INFO AG - QSC AG

QSC AG
The ICT full service provider for mid-sized companies
Acquisition of the majority of INFO AG and public tender offer
Cologne, May 3, 2011
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AGENDA
1. INFO AG at a glance
2. INFO AG and QSC – a perfect match
3. Public tender offer
4. Outlook
5. Questions & Answers
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QSC BECOMES THE ICT FULL SERVICE PROVIDER
FOR MID-SIZED COMPANIES
• QSC acquires* 58.98 percent of IT service provider INFO AG
for a price of € 14.35 per share in cash
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QSC has now 62.93 percent of voting rights,
as INFO AG owns 251,403 shares itself
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Public tender offer for the outstanding shares of INFO AG
INFO AG is a perfect addition to QSC
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Sizable acquisition to accelerate transformation process
=> Managed Services revenues will rise to > € 180 million per year
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Enhancement of talent to acquire and service large ICT projects
=> QSC’s market position is strengthened significantly
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Shared focus on mid-sized customers, but very few overlapping customers
=> Huge cross- and up-selling opportunity
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Increase of “share of wallet”
=> QSC will further move up the stack with ICT services
* After approval of German antitrust agency
INFO AG: A LEADING IT SERVICE PROVIDER FOR
MID-SIZED COMPANIES
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Founded in 1982, INFO AG has developed into a leading IT Service Provider
with two lines of business
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IT Outsourcing
IT Consulting
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Strategic partner of SAP and Microsoft
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In 2010, INFO AG reported revenues of € 85.3 million, an EBITDA of
€ 10.0 million and a net profit of € 2.7 million
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Sustainable positive free cash flow
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608 employees (2009: 518; planned end of 2011: approx. 690)
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More than 130 mainly mid-sized business customers;
85 percent of them have entered into long-term contracts
A STRONG PLAYER IN IT OUTSOURCING
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Main fields of activities
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Application management
IT infrastructure outsourcing
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3 own data centers (6,000 sqm)
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More than 1,400 Windows server systems up and running
More than 300 SAP systems up and running;
support for more than 40,000 end users
24/7 Support for more 21,000 users and more than 20,000 devices
Certification:
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Process driven outsourcing
SAS 70 Type I & II
ISO 27001
A STRONG PLAYER IN IT CONSULTING
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Main fields of activities
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More than 150 SAP consultants
More than 250 successful implementations
More than 120 Microsoft consultants
More than 50 successful implementations
Expert Services
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Technology consulting and implementation
Focus on Microsoft
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Business information management
Focus on SAP
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Application consulting and integration
More than 25 consultants in fields like CoreMedia, IBM, Software AG
AGENDA
1. INFO AG at a glance
2. INFO AG and QSC – a perfect match
3. Public tender offer
4. Outlook
5. Questions & Answers
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ACQUISITION WILL ACCELERATE THE
TRANSFORMATION PROCESS OF QSC
26%
32%
74%
68%
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INFO AG FITS PERFECTLY TO QSC‘S STRATEGY
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ICT OUTSOURCING: QSC IS NOW IN A POSITION
TO OFFER THE FULL RANGE
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INFO AG COMPLETES QSC‘S NATIONWIDE PRESENCE
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In late 2010, QSC has acquired
IP Partner – a housing and hosting
provider for mid-sized customers,
rooted in Southern Germany
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INFO AG is an IT outsourcing provider
for mid-sized customers, rooted in
Northern Germany
⇒ Shared customer focus
⇒ Shared lines of business
⇒ Different regional strength
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INFO AG‘S FLAGSHIP CUSTOMERS IN NORTHERN
GERMANY AND BEYOND
Retail &
Consumer Goods
Banking &
Insurances
The Media
Industry, Energy &
Other Sectors
Logistics
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ACQUISITION OF INFO AG WILL FURTHER INCREASE
QSC’S SHARE OF WALLET
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AGENDA
1. INFO AG at a glance
2. INFO AG and QSC – a perfect match
3. Public tender offer
4. Outlook
5. Questions & Answers
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THE TRANSACTION AT A GLANCE
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QSC acquires* 2,359,085 INFO AG shares for € 14.35 per share
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Vendor is INFO AG’s majority owner
MZ Erste Vermögensverwaltungsgesellschaft (58.98%)
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Shareholder structure INFO AG*
QSC:
58.98% (= 62.93% voting rights)
Own shares:
6.29%
Free float:
34.73%
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Maximum transaction volume: € 53.8 million
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Valuation (EV) = EBITDA * 7.8
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QSC will publish a public tender offer with the same conditions
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* After approval of German antitrust-agency
ADEQUATE VALUATION
Date 2
Target
Acquirer
EV 3
EV/EBITDA
15/07/2010
Dimension Data Holdings Plc.
NTT Corp.
2,185
11.5x
137
11.1x
14/06/2010
Intelligroup, Inc.
NTT Corp.
21/12/2009
Synetrix Ltd.
The Capita Group Plc.
78
6.5x
07/07/2008
Sylis SA
Group Open SA
50
8.1x
28/03/2008
Civica Plc.
3i Group Plc.
280
12.8x
14/02/2008
sds business services GmbH
Affiliated Computer Services, Inc.
61
9.2x
14/11/2007
Technisource, Inc.
