bombora investment management special investments growth … · 2020. 5. 12. · bombora is taking...

CONFIDENTIAL

Bombora Investment Management Special Investments Growth Fund

An Offering to Wholesale Clients | 30 April 2020

Disclaimer

Bombora Investment Management – Special Investments Growth Fund2

This Investor Presentation (Investor Presentation) contains information about Bombora Special Investments Growth Fund (Fund) and is dated 30 April 2020. The Fund is an unregistered managed investment scheme pursuant to section 601ED(2) of the Corporations Act 2001 (Cth) (Corporations Act). This Investor Presentation is issued by Bombora Investment Management Pty Ltd ACN 625 413 390 (Trustee or Bombora). This Investment Presentation is a summary of an information memorandum that has been prepared by Bombora with respect to the Fund (Information Memorandum), the Information Memorandum contains further information regarding the fund including the risks of investing in the Fund.

This Investor Presentation is intended solely for the use of the person to whom it has been delivered (Recipient) for the purposes of evaluating a possible investment in the Fund. It is not to be reproduced or distributed to any person (other than professional advisers of the Recipient) without Bombora’s prior written consent.

This Investor Presentation has been prepared for Wholesale Clients only , is not, and is not required to be a disclosure document or product disclosure statement within the meaning of the Corporations Act. This Investor Presentation may not contain the same level of disclosure as those documents and has not been, and is not required to be, lodged with the Australian Securities & Investments Commission (ASIC).

The Trustee is a corporate authorised representative of Ironbridge Capital Management Pty Limited ACN 105 880 108 (AFSL No. 237556) and is authorised to provide advisory, dealing and custodial services in connection with the Fund to Wholesale Clients only.

Investment Decision

Applicants should read this Investor Presentation and the Information Memorandum in their entirety before deciding to apply for Units. This Investor Presentation does not take into account the individual circumstances of any investor, nor does it give financial product advice. Accordingly, investors should obtain independent legal, financial and taxation advice before making a decision to invest in the Fund.

An investment in this Fund carries risks. An outline of some of the risks that apply to an investment in the Fund is set out in Section 6 of the Information Memorandum. Applicants are urged to consider this section of the Information Memorandum. carefully before deciding to apply for Units. No person is authorised to give any information or make any representation in connection with the Offer which is not contained in this Investor Presentation or the Information Memorandum. Neither the Fund, The Trustee nor its respective affiliates, related bodies corporate, directors, officers, employees, representatives or advisers accept any liability for any loss or damage suffered or incurred by the investor or any other person or entity however caused (including negligence) relating in any way to this Investor Presentation or the Information Memorandum.

Forward Looking Statements

This Investor Presentation contains forward looking statements. Forward looking statements are not based on historical facts, but are based on current expectations of future results or events. These forward looking statements are subject to risks, uncertainties and assumptions which could cause actual results or events to differ materially from the expectations described in such forward looking statements. While the Fund believes that the expectations reflected in the forward looking statements in this Investor Presentationare reasonable, no assurance can be given that such expectations will prove to be correct. The risk factors set out in Section 6, as well as other matters as yet not known to the Fund or not currently considered material by the Fund, may cause actual results or events to be materially different from those expressed, implied or projected in any forward looking statements. Any forward looking statement contained in this Investor Presentation is qualified by this cautionary statement.

CONFIDENTIAL

Introduction Bombora Special Investments Growth Fund

An Offering to Wholesale Clients: Special Investments Growth Fund

Bombora Investment Management – Special Investments Growth Fund4

Overview

Investment Strategy

Investment Manager

• The Bombora Special Investments Growth Fund (Fund) uniquely provides investors with an actively managed portfolio of Pre IPO and Listed Equities in high growth companies

• The objective of the Fund is to construct a concentrated, high conviction portfolio of unique growth opportunities to deliver strong positive risk adjusted returns for investors over the medium to long term

Investment Performance

Fundamental bottom up research, screening, diligence and structuring to provide investors with actively managed exposure to:• Pre IPO & co-investment opportunities; • Active managed listed equities; and • Special investment situations

Offer Details

• Team consists of professional executives, each with over 20 years experience in investments over multiple industries and geographic markets• Bombora uses Operational Partners and Industry Specialists to help drive value in our investments• Experience spans funds management, direct investment, private equity, mergers & acquisitions and equity capital markets• Bombora team are proven operators being Executives, Directors and Advisors to both private & public companies

• The Fund returned +53% (net of fees) in 2019, confirming it as one of the top 10 performing equity funds in Australia in the 2019 Morningstar All Funds report (as reported in the AFR)

• The Fund performance to date has been achieved with high levels of cash holdings and excludes further upside generated from incentive securities issued • The Bombora strategy prior to the Fund launch (2013 – 2018) generated Net Performance of 1.9x money on money returns assuming $1.00 invested in all

capital raisings. The IRR over this period has been 27.5%

Fund Structure Unregistered Managed Investment Scheme structured as an Australian Unit Trust for WHOLESALE CLIENTSInformation Memorandum June 2018Fee Structure 1.5% Management Fee & 20% Performance Fee for fund outperformance over hurdle rate of 7%

Experienced Management Team complemented by Operational Partners and Industry Specialists with a focussed growth mandate.

