EX-99.(C)(1)

EX-99.(C)(1) 9 d946494dex99c1.htm EX-99.(C)(1) EX-99.(C)(1)

Exhibit (c)(1) Project Blazing Star Confidential Discussion Materials October 8, 2024 [***] indicates information has been omitted on the basis of a confidential treatment request pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. This information has been filed separately with the Securities and Exchange Commission.

-- Confidential -- Situation Background: Saturn’s Initial Approach ▪ On September 23, 2024, Saturn submitted a letter outlining their “intention to make an offer to acquire” the entirety of Blazing Star for $13-14 per share ▪ The letter outlined Saturn’s very high level contemplated transaction / financing structure and proposed diligence process ▪ Since the initial letter, the Company and Centerview have held brief discussions with Saturn to clarify their proposal / letter and focus areas for diligence. Saturn emphasized their interest in the whole company ▪ Centerview noted to Saturn that the Board has not convened, nor commented on value, but we are willing to work through potential process logistics subject to Board approval ▪ Saturn has stated that they have done some outside-in work, along with some existing rd familiarity of certain businesses, but have not engaged 3 party advisors and have not yet had rd substantive conversations with their 3 party financing sources ▪ Saturn’s intention is to conduct a 45-day initial diligence process in order to be able to submit a revised proposal with more certainty around value and financing ▪ Today’s discussion will review the contours of Saturn’s proposal and diligence process, as well as an overview of Saturn and a proposed work plan / next steps 1

-- Confidential -- Table of Contents 1 Review of Saturn’s Initial Approach 2 Overview of Saturn 3 Next Steps for Project Blazing Star 2

[***] indicates information has been omitted on the basis of a confidential treatment request -- Confidential -- pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. This information Review of Saturn’s Initial Approach 1 has been filed separately with the Securities and Exchange Commission. Overview of Saturn’s Proposed Funding Sources Illustrative Capital Structure Across Range of Offer Prices Commentary (1) Implied Valuation / Metrics Required Funding (in $bn, except per share values) (5) EV / ’25 EBITDA : Offer Price Per Share $13.00 $14.00 ▪ 5.0-5.3x excl. Opioid Liab. (6) ▪ 6.0-6.3x incl. Opioid Liab. Diluted Shares Outstanding 0.863 0.863 (5) ’25 P/E : Equity Value $11.2 $12.1 ▪ 7.7-8.3x (+) Debt 8.5 8.5 Pro Forma Leverage (7) ▪ ’24 Gross Leverage: 3.8x (2) (1.5) (1.5) (-) Cash (8) ▪ Moody’s PF Adj. ‘24 Gross leverage: 7.7x Total Required Funding $18.2 $19.1 (8) ▪ S&P PF Adj. ’24 Gross leverage: 6.2x Proposed Sources of Funding (3) Proposed Sources (in $bn) ▪ Saturn stated ~$12bn of debt backstopped by UBS, but may include potential asset-backed Debt (UBS Term Loan + Wells Fargo / BofA ABL) ~$12 lending from BofA / Wells Fargo; [***] would be sole source of preferred financing Preferred Equity [***] ~2-3 ▪ ~$2bn of common equity funding likely requires significant LP contribution given ~$1bn of equity Based on Common Equity (Saturn + LP) ~2 left in Saturn’s fund Saturn’s Letter Common Equity (Shareholder Rollover) ~1-2 – Letter contemplates shareholder rollover but there has been no discussion regarding (4) Total Proposed Sources ~$18-19 substance or mechanics Source: FactSet as of September 27, 2024. Note: Multiples on fiscal year basis. (1) Reflects balance sheet as of May 31, 2024. (2) Pro forma for proceeds of Cencora and BrightSpring equity investment sales in August and September 2024, respectively. (3) Excludes financing and transaction fees and assumes no minimum cash to the balance sheet and operating leases all roll in the transaction structure. (4) As stated in Saturn’s letter on 9/23/24. (5) Estimates for FY’25 Adj. EBITDA and Adj. EPS provided by Blazing Star management. (6) Includes $3.5bn of NPV of estimated opioid liability per Moody’s as of May 2024. (7) Assumes ~$15bn of pro forma unadjusted gross debt (including preferred equity) and ~$1bn 3 of finance leases. (8) Assumes ~$15bn of pro forma unadjusted gross debt (including preferred equity); estimates for FY 2024 rating agency adjustments and FY 2024 Adj. EBITDAR provided by Blazing Star management.

