Project Raven Discussion Materials Goldman Sachs & Co. LLC August 13, 2019 Goldman Sachs does not provide accounting, tax, or legal advice. Notwithstanding anything in this document to the contrary, and except as required to enable compliance with applicable securities law, you (and each of your employees, representatives, and other agents) may disclose to any and all persons the US federal income and state tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind. STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
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Summary of Vail Proposal On August 13th, Vail made a proposal to Diamond outlining the following parameters for potential acquisition transaction of Raven: Diamond will exchange each of its shares of Raven’s Class B common stock for 0.0550 of a share of Vail Class A common stock — — — — Implies Raven’s Class B common stock at $8.71 per share1 Represents a 3.0% premium to 1-day spot exchange ratio and a 6.4% discount to the 30-day VWAP exchange ratio Values Diamond’s stake in Raven’s Class B common stock at $1,143mm2 Would increase Diamond’s economic ownership in Vail by 176bps (80.81% to 82.57%)3 Vail will acquire each of the outstanding shares of Raven’s Class A common stock for $14.25 per share in cash — Represents a 68.6% 1-day spot premium and a 5.0% discount to Raven’s IPO price of $15.00 per share — Among other conditions, the acquisition of Raven Class A common stock will be subject to non-waivable conditions requiring the following: –Approval of the holders of a majority of the outstanding Raven Class A common stock not owned by Diamond or its affiliates –Approval of the special committee of the Raven board of directors Source: Bloomberg as of 12-Aug-2019 1 Raven price per share implied from exchange ratio of 0.055x and Vail share price of $158.28 as of 12-Aug-2019. 2 Illustrative calculation of value of Vail shares issued to Diamond assumes Vail share price of $158.28 as of 12-Aug-2019. 3 Assumes 131.3m Raven shares held by Diamond, 330.7m Vail shares held by Diamond (300.0m Class B, 30.7m Class A) and 409.2 total Vail shares outstanding. 3 STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
Historical Exchange Ratio Analysis ($ in millions, except per share values) Implied Diamond PF Economic Ownership Implied Value to Raven Price Vail Price Implied Value to 1 2 Per Share Per Share Exchange Ratio in Vail Diamond Offer Price Current (08/12/19) 8.45 158.28 0.053 82.52 1,110 (34) 10-Day VWAP 9.07 163.75 0.055 82.59 1,151 8 20-Day VWAP 9.49 169.89 0.056 82.60 1,160 17 45-Day VWAP 10.43 170.09 0.061 82.78 1,274 131 Since FYQ1'20 Earnings VWAP 10.57 170.03 0.062 82.80 1,292 149 52-Week Low (Spot) 8.27 129.33 0.064 82.86 1,329 186 Source: Bloomberg as of 12-Aug-2019 1 Assumes 131.3m Raven shares held by Diamond, 330.7m Vail shares held by Diamond (300.0m Class B, 30.7m Class A) and 409.2 total Vail shares outstanding. 2 Illustrative calculation of value of Vail shares issued to Diamond assumes Vail share price of $158.28 as of 12-Aug-2019. 3 Offer given as a fixed exchange ratio; Raven price per share implied from exchange ratio of 0.055x and Vail share price of $158.28 as of 12-Aug-2019. 4 52-Week High (Spot) 29.15 206.80 0.141 85.33 2,930 1,786 60-Day VWAP 11.33 174.32 0.065 82.89 1,351 207 30-Day VWAP 9.92 168.92 0.059 82.69 1,221 78 15-Day VWAP 9.38 167.86 0.056 82.60 1,161 18 5-Day VWAP 8.66 156.55 0.055 82.58 1,150 7 Class B Offer3 $ 8.71 $ 158.28 0.055 x 82.57 % $ 1,143 NA As of Current (Aug-12) STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
