{ "docId": "019de50f-4a40-726d-b43c-db11cdad47db", "docSlug": "72b50d12da17cdc9e57fbf461ef843a6", "documentTitle": "J.P.Morgan | Investment Banking Pitch Book | 29 slides", "authorId": "j-p-morgan", "authorName": "J.P. Morgan", "documentKindSlug": "consulting-deck", "documentKindLabel": "Consulting deck", "sourceTypeSlug": "investment_bank", "sourceTypeLabel": "Investment bank", "presentationDate": "2019-01-01 00:00:00", "orientation": "landscape", "aspectRatio": 1.2929293, "pageNumber": 3, "pageCount": 29, "prevPage": 2, "nextPage": 4, "slideType": "situation_overview", "function": "establish_context", "density": "dense", "nDataPoints": 3, "notes": "The slide outlines the evolution of a transaction from a GP/IDR elimination to a full buy-in due to market shifts.", "elementsJson": null, "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019de50f-4a40-726d-b43c-db11cdad47db/3", "deckHref": "/decks/019de50f-4a40-726d-b43c-db11cdad47db", "deckJsonHref": "/decks/019de50f-4a40-726d-b43c-db11cdad47db.json", "deckAnchorHref": "/decks/019de50f-4a40-726d-b43c-db11cdad47db#slide-3", "components": [ { "bbox": { "h": 0.05, "w": 0.5, "x": 0.25, "y": 0.01 }, "kind": "disclaimer", "text": "Private and confidential – illustrative and for discussion purposes only. Analysis subject to change based on revised financials and conclusions of UGI and PWC tax analysis", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8682cb5b-7979-4c96-bcfd-64aa1c7e3bee", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.14, "x": 0.82, "y": 0.91 }, "kind": "image", "text": "J.P. Morgan", "attrs": null, "subkind": "logo", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "87cf0cf1-23e6-487b-af1d-28cead961ff5", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.7, "w": 0.91, "x": 0.045, "y": 0.18 }, "kind": "list", "text": "The MLP space in general is going through a structural change, as the traditional MLP structure with Incentive Distribution Rights becomes increasingly untenable. As discussed at the August meeting, UGI management, with the assistance of J.P. Morgan, considered and analyzed various alternatives relating to APU. With the approval of the UGI Board, management delivered an offer to eliminate its GP / IDRs in APU to the APU Board and commenced negotiations with the Conflicts Committee. The total consideration proposed for the elimination of the GP / IDRs was $675 million, which consisted of $325 million of APU common units and $350 million of Class B PIK units. UGI's proposal to the APU Conflicts Committee was met with opposition and a disparate view of the GP / IDR value. Major driver was disagreement around go-forward business profile and ability to maintain distributions. Equity research analysts have also begun to speculate about the potential for a distribution cut. However, recent developments with regard to APU and the broader market have altered the landscape and merits of such a transaction and caused a re-evaluation of the best path forward. As part of the UGI / APU Investor Day on December 4, 2018, management announced a strategic review of alternatives for APU, which is expected to last up to 120 days. Recent price movements have resulted in a reduced relative valuation for APU versus UGI. This has increased the viability of a potential APU buy-in as such a deal could be immediately accretive to UGI's EPS and CFPS based on today's prices. Conversely, the decline in the APU unit price would make a potential GP / IDR repurchase more challenging absent a change in valuation and/or structure. An acquisition of APU would result in increased UGI earnings volatility based on weather. However, current assumptions reflect a refined analysis of the proportion of historical shortfall / excess attributable to weather; while still meaningful, the impact is dampened using the current case. The trend of MLP buy-ins driven by lack of market access / investor appetite for MLP securities has accelerated. In light of these developments, UGI management recommends pursuing a full MLP buy-in of APU", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "bfba2399-6700-4f41-a323-173212949d3c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.23, "x": 0.045, "y": 0.115 }, "kind": "title", "text": "Situation overview", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "db0a3066-b652-4920-be3c-a735a6ab7722", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 4, "from": 3, "beatId": "6acb8f9d-01a9-410e-968e-a298624fb580", "arcName": "The Consultant's Gambit", "arcSlug": "consultants-gambit", "beatName": "Situation & Context", "beatSlug": "consultants-gambit-situation-context", "evidence": "The situation overview and agenda provide context for the discussion.", "position": 0, "confidence": 0.8, "parentBeatName": "Setup", "parentBeatSlug": "setup" } ], "loops": [ { "to": 17, "from": 3, "name": "Golden Circle", "slug": "11-golden-circle", "bestFor": "Visionary leadership, brand positioning, mission statements", "matchId": "f16e3641-db88-4f3b-b807-2c4674af0250", "evidence": "The deck presents a clear and concise summary of the benefits.", "position": 0, "objective": "What are the benefits of the merger?", "structure": "The Why (Belief) -> The How (Process) -> The What (Result)", "confidence": 0.7, "description": "Invert the typical pitch by starting with why you exist, rather than what you do" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }