2016 William Blair Case Competition, Winner

Kona Adventures
Matt Bender | Jimmy Kruse | Michael Loffredo
MiamiUniversity

Agenda
Executive summary
Industry drivers
Company overview
Valuation analysis
Strategic options
Final thoughts
WilliamBlaircasecompetition
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Kona presents an attractive opportunity in a peak marketExecutivesummary
Sell-side advisory
Valuation overview
Enterprise Value ($mm)
Potential buyers
3
 Kona Adventures is a leading
provider of travel and entertainment
services with a primary focus on
corporate travel
 Maintains its market position with a
loyal customer base, strong
management team, and significant
organic and inorganic growth
drivers
 Valuation analyses place Kona’s
enterprise value between
$560mm — $600mm
 2016E revenue: $206.2mm
 2016E EBITDA: $52.6mm
 Analysis of past transactions and
the potential for synergies along
with historically strong market
conditions leads to a
recommendation of pursing a near-
term sale to a strategic buyer
Compelling story & financials
Source: Team projections
$500 $550 $600 $650 $700
Leveraged Buyout (10.3x - 11.4x)
DCF - Exit Multiple (12.0x - 12.7x)
DCF - Perpetuity (10.8x - 11.8x)
Comparable Analysis (10.5x - 11.5x)
Precedent Analysis (11.0x - 12.0x)

Continuing growth in the broad travel marketIndustrydrivers
 Growth in the overall travel
industry will remain steady and
continue to drive the need for
global travel services
 Consumer behavior will
continue to change quickly,
and consumer needs will
become increasingly diverse
 Supply-side services, (e.g.
hotels and destination
services) will remain
fragmented, and there will
always be the need for an
intermediary
 Developing regions will
experience strongest growth in
demand for travel
 Kona’s recent expansion into
Asia will allow the company
to capitalize on this growth
Travel services industry revenue growth
4
Projection for number of outbound trips by region
Commentary
$0
$10,000
$20,000
$30,000
$40,000
2009 2010 2011 2012 2013 2014 2015 2016P 2017P
0
100
200
300
400
500
600
North America Europe LATAM MEA APAC
2013 2018E
($ in millions)
(in millions)
Sources: Euromonitor, IBIS world, investor presentations

Positioning within the travel industryIndustrydrivers
 Players in the global travel
service industry are providers
of high value, real-time
information related to travel
and entertainment itineraries
 Companies provide value-add
services to both travel providers
and buyers
 Requires strong relationships
with both vendors and
customers
 Consumers can now bypass
traditional brick-and-mortar
travel agencies, conduct their
own research, and purchase
directly online
Travelers
5
Commentary
Travel buyers
Value-add services
Providers
Airlines Cruise Car rental Hotels Airlines
Leisure Business
Online travel agencies
Offline travel agencies
Travel management companies
Corporations
Tour operators
Meta-search
Secure efficient B2B payment solutions
Improved efficiency of complex/high volume operations
Expanded addressable customer base and offering
Efficient workflow automation and improved productivity
Reduced operating costs
Source: Investor presentations

Travel services have outperformed the broader marketIndustrydrivers
 Within the broader travel industry, travel service providers have outperformed significantly
 Low-barriers to entry and highly-fragmented conditions, particularly among smaller companies, are
conducive to acquisition activity
 Further integration of travel services that are provided by these companies is making it much
easier for consumers and businesses to plan trips while also providing a more dynamic
experience
Indexed travel industry performance (weighted by market capitalization)
6
Commentary
Source: Bloomberg
70
90
110
130
150
170
190
Comparable set Dow travel & tourism index S&P500

Strong positioning with room for growthCompanyoverview
 Kona Adventures is a leading provider of
travel and entertainment services to
primarily small and medium size
businesses
 Includes airfare accommodation, hotel
booking, transportation services, and
entertainment planning
 For each transaction that Kona facilitates,
it receives a percentage of the total cost
 The company provides “service”
transactions, which are those done by
Kona employees, as well as “digital”
transactions, which are those made by
clients using an app or online means
 Strong projected EBITDA growth as the
company moves to expand into new
markets through acquisition and grow an
already large and diverse customer base 22.0%
24.0%
26.0%
28.0%
30.0%
$0
$20
$40
$60
$80
$100
2015A 2016E 2017P 2018P 2019P 2020P 2021P
EBITDA EBITDA Margin
EBITDA growth and margins
45.0%
25.0%
20.0%
10.0%
Small to medium business
(SMB)
Large corporations
Personal (luxury)
Local business
2016E sales by end market
7Sources: Team projections and company materials
($ in millions)