[***] indicates information has been omitted on the basis of a confidential treatment request -- Confidential -- pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. This information Review of Saturn’s Initial Approach 1 has been filed separately with the Securities and Exchange Commission. Saturn’s Proposed Process Timing ▪ Expect initial diligence process to take ~45 days, subject to receipt of information and access to segment-level leadership across key business segments: – (1) US Retail; (2) Boots / International; (3) Shields; (4) VillageMD ▪ Intent is to diligence all business segments in parallel to meet desired timelines. Intend to start with Boots / International given more challenging logistics to get to Europe and Shields given less existing familiarity Initial Diligence – Willing to mobilize four different diligence teams to meet with each line of business Process ▪ Plan to leverage readily available materials on each business, including historical (~45 Days) financials, forecasts, segment-level materials and previously completed BCG studies – Saturn shared an initial high priority diligence request list on 9/30/2024 ▪ Initially, Saturn will lead diligence and develop a view on the business / financial model ▪ After initial conversations, Saturn will bring in [***] (preferred equity) and following that, will bring in UBS (debt) in the latter half of the 45-day process ▪ After their initial ~45 day diligence period, Saturn expects to gain more certainty on financing and value and will submit a revised proposal after the 10/24 Board meeting Revised Offer (likely mid to late November) rd ▪ If the Board is supportive of the revised proposal, only then would Saturn engage 3 Confirmatory Diligence party advisors for confirmatory workstreams (e.g., legal, accounting) 4

-- Confidential -- Overview of Saturn 2 Saturn Overview Overview Leadership ▪ Co-founded Saturn in 2011 ~$11B NYC $4.75B ▪ Previously worked at Golden Gate Capital Current Fund Headquarters AUM since its inception (2000-2011) Size (2018) $750mm - $1bn ▪ Serves as a member of the Board of remaining, with Trustees of Phillips Academy track record Stefan Kaluzny Retail 31 gathering ▪ Graduated with a B.A. from Yale University Co-Founder / focused Investments To Date significant co- Managing Director and an MBA from Harvard Business School (20 Current) invest from LPs In early stages of raising a new fund Select Scaled Investments ($EV) Typical Playbook Engages with management teams to improve operating profitability and strategic value of assets (~$1bn, 2024) ($400mm, 2023) ($1.3bn, 2019) Seeks Out Willing to Comfort Break-up Stretch Navigating Candidates Leverage Bankruptcy ($6.5bn, 2017) ($1.1bn, 2018) ($2.8bn, 2015) Struggles in Aggressive Thrives on ($2.2bn, 2014) Auctions Negotiator Complexity Additional detail on current and previous investments included on page 16 5 Source: Company website, LinkedIn and PitchBook.

-- Confidential -- Next Steps for Project Blazing Star 3 th October 24 Board Meeting Proposed Agenda: CVP Analysis ▪ Centerview plans to perform in-depth analysis of Blazing Star’s financial plan to assess its standalone valuation as a public company ▪ Analysis will provide context to the Board on how to evaluate Saturn’s current price level (and any other future offers) ▪ Analysis will base valuation on a WholeCo and sum-of-the-parts basis, as appropriate Valuation Methodologies to Evaluate Initial Offer ▪ Comparison of current valuation multiples for Blazing Star’s relevant peers Selected Public (WholeCo and segments) Company Analysis ▪ Valuation focused on forward adjusted EBITDA multiples ▪ Multiples paid in selected transactions across each of Blazing Star’s key segments Selected Precedent ▪ Valuation focused on LTM revenue or EBITDA multiples Transaction Analysis ▪ Each transaction is situation-specific ▪ Intrinsic value, on a per share basis, of Blazing Star based on Management’s forecast, assuming a range of discount rates and terminal values Discounted Cash Flow (“DCF”) Analysis ▪ May include sensitivity analysis across select KPIs, growth or margins to illustrate impact to per share values Sponsor LBO Analysis▪ Implied value per share based on a range of leverage, target IRR and exit multiple assumptions ▪ Potential value per share of Blazing Star assuming achievement of Management’s forecast PV of Future Share Price against a range of EV / EBITDA or P / E multiples, discounted back to today Historical Premia Paid▪ Premia relative to share price prior to announcement for selected precedent transactions ▪ Future price targets based on sell-side analyst coverage of Blazing Star Analyst Price Targets ▪ Blazing Star closing trading prices over the last 12 months 52-Week Trading Range 7 For Reference Only

