COMPUTERSHARE LIMITED. — Capital/Financing Update 2020

Feb 4, 2020

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Computershare Limited

MARKET ANNOUNCEMENT

ABN 71 005 485 825 Yarra Falls, 452 Johnston Street Abbotsford Victoria 3067 Australia PO Box 103 Abbotsford Victoria 3067 Australia Telephone 61 3 9415 5000 Facsimile 61 3 9473 2500 www.computershare.com

Date:		5 February 2020
To:		Australian Securities Exchange
Subject:		Acquisition of Corporate Creations accelerates Issuer Services’ growth strategy
Acquisition Overview	› Corporate Creations is one of the leading Registered Agent providers servicing over 14,000 corporate entities across the US › Acquisition extends Computershare’s Registered Agent capabilities, accelerating our Issuer Services growth strategy › Transaction purchase price of $142.9m › LTM total revenue of $34.9m1 › Management EPS accretive in first full year post completion › Funded from existing cash balances and undrawn debt facilities › Post transaction net debt/EBITDA ratio to remain within Computershare’s target range of 1.75 to 2.25x²

Note: All figures stated in US dollars[1] Last twelve months to December 2019, based on cash basis accounts ² Net debt/EBITDA ratio (excluding SLS advances)

Computershare Limited ( ASX:CPU ) announces that it has entered into a binding agreement to acquire the business and assets of Corporate Creations Enterprises LLC (“Corporate Creations”). Founded in 1993, Corporate Creations is a highly regarded and growing Registered Agent business providing Registered Agent and related filing services with a national network across the US. The acquisition is subject to regulatory filing and other customary closing conditions. The transaction is expected to close in Q1 CY2020.

Computershare’s CEO Stuart Irving said, “We are excited by the acquisition of Corporate Creations. Computershare has been partnering with them to provide Registered Agent services for the last 3 years and has developed a strong understanding of their operations and capabilities. Corporate Creations is a compelling strategic fit and accelerates our Issuer Services growth strategy in the complementary, large and growing US Registered Agent market. Corporate Creations has a strong track record of recurring revenue growth servicing over 14,000 small, medium and large US entities. Combined with our own capabilities, Computershare will now be able to deliver an enhanced and integrated product suite and improved service proposition to clients that require US Registered Agent and entity management services. We look forward to welcoming the Corporate Creations team and continuing to build scale.”

Please refer to the attached presentation for additional information.

For further information contact:

Michael Brown Investor Relations Ph +61 (0) 400 24 8080 michael.brown@computershare.com.au

This announcement was authorised to be given to the ASX by the Group Chief Executive Officer.

Computershare (ASX:CPU) is a global market leader in transfer agency and share registration, employee equity plans, proxy solicitation and stakeholder communications. We also specialise in corporate trust, mortgage, bankruptcy, class action, utility and tax voucher administration, and a range of other diversified financial and governance services.

Founded in 1978, Computershare is renowned for its expertise in high integrity data management, high volume transaction processing and reconciliations, payments and stakeholder engagement. Many of the world’s leading organisations use us to streamline and maximise the value of relationships with their investors, employees, creditors and customers.

Computershare is represented in all major financial markets and has over 12,000 employees worldwide.

For more information, visit www.computershare.com

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ACQUISITION OF
CORPORATE CREATIONS
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Accelerating our Issuer Services’ growth strategy

5[th] February 2020

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Acquisition rationale – accelerating our Issuer Services’ growth strategy Extends Computershare’s Registered Agent capabilities in the US

Strategic rationale

• Enables Computershare to provide clients with a differentiated and integrated service offering for their US Registered Agent and entity management compliance

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• Transaction purchase price of $142.9m

• LTM total revenue of $34.9m¹

• Management EPS accretive in first full year post completion

• Registered Agent is a large market ($1bn+[3] ) with structural growth trends - scope for long term expansion

• Capital light business with majority recurring revenues

• Funded from existing cash balances and undrawn debt facilities

• Strategic entry into an attractive market enables Computershare to leverage new capabilities across its extensive corporate relationships

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Transaction overview

• Post transaction net debt/EBITDA ratio to remain within Computershare’s target range of 1.75x to 2.25x[2]

• National Registered Agent and filing service platform and experienced team enhances Computershare’s Issuer Services product suite and capabilities

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• Closing subject to expiration of the waiting period under the US Hart-Scott-Rodino Antitrust process, and other customary closing conditions

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• Track record of multi-year growth and high quality recurring revenue across a broad client base

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2 Note: All figures quoted in US dollars ¹ Last twelve months to December 2019, based on cash basis accounts[2] Net debt/EBITDA ratio (excluding SLS advances)[3] Computershare management estimates

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What is a Registered Agent?