Bombora Investment Management: Special Investments Growth Fund

Bombora Investment Management – Special Investments Growth Fund 5

Bombora“An indigenous Australian term for an area of submerged rock shelf, reef or sand bank that is located some distance from the shoreline that causes waves to surge as they pass over it.”

1 Strong track record

• Identified, structured and completed eight public market initial public offerings since 2013• Prior to Fund launch, raised >$250m to support initial public offerings, secondary raisings

and block trades in these companies• Pre-Fund strategy annual return over 5 years is ~30%• In Calendar Year 2019, the Fund returned +53% (net of fees)

2 Highly experienced team

• Background of Bombora team spans funds management, direct investment, private equity and M&A and equity capital markets experience

• Bombora team are proven operators as Executives, Directors and Advisors to both private & public companies

3 Access to opportunities

• Diverse background of Bombora investment team provides large number of high quality and unique investment opportunities

• Active corporate finance network of advisors and brokers

Bombora is taking applications for the Special Investments Growth Fund, to provide investors with actively managed exposure to pre IPO & co-investment opportunities, active managed listed equities and special investment situations.

Bombora utilises its network of industry experts in identifying, analysing, structuring and managing investments. This network, combined with Bombora’s transactional capital markets experience is combined to provide unique investment opportunities that meet targeted returns.

SQM Research: “Superior, High Grade Investment”

Research:

• During November SQM Research conducted and released an independent ratings review of the Fund

• We are proud to announce that the Fund has been rated as a “Superior, High Grade Investment” from SQM

• A copy of the report is available on request

• SQM Research conducts independent ratings on Managers and Investment opportunities across asset classes, with an emphasis on active styles and boutique managers with high alpha strategies

Accessible platforms available for Investment:

• The Fund was also approved as an authorised Wholesale Fund on the following Platforms:

• Macquarie Wrap IDPS Investment Menu

• HUB24 IDPS Investment Menu

• Netwealth Wrap

• Ausmaq

The Fund was listed in the top 10 performing funds in 2019 in Australia: Morningstar All Funds Report in 2019

All Funds Report 9846 Total Funds

Bennelong Emerging Companies +86.45

Atlantic Absolute Return +82.21

Regal Aus Small Caps +75.25

Saville Capital Emerging Companies +73.28

CFS Geared Global Property +69.86

CFS Geared Share +66.04

Acadian Geared Aus Equity +54.65

Acadian Geared Global Equity +53.43

Bombora Special Investments Growth +52.89

Ausbil Australian Geared +52.53

Bombora Philosophy and Points of Difference


CONFIDENTIAL

The Team Bombora Special Investments Growth Fund

Bombora Team Experience


The Bombora team is made up of the Investment team, complemented by Operational Partners and Industry Specialists and supported by an Independent Chair as part of the Investment Committee

Scott Wheeler

Investment Team and Operational Partners


Mike HillManaging Director and Portfolio Manager

Gregg TaylorChief Investment Officer and Portfolio Manager

Josh MayPartner and Investment Committee

• Mike is a former Operational Partner of Ironbridge from 2004 to 2014, a private equity firm with $1.5bn funds under management, at which he led and was involved in a number of transactions across a variety of different industries. Prior to this, Mike was a Partner of Ernst & Young

• Co-Founder of Bombora Group in 2014

• Current Board positions include Chairman of the Board of Janison Education Group Limited (ASX: JAN), PKS Limited (ASX:PKS) and AHAlife Holdings Limited (ASX: AHL). Non Executive Director on Acrow Formwork and Construction Services Limited (ASX:ACF)

• Formerly ASX Director of RHP, PRT, LVT, LAW

• Member of the Australian Institute of Chartered Accountants and holds a Bachelor of Arts Degree (Accountancy) from the University of South Australia

David WillingtonPartner and Investment Committee

• Gregg has 20 years of international business experience in financial markets, technology, sports administration, media and retail

• Most recently an Investment Executive at Blue Ocean Equities responsible for equity research, and capital markets services for ASX and NZX listed companies. Prior to this, his other roles included Investment Manager with Schroders Investment Managers. Gregg has also founded and managed multiple global operating businesses in the sports, retail and media sector

• Currently serving on the Board of Acrow Formwork and Construction Services Limited (ASX: ACF), VortivLimited (ASX:VOR) as well as Marketplacer Limited

• Bachelor of Commerce Degree from University of Wollongong and is a CFA Charter holder

Bryan ZekulichPartner and Investment Committee

• Josh was previously a Director within Ernst & Young’s M&A Advisory Practice in Sydney, before co-founding Oaktower Partnership in 2005, an independent Corporate Advisory business, based in Sydney and Melbourne. Advisory transaction themes have included private equity, entrepreneurial clients seeking growth capital, succession planning for large established private businesses, and sale of non-core assets for large corporations

• Currently serving on the Board of Acrow Formwork and Construction Services Limited (ASX: ACF)

• Josh has a Bachelor of Arts Degree (Accountancy) from the University of South Australia and is a member of the Australian Institute of Chartered Accountants

• David has over 25 years’ experience in corporate finance and investment banking and during his career has primarily advised companies in the technology, media and telecommunications industry

• David also sits on the Board of Janison Education Group Limited (ASX: JAN) and Orbx

• Previously, David was a Senior Partner at Deloitte Corporate Finance and prior to that was an investment banker with NM Rothschild and Citi

• David has a Bachelor of Commerce, is a member of the Institute of Chartered Accountants in Australia and is a Fellow of the Financial Services Institute of Australia

Complemented by Industry Specialists and Analysts (over page)

• Bryan was the Managing Partner of EY’s Private Equity Sector for over 15 years. Bryan is also a Board member, Treasurer and Company Secretary of the Australian Investment Council (formerly the Australian Private Equity and Venture Capital Association “AVCAL”).