-- Confidential -- Next Steps for Project Blazing Star 3 Recommended Next Steps ▪ Engage in substantive diligence with Saturn over next ~45 days to determine viability of offer – Saturn has provided an initial list of data requests, including: historical and projected financials, recent strategy/Board materials, store databases, etc. [see appendix for detailed list] – Conduct business update meetings with selected key executives from each of the four divisions: US Retail, Shields, VillageMD and Boots / International – Potential for follow-up discussions based on initial meetings and review of financial information th ▪ Reconvene on October 24 to discuss: (i) progress of discussions and diligence; (ii) other potential counterparties and pros / cons of approaching and timing; (iii) Centerview’s analysis of Blazing Star’s standalone financial plan and initial perspectives on valuation to support evaluation of Saturn’s initial offer range provided in letter ▪ Saturn expects to make firmer offer thereafter, which would need to be evaluated by the Board to determine next steps, if any (or stand down) 8

Appendix

-- Confidential -- Appendix: Table of Contents A Blazing Star Market Data B Additional Detail on Saturn C Saturn Due Diligence Request List 10

-- Confidential -- Blazing Star Market Data A Blazing Star Share Price Performance Over the Last 5 Years L5Y Share Price Performance Public Market Events Jan-21 – AmerisourceBergen (Cencora) A Share Price Performance Blazing Star CVS S&P 500 acquires Alliance Healthcare from Blazing L5Y L3Y L1Y YTD L3M Star for $6.5bn; +5% 1-day reaction $120 Blazing Star (83%) (81%) (57%) (65%) (26%) Sept-21 – Majority investment in Shields B CVS (1%) (28%) (12%) (22%) +5% for ~$1bn; (1%) 1-day reaction S&P 500 +94% +29% +34% +20% +5% +94% $100 Oct-21 – $5.2bn investment in C VillageMD, increasing stake from 30% to 63%; +7% 1-day reaction A Aug-22 – Completes acquisition of D $80 CareCentrix for ~$330mm; (0%) 1-day reaction C Sept-22 – Acquires remaining 30% E share of Shields for ~$1.4bn; (0%) $60 1-day reaction $54 (1%) E Nov-22 – VillageMD acquires Summit F Health for ~$8.9bn; +4% 1-day reaction G H $40 Sept-23 – Tim Wentworth rumored G I next CEO; +6% 1-day reaction B H Apr-24 – IRS tax liability dispute $20 D reported on Bloomberg; (10%) 1-day reaction $9.06 (83%) F Jun-24 – Q3’24 results; (22%) I COVID-19 1-day reaction $0 Sep-19 Sep-20 Sep-21 Sep-22 Sep-23 Sep-24 11 Source: FactSet as of September 27, 2024. Note: Share prices indexed to Blazing Star. Assumes COVID-19 period ends when FDA officially approved the first COVID-19 vaccine in August 2021.

-- Confidential -- Blazing Star Market Data A Blazing Star L5Y NTM P / E and EV / EBITDA Multiple Performance Over the past year, Blazing Star has traded at a persistent and significant discount to CVS NTM P / E EV / NTM EBITDA Average NTM P / E Average NTM EV / EBITDA Average NTM P / E L5Y L3Y L1Y YTD L5Y L3Y L1Y YTD (1) Blazing Star 8.0x 7.4x 5.8x 5.6x Blazing Star 6.7x 6.5x 5.4x 4.9x 14.0x 11.0x (2) CVS 9.6x 9.7x 8.4x 8.4x CVS 7.9x 7.7x 7.1x 7.2x 13.0x 10.0x 12.0x 9.0x 11.0x 8.1x 8.0x 10.0x 7.3x (0.8x) 9.0x 7.0x 8.7x 9.0x (0.0x) 6.8x 8.7x Current 8.0x Current 6.0x Blazing Star Blazing vs. CVS Δ: 7.0x Star vs. (3.1x) CVS Δ: 5.0x (3.6x) 6.0x 4.3x 5.1x (2.6x) 4.0x (4.0x) 5.0x 3.0x 4.0x Sep-19 Jul-20 May-21 Mar-22 Jan-23 Nov-23 Sep-24 Sep-19 Jul-20 May-21 Mar-22 Jan-23 Nov-23 Sep-24 Blazing Star CVS Source: FactSet as of September 27, 2024. 12 (1) Blazing Star EV excludes operating and finance leases and opioid and tax liabilities. (2) CVS EV excludes operating and finance leases.

