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Bigger may be better. Highly accretive - similar to most acquisitions these days - the deal looks like a big positive for NCLH. The $25m synergy target seems conservative.


  • Prestige:  49% market share of upscale market
  • Broad portfolio of products and experiences:  Oceania- country club environment, Regent - luxury-focused, NCL- family-based 
  • Multiple:  11x adjusted EBITDA (estimated 2014 earnings before synergies)
  • $50m bonus may be paid to Prestige shareholders based on reaching 2015 financial targets
  • Prestige:  formed in 2008.  Shielded from recession and economic downturn. 
  • Prestige: have invested $125m in refurbishments
  • Pro-forma Combination: (TTMJune 30 2014):  +43% revenue, +18% in net yield, +33% in adjusted EBITDA (includes $25m synergies) 
  • Pro-forma leverage at end of 3Q:  5.3x
    • Soon after, they expect leverage to go back to 4x

Q & A

  • Prestige net yield guidance:  business continues to be strong; long forward bookings curve
  • Prestige 2015 deployment:  similar to 2014
    • Mid- April to mid-Nov:  2 ships in Europe, 2 ships in Alaska
    • Mid Nov- Mid-April:  2 ships in Miami, 1 ship in South America, 1 ship in Australia, 2 ships in Asia, 1 ship (180 day- around the world cruise)
  • $25m cost synergies:  getting into luxury/upper end agent community; merging customer databases; fuel/marketing cost synergies
    • Conservative target?  It's early to say.  Feel very comfortable with '1st $25 million' for 2015.
    • NCL:  Can do much better job on front-loading the business.  Prestige will finish 2014 50% booked more than NCL
    • Will affect interest expense (more efficient on margin basis), D&A will be better as well
  • Prestige's highest yielding ship is their oldest ship.
    • Focus on customer service and fine dining
  • Genting's thoughts on deal:  complicated situation but sees enormous value from deal.
    • Believe lock up in shares until end of 2015
  • Will not be surprised if private equity guys continue to sell.
  • Prestige:  on the cost side, could do better given their small scale.
  • For every $ of synergy on cost, double/triple that on the revenue side
  • 7,000 people on combined basis
  • Prestige:  CEO Frank committed to stay until end of 2015
  • Will set up a investor meeting in NYC in November