• Significant experience in the M&A market in Australia including mergers & acquisitions, divestments, strategic finance, capital raisings and advising on the Australian stock exchange listing requirements.

• Bryan has a Bachelor of Commerce from The University of Western Australia, Fellow of the Institute of Chartered Accountants of Australia (FCA) and Fellow of the Financial Services Institute of Australia (FINSIA), F. Fin

Analysts and Industry Specialists


Chris ColferIndustry Specialist

Brett ChenowethIndustry Specialist

Greg RuddockIndustry Specialist

• Chris has Chairman, Chief Executive and Board Director experience with an exemplary track record in multiple industry sectors including luxury goods, branded goods and E-Commerce. He is highly skilled in strategy, retail, e-commerce, business development and marketing

• He was the longest serving Non-Executive Board Member of online luxury fashion retailer NET-A-PORTER, where he oversaw the initial investment by Richemont, saw its transformation into a billion-dollar company, and subsequently led the full acquisition in February 2010

• Christopher currently sits on a number of technology and consumer goods boards, including Nude by Nature, Grown Alchemist, Mobile Digital, AHAlife Holdings Ltd (ASX: AHL) and LYST

Julian Knights AOChair Investment Committee

• Brett has over 25 years of professional experience working primarily in media, technology, telecommunications and digital businesses, most recently as Managing Director and Chief Executive Officer of APN News and Media Limited

• Co-Founder of Bombora Group in 2014

• Currently Chairman of Madman Entertainment, Canberra Data Centres (CDC), Yellow Group (NZ) and Creative Enterprises Australia (CEA). He serves as the Chairman of the Advisory Board of H.R.L Morrison & Co. and sits on the boards of Janison Education Group Limited (ASX: JAN), Sellable Pty Ltd and Surfing Australia

• Brett has a Bachelor of Laws and a Bachelor of Economics from the University of Queensland and a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia

• Founder and Joint CEO of Ironbridgesuccessfully raising and investing the 2001 $450m fund and the 2006 $1.05bn fund

• Prior to forming Ironbridge, Greg joined Gresham Private Equity in 1999 and had 12 years operational experience at Wesfarmers and with diversified listed company Avatar

• Has been a member of the IronbridgeInvestment Committee since inception and has represented the IronbridgeFunds on the Boards of Stardex, Super A-mart, EnviroWaste, Easternwell, FleetPartners (now Eclipx), ISGM and AOS. Greg is currently a Director of Eclipx Group Limited (ASX: ECX) and Navigator Resources Limited (ASX: NAV)

• Greg has been a Director of Prospasince 2015 which is pending an IPO in 2018

• Greg qualified as an accountant and holds a Bachelor of Commerce degree from the University of Western Australia

• Founding Partner of Gresham Private Equity (majority owned by Wesfarmers) and Founding Partner of Ironbridge in 2001

• 15 years of private equity experience raising approximately $1.75bn of funds under management and 17 years investment banking experience in the UK and Australia

• In 2008 served as the Chairman of AVCAL (Australian Private Equity and Venture Capital Association)

• In 2013 was appointed as the Chair of the Major Performing Arts Board of the Australia Council

• Julian qualified as a solicitor and holds BComm and LLB degrees from the University of the Witwatersrand

Industry Specialists will support the Investment team and work directly on portfolio investments.

Advait JoshiPortfolio Analyst

• Advait is a Portfolio Analyst at Bombora. Prior to joining the Bombora team, he was an Equity Research cadet at UBS investment bank working in the small caps team

• Advait is the youngest global winner of the ASX (Opens) Share market game

• Advait is in the process of completing a Bachelor of Commerce degree from UNSW

Scott WheelerAssociate

• Scott recently joined Bombora after joining the Private Equity industry in June 2019 with Axle Equity Partners

• He completed his MBA in May 2019 at AGSM and London Business School and was awarded the Community Spirt Scholarship.

• As a former civilian and military helicopter pilot, Scott has extensive knowledge of the aviation and defence industries and worked as an Aviation Consultant during his MBA. Prior to this, he led numerous anti-poaching operations in East Africa

CONFIDENTIAL

Portfolio Construction Bombora Special Investments Growth Fund

Key fund features


Fund Name Bombora Special Investments Growth Fund (Fund) is an unregistered managed investment scheme structured as a unit trust

Investment Manager and Trustee Bombora Investment Management Pty Limited (Bombora) ACN 625 413 390

Custodian and Administrator Mainstream Fund Services (part of the ASX listed entity Mainstream Group Holdings (ASX: MAI)

Fund Type Pre-IPO and Australian listed equity portfolio

Suggested Investment Horizon 3-5 years

Investor Eligibility Wholesale Clients, as defined in the Corporations Act 2001

Minimum Investment $50,000

Minimum Redemption $50,000 (subject to a minimum balance of $50,000)

Buy/Sell Spread 30 basis points

Fees and Expenses a. Management fee of 1.5% p.a. of the Fund’s net asset value calculated and payable monthly in arrearsb. Performance fee of 20% p.a. of the returns in a performance fee period exceeding the higher of the previous high-water mark

and the hurdle rate. The performance fee is calculated and payable quarterly in arrearsc. The Trust incurs cost recovery to a maximum of 1% p.a. of the Trust’s net asset value

Hurdle Rate 7% p.a. (inclusive of management fee and cost recovery accrued)

Application Frequency Monthly

Valuations Unit price calculated monthly

Distributions Annually as at June 30. Distributions are automatically reinvested unless instructed otherwise

Redemptions Quarterly with 30 days notice

Bombora Special Investment Growth Fund Target Portfolio


Concentrated high conviction portfolio of ~20 holdings

Diversification of investment theme and industry sector

Detailed due diligence process with unanimous Investment Committee approval required for each investment

Strong selling discipline

✓

✓

✓

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Momentum and Strategy of Bombora to Last Quarter

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Within 12 months since inception, Bombora achieved Target Weight

Bombora Investment Management – Special Investments Growth Fund

Strategic Growth Phases of Bombora:Phase I (June 2018 – Sept 2018) – Seed Fund:➢ 80% of cumulative FUM net inflows ending June 2019 were secured as at September 2018Phase II (Sept 2018 – June 2019) – Prove Performance:➢ FUM ex. Cash returned +244% from Sept 2018 to June 2019 despite little new FUM inflowsPhase III (July 2019 onwards) – Capital Raise to increase FUM and continue to deliver targeted risk-adjusted returns

Number and weight of investments vs target portfolio

Mar 2019 Jun 2019 Sep 2019 Dec 2019 Mar 2020 Target

Number Weight Number Weight Number Weight Number Weight Number Weight Number Weight

Listed 7 34% 11 52% 11* 56% 11* 55% 10* 37% 8-12 40-50%

Pre-IPO 4 9% 5 15% 5 14% 6 22% 6 28% 6-10 20-30%

Special Situations 2 16% 3 10% 3 14% 3 11% 4 18% 4-6 10-20%

Cash 41% 22% 16% 12% 18% 10-20%

*PKS Options included as a separate holding

Examples of Current Listed Fund Positions

PKS is a leading healthcare informatics company that provides a proprietarysubscription-based Clinical Decision Support (CDS), “RippleDown”, that enablesautomation efficiency in pathology and hospitals by capturing and storingknowledge from specialists in its knowledge engine to support replicated clinicaldecisions. The Manager’s investment into PKS was initially through a SpecialPurpose acquisition vehicle QPro Limited (QPro).

EML is a payments processing technology business. Their portfolio offersinnovative financial technology that provide solutions for payouts, gifts,incentives and rewards, and supplier payments. EML issues mobile, virtual andphysical card solutions to some of the largest corporate brands around theworld, processing billions of dollars in payments each year, and manages morethan 1,200 programs across 21 countries in North America, Europe and Australia.The Manager views EML as a high growth business at a reasonable valuation.

UWL is a fixed wireless broadband provider with proven high-speed performancewith the potential to provide an alternative solution to the NBN on aninternational scale. Following the acquisitions of LBNCo and 1300 Australia, UWLhas established a strong ‘3 pillars’ operating model which features significantcross sell opportunities. The Manager believes this model will continue to deliverrobust EBITDA and revenue growth. The Manager’s investment into UWL wasinitially through a convertible note issuance as part of the Fund’s SpecialSituations portfolio. The company operates in an attractive consolidatingindustry with a strong board and management team.

JAN is an education technology company that operates Janison Learning, acorporate development business and Janison Assessment, a platform for managingdigital exams. The company JAN’s share price rallied in the lead up to its Q1FY20update with the market expecting the firm to announce recurring revenue growthand margin expansion as well as the company’s November contract win with theOrganisation for Economic Cooperation and Development (OECD).

17Bombora Investment Management – Special Investments Growth Fund

VOR is a technology business that owns Decipher Works Limited and CloudtenLimited, businesses that provide specialist cybersecurity and cloud securitysolutions respectively to enterprise customers and government institutions.Decipher Works’ clients are blue-chip financial institutions including TAL, MeBank,iCare, Cuscal and government entities including the NSW Office of State Revenue.Cloudten’s clients include Origin energy, IAG, NSW transport, iCare and MonashUniversity. Gregg Taylor (Bombora’s CIO) has joined Vortiv’s board as Non-ExecutiveDirector.

KNO’s KnowledgeIQ software which sits on top of existing Enterprise Solutions,forming enabling integration with legacy systems. KNO offers an end to endknowledge management platform by indexing data and locating information,creating a virtual link to the data without actually moving the data to a centralrepository and using applications existing within Knosys platform or integrateswith customers’ applications to create complete query-to-solution platform forcustomers.