Customer and service diversificationCompanyoverview
 Recent emphasis on
entertainment planning allows
for diversification of revenue
 Complete integration from
air travel to event
attendance
 Kona creates value for its
customers by removing the
need for an in-house
administrative travel process
 Strong vendor relationships
provide superior access for
customers
 The company maintains and
continues to grow its global
presence through its
multinational customer base
 25% of 2016E sales are
through European markets
Service / solution offerings breakdown by revenue
8
Customer concentration trends
Commentary
58.5%23.8%
11.3%
6.5%
Aircraft accomodation Hotel booking Transportation services Entertainment planning
54.8%
24.7%
10.0%
10.4%
44.4%
28.4%
8.4%
18.9%
2013 2016 2021
0%
10%
20%
30%
40%
50%
Small to medium
business
Large corporations Personal (luxury) Local business
2011 2016E
Sources: Company materials and team projections

Positioning analysisCompanyoverview
9
W
TO
S
 Second to market in fast growing
service offerings and geographic
segments
 Focused in business travel, which
is growing slower than leisure
travel
 Growth of direct booking
that allows for greater
discounts
 Low barriers to entry and high
fragmentation lead to a very
competitive landscape
 Cyclical nature of travel industry poses
macroeconomic risk
 Current portfolio offering and
strong vendor relationships allow
customers broad access
 Strong and committed
management team
 Diverse geographic
presence
 Further expansion into
Asia and other developing
areas
 Pursuing acquisitions to expand
offerings, such as education services
 Development of new vendor
relationships
Source: Company materials

Valuation overviewValuationanalysis
$500 $550 $600 $650 $700
2016E EBITDA multiple:
Enterprise Value ($ in millions):
9.5x 10.5x 11.4x 12.4x 13.3x
10
Valuation Range:
$560mm — $600mm
Source: Team projections

Comparable company analysisValuationanalysis
($ in millions, except for price. Data as of November 3, 2016)
Company name
Ticker &
exchange Price
% of 52 Market
Cap
Enterprise LTM 2016E EBITDA Enterprise Value EBITDA
week high value EBITDA Revenue EBITDA Revenue margin LTM EBITDA 2016E EBITDA 2016E Revenue YOY Growth
Corporate Travel Management CTD AU A$18.12 94.1% $2,346 $2,308 $90 $339 $116 $437 26.5% 25.7x 19.9x 5.3x 29.1%
eDreams Odigeo SL EDR SM € 2.70 87.6% 314 674 105.2 546.0 111.6 543.7 19.3% 6.4x 6.0x 1.2x 13.3%
Lastminute.com NV LMN SW CHF 13.70 87.0% 195 122 13.1 253.1 14.6 260.5 5.2% 9.3x 8.4x 0.5x NA
MakeMyTrip Ltd. MMYT US $27.00 84.6% 1,140 1,125 (76) 374 (53) 224 (20.2%) NA NA 5.0x NA
Sabre Corp. SABR US $23.46 78.2% 6,573 9,764 924 3,248 1,084 3,393 28.5% 10.6x 9.0x 2.9x 29.0%
Smiles SA SMLE3 BZ R$54.75 91.9% 2,148 2,025 171 459 166 468 37.2% 11.9x 12.2x 4.3x 24.3%
Travelport Worldwide Ltd. TVPT US $13.44 88.3% 1,667 3,976 527 2,310 608 2,491 22.8% 7.5x 6.5x 1.6x 11.8%
Travelzoo Inc. TZOO US $9.15 69.0% 127 102 13 131 12 129 9.6% 8.1x 8.3x 0.8x 9.1%
WebJet Ltd. WEB AU A$9.31 76.3% 1,183 1,104 48 198 72 277 24.3% 22.9x 15.4x 4.0x 56.8%
Kona Adventures $52.6 $206.2 25.5% 15.4%
High $6,573 $9,764 $924 $3,248 $1,084 $3,393 37.2% 25.7x 19.9x 5.3x 56.8%
3rd Quartile 2,148 2,308 171 546 166 544 26.5% 14.6x 13.0x 4.3x 29.1%
Median 1,183 1,125 90 374 112 437 22.8% 10.0x 8.7x 2.9x 24.3%
Mean 1,744 2,356 202 873 237 913 17.0% 12.8x 10.7x 2.8x 24.8%
1st Quartile 314 674 13 253 15 260 9.6% 7.9x 7.8x 1.2x 12.6%
Low 127 102 (76) 131 (53) 129 (20.2%) 6.4x 6.0x 0.5x 9.1%
Commentary Derived valuation
 Comparable companies are similar in size
and derive revenue from around the world
 Much of the North American market has
been consolidated into three large players
 Travel technology companies were chosen
to represent Kona’s scalable platform
Kona Adventures' 2016E EBITDA $52.6
Comparable Multiple Range 10.5x 11.5x
Enterprise Value Range $552.1 $604.7
Source: Bloomberg 11