-- Confidential -- Blazing Star Market Data A Overview of Blazing Star’s Top 20 Shareholders Current Top 20 Institutional Shareholders # of Shares Mkt. Value Estimated Shareholder % O/S Current (mm)Δ L6MΔ LTM ($mm) Cost Basis Vanguard 9% 79 (1) +6 $715 $46.99 Blackrock 7% 63 +4 +4 573 46.23 State Street Global Advisors 4% 36 (18) (19) 330 47.97 Capital Research & Management 3% 29 +11 +10 265 33.23 Invesco 2% 20 +3 +7 181 35.40 Geode Capital 2% 20 +3 +4 179 46.34 Charles Schwab 1% 8 +1 +2 69 45.41 Northern Trust 1% 7 +0 +0 64 47.62 Camber Capital Management 1% 7 – (1) 63 32.74 Norges Bank Investment Management 1% 7 +6 +6 63 20.58 Thompson, Siegel & Walmsley 1% 6 +6 +6 55 19.36 8 Knots Management 1% 6 +6 +6 51 22.51 Goldman Sachs Asset Management 1% 5 +1 +1 46 31.10 Morgan Stanley 1% 5 (1) +3 44 27.87 Jane Street Capital 1% 5 +3 +4 41 19.44 Legal & General Investment Management 1% 4 (0) (1) 40 58.35 Pacific Investment Management 0% 4 +0 +2 37 35.53 LSV Asset Management 0% 4 (1) (1) 34 69.16 Numeric Investors 0% 4 +2 +3 33 22.85 Amundi Asset Management 0% 4 +2 +2 32 30.25 Top 20 Institutional Ownership 37% 322 +27 +44 $2,915 $36.95 Source: Public filings and FactSet as of September 27, 2024. 13 Note: Positions reflect latest publicly available holdings as of September 27, 2024. Most positions reflect quarterly holdings reporting as of June 30, 2024. BlackRock reflects sum of three largest holdings

-- Confidential -- Blazing Star Market Data A Blazing Star Analyst Price Targets (1) Buy / Hold / Sell and Price Target Progression Selected Current Analyst Target Outlook Average Prem. / Prem. / Buy Hold Sell PT (Disc.) Broker Price Target Rating (Disc.) $23 Morningstar Buy +154% Current 16% 63% 21% $12 +33% (6/28/24) $16 TD Cowen Buy +77% (9/12/24) 2023 11% 78% 11% 31 +46% $15 JP Morgan Buy +66% (8/29/24) $15 Mizuho Securities Hold +66% 2022 11% 72% 17% 42 +30% (9/16/24) $13 Deutsche Bank Hold +43% (6/27/24) 2021 5% 85% 10% 52 +7% Nephron Research $13 Hold +43% (6/27/24) 2020 5% 86% 10% 41 +16% $13 RBC Capital Hold +43% (7/1/24) $13 Truist Securities Hold +43% 2019 12% 73% 15% (6/28/24) 58 +7% Leerink Partners $9 Hold (1%) (9/3/24) 2018 29% 68% 4% 72 (3%) $9 Morgan Stanley Sell (1%) (6/28/24) Evercore ISI $8 Hold (17%) 2017 69% 31% 93 +19% (8/29/24) Barclays $7 Sell (23%) (9/13/24) 2016 60% 40% 94 +16% $7 HSBC Sell (23%) (8/28/24) 2015 52% 48% 99 +16% $9.06 $12.35 Avg. Prem. / (Disc.) Current Mean Price +36% Price Target Source: Wall Street research and FactSet as of September 27, 2024. 14 Note: Historical and current Wall Street analyst recommendations and average price targets per Bloomberg. (1) Represents Wall Street analyst recommendations as of September 27 for each calendar year.

-- Confidential -- Blazing Star Market Data A Broker Price Target Methodology Current PT Broker Methodology Multiple Current PT Date Issued Prior PT Discounted Cash Flow Analysis n.a. $23 6/28/24 $33 Discounted Cash Flow Analysis n.a. 16 9/12/24 22 Price / CY'26E Adj. EPS 9.5x 15 8/29/24 20 No Access 15 9/16/24 19 Price / FY'25E EPS 7.5x 13 6/27/24 22 Price / FY'25E EPS 6.5x 13 6/27/24 24 Price / CY'25E Adj. EPS ~6.0x 13 7/1/24 22 Price / FY'25E Adj. Cash EPS ~6.2x 13 6/28/24 20 Price / CY'25E EPS ~6.0x 9 9/3/24 11 Price / CY'25E EPS 4.2x 9 6/28/24 13 EV / CY'25E EBITDA 7.0x 8 8/29/24 10 Price / CY'25E Adj. EPS ~5.5x 7 9/13/24 11 EV / FY'25E Adj. EBITDA 2.6x 7 8/28/24 11 Broker analysis includes SOTP 15 Source: Company filings, Bloomberg and FactSet.