AHL is an online marketplace for luxury and designer lifestyle products in NorthAmerica. AHA acquired Design Milk in February 2019, a globally recognised, US-based digital media platform which connects the latest news in art, interior design,furniture, décor, fashion and technology from around the world to its audience. TheDesign Milk audience includes several subscriber groups that are within AHA’starget market including interior designers, architects and other design industryprofessionals. A key pillar of AHL’s acquisition rationale was to expand its growingcorporate and B2B offerings within this target market.

Example of Current Unlisted Fund Positions

Orbx is highly profitable and has significant growth potential. Thecompany has approximately 115k global user accounts. The strategicopportunity for Orbx is to create product pricing and marketingactivities to attract new consumer, commercial and gaming partners todrive sales. The board is focused on transitioning from a sales perproduct model to SaaS model to increase customer stickiness. Thecompany has a clear product development road map and recently hireda dedicated in-house development team to increase the pace of productreleases.

Ultraserve is an enterprise software product that provides the full cloudcomputing software as a service (SaaS) stack for business’s cloudcomputing needs to the global e-commerce market. The companystrategy is to capture significant market share in its US$500m+ targetmarket of the mid enterprise retail and e-commerce segment requiringcloud computing services. The company has secured partnerships withBroadleaf, AWS and Adobe as part of its cloud services ecosystem.

Micromine is a leading global provider of general mine planningsoftware solutions. Micromine has three key offerings; Micromine, anexploration and mining solution, including pit optimisation, schedulingand processing of third party data; Pitram, a fleet management andmine control platform that records, manages and processes mine sitedata, used in development and production phases; and Geobank, ageological data management tool, comprising data collection,management, validation, reporting and field logging.

18Bombora Investment Management – Special Investments Growth Fund

Mobile Digital is a software tool that enables organisations to design,personalise and send branded messages direct to smartphone inboxes.It’s use-cases include advertising (e.g. MMS/SMS campaigns toreactivate clients, referral marketing, etc.) and communication revenuestreams (e.g. digital renewal notices sent to potential customers’ inboxon behalf of clients).

Marketplacer Limited, a software company that establishes and runsonline marketplaces for its customers, mainly large retail and B2B firms.Using Marketplacer enables firms to make the process of developingmarketplaces faster (the business has historically taken its marketplaceslive within 12 months) and cheaper as well as allowing firms tooutsource the online marketplace technology piece, enabling them tofocus on their core business.

CONFIDENTIAL

Proven Strategy Pre Fund Bombora Special Investments Growth Fund

Bombora Past Performance – Pre Fund Launch


Note: As at June 2018; (1) First re-capitalisation completed; (2) Includes capital raisings completed in RHP, JKL, AHL, LVT, JAN and ACF, over an investment period between Apr-14 to June-18.

Date of original investment1 Mar-13

Number of historical capital raisings 23

Assumed investment in each opportunity $1.00

Total invested amount across all investments $23.00

Value of all investments to June 2018 (Fund Launch) $44.04

$ return on investments $21.04

Money on Money return 1.9x

IRR return over period since March 2013- excludes further upside generated from incentive securities

issued as part of capital raisings and capital distributions

27.5%

Performance summary to June 18 (launch of BSIG Fund)Previous investments

rhipe Limited (ASX: RHP)

JustKapital Limited (ASX: LAW)

Ahalife Limited (ASX: AHL)

LiveTiles Limited (ASX: LVT)

Janison Education Group Limited (ASX: JAN)

Acrow Formwork and Construction Services Limited (ASX: ACF)

IRR of 27.5% generated for investors across historical Bombora investment opportunities

ASX Ticker Description Listing date AcquisitionsMarket cap range since listing (1) Bombora Group Directors

RHP Founded in 2003 as NewLease, rhipe has grown to become the leading cloud software licensing expert in the Asia-Pacific region

Apr 14 FRR: A$2mrhipe: A$13mnSynergy: A$25m

A$2m – A$400mCurrently A$278m

Mike Hill(resigned 26 March 2019)

LAW Leading litigation funder offering finance to corporate and individual plaintiffs who lack the resources to pursue claims

Apr 15 ACJ: A$6mJustKapital: A$14mMacquarie Medico: A$19mPortfolio of cases: A$17m


Mike Hill(resigned 27 November 2017)

AHL New York Based luxury online goods marketplace with over 4,000 designers from more than 45 counties

Jul 15 INT: A$2mAHAlife: A$20mGrowth Capital: A$6m (Oct-17)


Mike Hill(Currently Chairman)

LVT Offers digital workplace platforms, including modern user experience-focused solutions to the enterprise, education and SMB markets

Sep 15 MOU: A$2mLiveTiles: A$12mGrowth Capital: A$12m (Sep-17)Growth Capital: A$20m (Feb-18)


Mike Hill(resigned 5 September 2017)

JAN Digital education provider and developer of platforms to digitise large-scale exams

Dec 17 HJB: A$2mJanison Education Group: $26mIPO raise: A$10m


Mike Hill (Currently Chairman)Brett Chenoweth (NED)David Willington (NED)

ACF Provider of formwork and other services to the infrastructure and construction industries

Apr 18 NMG: A$2mAcrow: $23m (raise size $27m)


Mike Hill, Gregg Taylor, Josh May(All NEDs)

PKS Provides proprietary subscription based Clinical Decision Support (CDS) system “RippleDown” that automates the decision-making process in healthcare organisations.