($ in millions, except for price. Data as of November 3, 2016)
Target company Acquirer
Transaction Announcement Transaction
Premium
Transaction Value
type date value Revenue EBITDA EBIT
eLong Inc. China E-Dragon Holdings Ltd Strategic 2/4/2016 $75.8 27.5% 2.0x -- --
Ikyu Corp. Yahoo Japan Corp. Strategic 12/15/2015 774.2 39.1% 13.0x 35.7x 36.9x
Orbitz Worldwide Inc. Expedia Inc. Strategic 2/12/2015 1,595.5 26.5% 1.7x 11.4x 19.5x
Wotif.com Holdings Ltd. Expedia Inc. Strategic 7/7/2014 584.2 32.6% 4.0x 8.5x 9.6x
Astaka Holdings Ltd. Corporate Travel Management Strategic 11/20/2013 49.2 40.5% 2.2x 8.1x 9.1x
Qunar Cayman Islands Ltd. Ocean Management Ltd. Sponsor 6/23/2016 4,067.4 7.9% 6.0x -- --
Kuoni Reisen Holding AG EQT Partners AB Sponsor 2/2/2016 1,351.3 25.0% 0.4x 10.0x 16.6x
Opodo Ltd. AXA SA Sponsor 7/1/2011 613.2 -- 4.1x 11.7x 17.2x
High 13.0x 35.7x 36.9x
3rd Quartile 4.6x 11.6x 18.9x
Median 3.1x 10.7x 16.9x
Mean 4.2x 14.2x 18.1x
1st Quartile 2.0x 8.9x 11.3x
Low 0.4x 8.1x 9.1x
Precedent transaction analysisValuationanalysis
Commentary Derived valuation
 Precedent transactions were chosen from
similarly sized companies with comparable
growth rates
 North America’s consolidation has taken
place with far larger companies
 Recent sponsor activity has been in
emerging markets as middle class develops
Kona Adventures' 2016E EBITDA $52.6
Comparable Multiple Range 11.0x 12.0x
Enterprise Value Range $604.7 $657.3
Source: Bloomberg 12

Discounted cash flows analysisValuationanalysis
Derived valuation
($ in millions, except for price. FY ended December 31,)
Estimated Projected
2016E 2017P 2018P 2019P 2020P 2021P
EBITDA 52.6 60.7 66.7 73.4 84.0 91.3
Less: D&A 0.5 0.5 0.6 0.5 0.7 1.0
EBIT 52.1 60.2 66.1 72.9 83.2 90.4
Tax Effect @ 35.0% 18.2 21.1 23.1 25.5 29.1 31.6
NOPAT 33.9 39.1 43.0 47.4 54.1 58.7
Add: D&A 0.5 0.5 0.6 0.5 0.7 1.0
Less: CapEx (0.7) (0.7) (0.7) (0.8) (0.9) (1.0)
Less: Acqusition Costs 0.0 0.0 0.0 0.0 0.0 0.0
Less: Changes in NWC (14.8) (2.3) (2.6) (2.6) (3.0)
Free Cash Flow 24.1 40.5 44.5 51.4 55.7
PV of FCF 20.0 30.5 30.5 32.1 31.6
 Assumptions
 Revenue growth peaks in
2019 at 10%+
 Normalized margins
 WACC of 9.9%
 Comparable assumptions
 Comparable unlevered betas
were used in determining
Kona’s systematic risk
 Cost of debt was estimated
using debt comparables
 Exit multiple method led to
higher valuation due to double
digit EBITDA growth
 Low capital expenditures
result in higher FCF
Commentary
Exit Multiple Method
Exit Multiple 10.0x
Terminal Value 913.4
PV of Terminal Value 517.9
Plus: PV of Future FCF 144.6
Enterprise Value 662.4
Perpetuity Growth Method
Perpetuity Growth Rate 2.75%
Terminal Value 798.3
PV of Terminal Value 452.6
Plus: PV of Future FCF 144.6
Enterprise Value 597.2
Sources: Bloomberg and team projections 13