-- Confidential -- Additional Detail on Saturn B Overview of Selected Saturn Investments Company Year Enterprise Value Type Status Comment ▪ Previously attempted to take private in 2019 amidst stock 2024 $1.0bn PublicCo Acquisition Current price challenges; in 2024 stock was on upswing ▪ Acquired 450 Canadian stores from Lowe's following 2023 $400mm Carve-out Current strategic review ▪ Fashion retailer with >500 stores $140mm 2021 Financing n.a.▪ Previously attempted take-private in 2015, cancelled due (Loan Agreement} to financing difficulties ▪ Combined Ann Taylor / Loft with Talbots to form 2020 $540mm Bankruptcy Buyout Current KnitWell Group in 2023 with $3bn of sales ▪ Lane Bryant to be operated separately ▪ Carve-out from Newell Brands $1.3bn / 2019 Carve-out Current▪ Recent leverage challenges; acquired 1/4 of first-lien term 2.3x LTM Revenue loan at discount ▪ Acquired after rumored sale process $6.5bn / 2017 PublicCo Acquisition Current▪ Strategy focused on expanding B2B business to 5.3x LTM EBITDA reinvigorate growth ▪ Acquired after strategic review process $2.8bn / 2015 PublicCo Acquisition Current▪ Filed for Chapter 11 in 2021 and restructured remaining in 6.9x LTM EBITDA majority control ▪ Acquired as part of The Jones Group Carve-out / PublicCo (1) 2014 n.a. Realized▪ Sold to Cinven in 2015 for $370mm (rumored 8.2x Acquisition EBITDA) ▪ Acquired as part of The Jones Group Carve-out / PublicCo (1) 2014 n.a. Realized▪ Entered bankruptcy in 2018 and Nine West brand IP sold Acquisition to ABG ▪ Acquired as part of The Jones Group Carve-out / PublicCo (1) 2014 n.a. Realized▪ Sold to Coach / Tapestry in 2015 for $530mm upfront Acquisition cash (1.8x revenue) ▪ Combined Talbots with Ann Taylor to form KnitWell 2012 $391mm PublicCo Acquisition Current Group in 2023 with $3bn of sales Selected Rumored / Not Completed 2015 2016 2020 2021 2022 2022 2024 2024 2024 PublicCo Transactions 16 Source: Wall Street Research, company website and CapitalIQ. (1) Part of Saturn’s acquisition of The Jones Group, a transaction that was valued at approximately $2.2 billion (9.8x LTM EBITDA).

-- Confidential -- Additional Detail on Saturn B Saturn’s Typical Playbook for Engagement Past experience indicates Saturn pursues complex transactions where they believe they have a unique perspective / value creation strategy, but can be difficult negotiators ▪ Pursue transactions that have sum-of-the-parts upside Seeks Out Break-up ▪ Often easier for them to restructure and break-up companies in the private markets vs. Candidates having to meet quarterly expectations from public investors ▪ Comfort stretching to leverage levels that other buyers won’t to minimize equity check Willing to Stretch and create asymmetrical upside (although increases risk of bankruptcy) on Leverage ▪ Often utilize dividend recaps during their hold period to increase their returns ▪ Not afraid of bankruptcy and highly experienced at negotiating through the process Comfortable with Bankruptcy ▪ Will use bankruptcy as a tool to extract value (e.g., alleviate lease obligations) ▪ Will only really dig in during a process if they believe there is a very limited set of Struggles in counter-parties with ‘real’ interest / ability to complete the acquisition ‘Auctions’ ▪ Not typically successful in bidding wars / competitive auctions ▪ Given predisposition to bespoke transactions with limited counter-parties, have Aggressive tendency to utilize this leverage and negotiate aggressively on final contract Negotiator ▪ Unafraid to hang around potential deals for multiple years before ultimate acquisitions ▪ Are not deterred by complex transactions Thrives on ▪ Seek out these situations as they believe they can underwrite value levers and Complexity understand complexities other buyers cannot 17