NEXT Discussion Materials
Transaction Overview
SOURCES USES Commentary
C.)
Debt $ 15 ()Enterprise Value $ 29 Transaction values Next at $29M, net
()
@Cash on B/S" ) 14 of cash, which implies a valuation of
5.6x LTM EBITDA.
Cash on B/S(' ) $ 14 Equity Value $ 43
@Next has -$15M of cash on the
Equity Fees & Expenses $ 0.3 balance sheet, of which $1M is
New OpenGate Equity $ 6 estimated to be normal working
capital.
Rolled Faith / Joel Equity 8
Total Equity $ 14
°Transaction financed with $15M of
debt, $14M of cash on the balance
Total Sources $ 43 Total Uses $ 43 sheet and $14M of equity ($6M new
equity from OpenGate; $8M rolled
from Faith/Joel). Faith/Joel assumed
PROCEEDS & PF OWNERSHIP VALUATION & LEVERAGE to roll equity to maintain 58%
Cash Proceeds From: EV / LTM Revenue ($36M)(2) 0.8x ownership; OpenGate to own 42%.
Debt/Cash Equity Total EV / LTM EBITDA ($5.2M)(2) 5.6x
®GGC $ 12 $ 6 $ 18 O D Transaction results in $18M cash
proceeds to GGC and $17M to Faith/
Faith / Joel 17 17 @Debt / LTM EBITDA 2.9x Joel (Faith/Joel maintain their 58%
6 $ 35 ownership post transaction).
Total $ 29 $ Est. Interest / LTM EBITDA(3) 5.0x
OPFGGC Ownership
0O/O
@Post transaction, leverage will be -c3x
and interest coverage is estimated to
Faith / Joel 58% be —5x.
OpenGate 42%
Total 100%
(1) Assumes —$15M of cash on the balance sheet, of which $1M assumed to be normal working capital.
(2) LTM financial stets as of 11/30/14.
(3) Assumes interest rate of 7%.
This Fformation is confidential and was prepared by Golden Gate Capital solely for internal use
EFTA00593025
NEXT Discussion Materials
Transaction Considerations
Discussion Topic Considerations
• Per the 2008 Operating Agreement, GGC has the
right to transfer its ownership units to a third party
Ability to Transfer Units of its choice (the "Substituted Member").
• The Substituted Member will assume the Operating
Agreement and will be subject to its provisions.
• The Substituted Member will have the ability to
Board Seats appoint 2 of 4 Managers, consistent with GGC's
current rights.
• The transaction will be partially financed by raising
third party debt to fund a dividend to all
Leverage shareholders.
• Pro forma for the transaction, Next's leverage will
be <3x EBITDA, and interest coverage is
estimated to be 5x.
This li fonnation is confidential and was prepared by Golden Gate Capital solely for internal use
EFTA00593026
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NEXT Discussion Materials
Transaction Overview
SOURCES USES Commentary
C.)
Debt $ 15 ()Enterprise Value $ 29 Transaction values Next at $29M, net
()
@Cash on B/S" ) 14 of cash, which implies a valuation of
5.6x LTM EBITDA.
Cash on B/S(' ) $ 14 Equity Value $ 43
@Next has -$15M of cash on the
Equity Fees & Expenses $ 0.3 balance sheet, of which $1M is
New OpenGate Equity $ 6 estimated to be normal working
capital.
Rolled Faith / Joel Equity 8
Total Equity $ 14
°Transaction financed with $15M of
debt, $14M of cash on the balance
Total Sources $ 43 Total Uses $ 43 sheet and $14M of equity ($6M new
equity from OpenGate; $8M rolled
from Faith/Joel). Faith/Joel assumed
PROCEEDS & PF OWNERSHIP VALUATION & LEVERAGE to roll equity to maintain 58%
Cash Proceeds From: EV / LTM Revenue ($36M)(2) 0.8x ownership; OpenGate to own 42%.
Debt/Cash Equity Total EV / LTM EBITDA ($5.2M)(2) 5.6x
®GGC $ 12 $ 6 $ 18 O D Transaction results in $18M cash
proceeds to GGC and $17M to Faith/
Faith / Joel 17 17 @Debt / LTM EBITDA 2.9x Joel (Faith/Joel maintain their 58%
6 $ 35 ownership post transaction).
Total $ 29 $ Est. Interest / LTM EBITDA(3) 5.0x
OPFGGC Ownership
0O/O
@Post transaction, leverage will be -c3x
and interest coverage is estimated to
Faith / Joel 58% be —5x.
OpenGate 42%
Total 100%
(1) Assumes —$15M of cash on the balance sheet, of which $1M assumed to be normal working capital.
(2) LTM financial stets as of 11/30/14.
(3) Assumes interest rate of 7%.
This Fformation is confidential and was prepared by Golden Gate Capital solely for internal use
EFTA00593025
NEXT Discussion Materials
Transaction Considerations
Discussion Topic Considerations
• Per the 2008 Operating Agreement, GGC has the
right to transfer its ownership units to a third party
Ability to Transfer Units of its choice (the "Substituted Member").
• The Substituted Member will assume the Operating
Agreement and will be subject to its provisions.
• The Substituted Member will have the ability to
Board Seats appoint 2 of 4 Managers, consistent with GGC's
current rights.
• The transaction will be partially financed by raising
third party debt to fund a dividend to all
Leverage shareholders.
• Pro forma for the transaction, Next's leverage will
be <3x EBITDA, and interest coverage is
estimated to be 5x.
This li fonnation is confidential and was prepared by Golden Gate Capital solely for internal use
EFTA00593026