Leveraged buyout analysisValuationanalysis
 Leveraged assumptions
 Leverage 5.5x EBITDA
consisting of term loan B at
6.5% fixed interest
 Consists of a 3.0%
repayment rate per year
 Debt comprised 50% of
initial sources
 Multiple assumptions
 Assumes a 10.5x exit
multiple, which implies a
10.5x entry multiple
 Limited capital expenditures
maximize cash flow available
for debt repayment
 Asset-light base results in
sizable goodwill creation
CommentaryCapital structure
Exit Multiple
SponsorTarget
IRR
9.5x 10.0x 10.5x 11.0x 11.5x
21.0% 568.2 586.2 604.2 622.3 640.3
23.0% 543.3 559.8 576.4 592.9 609.4
25.0% 520.9 536.1 551.3 566.5 581.7
27.0% 500.7 514.7 528.7 542.7 556.7
29.2% 480.7 493.5 506.3 519.1 531.9
EV sensitivity analysis
Sources: Bloomberg and team projections
($ in millions)
14
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2017P 2018P 2019P 2020P 2021P
Equity Debt

Historically long bull market brings downside riskValuationanalysis
 Industry revenue is driven by
discretionary spending, which is one of
the first metrics affected during a
recession
 Extravagant corporate travel is first to
go when earnings slide
 In a modeled recession, revenues drop
~5% in consecutive years as travel
spending is curtailed
 Earnings rebound in 2021P
 Low asset base allows for high variable
costs and low overhead
 Projected downside beginning in 2019P
results in a valuation ~20% below the
current valuation range
 Use of debt allows for less downside in
leveraged buyout scenario
Valuation impact
Top-line numbers hit hardest in a 2019P recession
$150
$200
$250
$300
$350
2014A 2015A 2016E 2017P 2018P 2019P 2020P 2021P
Base Downside
$0
$200
$400
$600
$800
Base Downside
DCF - Exit multiple DCF - Perpetuity Leveraged buyout
$168mm of cumulative
revenue lost
Sources: Team projections and company materials
($ in millions)
($ in millions)
15

Potential acquisition targetsStrategicoptions
Source: Company websites 16
Kona Adventures
 Choose to enter a new,
fast-growing market
segment, that has seen
a flurry of recent deal
activity
 Continue to develop
technology platform
as a value proposition
for clients through
acquisition
 Studentuniverse.com, Inc. provides
ticket booking, hotel book, and
activity booking services exclusively
for students
 BeatnPaths, Inc. is a B2B cloud
platform connecting global
attractions and activities with
agencies, hotels, and airlines to
enhance travel experience
Kona’s proven acquisition history and financial capacity
continue to make it an acquiror of choice

Potential acquisition financial impactStrategicoptions
 Proposed acquisition takes place in 2017P and has small financial impact
 Penetration into new market allows for further acquisitive actions in 2018+
 In a levered buyout situation, initial cash outlay is mitigated by additional cash available for
debt repayment in subsequent years
 Acquisition can result in a valuation increase that is 2.0x initial investment $12.2 million
EBITDA impact
$0
$20
$40
$60
$80
$100
2013A 2014A 2015A 2016E 2017P 2018P 2019P 2020P 2021P
Organic Incremental Addition
Commentary
Sources: Team projections and company materials
($ in millions) ($ in millions)
17
Cash available for debt repayment
($15)
$0
$15
$30
$45
$60
2017P 2018P 2019P 2020P 2021P
Organic Incremental Source (Use)

Strategic buyer universeStrategicoptions
Initial Outlay
Integrated / Operators Technology platformTravel service
 Due to Kona’s attractive value proposition in a consolidating market, the company would be
very attractive to a strategic industry player
 Asset-light base and tech-enabled platform provide further incentives for acquisition
 The company can be expected to draw interest from various players within the travel industry
Sources: Travel Weekly, Bloomberg, CapIQ 18

TTS is a global leading
player in the development
of innovative solutions for
the travel and tourism
industry
Targeted strategic buyersStrategicoptions
RationaleMetrics
 Size and legacy platform motivates acquisition
 Current dependency on brick-and-mortar locations
 Stated expansion plans for online booking and
research capabilities
Sources: Company websites, CapIQ
Privately Held
$3.8B in sales in
2015
Privately Held
$2.5B in sales in
2015
LTM sales of
£14.6B
LTM EBITDA of
£1.3B
Private Held
$2.8B in sales in
2015
Description
AAA Travel, a subsidiary of
AAA, offers products and
services directly to
consumers via brick-and-
mortar locations and online
Altour is the largest
independently owned travel
management company in
the U.S., serving luxury and
mid-markets
TUI Group is a leading
tourism company. Based in
Germany, it boasts 1,800
travel agencies, six airlines,
and 300 hotels
Travel and Transport is a
full service travel
management company
headquartered in Omaha,
Nebraska
 An American Express Travel Representative
 Four acquisitions in the last 12 months
 Concentration within corporate travel fits Kona’s
current revenue concentration
 Provides international growth platform
 Fully-integrated business model creates expansion
opportunity for Kona’s event segment
 Market-leading expertise in technology solutions for
the travel and tourism industry
 Platform for growth in domestic and international
markets
 Concentrates on corporate event management
 Looking to enter faster growing luxury tourism
management
 Recent Gallup market study confirmed commitment
to advancement in travel industry
Privately Held
19