Overview of Potential Collar Structures Fixed Exchange Ratio Fixed Price Floating Exchange Ratio with Symmetric Collar Fixed Exchange Ratio within Collar (Symmetric) Target receives a fixed number of Acquiror shares (per Target share); the price paid fluctuates with Acquirer share price Target receives a fixed price per share (and fluctuating number of Acquiror shares) Target receives fluctuating number of Acquiror shares (per Target share) within collar range, and receives adjusted number of shares above/below the collar Target receives fixed number of Acquiror shares (per Target share) within collar range, and receives adjusted number of shares above/below the collar Deal Structure Target receives higher value as Acquiror share price rises Target receives fewer shares Provides value certainty within the collar – Target receives fewer shares within collar, and an adjusted fixed number of shares above the collar Caps upside to Target - Target receives fixed number of shares within collar, and less shares (fixed value) above the collar Acquiror Share Price Rises Target receives same nominal value Acquiror dilution remains constant Acquiror dilution is reduced above the collar Acquiror dilution is reduced Target receives lower value as Acquiror share price falls Target receives more shares Provides value certainty within the collar –Target receives more shares within the collar, and an adjusted fixed number of shares below the collar Limits downside to Target - Target receives fixed number of shares within the collar, and more shares (fixed value) below the collar Acquiror Share Price Falls Target receives same nominal value Acquiror dilution remains constant Acquiror dilution is increased Limits Acquiror dilution below band (important to prevent crossing, e.g., vote thresholds) Acquiror exposed to incremental dilution below the collar Illustration Acquiror price Value to Target 5 STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
Appendix
Historical Trading Performance Since Raven IPO Since FY2020 Q1 Earnings 200% 120.0 % 30D % % 180% 110.0 % 160% 140% .0 % 100.0 % 38.9 % 120% .1)% 0 % 90.0 % 100% 80% 80.0 % 60% 22.4)% .3)% 40% 70.0 % Apr-18 Jun-18 Sep-18 Nov-18 Jan-19 Apr-19 Jun-19 Jun-19 Jun-19 Jul-19 Jul-19 Jul-19 S&P 500 Raven Vail Raven Vail S&P 500 Source: Bloomberg as of 12-Aug-2019 Appendix 7 Indexed Price Indexed Price Pe rform ance (%) 5D 10D 15D Rave n (6.7)% (11.2)% (16.7)% (20.0) Vail 1.6 % (10.9)% (13.0)% (5.3) 2 (7 ( 8. (46 STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
Raven / Vail Exchange Ratio Analysis Since Raven IPO Since FY2020 Q1 Earnings 0.075x 0.23x 0.19x 0.070x 0.16x 0.065x x x 0.12x 0.060x x 0.09x x x x x x 0.055x 0.05x x 0.050x Jun-19 Jun-19 Raven / Vail 10 Day VWAP 30 Day VWAP Offer Price Jul-19 Aug-19 0.02x 5 Day VWAP 15 Day VWAP Since Q1'20 Earnings Apr-18 Jul-18 Nov-18 Feb-19 May-19 Raven / Vail IPO Avg Source: Bloomberg as of 12-Aug-2019 1 Representative exchange ratio premia calculations based on respective volume-weighted average prices for Raven and Vail. Appendix 8 Exchange Ratio Exchange Ratio 0.135 0.053 Since Q1'20 E-Ratio Pre m ia1 5D 10D 15D 30D Earnings Rave n / Vail (3.5)% (3.6)% (4.4)% (9.1)% (14. 1)% 0.062 0.059 0.056 0.055 0.055 0.055 0.053 STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
Fixed vs. Floating Collar Summary Observations A collar mitigates the impact of fluctuations in the Acquiror’s share price — In a fixed exchange ratio (“fixed collar”) transaction, a collar adjusts the merger consideration in the event of significant upward or downward swings in Acquiror’s share price In a fixed price transaction (“floating collar”), a collar establishes the maximum and minimum number of Acquiror shares to be issued to the Target’s shareholders — Fixed Collar Floating Collar A fixed exchange ratio that has a price ceiling and a price floor A fixed price that has a share ceiling and a share floor If Acquiror’s share price decreases within the collar, the number of shares issued by Acquiror does not change If Acquiror’s share price decreases outside collar, it issues additional number of share If Acquiror’s share price decreases within the collar, it issues additional number of shares If Acquiror’s share price decreases outside collar, the number of shares issued by Acquiror Is capped If Acquiror’s share price increases within the collar, the number of shares issued by Acquiror does not change If Acquiror’s share price increases outside the collar, it issues fewer number of shares If Acquiror’s share price increases within the collar, it issues fewer shares If Acquiror’s share price increases outside the collar, the number of shares it issues is capped Appendix 9 Impact in the Case of Acquiror’s Share Price Rise Impact in the Case of Acquiror’s Share Price Decline Description STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
