EX-99.(C)(7) 8 ny20006083x2_ex99c7.htm EXHIBIT (C)(7)

Exhibit (c)(7)

 Project Optimus PrimePresentation to the Special Committee  November 21, 2022 
 

 Optimus Prime Historical and Forecasted Financial Overview (Management Case)  Source: Company filings, historical financials and management forecasts provided by the Company on 11/01/2022 (approved for our use by the Special Committee)  Note: (1) Excludes acquisitions  ($ in millions, all years reflect CY year-end 12/31)  (1) 
 

 Unaffected Ratings History  Price Target by Broker(1)  Equity Analyst View of Optimus Prime Stock  Select Broker Commentary  Source: Wall Street research, Capital IQ as of 11/18/2022  Note: (1) HC Wainwright placed Optimus Prime stock under review due to proposed buyout and did not offer a price target or rating in most recent report dated 11/10/2022  Roth Capital Partners   11/10/2022  Lake Street Capital Markets   11/10/2022  BMO Capital Markets  11/10/2022  Buy  Hold  “[Company] offers among the broadest product offerings in the food waste category and believe double-digit growth from its next-generation products seen since 2021 can continue to deliver alpha from current levels.” – Lake Street Capital Markets (11/10/2022)  “… the increase in revenue was approximately 3.1% YoY. We believe revenue growth was supported by results from diversification efforts.” – HC Wainwright (11/10/2022)  “[Company] continues to execute on its diversification strategy posting the seventh consecutive quarter of growth.” – Roth Capital Partners (11/10/2022)  “We slightly lower estimates following a disappointing Q3 update largely owing to FX … [Company] earnings remain somewhat flattish with a slight trajectory upward.” – BMO Capital Markets (11/10/2022) 
 

 Last 12 Months Share Price and Trading Volume  Since De-spac (08/03/2015)  Optimus Prime Stock Price Performance  Source: Capital IQ as of 11/18/2022  Notes: High Value Specialties includes Croda, Chr Hansen, Balchem and Novozymes; Large AgChem includes Nutrien, Mosaic, FMC Corp, CF Industries, Dow, Bayer, Corteva, BASF, Nufarm and UPL Limited; AgChem / AgTech includes FMC Corp, Scotts Miracle-Gro, Bioceres and American Vanguard; Food Safety / Security includes Ecolab, Sotera, Diversey and Neogen  Offer Price: $3.00  Offer Price: $3.00  06/15/20: Announces $150M convertible preferred equity investment from Paine Schwartz Partners  10/27/2022: Announces the Special Committee of Optimus Prime agreed with Paine Schwartz Partners to pursue a transaction in which Paine Schwartz Partners would acquire all outstanding common stock for $3.00 per share  10/27/2022: Trading volume peaked at 39M+ shares (not shown to scale); next highest volume during LTM occurred on 10/28/2022 at ~2.1M shares  Unaffected (10/26/2022) Optimus Prime VWAPs  30-Day  $1.58  60-Day  $1.60  90-Day  $1.68 
 

 Unaffected EV and Valuation  EV / NTM EBITDA Over Time (Since January 2019)(6)(7)  Optimus Prime Public Market Trading Multiple Over Time  Share Price (10/26/2022)(1)  $1.57   (x) Fully Diluted Shares(2)  58.460  Equity Value  $91.8   (-) Cash(3)  (35.6)   (+) Debt(4)  261.3   (+) Preferred at Liquidation Preference(5)  253.7   (+) Non-Controlling Interest(3)  6.9  Enterprise Value  $578.1  Management Case Multiples  CY2022E  CY2023E   EV / Revenue  3.5x  3.2x   EV / EBITDA  9.6x  9.1x  Consensus Multiples  CY2022E  CY2023E   EV / Revenue  3.5x  3.2x   EV / EBITDA  9.9x  9.1x  Source: Company filings, Historical financials and management forecasts provided by the Company on 11/01/2022 (approved for our use by the Special Committee), FactSet and Capital IQ as of 11/18/2022  Notes: (1) Unaffected stock price prior to the announcement of Paine Schwartz Partners’ take-private of Optimus Prime   (2) Calculated as basic shares outstanding plus the effects of dilutive securities provided by the Company on 11/18/2022   (3) As of Q3 2022   (4) Includes principal value of Term Loan B ($260.438M) and Optimus Prime Fruit Protection Loan ($0.897M) per Q3 2022 10-Q   (5) Reflects change of control for Paine Schwartz Partners' convertible preferred equity at 2.0x MOIC assuming redemption date of 01/31/2023; liquidation preference assumes 50% cash / 50% PIK split for future preferred stock dividends (vs. option to elect 62.5% cash / 37.5% PIK split) based on management assumptions   (6) Earliest publication of 3rd party EV/NTM EBITDA data after De-SPAC on 08/03/2015   (7) Convertible preferred equity not reflected in EV / NTM EBITDA over time for Optimus Prime  06/15/2020: Announces $150M convertible preferred equity investment from   Paine Schwartz Partners  10/27/2022: Announces the Special Committee of Optimus Prime agreed with Paine Schwartz Partners to pursue a transaction in which Paine Schwartz Partners would acquire all outstanding common stock for $3.00 per share  Offer EV and Valuation  Offer Price  $3.00   (x) Fully Diluted Shares(2)  58.460  Offer Value  $175.4   (-) Cash(3)  (35.6)   (+) Debt(4)  261.3   (+) Preferred at Liquidation Preference(5)  253.7   (+) Non-Controlling Interest(3)  6.9  Enterprise Value  $661.7  Management Case Multiples  CY2022E  CY2023E   EV / Revenue  4.0x  3.7x   EV / EBITDA  11.0x  10.4x  Consensus Multiples  CY2022E  CY2023E   EV / Revenue  4.0x  3.7x   EV / EBITDA  11.3x  10.4x  ($ in millions, except share price) 
 