Financial sponsors universeStrategicoptions
Rationale
 Invests in media, communications, business, and information services
companies
 Partners with management to help build the business and allow synergies
 Currently maintains investments in corporate travel management companies
Criteria
Equity value of
~$150mm
N/A but recently
partnered to invest
$900mm in equity
 Partners with company management to create long-term value
 Invests in the travel, transportation, hospitality, and payment sectors
 Current investments; American Express Global Business Travel and Travel
Leaders Group
 Multi-stage investment firm exclusively focused on global travel private equity
and venture capital investments
 80% of firm investments are as private equity
 Supports a robust travel portfolio
Equity value between
$30-250mm
 Seeks to find high growth businesses in a variety of industries
 Invested in several travel companies including Reed & Mackay, CTC Aviation
Group and Griffin Global
Equity value of
~$120mm
Source: Company websites 20

Financial sponsors universeStrategicoptions
RationaleCriteria
Source: Company websites
Equity value of $30-
100mm but is able to
partner for
more equity
Equity value above
$250mm
Equity value between
$100-500mm
N/A
 First independent private equity firm focused on Chinese travel and tourism
sector
 Invests across all aspects of the travel industry; hotels and resorts, attractions,
online and offline travel agencies and operators, transportation services, and
related business solution providers.
 Focused on business services and technology
 Current investments in travel industry include Odigeo, which is the leading
online travel agency in Western Europe
 Invests in a wide range of industries including the transport & travel sectors
 Recently purchased Kuoni group, a leading service provider to the global travel
industry
 Financial capacity
 Involved in the middle market travel services industry
 Three related transactions during the past 30 months
21

Selected buyersStrategicoptions
Source: Company websites
Certares focuses exclusively on the travel, transportation, hospitality, and
payment sectors. The management team has significant experience operating
companies within the travel sector, particularly travel management companies.
The firm owns American Express Global Business Travel and Travel
Leaders group. Because of these portfolio companies, we believe that Kona
would be a strong fit to provide new growth opportunities and product
offerings, which would likely allow for a higher price to be paid.
Altour is an established travel management company through its American
Express Travel Representative membership. Additionally, they are one of the
few asset-light travel management companies to be involved in corporate,
leisure, and event management services. With over $2.5B in sales in 2015,
Altour’s size would make an acquisition possible, with the potential for
significant synergies as a result of the transaction.
22

Favorable time for saleStrategicoptions
 Recent run-up in comparable
equity prices has been due to
investor sentiment, not
financial results
 Run almost solely driven by
multiple expansion
 Spurred-on by acquisition
rumors
 Overall M&A market has
been stagnant
 Multiples have leveled out
during the past 24 months
 Combination of factors make
it an ideal time for Kona
Adventures to go to market
Middle-market multiples have stagnated…
…But travel service comparables are at historic highs
Commentary
Sources: Team projections and Pitchbook
0.0x
4.0x
8.0x
12.0x
16.0x
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2014 2015 2016
(EV/EBITDA multiples for transactions with EV>$250mm)
6.0x
10.0x
14.0x
2/10/2016 4/8/2016 6/7/2016 8/4/2016 10/3/2016
(Comparable companies EV/EBITDA multiples)
23

Kona presents an attractive opportunity in a peak marketFinalthoughts
Strategic vs. sponsored
Alternative growth opportunities
Valuation overview
Enterprise Value ($mm)
Final recommendation
 A sale to a strategic buyer offers
Kona a number of advantages
 Larger global platform to
continue to penetrate
international markets and grow
share in existing segments
 Stronger synergies from cross-
selling opportunities
 Current management will be left
on to spearhead new growth
opportunities
An acquisition of StudentUniverse would
begin a move into the fast-growing,
fragmented student travel industry
BeatnPaths would build on an already solid
technology platform to connect clients
with travel experience opportunities
 We recommend that Kona Adventures engages in a sale
to Altour International, Inc.
 Strong synergies along with the opportunity for
entirely new growth channels
 This sale should take place in the near-term given strong
current market conditions
 Implied valuation range of $560 — $600mm
24
$500 $550 $600 $650 $700