Spherion Corp.
140
17.9x
23/10/2007
Itelligence AG (87.41% stake)
NTT Data Europe GmbH and Company KG
147
13.2x
30/07/2007
Xansa Plc.
Group Steria SCA
714
15.3x
25/05/2007
Innovativ Systems Design, Inc.
Agilysys, Inc.
141
9.5x
02/05/2007
Arinso International NV
Northgate Information Solutions Plc.
347
15.0x
11/12/2006
TDS Informationstechnologie AG Fujitsu Services Plc.
105
8.6x
Mean
Median
INFO AG
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Share price has not
reflected the fair value
of INFO AG prior
to offer
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Price is below that of
comparable transactions
11.6x
11.3x
7.8x
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Notes:
1) Selected transactions in the field of IT outsourcing and consulting in Europe and North America since 2006 (EV > € 50 million)
2) Announcement date
3) Enterprise Value (EV) in € million
Source: mergermarket
FUNDING IS BUILD ON QSC‘S OWN FINANCIAL
STRENGTH
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Two main sources of financing
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Cash position
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Free cash flow
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As of December 31, 2010, QSC had a cash position of € 46.6 million
and a net liquidity of € 28.4 million
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QSC expects a free cash flow of € 35 – 45 million in 2011
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In addition, QSC has access to an existing credit facility of € 50 million
AGENDA
1. INFO AG at a glance
2. INFO and QSC – a perfect match
3. Public tender offer
4. Outlook
5. Questions & Answers
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OUTLOOK 2011
QSC REITERATES GUIDANCE FOR 2011
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Ongoing transformation
process
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Focus on financial strength
and profitability
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Payment of a dividend for
fiscal year 2011
TIMELINE FOR THE PUBLIC TENDER OFFER
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In June 2011:
Publication of public tender offer
In July 2011:
Deadline for submission of quotation
In August 2011:
Additional quotation term (2 weeks)
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August 8, 2011:
Q2 2011 report of QSC – for the first time,
INFO AG will be fully consolidated for the period
starting May 2, 2011*
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* If German anti-trust agency will approve the transaction
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QSC AND INFO AG: A PERFECT MATCH
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Sizable acquisition to accelerate transformation process
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INFO AG with its focus on Northern Germany complements the regional
strengths of QSC
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As there are only very few overlapping customers, there is a huge crossand up-selling opportunity
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QSC will increase its “share of wallet” and more than double its potential
market
INFO AG, as well as IP Partner, improve QSC’s ability to acquire and
service large ICT projects in Germany and beyond
QSC is now the ICT full service provider for mid-sized companies
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AGENDA
1. INFO AG at a glance
2. INFO and QSC – a perfect match
3. Public tender offer
4. Outlook
5. Questions & Answers
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CONTACT
QSC AG
Arne Thull
Head of Investor Relations
Mathias-Brüggen-Strasse 55
50829 Cologne
Phone
Fax
E-mail
Web
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+49-221-6698-724
+49-221-6698-009
invest@qsc.de
www.qsc.de
twitter.com/QSCIRde
twitter.com/QSCIRen
blog.qsc.de
xing.com/companies/QSCAG
slideshare.net/QSCAG
paulrobertloyd.com/2009/06/social_media_icons
SAFE HARBOR STATEMENT
This presentation includes forward-looking statements as such term is defined in the U.S. Private
Securities Litigation Act of 1995. These forward-looking statements are based on management’s
current expectations and projections of future events and are subject to risks and uncertainties.
Many factors could cause actual results to vary materially from future results expressed or implied
by such forward-looking statements, including, but not limited to, changes in the competitive
environment, changes in the rate of development and expansion of the technical capabilities of
DSL technology, changes in prices of DSL technology and market share of our competitors,
changes in the rate of development and expansion of alternative broadband technologies and
changes in prices of such alternative broadband technologies, changes in government regulation,
legal precedents or court decisions relating, among other things, to line sharing, rent for colocation and unbundled local loops, the pricing and timely availability of leased lines, and other
matters that might have an effect on our business, the timely development of value-added
services, our ability to maintain and expand current marketing and distribution agreements and
enter into new marketing and distribution agreements, our ability to receive additional financing if
management planning targets are not met, the timely and complete payment of outstanding
receivables from our distribution partners and resellers of QSC services and products, as well as
the availability of sufficiently qualified employees.
A complete list of the risks, uncertainties and other factors facing us can be found in our public
reports and filings with the U.S. Securities and Exchange Commission.
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DISCLAIMER
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This document has been produced by QSC AG (the “Company”) and is furnished to
you solely for your information and may not be reproduced or redistributed, in whole
or in part, to any other person
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No representation or warranty (express or implied) is made as to, and no reliance
should be placed on, the fairness, accuracy or completeness of the information
contained herein and, accordingly, none of the Company or any of its parent or
subsidiary undertakings or any of such person’s officers or employees accepts any
liability whatsoever arising directly or indirectly from the use of this document
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The information contained in this document does not constitute or form a part of, and
should not be construed as, an offer of securities for sale or invitation to subscribe for
or purchase any securities and neither this document nor any information contained
herein shall form the basis of, or be relied on in connection with, any offer of securities
for sale or commitment whatsoever