M&A Announcement

May 13, 2021

Slides

Good morning, and thanks for joining the call following announcements earlier today. I have with me Julia Thomas, our SVP of Corporate Development Jatin Timis, our CFO and Denis Moreau, our VP of Investor Relations. I'm delighted that we have entered into an agreement to acquire SCI Global Assurance to scale up our global assurance offering. We are very excited about the acquisition of SEI Global Assurance. The ATIC industry is expected to grow faster post COVID-nineteen. Assurance is a capitalized high growth and high margin service and is mission critical to addressing the increased corporate focus on risk. The acquisition of Will Skalop, Intertek's Assurance offering with a high quality business run by a highly respected management team. SI Global Assurance will increase our global presence in complementary geographic markets and bring new services in attractive end markets. This transaction is expected to deliver attractive financial returns for our shareholders. We've been leading the industry for many years based on our risk based quality assurance approach, offering total quality assurance to our clients with our ATIC solutions. Pre COVID-nineteen and for several years, we saw our clients increase their focus on risk based quality assurance to make sure that they provide the highest quality, safety and sustainability products and services to their own customers. COVID-nineteen has demonstrated there were major risks in the operation of our clients that were not properly 5 non mitigated. Moving forward, all stakeholders expect governments and corporations to build back a better world with a sharper focus on end to end Quality Assurance. Said differently, COVID-nineteen has made the case for total Quality Assurance clearer and stronger. 2020 will be remembered as the year when we were forced to rethink how we operate to make the world a safer place. And we expect the theme of Build Back Ever Better to guide the actions of governments, companies, institutions, regulators and consumers in three areas. Management, board and shareholders will want to see their companies operate with a safer supply chain. Consumers, governments, corporations will want to offer better the personal safety. The way the world operates and invests will build a low carbon society. Indeed, 2020 has made the need for risk based quality assurance clear and stronger. And this is evidenced by Gartner's recent survey. 87% of companies said they will invest within 2 years to make their supply chain more resilient, great news for our Assurance business. Therefore, we expect the total quality assurance market to grow faster moving forward given that increased corporate focus on risk based quality assurance. And within our ATIC TQA offering, assurance is mission critical to addressing the increased corporate focus on risk based quality assurance. The acquisition of SEI Global Assurance is an attractive opportunity Scallop, our global industry leading assurance business with a high quality business. FCI Global Assurance was founded in 2003, is headquartered in Sydney, Australia, operates in 16 locations globally and works with more than 70,000 customers. SAI Global Assurance is part of the wider SAI Global Group, owned by Bering Private Equity Asia and will be acquired for cash consideration of AUD 855,000,000 on a cash free and debt free basis. The purchase price is equivalent to a multiple of 15.5 times SEI Global Ocean's expected adjusted EBITDA for 2021. SCI Global Insurance year end is June and the expected full year revenue for 2021 is AUD 2 AUD 40,000,000. SCI Global Assurance operate with a strong margin and a 2021 adjusted EBITDA margin is expected to be 23%. This transaction is expected to provide an attractive financial return to our shareholders. Specifically, we expect to deliver robust organic growth, capitalizing on a strong track record of our Assurance business, which has been the fastest growing solution over the years in the group. For the acquisition. We have targeted a 300 basis plus of margin accretion over 3 years as we'll benefit from positive operating leverage linked to robust organic growth as well as from the cost synergies we plan to realize during the integration. EPS is expected to be accretive from the first full year. And the SEI Global Ocean's ROIC is expected to exceed the group cost of capital by year 5. The transaction will be funded by new year range set fund facilities at an attractive interest rate, and the transaction is subject to customary closing conditions and is expected to grow in Q3 of 2021. SCI Grow Assurance has built excellent relationships with its 70,000 customers over the years, providing audit and global market access solutions globally. 65% of SAI Global Assurance revenues are delivered within their audit activities, providing management system certifications and second party audits to more than 60,000 customers in 130 countries across a wide variety of sectors. 30 percent of Essai Global Assurance revenues are delivered through their global market access solutions offering more than 1,500,000 technical stands to more than 10,000 customers in Asia Pac, Europe and the Americas. The strategic fit of SEI Global Restaurants with Intertek is excellent from a geographic standpoint as we'll strengthen our scale position in attractive growth countries. Specifically, we'll benefit post acquisition from a stronger market position in Australia, the U. S, Canada, the U. S, U. S, U. K. And China. The strategic fit of the SEI Global Assurance portfolio with Inpatec Solutions is also excellent from a service standpoint and will expand our audit offering in high growth sectors. Specifically, we look forward to getting additional sales in the following sectors: food, agriculture, quick service restaurant, sustainability and global market access. In conclusion, the acquisition of SEI Global is a value accretive transaction with an excellent strategic fit for Intertek. Given the increased corporate focus on risk moving forward, the growth of the AP industry is expected to accelerate Assurant is mission critical to addressing the increased corporate focus on risk. This acquisition scales up Intertek industry leading offering with a high quality business run by a highly respected management team. SEI Global Assurance will increase our global presence in attractive Graphic Markets and bringing new services in the high growth sectors. This transaction is expected to provide strong financial returns to our shareholders by scaling up our capitalized high growth and high margin global Assurance business. Thank you for your time this