Appendix
WilliamBlaircasecompetition

Pro forma statement of incomeAppendix
Statement of income
Historical Estimated Projected
2013A 2014A 2015A 2016E 2017P 2018P 2019P 2020P 2021P
Airfare accomodation $95.1 $101.0 $106.7 $113.1 $119.3 $124.1 $128.4 $132.4 $135.9
Hotel booking 38.7 42.5 46.5 50.9 57.0 64.9 72.1 80.0 86.9
Transportation services 18.3 19.0 19.8 20.7 21.6 22.5 23.5 24.5 25.6
Entertainment planning 10.5 13.2 16.7 21.5 26.9 35.5 47.9 63.0 77.7
Total revenue $162.7 $175.6 $189.7 $206.2 $224.8 $247.0 $272.0 $299.9 $326.2
Service costs (non-payroll) 63.8 68.5 75.9 85.6 94.4 106.2 119.7 131.9 143.5
Digital/apps/online costs 37.1 39.9 39.8 41.2 42.7 44.5 46.2 48.0 48.9
Payroll costs 26.0 26.3 27.5 26.8 27.0 29.7 32.6 36.0 42.4
Potential acquisition expenses - - - - - - - - - - - - - - - - - -
Depreciation & amortization expense 0.3 0.4 0.6 0.5 0.5 0.6 0.5 0.7 1.0
EBIT $35.5 $40.6 $45.9 $52.1 $60.2 $66.1 $72.9 $83.2 $90.4
Interest expense 10.1 10.1 10.1 10.1 10.1 10.1
Tax provision 12.4 14.2 16.1 14.7 17.5 19.6 22.0 25.6 28.1
Net income $23.0 $26.4 $29.8 $27.3 $32.5 $36.4 $40.8 $47.5 $52.2
Depreciation & amortization 0.3 0.4 0.6 0.5 0.5 0.6 0.5 0.7 1.0
Capital expenditures 0.2 0.5 5.5 0.7 0.7 0.7 0.8 0.9 1.0
EBITDA $35.8 $40.9 $46.5 $52.6 $60.7 $66.7 $73.4 $84.0 $91.3
Margin analysis
EBITDA 22.0% 23.3% 24.5% 25.5% 27.0% 27.0% 27.0% 28.0% 28.0%
D&A (as a % of Total revenue) 0.2% 0.2% 0.3% 0.2% 0.2% 0.2% 0.2% 0.3% 0.3%
CapEx (as a % of Total revenue) 0.1% 0.3% 2.9% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3%
NWC (as a % of Total revenue) 4.0% 3.3% 4.3% 10.6% 10.6% 10.5% 10.4% 10.5%
EBIT 21.8% 23.1% 24.2% 25.3% 26.8% 26.8% 26.8% 27.8% 27.7%
% Cost of sales
Service costs (non-payroll) 39.2% 39.0% 40.0% 41.5% 42.0% 43.0% 44.0% 44.0% 44.0%
Service costs (non-payroll, as a % of Service revenue) 71.9% 73.2% 78.9% 85.8% 88.0% 91.1% 92.1% 90.8% 89.7%
Digital/apps/online costs 22.8% 22.7% 21.0% 20.0% 19.0% 18.0% 17.0% 16.0% 15.0%
Digital/apps/online costs (as a % of Digital revenue) 50.1% 48.5% 42.6% 38.7% 36.3% 34.1% 32.5% 31.1% 29.5%
Payroll costs 16.0% 15.0% 14.5% 13.0% 12.0% 12.0% 12.0% 12.0% 13.0%
Tax Rate 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0%
Average interest rate 8.0% 8.0% 8.0% 8.0% 8.0% 8.0%
25

Pro forma balance sheetAppendix
Balance sheet
Estimated Projected
2016E 2017P 2018P 2019P 2020P 2021P
Assets
Cash $16.9 $34.7 $69.4 $108.3 $154.0 $203.9
Restricted cash 2.1 2.1 2.1 2.1 2.1 2.1
Accounts receivable, net 81.9 86.2 94.8 104.3 114.7 125.1
Prepaid expenses & other assets 2.4 3.4 3.7 4.1 4.5 4.9
Income tax receivable 0.7 0.7 0.7 0.7 0.7 0.7
Deferred income taxes 0.7 0.7 0.7 0.7 0.7 0.7
Total current assets $104.7 $127.8 $171.4 $220.2 $276.7 $337.4
PPE, net 10.9 11.0 11.2 11.5 11.6 11.6
Goodwill 157.6 157.6 157.6 157.6 157.6 157.6
Intangible assets, net 39.8 39.8 39.8 39.8 39.8 39.8
Acquisition assets - - - - - - - - - - - -
Deferred financing fees, net 1.9 1.9 1.9 1.9 1.9 1.9
Refundable security deposits 0.4 0.4 0.4 0.4 0.4 0.4
Total other assets $210.5 $210.7 $210.8 $211.1 $211.2 $211.2
Total assets $315.3 $338.5 $382.2 $431.3 $487.9 $548.7
Liabilities & Member's Equity
Accounts payable and accrued expenses $48.9 $49.5 $54.3 $59.8 $66.0 $71.8
Income taxes payable 0.9 0.9 0.9 0.9 0.9 0.9
Client deposits 16.7 16.9 18.5 20.4 22.5 24.5
Deferred revenue - - - - - - - - - - - -
Contingent purchase consideration 10.3 - - - - - - - - - -
Total current liabilities $76.8 $67.2 $73.8 $81.1 $89.4 $97.1
Long-term debt 126.4 126.4 126.4 126.4 126.4 126.4
Deferred rent 6.4 6.6 7.4 8.4 9.2 10.0
Deferred income tax liability 13.9 13.9 13.9 13.9 13.9 13.9
Total liabilities $223.5 $214.1 $221.5 $229.8 $238.9 $247.5
Total member's equity $91.8 $124.3 $160.7 $201.5 $249.0 $301.2
Total liabilities & member's equity $315.3 $338.5 $382.2 $431.3 $487.9 $548.7
check - - - - - - - - - - - -
NWC 8.9 23.8 26.1 28.7 31.2 34.3
26