 Valuation Summary  Unaffected (10/26)  Price: $1.57  Source: Company filings, historical financials and management forecasts provided by the Company on 11/01/2022 (approved for our use by the Special Committee)  Notes: Unaffected share price as of 10/26/2022   Enterprise value-based valuation methodologies reflect change of control for Paine Schwartz Partners' convertible preferred equity at 2.0x MOIC assuming redemption date of 01/31/2023; liquidation preference assumes 50% cash / 50% PIK split for future preferred stock dividends (vs. option to elect 62.5% cash / 37.5% PIK split) based on management assumptions   (1) Broker price targets represent 12-month targets; prices discounted 12 months from date of publication to 10/26/2022; reflects latest unaffected price targets; assumes cost of equity of 19.0%   (2) Based on unaffected current median of AgChem / AgTech and unaffected Optimus Prime 2023E trading multiple   (3) Based on +/- 1.0x vs. median of precedent transactions   (4) Core Products WACC range derived using cost of equity implied by CAPM at optimal capital structure (~13.0% WACC) and cost of equity implied by the yield on Paine Schwartz Partners' preferred equity investment in Optimus Prime assuming redemption on 07/27/2023 at current capital structure (~15.5% WACC)   (5) New Products WACC assumed to be 200 bps greater than Core Products WACC to reflect greater execution risk; assumes full achievability of New Products  (1)  Offer   Price: $3.00  (2)  (4)  (5)  (4)  (5)  (3) 
 

 EV / CY2023E EBITDA  EV / CY2022E EBITDA  Current Public Market Valuations of Selected Peers  Source: Company filings, historical financials and management forecasts provided by the Company on 11/01/2022 (approved for our use by the Special Committee), FactSet and Capital IQ as of 11/18/2022  Notes: (1) Reflects change of control for Paine Schwartz Partners' convertible preferred equity at 2.0x MOIC assuming redemption date of 01/31/2023; liquidation preference assumes 50% cash / 50% PIK split for future preferred stock dividends (vs. option to elect 62.5% cash / 37.5% PIK split) based on management assumptions  Optimus Prime  (Offer)(1)  Optimus Prime  (Unaffected) (1)  Optimus Prime  (Offer) (1)  Optimus Prime  (Unaffected) (1)   AgChem / AgTech   High Value Specialties   Food Safety / Security 
 

 Date  12/21/2021  12/14/2021  6/28/2021  3/24/2021  10/19/2020  10/12/2020  7/17/2020  9/30/2019  7/20/2018  4/30/2015  9/11/2014  Acquirer  Target  Enterprise Value ($M)  $198  $5,300  $170  $402  $165  $1,500  $1,142  $1,188  $4,200  $879  $2,773  EV / EBITDA for Select Precedent Transactions  Select Precedent Transactions  Source: Company filings, Moody’s, press releases  (Food Safety Business)  (South American Plan Nutrition Business)  Mean: 11.4x  Median: 10.2x 
 