June-19 IPO: $19.5mPavilion Health: $8.5m

Currently $18m Mike Hill(Currently Chairman)

Public transaction experience

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The Bombora group has a strong history of taking growth companies to the public markets

(1) As at 30 April 2020

>A$200m raised from institutions to support acquisitions


CONFIDENTIAL

Fund PerformanceBombora Special Investments Growth Fund

❑ The Fund has returned +41.5% (net of fees) in the period since inception (following the fund launch on 1 June 2018)

❑ The ASX Emerging Companies Index and the ASX Small Industrials Index have returned -21.4% and -11.8% over the same period respectively

❑ $100,000 invested with the Fund at inception would have grown to $141,528 as at 30 April 2020 net of fees

Performance To 30 April 2020


Date of Fund Launch 1 June 2018

Date of Fund Seeding 30 September 2018

Returns Since Inception 41.5%

Outperformance of Small Industrials(Since Inception)

53.4%

Performance Metrics

Rolling Returns

Last 3 Months -7.1%

Last 6 Months -9.7%

Last 12 Months +20.1%

Since Inception +41.5%

PERFORMANCE SINCE INCEPTION

FUM growth To 31 March 2020

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FUM GROWTH SINCE INCEPTIONPost Phase 1 (September 2018) Total FUM has grown +107% vs Cumulative Netflows +80%


CONFIDENTIAL

Investment Process Bombora Special Investments Growth Fund

Investment Process


Opportunity sourcing

A key strength of the Bombora team is the capability to source truly unique opportunities ahead of the market• Diverse backgrounds of the Bombora team lead to large number of potential opportunities being received on a highly frequent basis• Bombora’s Operational Partners and Industry Specialists play a key role in sourcing unique opportunities• Open mandate of the Fund enables structuring of potential transaction to best suit Bombora strategy

Phase 1: Initial opportunity

screening

Bombora investment experience ensures a reliable and rigorous screening process• Phase 1 screening of investment opportunities will include: review of company financials and model testing; detailed valuation analysis based on DCF

and earnings multiple, comparable companies and comparable transaction analyses; meetings with key management and shareholders; and site visits• Insights from Bombora’s Operational Partners and Industry Specialists plays a key role in screening opportunities• Approval from Investment Committee will be required to move beyond Phase 1 screening

Phase 2:Due diligence

High Conviction positions drive detailed due diligence being undertaken following initial opportunity screening• Bombora adopts a deep dive to ensure suitability for genuine investment partnership with company• Further, detailed internal diligence will first be conducted, including further stress testing of financial model and further interviews with

management and customers • Formal due diligence reports will be procured, including legal, financial, technical and commercial when required

Investment Committee Approval

Diverse and experienced Investment Committee need to unanimously approve the execution of any transaction• A detailed Investment Committee Paper will be prepared by the Bombora deal team, including summary of findings of all internal and external

diligence reports. Include targeted strategy and outcome of investment• Opportunities may be rejected, required further diligence under Step 3, or be accepted for investment

Ongoing reporting and monitoring

Active investment positions with a view of partnership designed for Bombora to stay on top of performance• Bombora team will work closely with management and Board of portfolio companies, acting as an investment partner to unlock the growth

potential of the company

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Bombora Special Investment Growth Fund Stock Selection


Target Industry Sectors

• Technology

• Telecommunications

• Media

• Healthcare

• Financial Services

• Infrastructure and related services

• General Industrial

• Energy – including Renewables

Screen & Identify

StructurePre IPO Invest

ASX Listing M&A Exit

A typical pre IPO investment lifecycle - Bombora Board Representation and Active Management of Investment throughout

Target Company Characteristics

• Earnings growth

• Attractive industry dynamics

• Strong gross margins

• Strong management and culture

• Sustainable competitive advantage

• Scalable business model with operating leverage

• Strong balance sheet and sustainable funding model

• Valuation discount to peers

• Identifiable catalyst for closing valuation discount

• Example: Pacific Knowledge Systems (ASX:PKS)

CONFIDENTIAL

Case Studies Bombora Special Investments Growth Fund

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Case study: Marketplacer – Pre-IPO Raising by Bombora

Cmint Limited “IPO Company”

(Seeded by BSIGF)

A$19.0m 100% of Marketplacer Pty Ltd

New Investors

Bombora Cornerstones capital raising into CMintHoldings Limited

All existing Shareholders roll into IPO Company


Overview

• Marketplacer is a software company that provides the technology and infrastructure needed to establish and maintain online marketplaces for retail and B2B customers. Its customers include businesses looking to consolidate niche segments, large retailers, brands, wholesalers and franchise groups looking to expand their e-commerce capabilities. For further information on the business, please visit www.marketplacer.com

• Marketplacer pursued a pre-IPO capital raise for:

• Funding growth strategies:

• Accelerate sales pipeline and contract wins, especially with large retail customers

• Geographical expansion beyond existing geographical reach

• Repayment of Marketplacer’s existing debt

• The Implied valuation multiples are compelling:

• Bombora cornerstoned and led a $19.0m raising in the form of ordinary equity in CMint Limited (“IPO Company”) termed a “Pre IPO capital Raise” at a pre-money EV of $41.0m

• CMint was an unlisted public company seeded by Bombora Special Investments Growth Fund (“BSIGF”)

• On completion of the capital raising CMint acquired 100% of the equity in Marketplacer Pty Ltd (“Marketplacer”) on a scrip-for-scrip basis

• Post settlement, the Group used a portion of the cash raised to pay down $10.5m of debt owed by Marketplacer. This did not affect enterprise value

• The deal structure is seen below:

Deal Structure

http://www.marketplacer.com/

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Case study: EML Payments Limited (ASX:EML)

Overview of EML Payments


Share Price Movement: Fund Cost vs SP as at 30 April 2020

Initial Fund Cost Price:

$1.96

30 April 2020: $2.81

Thesis

• EML is a provider of prepaid, reloadable and virtual account number payment services in Australia, Europe, and North America

• EML provides prepaid and reloadable gift cards (such as the Fugitsu incentives Gift Card and the Ladbrokes card) and issues virtual account numbers and handles the complete payments relationship between clients and end-users. This enables EML to generate a number of revenue streams throughout the payments relationship including establishment fees, transaction and FX fees, breakage and interest earnings

• In FY20e, we believe EML is likely to beat guidance and consensus on both Revenue and EBITDA metrics, driven by organic and inorganic growth

• EML has a track record of strong financial performance with a Revenue CAGR of +75% between FY16a-18a and is forecast to grow at +27% CAGR between FY18a-22e. EML’s EBTDA has grown at a CAGR of +103% between FY16a-18a and is forecast to grow at +35% CAGR from FY18a-22e

• We see multiple catalysts for EML going into FY20e including the full year contribution of its recent PFS acquisition, impacts of salary packaging contracts and Pointsbet’s USA online gaming expansion

• EML targets the instant online and physical gift card space which remains heavily fragmented with largely outdated payment processing mechanisms

• The company has a strong and experienced leadership team constituting of Peter Martin as Chairman (Ex-CEO of Rothschild Australia Asset Management), Thomas Cregan as CEO (Formerly the Executive VP of NetSpend Corporation) and Tony Adcock (>20 years’ experience as Director of various companies)

• EML remains at a discount to peers on a forward looking basis and we are confident of the stock’s continued positive momentum and growth

Current Fund Cost

Price: $3.23

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Case study: Uniti Group Limited (ASX:UWL)

Overview of Uniti Group Limited


Share Price Movement: Fund Cost vs SP as at 30 April 2020

Initial Fund Cost Price:

$0.20

16 Jan 20: $1.54

Thesis

• The Manager’s investment into UWL was initially through a convertible note issuance as part of the Fund’s Special Situations portfolio

• Uniti Group Limited (UWL) is a fixed wireless broadband provider with proven high-speed performance with the potential to provide an alternative solution to the NBN

• Following the acquisitions of LBNCo and 1300 Australia, UWL has established a strong ‘3 Pillars’ operating model which features significant cross-sell opportunities. The pillars are: Consumer & Business enablement; Wholesale and Infrastructure; and Specialty services

• The Manager initially invested in UWL through a convertible note as part of its special situations portfolio in July 2018. The position then became a Pre-IPO holding for the Fund in January 2019. UWL listed on the ASX and commenced trading in February 2019.

• UWL has continued to outperform both its own guidance as well as market expectations

• In 1H20, the Manager participated in UWL’s c.$78m fully underwritten placement and entitlement offer. The raise was partly used to acquire 100% of 1300 Holdings Pty Ltd (“1300 Australia”). 1300 Australia holds the largest inventory of priority numbers (‘1300’, ‘1800’ and ’13’) in Australia and presents significant cross sell opportunities as well as cost synergies for UWL.

• The acquisition featured significant FY20F EBITDA per share accretion and the Manager is confident of UWL’s performance in both the medium and long term

• UWL operates n the Non-NBN fibre and Non-NBN fixed wireless wholesale and retail service industry. UWL bypasses the NBN access network, allowing it to control service delivery to enable high satisfaction and low customer churn

• UWL has a strong Board and Executive Team with Michael Simmons as Group MD and CEO, Darryl Inns as CFO, Steve Picton (LBNCo CEO) as CEO of Wholesale and Jordan Grives (Fone Dynamics Founder) as CEO of Specialty Services

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Case study: Orbx Simulation Systems – Pre-IPO Raising by Bombora

Orbx Investments Limited

“IPO Company”

A$2.6m

100% of Orbx Simulation Systems Ltd

New Investors

Bombora Cornerstones capital raising into Orbx Investments Limited

All existing Shareholders roll into IPO Company

• Orbx is a software content company that develops and sells simulation graphics scenery to users of flight simulation programs. The business sells its software products to customers all over the world which are downloaded and used as an add-on to flight simulation software programs. Orbx currently has a digital library of 183 products sold on www.orbxdirect.com