Fixed Collar Value / Risk Trade-Offs Acquiror Shares to be Issued Acquiror Shares to be Issued Acquiror Stock Price Acquiror Share Price Advantages Considerations When Acquiror’s share price increases outside collar ceiling, Acquiror delivers fewer shares Risk of additional dilution exists if Acquiror’s share price falls outside collar floor Acquiror issues fixed number of shares as long as its share price is within collar If Acquiror’s share price increases but remains within collar, higher implied value is received by Target Decrease in Acquiror’s share price below collar floor would result in additional shares to be issued to Target’s shareholders Some downside risk exists if Acquiror’s share price decreases but remains within collar Ability to share upside of increase in Acquiror’s share price is capped Target’s shareholders share in some upside if Acquiror’s share price increases but remains within collar Appendix 10 Number of Acquiror Shares to be Issued Value to Target Shareholders Target Acquiror Collar Floor Collar Ceiling Collar Floor Collar Ceiling STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
Floating Collar Value/Risk Trade-Offs Acquiror Shares to be Issued Implied Value to be Received by Target Acquiror Stock Price Acquiror Stock Price Advantages Considerations Number of shares to be issued by Acquiror is capped by collar Some risk of additional dilution if Acquiror’s share price decreases but remains within collar An increase in Acquiror’s share price decreases number of Acquiror shares to be issued until collar ceiling is reached A decrease in Acquiror’s share price increases number of shares to be issued subject to collar floor Downside risk exists if Acquiror’s share price falls below collar floor Target gets to share in upside if Acquiror’s share price increases above collar cap Appendix 11 Number of Acquiror Shares to be Issued Implied Value to Target Shareholders Target Acquiror Collar Floor Collar Ceiling Collar Floor Collar Ceiling STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
Summary Since 2003 Statistics from Precedent Collars (N = 17) Symmetry Source: Factset MergerMetrics for transactions greater than $200 million announced between 2003 and December 31, 2018 Note: Relatively Symmetric is defined by the upper collar range and lower collar range being within 5% of each other (but not absolutely symmetrical). Appendix 12 Collar 74% of collars have been asymmetric, 17% relatively symmetric, and 8% absolutely symmetric Collar Pricing Period 20 days and 10 days are the most common pricing periods, occurring in 44% and 26% of collared transactions since 2003, respectively Fixed Collars Median collar is 17% above / 16% below Acquiror’s 1-day prior stock price Mean collar is 14% above / 17% below Acquiror’s 1-day prior stock price Consideration: 18% stock-for-stock; 65% stock/cash combination; and 18% stock/cash election Floating Collars (N = 69) Median collar is 12% above / 12% below Acquiror’s 1-day prior stock price Mean collar is 14% above / 13% below Acquiror’s 1-day prior stock price Consideration: 26% stock-for-stock, 57% stock/cash combination; 17% stock/cash election Among 86 transactions with collars since 2003, 80% have floating collars and 20% have fixed collars Among transactions with collars, 26% have walk-away provisions — 59% available to Target only, 14% to Acquiror only, and 27% available to both No MOEs within sample have collars STRICTLY CONFIDENTIAL, PRELIMINARY DRAFT AND SUBJECT TO CHANGE
