Moelis & Company Investment Banking Pitch Book
Selected Publicly Traded Companies Analysis Overview
Vast majority of revenues derived from technology licensing
Exposure to the cyclicality of the film slate
STRICTLY CONFIDENTIAL
Although none of the selected companies are directly comparable to Rhombus given the unique nature of Rhombus' business, Moelis
focused on selected companies operating in the following categories:
- Media / Technology Licensing
Theater Exhibitors
Other IP Licensing
▪ Moelis believes EBITDA multiples are more relevant than sales multiples in this case
Accounting for the margin profile of Rhombus' business
Area of focus for research analysts in valuing the comparable businesses
▪ Because of the inherent differences amongst the businesses, operations and prospects of Rhombus and those of the selected publicly-
traded companies, Moelis made judgments to select appropriate reference ranges shown on page 21 for the selected companies
trading analysis
▪ Relevant Rhombus attributes include:
COGS comprised of cinema system depreciation and glasses; operating expenses largely scalable
▪ As a result, Moelis deemed media and licensing businesses as most relevant, given industry dynamics
Theater businesses require higher capital expenditures and have a different cost structure
MOELIS & COMPANY
IP licensing businesses lack exposure to film slate and also have a different cost structure
▪ For the purposes of analyzing calendar year results, as directed by Rhombus Management, quarterly FY2017 and FY2018 projections
were estimated by applying average quarterly EBITDA contributions over the past four years to full year FY2017 and FY2018
estimates
▪ While IMAX may operate in the same industry as Rhombus, there are a number of differences between the business models of the two
companies:
IMAX provides an end-to-end cinematic solution combining proprietary software, theater architecture and equipment, resulting in
high customer switching costs
IMAX typically receives a larger percentage of the exhibitor's box-office receipts than Rhombus
IMAX in some cases receives concession revenues
IMAX is more diversified, generating revenues from both 2D and 3D films
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