• Orbx is pursuing a capital raise for:

• To fund growth strategies:

• Accelerate product development (USA regions in roll out now)

• To corporatize the business through executive recruitment

• Accelerate pricing and marketing strategies – SaaS pricing and digital marketing

• All Capital Raised is for primary growth, no shareholders are exiting or taking cash off table

• Pre-money valuation of $43.5 m and post money $46.8m (assuming $300k for costs)

• Implied multiples are compelling:

Overview Deal Structure

• $2.6m Pre-IPO capital raise at $0.008 per share into Orbx Investments Ltd (“the Group”), a special purpose pre-IPO public unlisted vehicle. Investors will receive 0.0307635 options per share subscribed to under this offer exercisable at $0.01 and an equal number of options at $0.013 exercise price

• At the completion of this offer there will be 303m options on issues. Options will have a five year term and 151.5m will be exercisable at $0.01 per share and 151.5m will be exercisable at $0.013

• On completion of the capital raising, the Group will acquire 100% of the equity in Orbx Simulation Systems Pty Ltd (“Orbx”) on a scrip-for-scrip basis

Summary Financial Ratios FY19F FY20F

Revenue 5.9 6.1 11.2

EBITDA 4.8 3.7 6.6

EV / Revenue (x) 7.1x 3.9x

EV / EBITDA (x) 11.8x 7.6x

EV / EBIT (x) 14.5x 8.3x

P/E (x) 24.6x 9.0x

Summary Financial Ratios FY19F FY20F

Revenue 5.9 6.1 11.2

EBITDA 4.8 3.7 6.6

EV / Revenue (x) 7.1x 3.9x

EV / EBITDA (x) 11.8x 7.6x

EV / EBIT (x) 14.5x 8.3x

P/E (x) 24.6x 9.0x


http://www.orbxdirect.com/

Case study: rhipe growth journey - Pre Fund Launch

33

rhipe has experienced rapid growth in revenue and scale, from $40m revenue in FY12 to c.$252.5m in FY19 and now has a presence in multiple countries across South-East Asia

• rhipe offers cloud licensing of major software providers (including Microsoft, Citrix and VMware), subscription management tools, and value added services to IT services providers who bundle subscription offers to end users

• The Bombora Group successfully assisted rhipe in listing on the ASX with a A$0.7m capital raising in April 20141

• The listing followed the Founder unexpectedly passing away immediately prior to the planned listing date

• As a result of continued Bombora involvement with the company, rhipe was still able to complete the listing, enable CEO succession and continue to grow and expand the business

• rhipe revenue and EBITDA have grown >6x between FY12 and FY19

Commentary

Capital raising history

Date Size Price

FRR re-capitalisation Mar 20132 A$1.0m A$0.19

NewLease acquisition Apr 2014 A$0.7m A$0.36

Nsynergy acquisition Nov 2014 A$25.0m A$1.00

Current price per share A$1.73

Value today of $1 invested in all capital raisings A$15.60

Implied IRR on $1 invested in all capital raisings 29.9%

Note: As at 30 April 2020; (1) Announcement of acquisition; (2) Date of re-capitalisation of FRR

Sector Information technology

Industry Subscription software distribution

Location Australia, New Zealand, Singapore, Malaysia, Philippines, Indonesia, Thailand, South Korea

Investment date Apr-141

Current market cap A$278.0m

Acquisition value A$13.0m

Overview

Investment highlights

Initial Investment highlight Subsequent result

Subscription based revenue model

Increase in subscription revenue to $243m in FY19 from $40m in FY12

Expansion opportunities to high-growth South-East Asian (SEA) area

70% growth in SEA in FY17, opened South Korean business (

Early focus on cloud-based business model

Rhipe has crossed 200,000 Microsoft CSP users, representing $34.6m annual run-rate revenue, after only 2.5 years since launching

Arugam Limited - An investment of the Bombora Investment Management Special Investments Growth Fund

Case study: Acrow Formwork and Construction Services - Pre Fund Launch

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One of Australia’s largest formwork and construction services companies

Investment highlights

Investor distribution

Sector Engineering and construction

Industry Hire assets

Acquisition value A$23.0m

Investment date Mar-181

Capital raising A$28.0m

Cornerstone support A$8.4m

Current market capitalisation A$51.9m

Overview

• NMG was able to secure the asset at a highly attractive valuation

• FY16 to FY19 EBITDA growth of 35% to $11.6m and high cash conversion

• High quality and versatile portfolio of hire assets with replacement value of +A$100m

• Strong underlying industry fundamentals

• Near term growth opportunities

• Early cornerstone support from leading industry participants

• High level of investor demand, book multiple times over-subscribed

Performance since listing (Apr-18)

Cornerstone demand$8.4m

Institutional and Retail demand$19.6m

Total raise size: A$28.0mNote: As at 30 April 2020; (1) Date of acquisition

-5.3%

25.8%

S&P/ASX 200

Arugam Limited - An investment of the Bombora Investment Management Special Investments Growth Fund

bombora investment management special investments growth … · 2020. 5. 12. · bombora is taking...

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