 Discounted Cash Flow Analysis – Management Case  New Products Unlevered Free Cash Flows  Core Products Unlevered Free Cash Flows  Combined Terminal Value Build and Valuation  Sources: Company filings, historical financials and management forecasts provided by the Company on 11/10/2022 (approved for our use by the Special Committee), FactSet as of 11/18/2022  Notes: Assumes valuation date of 11/18/2022; assumes tax rate of 25.0%; fiscal year ends Dec. 31; WACCs of 14.25% and 16.25% utilized for Core Products and New Products respectively; perpetuity growth rates of 1.0% and 3.0% utilized for Core Products and New Products, respectively; D&A, SBC, and change in NWC allocated based on in-year sales contribution; CapEx allocated based on forward year sales contribution (excl. 2032E); assumes full achievability of New Products   (1) 2022E-2026E amortization sourced from Q3 2022 10-Q estimated annual amortization schedule; 2027E-2032E amortization assumed to decrease by (0.5%) each year   (2) Change in NWC as a % of change in revenue held constant from 2027E   (3) As of Q3 2022   (4) Includes principal value of Term Loan B ($260.438M) and Optimus Prime Fruit Protection Loan ($0.897M) per Q3 2022 10-Q   (5) Reflects change of control for Paine Schwartz Partners' convertible preferred equity at 2.0x MOIC assuming redemption date of 01/31/2023; liquidation preference assumes 50% cash / 50% PIK split for future preferred stock dividends (vs. option to elect 62.5% cash / 37.5% PIK split) based on management assumptions   (6) Calculated as basic shares outstanding plus the effects of dilutive securities provided by the Company on 11/18/2022  (5)  (2)  (1)  (1)  (2)  (1)  (1)  (4)  (3)  (3)  (6)  ($ in millions, except share price) 
 

 Discounted Cash Flow Sensitivities – Management Case  Enterprise Value Sensitivity – Combined(1)(2)  Implied Share Price Sensitivity(1)(2)  Enterprise Value Sensitivity – Core Products(1)  Enterprise Value Sensitivity – New Products(2)  Sources: Historical financials and management forecasts provided by the Company on 11/10/2022 (approved for our use by the Special Committee)  Notes: Assumes valuation date of 11/18/2022; assumes tax rate of 25.0%; fiscal year ends Dec. 31; assumes full achievability of New Products   (1) Core Products WACC range derived using cost of equity implied by CAPM at optimal capital structure (~13.0% WACC) and cost of equity implied by the yield on Paine Schwartz Partners' preferred equity investment in Optimus Prime assuming redemption on 07/27/2023 at current capital structure (~15.5% WACC)   (2) New Products WACC assumed to be 200 bps greater than Core Products WACC to reflect greater execution risk  ($ in millions, except share price) 
 

 Precedent Premia Analysis  Source: FactSet as of 11/18/2022  Notes: Unaffected premiums shown for acquisitions since 11/18/2020 with a transaction value between $100M – $3B and targets in the United States; excludes MOEs and transactions with targets industries of Energy, Insurance, Mining, Oil & Gas, REITs, Railroads, and Utilities 
 

 Appendix  12 
 

 CAPM approach – Bloomberg 5Y Weekly Beta at Optimal Capital Structure  Cost of Equity Floor at Yield on Convertible Preferred Equity At Current Capital Structure  Illustrative WACC Analysis – CAPM vs. Yield of Preferred Equity  Source: Company filings, Bloomberg, Kroll, Mizuho, FactSet and Capital IQ as of 11/18/2022  Notes: (1) 5-year weekly Bloomberg Beta; Optimus Prime beta as of unaffected date (10/26/2022); all peer betas as of 11/18/2022   (2) Deloitte Corporate Tax Rates 2022   (3) Includes principal value of Term Loan B ($260.438M) and Optimus Prime Fruit Protection Loan ($0.897M)   (4) Equity calculated as of 10/26/2022 using basic shares outstanding plus the effects of dilutive securities as of 11/18/2022; includes value of convertible preferred equity, reflecting change of control for Paine Schwartz Partners' convertible preferred equity at 2.0x MOIC assuming redemption date of 01/31/2023   (5) Kroll’s supply-side long term equity risk premium   (6) 20-year treasury rate as of 10/26/2022   (7) Size premium interpolated based on Kroll size premia by market cap range using assumed optimal capital structure for Optimus Prime of 80% Equity / Capitalization   (8) Based on effective yield for high-yield chemicals sector index   (9) Refers to yield on Paine Schwartz Partners' preferred equity investment in Optimus Prime, ranging from 16% total annual coupon yield on to ~27% IRR on investment assuming redemption on 07/27/2023  ($ in millions) 
 

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