Tecnoglass Inc. · NYSE:TGLS
Tecnoglass — Andina Acquisition — SPAC Merger (November 2013)
32 slides from Tecnoglass's SPAC merger presentation, Nov 4, 2013
Slide 1: Proposed Merger with Andina Acquisition Corporation
A Leading Manufacturer of Architectural Glass & Windows Proposed Merger with Andina Acquisition Corporation (NASDAQ:ANDA/ANDAU/ANDAW) November 2013
Slide 2: Andina presentation and proxy solicitation notice
2 Andina Acquisition Corporation (“ Andina ”) is holding presentations for certain of its shareholders, as well as other persons who might be interested in purchasing Andina’s securities, regarding its business combination with Tecnoglass S . A . (“ Tecnoglass ”) and C . I . Energia Solar S . A . E
Slide 3: Forward Looking Statements
3 FORWARD LOOKING STATEMENTS This presentation may include “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 . Forward - looking statements may be identified by the use of words such as “anticipate”,
Slide 4: Financial Presentation
4 FINANCIAL PRESENTATION Certain of the financial information contained herein is unaudited and does not conform to SEC Regulation S - X . Furthermore, it includes EBITDA (earnings before interest, taxes depreciation and amortization) which is a non - GAAP financial measure as defined by Regulation
Slide 5: The Opportunity
• Tecnoglass S.A. and C.I. Energia Solar E.S Windows to go public via transaction with Andina Acquisition Corporation • Current owners of Tecnoglass will retain majority ownership and operational control • Proceeds devoted exclusively to funding growth; no selling shareholders • Combined entity: Tec
Slide 6: The Transaction: Summary of Merger Terms
THE TRANSACTION Summary of Merger Terms • Business combination valued at approximately $278 mm or approximately $313 mm on a pro forma fully diluted (treasury method) basis (1 ) – 10.1x LTM 6/30/2013 adjusted EBITDA – 8.9x 2013E adjusted EBITDA – Significant discount to publicly traded peers (2) • T
Slide 7: Pro Forma EBITDA Target and Enterprise Value
LTM FY FY FY FY 6/30/2013A 2013E 2014T 2015T 2016T Pro Forma EBITDA Target 30.8$ 35.0$ 36.0$ 40.0$ 45.0$ Add'l Contingent Consideration Shares - - 0.5 1.0 1.5 Assumed Price Per Share 10.18$ 10.18$ 10.18$ 10.18$ 10.18$ Contingent Consideration -$ -$ 5.1$ 10.2$ 15.3$ Diluted Shares (Treasury) (1)(3) 2
Slide 8: Global Customer Base; Hi-Spec Products for Premier Properties
8 INVESTMENT HIGHLIGHTS Global Customer Base; Hi - Spec Products for Premier Properties Park Square at Doral (Miami, FL) Trump Plaza (Panama) South Dade Miami Cultural Arts Center (Miami, FL) The W Hotel (Ft. Lauderdale, FL) Miami Courthouse (Miami, FL) 4 Waterway Square (The Woodlands, TX) Aeropuer
Slide 9: High Barriers to Entry: Vertically Integrated Manufacturing Facility
INVESTMENT HIGHLIGHTS High Barriers to Entry: Vertically Integrated State - of - the - Art Manufacturing Facility 9 1.2 mm square foot, state - of - the - art manufacturing complex in Barranquilla, Colombia provides distinct and formidable competitive advantage Glass production; features include: –
Slide 10: Strong Revenue and Adjusted EBITDA Growth since 2011
INVESTMENT HIGHLIGHTS Strong Revenue and Adjusted EBITDA Growth since 2011 10 $63 $82 $92 $111 $48 $76 $95 $108 $110 $159 $187 $219 2011A 2012A LTM 6/30/13 2013E Consolidated Revenue (USD mm) Tecnoglass Energia Solar $7 $13 $14 $21 $1 $9 $17 $14 $8 $22 $31 $35 2011A 2012A LTM 6/30/13 2013E Consolida
Slide 11: Near Term Thesis #1: U.S. Market Upturn
11 NEAR TERM THESIS #1: U.S. Market Upturn • Sales in architectural glass segment up 18% in 1 st 6 months 2014 (Aug 31) • “Top - and bottom - line increases resulted from improved mix, pricing and productivity” • “We continue to expect strong top - and bottom - line growth in fiscal 2014…we have rai
Slide 12: Near Term Thesis #2: U.S. Market Rebounding, Southeast / Florida
NEAR TERM THESIS #2: U.S. Market Rebounding, Especially Southeast / Florida ...aided by niche Southeastern U.S. / Florida impact - resistant window and door market 0 50 100 150 200 250 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E Florida Total Housing Starts (000s) (2) Florida Impact R
Slide 13: Near Term Thesis #3: Deal Accelerates TGS' Penetration of U.S.