• Registered Agents play an integral role in the US entity compliance landscape

• $1bn+ target addressable market

• 

• $1bn+ target addressable Monthly representation market services

•  Positive structural growth Annual report filings trends driven by: ‒ Number of Corporations

• ‒ Number of entities per Corporation

• ‒  Entity churn and national Incorporation & formation expansion filing

• ‒  Increasing compliance Name registration / change complexity  State based regulatory

• ‒ Litigation activity search and filings  Entity conversions

• In the US, companies are required by law to register their entities in every State where they operate

• Each entity requires a Registered Agent

• A Registered Agent is a thirdparty appointed as the company’s official representative

• The Registered Agent receives lawsuits, subpoenas, employee garnishments and Government documents on the entity’s behalf

• Entity rationalisation

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Corporate Creations overview

A highly regarded and growing national Registered Agent business

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14,000+ small, 24% 3 year total medium and large revenue CAGR entities under management

Full service Registered Agent product suite

National US footprint

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$1bn+ target Scalable addressable technology market¹ platform

High proportion of revenue recurring

Diversified revenue base (top 10 clients represent <5% total revenue)

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4 ¹ Computershare management estimates

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Computershare Investor Relations

For further information contact:

Michael Brown

Investor Relations Ph +61 (0) 400 24 8080

michael.brown@computershare.com.au

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Important Notice

Summary information

• This announcement contains summary information about Computershare and its activities current as at the date of this announcement.

• This announcement is for information purposes only and is not a prospectus or product disclosure statement, financial product or investment advice or a recommendation to acquire Computershare’s shares or other securities. It has been prepared without taking into account the objectives, financial situation or needs of a particular investor or a potential investor. Before making an investment decision, a prospective investor should consider the appropriateness of this information having regard to his or her own objectives, financial situation and needs and seek specialist professional advice.

Financial data

• Management results are used, along with other measures, to assess operating business performance. The company believes that exclusion of certain items permits better analysis of the Group’s performance on a comparative basis and provides a better measure of underlying operating performance.

• Management adjustments are made on the same basis as in prior years.

• The non-IFRS financial information contained within this document has not been reviewed or audited in accordance with Australian Auditing Standards.

• All amounts are in United States dollars, unless otherwise stated.

Past performance

• Computershare’s past performance, including past share price performance and financial information given in this announcement is given for illustrative purposes only and does not give an indication or guarantee of future performance.

Future performance and forward-looking statements

• This announcement may contain forward-looking statements regarding Computershare’s intent, belief or current expectations with respect to Computershare’s business and operations, market conditions, results of operations and financial condition, specific provisions and risk management practices.

• When used in this announcement, the words ‘may’, ‘will’, ‘expect’, ‘intend’, ‘plan’, ‘estimate’, ‘anticipate’, ‘believe’, ‘continue’, ‘should’, ‘could’, ‘objectives’, ‘outlook’, ‘guidance’ and similar expressions, are intended to identify forward-looking statements. Indications of, and guidance on, plans, strategies, management objectives, sales, future earnings and financial performance are also forward-looking statements.

• Forward-looking statements are provided as a general guide only and should not be relied upon as a guarantee of future performance. They involve known and unknown risks, uncertainties, contingencies, assumptions and other important factors that are outside the control of Computershare.

• Actual results, performance or achievements may differ materially from those expressed or implied in such statements and any projections and assumptions on which these statements are based. Computershare makes no representation or undertaking that it will update or revise such statements.

Disclaimer

• No representation or warranty, expressed or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this announcement. To the maximum extent permitted by law, none of Computershare or its related bodies corporate, or their respective directors, employees or agents, nor any other person accepts liability for any loss arising from the use of this announcement or its contents or otherwise arising in connection with it, including, without limitation, any liability from fault or negligence.

Not intended for foreign recipients

• No part of this announcement is intended for recipients outside Australia. Accordingly, recipients represent and warrant that they are able to receive this announcement without contravention of any applicable legal or regulatory restrictions in the jurisdiction in which they reside or conduct business.

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