice and company reports.
RHI Magnesita: Global footprint RHI Magnesita’s revenue breakdown and global facilities Europe 28% North America 22% South America 20% Production facilities APAC 17% Raw material sites MEA-CIS 13% 19 Source: Spice and company reports.
Rimini Street (“Rimini”), a leading independent provider of 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 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” 900+ employees 1,500+ active clients +90% retention rate 20 Source: Spice. Source: Spice and company reports.
Rimini Street: An attractive opportunity Global presence and leadership position Growth North America represents ~75% of revenues, Main support services Ambitions demonstrating further internationalization potential Balance sheet restructuring opportunity Expertise Alignment Successful track record with Corporate Despite small stake, Spice has significant Governance representation with 2 out of 9 board seats 21 Source: Spice and company reports.
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