Acquisition of Controlling Stake in Advance and Rextur (Duotur) December 2014

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1 Acquisition of Controlling Stake in Advance and Rextur (Duotur) December 2014

2 Key Messages CVC s acquisition of a controlling stake in Advance and Rextur (Duotur) will: Establish CVC as a preeminent player across the Brazilian travel market, pairing a leader in leisure travel (CVC) with one of the leaders in business travel (Rextur + Advance) The resulting Company will be more efficient CVC's corporate governance practices will continue to be applied to the combined business 2

3 Role of Airline Consolidators in the Travel Industry Business Model Relationship with Airline Companies Provide access to Airlines to reach Independent Agents in a very efficient way Manage credit and provide business information related to small and medium Independent Agents The largest indirect distribution channel for airline companies in Brazil No working capital requirements Credit risk dispersed among many clients (~16K agents in Brazil) We estimate that airline consolidators bookings totaled ~ R$12 billion in 2013 Strong Relationship with Independent Agents Clients consist of small and medium Independent Agents which in turn attend small and medium enterprises Airline consolidators provide an IT platform to independent travel agents, enabling them to search, book and issue tickets directly with the airline companies systems Provide reports and accountability to small agents Airline consolidators often hold credit risk for the independent travel agents, serving as a critical link between the agents and the airlines

4 Duotur at a Glance Bookings* R$ mm Market Leadership Leader in the airline consolidator market, with a market share of approximately 25% Mainly business travelers +32% branches, covering ~ 5,000 independent agents Adj. EBITDA* R$ mm Company Overview ~ 700 Employees Seasoned management team and long-standing relationships with suppliers and clients +75% Best IT Platform in the Market Reserva Fácil is a complete and dynamic platform, recognized as one of the most sophisticated IT platforms in the Brazilian tourism industry Serves as an important interface linking airline companies and independent agents (operations and accountability) Adj. Net Income* R$ mm +80% * Unaudited figures 4

5 Strategic Rationale Key Opportunities Rationale Cross-Sell CVC Products Given CVC s product portfolio and Duotur s strong relationships with independent agents, there is an opportunity to offer corporate hotels and leisure packages through Duotur s sales channels Capitalize on Duotur s Relationships with International Airlines Duotur s role as an important partner for many international airlines should result in new opportunities for CVC to continue to grow its international product offering Leverage Duotur s IT platform and Credit Expertise Duotur has a leading B2B IT platform and is an expert in B2B credit analysis, strengths which CVC can leverage as it continues to grow its leisure travel business Reinforce CVC s Market Leadership Transaction would combine two complementary players in the travel market, broadening CVC s product portfolio, creating scale and resulting in a more efficient group 5

6 Deal Structure Acquisition of Controlling Stake (51%) Total consideration estimated at R$228mm for 51% of Duotur - R$54mm cash at closing - R$174mm divided in six annual installments of R$29mm 2014 implied transaction multiples, considering EV and Equity Value of R$ 447 million Call/Put Option Minority Stake (49%) Call Option: Exercisable by CVC within Put Option, 1 st degree: Exercisable by the sellers during years 2018 and 2019, conditioned on the achievement of certain EBITDA targets Put Option, 2 nd degree: Exercisable by the sellers in 2021, conditioned on the achievement of certain EBITDA targets - P/E multiple of 8.5x - EBITDA multiple of 5.6x Governance and Management Board of Directors (5 members) - 3 members appointed by CVC - 2 members appointed by Duotur Current CEO (Marcelo Sanovicz) and other key executives remain in place CVC to appoint the CFO and the audit firm * Maximum consideration assuming achievement of EBITDA target 6

7 New Company Key Figures (1/2) Selected Financial Figures 2013 ( R$ mm) Market Leisure Business Bookings Adj. EBITDA CVC Duotour * Combined 4,450 3,011 7, % 70% 30% 28% 72% Entry into new market for CVC Adj. EBITDA Margin 1 Adj. Net Income Adj. Net Income Margin 2 (1) Adj. EBITDA / Net Revenue (2) Adj.Net Income / Net Revenue (3) Return on Invested Capital 51.3% 34.8% 47.6% % 23.9% 23.6% ROIC % NA 48.5% Channel CVC Duotur Combined Stores Agents Online 4% 2% 19% 51% 100% 77% 47% CVC Duotur Combined More balanced channel mix * Unaudited figures 7

8 New Company Key Figures (2/2) Segment Product Domestic International Cruises Package* Cruise Airline Ticket 7% 4% 32% 47% 38% 61% 53% 58% Strengthens CVC s international business 4% 7% 89% 100% 43% 4% 53% CVC Duotur Combined CVC Duotur Combined Duotur currently does not sell hotel rooms *Including hotels 8

9 Deal Steps Non-Binding Offer Due Diligence Purchase Agreement and Shareholders Agreement Board Approval Material Fact Antitrust (CADE) Analysis Extraordinary Shareholder Meeting