Exhibit 99.2
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Columbus McKinnon to Acquire Magnetek
Advancing Productivity and Safety for Our Customers
July 27, 2015
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Call Participants
Timothy T. Tevens
President and Chief Executive Officer, Columbus McKinnon Corporation
Gregory P. Rustowicz
Vice President – Finance and CFO, Columbus McKinnon Corporation
Peter M. McCormick
President and Chief Executive Officer, Magnetek, Inc.
Marty J. Schwenner
Vice President and CFO, Magnetek, Inc.
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Safe Harbor Statement
Any statements made concerning the proposed transaction between the Company and Magnetek, the expected timetable for completing the transaction, the successful integration of the business, the benefits of the transaction, future revenue and earnings and any other statements that are not purely historical fact are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed or implied by such statements, including general economic and business conditions, conditions affecting the industries served by the Company or Magnetek and their respective subsidiaries, conditions affecting the Company’s or Magnetek’s customers and suppliers, competitor responses to the Company’s or Magnetek’s products and services, the overall market acceptance of such products and services, the integration of the businesses and other factors disclosed in the Company’s and Magnetek’s periodic reports filed with the SEC. Consequently, such forward looking statements should be regarded as the Company’s and Magnetek’s current plans, estimates and beliefs. Neither the Company nor Magnetek assume any obligation to update the forward-looking information contained in this report, except as expressly required by law.
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Additional Information
Additional Information and Where to Find it
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities. The tender offer for the outstanding shares of Magnetek’s common stock described in this communication has not commenced. At the time the tender offer is commenced, the Company will file or cause to be filed a Tender Offer Statement on Schedule TO with the SEC and Magnetek will file a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC related to the tender offer. The Tender Offer Statement (including an Offer to Purchase, a related Letter of Transmittal and other tender offer documents) and the Solicitation/Recommendation Statement will contain important information that should be read carefully before any decision is made with respect to the tender offer. Those materials will be made available to Magnetek’s stockholders at no expense to them by the information agent to the tender offer, which will be announced. In addition, all of those materials (and any other documents filed with the SEC) will be available at no charge on the SEC’s website at www.sec.gov.
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Strategic Imperatives
Superior Customer Satisfaction
Grow Profitably
Geographic Market Expansion
Acquisitions and
Strategic Alliances
Global Product Development and Key Vertical Markets
Operational Excellence
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Productivity
Safety
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Acquisition Aligned with Growth Strategy
Combination of America’s largest supplier of digital power control systems for industrial cranes and hoists with leading global hoist manufacturer
Acquisition accelerates plan to achieve $1B in revenue
Complementary adjacencies: Brain and brawn
“Smart power” with mechanical lifting and positioning
New product lines and markets
Strong strategic and cultural fit
Commitment to quality, service and superior customer satisfaction
Customer intimacy as strategic advantage
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Magnetek
March 2015 TTM financial data:
Revenue: $112.2 million
Adj. Operating income: $12.4 million, 11.1% of sales
EBITDA: $13.2 million or 11.8% of sales
America’s largest supplier of digital power control systems for industrial cranes and hoists
Leading position in radio controls
World leading independent designer of digital motion-control systems for elevators
Serves sub-surface mining industry with new generation of digital drive systems
Founded in 1984; ~ 340 employees HQ: Menomonee Falls, WI
NASDAQ: MAG
Magnetek 2014 Revenue Mix
5% 21% 74%
Material Handling Elevator Mining
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Combination Creates Strategic Value
Stronger
Value
Proposition
Revenue
Synergies
Cost
Synergies
Blending strong brands in lifting and positioning
Complete solutions for key vertical markets
Improves safety with wireless control
Larger addressable market combined
Push Magnetek products through CMCO global market channels
Bring smart power solutions to vertical markets
Public company costs
Administrative costs
Manufacturing and sourcing costs
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Transaction Highlights
Purchase Price
Consideration
Pro Forma Financials1
Cost Synergies
EPS Impact
Transaction Close
$50 per share: $188.9 million total value 55% premium to 7/24/15 close
8.9x on first full fiscal year Adj. EBITDA with cost synergies & PV of NOLs 100% cash consideration financed with cash and available committed line
Pro forma revenue: $690 million
Pro forma adjusted EBITDA: $85 million
Expected savings in first full year of at least $5 million
Expect approximately $0.40 per share accretive impact in first full fiscal year following close excluding purchase accounting; $7.5 to $8.5 million pre-tax one-time costs
Tender offer subject to HSR, 50% minimum tender and other customary conditions; closing expected by September 30th
(1) Pro forma is sum of CMCO and MAG financials for trailing 12 months as of March 2015, adjusted for consolidation. Pro forma does not include transaction costs, estimates for purchase accounting adjustments and synergy benefits. See reconciliation of GAAP to Non-GAAP measures on slide 12.
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Acquisition Financing
Sources & Uses
Sources: Amount Uses: Amount
Existing $150 million RC facility $ 106.8 Purchase Price $ 188.9
Incremental $75 million CM Est. Fees
RC facility 75.0 & Expenses 5.0
CMCO Cash 5.0
Magnetek Cash1 7.1
Total Sources $ 193.9 Total Uses $ 193.9
_ Secured new incremental $75 million revolving facility
_ Same terms as existing credit facility
_ Ample liquidity2 of ~$94.8 million after closing
_ Debt/total capitalization of 53.4% in line with strategic target when flexed for acquisition
_ Combination quickly de-levers the Balance Sheet
1 Balance as of 3.29.15
2 Liquidity calculated as undrawn Revolver plus Cash minus estimated outstanding letters of credit ($6.5 million)
Pro Forma Capitalization
3/31/2015 3/31/2015
Reported Pro Forma
Cash and cash equivalents $ 63.1 $ 58.1
Existing $150 million revolving
credit facility due 2020 - 106.8
Existing $125 million term loan
facility due 2020 124.4 124.4
New incremental $75 million
revolving credit facility due 2020 - 75.0
Capital leases 2.3 2.3
Total debt 126.7 308.5
Total net debt 63.6 250.4
Shareholders’ equity 268.7 268.7
Total capitalization $ 395.4 $ 577.2
Debt/total capitalization 32.0% 53.4%
Net debt/net total capitalization 19.2% 48.2%
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Appendix
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Pro Forma Adjusted EBITDA Reconciliation
Pro Forma Reconciliation for Trailing Twelve Months March 2015
Eliminations/
Magnetek CMCO Adjustments Total
TTM FYE
3/29/2015 3/31/2015 Pro Forma
Revenue $112,212 $579,643 ($1,500) $690,355
GAAP Net Income (26,013) 27,190 1,177
Add Back:
Income tax expense 516 8,825 9,341
Interest and debt expense 12,390 12,390
Cost of bond redemption 8,567 8,567
Investment (income) (2,725) (2,725)
Foreign currency exchange loss 863 863
Other income, net (462) (462)
Depreciation & amortization 810 14,562 15,372
European facility consolidation costs 1,726 1,726
Acquisition inventory step-up expense 659 659
Loss from discontinued operations 837 837
One time pension settlement charge 37,092 37,092
Adjusted EBITDA 13,242 71,595 84,837
Pro forma is the sum of Columbus McKinnon and Magnetek financials for the trailing 12 months as of 3/31/2015, adjusted for the impact of the merger. Pro forma excludes transaction costs, estimates for purchase accounting adjustments and synergy benefits.
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