Credit Suisse Investment Banking Pitch Book
Selected transaction terms
Transaction
structure
Total
consideration
Go-shop
Fiduciary out
Termination fee
for go-shop/
fiduciary out
Financing
Reverse
termination fee
Certain closing
conditions
(2)
PRELIMINARY | SUBJECT TO FURTHER REVIEW & REVISION
Two-step transaction:
- Asset purchase: Newly formed fund (GSO Osprey Fund, "GSOOF"), with investors sourced by GSO, to purchase loan portfolio; net
proceeds used to repay Osprey debts / liabilities and fund a portion of second-step merger consideration
- Merger: First Eagle to acquire 100% of Company (which will retain asset manager platform) via merger
Headline merger consideration (undiscounted): $12.44 per share ($11.44 per share in cash plus undiscounted $1.00 per share in non-
transferable CVR, assuming 2017 transaction close) or $12.32 per share ($11.44 per share in cash plus undiscounted $0.88 per share in
non-transferable CVR, assuming Q1'18 transaction close)(12)
■ PV assuming 2017 transaction close: $12.21-$12.37 per share(¹) ■ PV assuming Q1'18 transaction close: $12.10-$12.25 per share(¹)
- $11.44 per share in cash(12)
$11.44 per share in cash(1)(2)
- $0.77-$0.93 per share in non-transferable CVR(¹)
$0.66-$0.81 per share in non-transferable CVR(¹)
■ 30-day go-shop period following announcement of transaction
14 days from no-shop period start date for excluded party to submit binding superior proposal and Board to trigger process to terminate
■ Company permitted to terminate transaction to accept superior proposal solicited in go-shop period or unsolicited superior proposal after go-
shop period, subject to matching right of First Eagle and GSOOF
2% of transaction equity value for transaction resulting from superior proposal during go-shop period as long as Board has determined it is
superior proposal within 14 days after end of go-shop period
3% of transaction equity value for transaction resulting from superior proposal after go-shop period
Equity commitments from investors: $910mm to $1,215mm, as per proposal letter dated 8/23/2017
- GSO to cause investors to fund once closing conditions are satisfied
Wells Fargo - commitment letter for $1,600mm in asset-backed loans with no backstop minimum
■ CDPQ-commitment letter for $250mm in asset-backed loans with no backstop minimum
☐ Existing loans to have value fixed at signing for borrowing base purposes (less any prepayments prior to closing)
New loans to have value set by Wells Fargo
5% of transaction equity value
Asset buyer is proposing that fee be guaranteed by individual investors of fund
Osprey stockholder approval
■ Consents from clients / investors so that run-rate revenue is at least 90% of closing run-rate revenue
■ No Company material adverse effect
■ Consummation of asset sale
Source: Merger Agreement draft dated 10/5/17, Asset Purchase Agreement draft dated 10/6/17 and Osprey management.
Based on fully diluted shares outstanding, calculated based on 41,480,754 basic shares (incl. unvested restricted stock), 0.125 million options and 12.0 million warrants as of 9/30/17,
per Osprey management. Assumes treasury stock method for the upfront cash consideration only, per Merger Agreement draft dated 10/5/17.
Includes $2.0 million mark on OREO, valued at $12.0 million per Osprey management.
Confidential
5
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