Inovalon Mergers and Acquisitions Presentation Deck
Deal Notes
INOV & ABILITY Presentation (3.7.18) v1.0.0
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ABILITY Network Revenue Metrics: ABILITY's revenue growth rate in 2016 and 2017
was 10.1% and 10.0% respectively. In 2018, the revenue resulting from the
incorporation of ABILITY into Inovalon will be decremented by approximately $8 million
due to cost accounting of the merger, thus resulting in a lower than historical
recognition of revenue in the 12 months following acquisition. ABILITY Network's
revenue is approximately 99% recurring in nature and annual client retention rates are
approximately 92%.
The $100 million in restricted Inovalon equity $100 million in restricted Inovalon stock
(translating into 7.6 million shares, based on the 45-day trailing average closing stock
price for INOV as of March 5, 2018 of $13.16) will be held predominantly by Summit
Partners and Bain Capital Ventures, as well as management of ABILITY. The equity
will be restricted from sale or transfer, with 50% becoming unrestricted after 12 months
and the remainder at 18 months post closing.
Approximately $11.1 million in annual run-rate cost synergies are estimated through
the combination of the businesses. This run-rate amount is expected to be achieved
after 18 months of integration efforts. In-real realization for 2018 is estimated to be $8
million presuming an early April 2018 closing date.
Integration expenses are estimated to be approximately $7.5 million during 2018.
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