Pro forma statement of cash flowsAppendix
Statement of cash flows
Projected
2017P 2018P 2019P 2020P 2021P
Cash from operating activities:
Net income $32.5 $36.4 $40.8 $47.5 $52.2
Depreciation & amortization 0.5 0.6 0.5 0.7 1.0
∆ in deferred rent 0.2 0.8 0.9 0.9 0.8
∆ in restricted cash - - - - - - - - - -
∆ in accounts receivable (4.3) (8.5) (9.6) (10.4) (10.4)
∆ in prepaid expenses & other assets (0.9) (0.3) (0.4) (0.4) (0.4)
∆ in income tax receivable - - - - - - - - - -
∆ in deferred income taxes - - - - - - - - - -
∆ in accounts payable and accrued expenses 0.6 4.9 5.5 6.1 5.8
∆ in income taxes payable - - - - - - - - - -
∆ in client deposits 0.2 1.7 1.9 2.1 2.0
∆ in deferred revenue - - - - - - - - - -
∆ in contingent purchase consideration (10.3) - - - - - - - -
Cash flows provided (used) from operating activities $18.5 $35.5 $39.7 $46.6 $50.9
Cash from investing activities:
Acquisition costs - - - - - - - - - -
Capital expenditures (0.7) (0.7) (0.8) (0.9) (1.0)
Cash flows provided (used) from investing activities ($0.7) ($0.7) ($0.8) ($0.9) ($1.0)
Cash from financing activities:
∆ in long-term debt - - - - - - - - - -
Cash flows provided (used) from financing activities - - - - - - - - - -
Net change in cash $17.8 $34.8 $38.9 $45.7 $49.9
27

Pro forma income statement (w/ acquisition)Appendix
Statement of income
Historical Estimated Projected
2013A 2014A 2015A 2016E 2017P 2018P 2019P 2020P 2021P
Airfare accomodation $95.1 $101.0 $106.7 $113.1 $129.5 $134.8 $140.1 $145.2 $150.0
Hotel booking 38.7 42.5 46.5 50.9 57.0 64.9 72.1 80.0 86.9
Transportation services 18.3 19.0 19.8 20.7 21.6 22.5 23.5 24.5 25.6
Entertainment planning 10.5 13.2 16.7 21.5 26.9 35.5 47.9 63.0 77.7
Total revenue $162.7 $175.6 $189.7 $206.2 $235.0 $257.8 $283.7 $312.7 $340.3
Service costs (non-payroll) 63.8 68.5 75.9 85.6 94.4 106.2 119.7 131.9 143.5
Digital/apps/online costs 37.1 39.9 39.8 41.2 42.7 44.5 46.2 48.0 48.9
Payroll costs 26.0 26.3 27.5 26.8 27.0 29.7 32.6 36.0 42.4
Potential acquisition expenses - - - - - - - - 7.1 7.5 8.2 8.9 9.8
Depreciation & amortization expense 0.3 0.4 0.6 0.5 0.6 0.6 0.6 0.8 1.0
EBIT $35.5 $40.6 $45.9 $52.1 $63.2 $69.3 $76.4 $87.0 $94.5
Interest expense 10.1 10.4 10.8 10.8 10.8 10.8
Tax provision 12.4 14.2 16.1 14.7 18.5 20.5 23.0 26.7 29.3
Net income $23.0 $26.4 $29.8 $27.3 $34.3 $38.0 $42.7 $49.6 $54.5
Depreciation & amortization 0.3 0.4 0.6 0.5 0.6 0.6 0.6 0.8 1.0
Capital expenditures 0.2 0.5 5.5 0.7 0.7 0.8 0.9 0.9 1.0
EBITDA $35.8 $40.9 $46.5 $52.6 $63.8 $69.9 $76.9 $87.8 $95.6
Margin analysis
EBITDA 22.0% 23.3% 24.5% 25.5% 27.1% 27.1% 27.1% 28.1% 28.1%
D&A (as a % of Total revenue) 0.2% 0.2% 0.3% 0.2% 0.2% 0.2% 0.2% 0.3% 0.3%
CapEx (as a % of Total revenue) 0.1% 0.3% 2.9% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3%
NWC (as a % of Total revenue) 4.0% 3.3% 4.3% 10.6% 10.6% 10.5% 10.4% 10.5%
EBIT 21.8% 23.1% 24.2% 25.3% 26.9% 26.9% 26.9% 27.8% 27.8%
28

