Coats Group Plc · LSE:COA
Coats — Merger or Acquisition (August 2022)
14 slides from Coats's merger presentation, August 2022
Slide 1: Acquisition of Rhenoflex
ACQUISITION OF RHENOFLEX EXPANDING COATS’ LEADING POSITION IN THE ATHLEISURE AND SPORTS FOOTWEAR MARKET AUGUST 2022
Slide 2: Transaction Highlights
TRANSACTION HIGHLIGHTS Acquisition of Rhenoflex, a Leading Provider of Structural Footwear Components and Sustainable Reinforcement Solutions Unique Opportunity for Coats to Further Expand its Footwear Platform Through a Synergistic Combination with Texon Consolidates Existing Presence in Highly Att
Slide 3: Rhenoflex at a Glance
RHENOFLEX AT A GLANCE Footwear Lifestyle ~73% of 2021 Sales ~27% of 2021 Sales Reinforcement Dongguan, China components to attach zippers, seams and patches Heel Counter Heel Grip Engineered thermoplastic sheets Interlining and components for leather goods as well Ho Chi Minh City, Vietnam as orthop
Slide 4: Compelling Strategic Rationale
COMPELLING STRATEGIC RATIONALE • Combines two global leaders in structural footwear components with enhanced scale, Strengthens Position global reach and capability • Consolidates Coats’ presence in highly attractive and fast-growing athleisure and sports + 1 as Global Leader in footwear market and
Slide 5: Combination Establishes Global Leading Footwear Platform
COMBINATION ESTABLISHES GLOBAL LEADING FOOTWEAR PLATFORM Consolidates Position in the Attractive Premium Athleisure Establishes a Global Platform with Enhanced Scale and and Sports Footwear Market Reach ~$425m Combined LTM June-22 Revenue(1) Footwear & Accessories COATS GROUP PLC | ACQUISITION OF RH
Slide 6: Highly Complementary to Texon and Coats
HIGHLY COMPLEMENTARY TO TEXON AND COATS… Complementary Product Offering Enhances Customer Proposition Coats’ Offerings Heel Grip FOOTWEAR LIFESTYLE Heel Uppers Counters Interlining Toe Non-woven Puffs Eyelets Insoles Leather Alternatives RhenoprintTM Threads Bags Cellulose Fashion Process Insoles Re
Slide 7: With Focus on Innovation and Sustainability
WITH FOCUS ON INNOVATION AND SUSTAINABILITY Focus on Innovation and Technology Focus on Sustainability Pipeline of innovative new products Eco-friendly manufacturing inputs Vegan Product Line Recycled Materials Renewable Materials RhenoprintTM Multi-zone Complementary to existing Use of recycled pla
Slide 8: Significant Value Creation Potential
SIGNIFICANT VALUE CREATION POTENTIAL Highly Synergistic Combination Delivering Incremental Annual Cost Synergies of $6m $5m $6m $11m Texon Synergies Rhenoflex Synergies (Standalone) (Incremental) Total Cost Synergies Overview of Key Value Drivers Procurement Operational Further Potential Upside SG&A
Slide 9: Attractive Financial Rationale
ATTRACTIVE FINANCIAL RATIONALE Rhenoflex Combination Attractive Outlook FY22-26 Expected Enterprise Value $237m $117m $354m Revenue CAGR LTM June-22 EBITDA ($m) $22m $12m $34m +8% Acquisition Multiple 10.9x 9.3x 10.3x (Pre-Synergies) Medium Term EBITDA Margin (Including Synergies) Run-Rate Cost Syne
Slide 10: Key Transaction Terms
KEY TRANSACTION TERMS Attractive Financial Rationale Overview of Transaction Structure Purchase price of €115m ($117m) EV – Represents 9.3x LTM June-22 EBITDA and 6.2x LTM Consideration to be funded with 10% equity placing at announcement EBITDA on a post-synergy basis High c.7%) Single Dig
Slide 11: Q&A
Q&A Q&A will begin in 5 minutes Participant joining details - Joining by Telephone: United Kingdom 0800 640 6441 United Kingdom (Local) 020 3936 2999 All other locations +44 20 3936 2999 Access code: 035969 Press *1 to ask a question, *2 to withdraw your question, or *0 for operator assistance. COAT
Slide 12: Disclaimer (1/3)
DISCLAIMER (1/3) THIS PRESENTATION, ITS CONTENTS AND ANY INFORMATION PROVIDED AT THIS PRESENTATION ARE STRICTLY CONFIDENTIAL AND ARE FOR INFORMATION PURPOSES ONLY AND MUST NOT BE RELIED UPON FOR ANY PURPOSE. THIS PRESENTATION IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRE
Slide 13: Disclaimer (2/3)
DISCLAIMER (2/3) None of Citi or Peel Hunt or any of their respective directors, officers, employees, agents, affiliates and consultants ("Associates") or advisors have independently verified the information in this document and such information does not constitute a recommendation from either Citi
Slide 14: Disclaimer (3/3)
DISCLAIMER (3/3) This Presentation is not an offer to sell or a solicitation of an offer to buy any securities and is not for publication or distribution in the United States except to QIBs (as defined below). The securities have not been, and will not be, registered under the U.S. Securities Act of