Discounted cash flow assumptions & calculationsAppendix
WACC calculations
Capital structure
Debt 126.4
Market value of equity 442.6
Beta 0.99
Equity Risk Premium 7.5%
Size Premium 2.0%
Risk Free Rate 1.8%
Cost of Equity 11.3%
Pretax Cost of Debt* 8.0%
Tax Rate 35.0%
Cost of Debt 5.2%
WACC 9.9%
Adjusted
Company name beta Equity Debt Tax rate Unleavered beta
eDreams Odigeo SL 1.146 341.3 474.5 28.0% 0.57
Corporate Travel Management 1.000 1,351.5 28.3 30.0% 0.99
MakeMyTrip Ltd. 0.849 1,203.3 180.9 35.0% 0.77
Travelport Worldwide Ltd. 1.404 1,776.3 2,410.8 35.0% 0.75
WebJet Ltd. 0.868 826.1 42.2 30.0% 0.84
Sabre Corp. 0.936 7,161.6 3,256.0 35.0% 0.72
Travelzoo Inc. 1.212 166.7 - - 35.0% 1.21
Avg: 0.84
Kona Adventures' Capital Structure
Unlevered Beta 0.84
Equity 442.6
Debt 126.4
Tax Rate 35.0%
Levered Beta 0.99
29

Additional leveraged buyout dataAppendix
Debt Assumptions
Scenario: 3
% of
Total Ratio Years Amount
Leverage Ratio 5.5x Debt Assumed 289.2
Revolver 0.0% 0.0x Revolver N/A 0.0
Term Loan A 0.0% 0.0x Term Loan A 10 0.0
Term Loan B 100.0% 5.5x Term Loan B 10 289.2
Subordinated Note 0.0% 0.0x Subordinated Note 10 0.0
Mezzanine Debt 0.0% 0.0x Mezzanine Debt 10 0.0
Check 100.0% 5.5x Check 0
Interest Rates
Principal Repayment Rates (per
Annum)
Revolver L+ 175 bps Revolver N/A
Term Loan A L+ 340 bps Term Loan A 5.0%
Term Loan B 9.0% Term Loan B 1.0%
Subordinated Note 13.0% Subordinated Note 0.0%
Mezzanine Debt 15.0% Mezzanine Debt 0.0%
Transaction Summary
Implied Enterprise Value 551.3 Equity Value $441.8
Leverage Ratio 5.5x Enterprise Value $551.3
Sonsor Target IRR 25.0% EBITDA Purchase Multiple 10.5x
Minimum Cash $15.0 EBITDA Exit Multiple 10.5x
Exit Year 2021 Debt Used $289.2
Equity Value Calculations Fees
Purchase Enterprise Value 551.3 Amount % EV
Less: Debt 126.4 Advisory 5.2 1.0%
Plus: Cash 16.9 Financing 5.2 1.0%
Purchase Equity Value 441.8 Legal 5.2 1.0%
Total 15.7
Leverage Ratio
SponsorTarget
IRR
5.0x 5.3x 5.5x 5.8x 6.0x
21.0% 634.1 676.9 719.7 762.5 805.3
23.0% 546.6 582.8 618.9 655.0 691.1
25.0% 488.0 519.6 551.3 582.9 614.6
27.0% 446.1 474.5 503.0 531.4 559.8
29.2% 412.0 437.8 463.6 489.5 515.3
Sources and Uses
Sources
Amount % of Total
Excess Cash 1.9 0.3%
Total Debt 289.2 49.5%
Sponsor Equity 292.8 50.1%
Total Sources 583.9 100.0%
Uses
Amount % of Total
Equity Value of Company 462.7 78.1%
Repay Existing Debt 126.4 21.3%
Fee Total 3.4 0.6%
Total Uses 592.5 100.0%
30

2016 William Blair Case Competition, Winner

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