NEAR TERM THESIS #3: Deal Accelerates TGS’ Penetration of U.S. • Much of TGS’ U.S. business requires bonding • Currently constrained – approximately $60mm of bonding capacity • U.S. sales currently about 30% of total, i.e. approximately $54mm LTM • Equity plus U.S. listing could nearly triple TGS’ b
Slide 14: Near Term Thesis #4: Favorable Cost Structure
NEAR TERM THESIS #4: TGS Has a Favorable Cost Structure • Barranquilla manufacturing highly advantaged – Captive aluminum extrusions production – high level of vertical integration including electricity generation – Colombian labor cost vs. U.S. – 4 - day transportation to Southeast U.S. markets Bec
Slide 15: Colombia Attractiveness
15 Colombia Attractiveness 0 20 40 60 80 100 120 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 Colombia COL United States USA DEPENDENCY RATIO SOURCE: WORLD BANK
Slide 16: Attractive Valuation & Growth Profile
Attractive Valuation & Growth Profile 16 • Over the last 12 months, the share - price performance of Tecnoglass’s public comparables has far outperformed the growth of S&P, Nasdaq and Dow Jones Indexes • Transaction values Tecnoglass at a compelling discount to closest public comparables * Lighter c
Slide 17: Appendix Slides
APPENDIX SLIDES S| cienenca sour [> EswinDows = 17
Slide 18: Investment Highlights
INVESTMENT HIGHLIGHTS Industry Leader High Quality, Innovative Products Global Customer Base; Hi - Spec Products for Premier Properties Record of Success; Robust Growth Projected High Barriers to Entry Attractive Market Dynamics Strong & Experienced Management Team Comparison to Public Comparables P
Slide 19: Industry Leader
19 Industry Leader • Tecnoglass S.A. – founded 1994 – #1 glass transformation company in Colombia with 40% market share – Glass Magazine has ranked Tecnoglass as the second largest glass fabricator serving the U.S. market in 2012 (1) – Aluminum plant established 2007 ( Alutions by Tecnoglass ) • C.I
Slide 20: High Quality, Innovative Products: Glass Products
High Quality, Innovative Products 20 Glass Products Description Laminated / Thermo - Laminated Produced by bonding two glass sheets with an intermediate film between. Safety product – fractures into small pieces if it breaks. Thermo - Acoustic Manufactured with two or more glass sheets separated by
Slide 21: High Quality, Innovative Products: Finished Products
High Quality, Innovative Products 21 Finished Products Windows Floating facades Commercial display windows Hurricane - proof windows Automatic doors Commercial display windows Bathroom dividers Aluminum Products Bars Plates Profiles Rods Tubes
Slide 22: Global Customer Base; Hi-Spec Products for Premier Properties
Global Customer Base; Hi - Spec Products for Premier Properties • 300+ customers in North, Central and South America • No customer accounts for greater than 10% of revenues • 80 - 85% of glass and aluminum sales to architectural market; 15 - 20% to industrial • Sell architectural products primarily
Slide 23: Record of Success; Strategy for Continued Growth
Record of Success; Robust Growth Projected Strategy for Continued Growth • Post - transaction balance sheet significantly expands bonding capacity by at least $100mm in the US ( currently $60 mm), allowing participation in larger projects • Increase market share in U.S. and South America • Penetrate
Slide 24: High Barriers to Entry
24 High Barriers to Entry • Vertical integration • Strict regulation and product standardization requirements, notably in hurricane - prone markets in the U.S., Latin America, and Caribbean • Demand for quality: safety, comfort, environmental control • Only PPG certified glass fabricator in South Am
Slide 25: High Barriers to Entry: Strategic Location
• $29 mm in capital investments (2012) • Best practices in sustainability and environmental responsibility – Recycle ~ 30% of manufacturing - related residues – Self - supplied power generation • Location favors: – Exports to the Americas, the Caribbean, and the Pacific – Imports of raw materials BE
Slide 26: Attractive Market Dynamics
Attractive Market Dynamics • Global construction industry expected to grow from $7.2 trillion currently to over $10 trillion by 2020 (13% of global GDP to 15%) (1) • Latin America: $550 billion – Growing annually at 6% with good long - term prospects (2) • U.S.: $915 billion (3) – $340 billion resid
Slide 27: Attractive Market Dynamics: U.S. Window Demand
Attractive Market Dynamics U.S. demand for windows is expected to grow significantly over the next several years... 66.7 59.1 48.4 38.9 41.6 37.9 40.5 45.8 54.2 58.9 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E U.S. Window Demand by Shi
Slide 28: Strong & Experienced Management Team
28 Strong & Experienced Management Team Name Position Age Biography Notes José M. Daes Chief Executive Officer and Director 53 • Founder and CEO of ES since 1990 • Over 30 years experience starting and operating various businesses in Colombia and the U.S Christian T. Daes Chief Operating Officer and
Slide 29: Business Comparison
Business Comparison Competitor LTM Revenue HQ Commercial Resi - dential Project Size Glass Alum Hurricane Proof Geographic Reach Customers LTM EBITDA Margin Apogee (APOG) $728mm Minnesota, US x - Mid / Large x - x U.S. & Brazil Contractors & Distributors 8.2% PGT (PGTI) $222mm Florida, US - x Small
Slide 30: Comparison to Public Comparables: Revenue Growth
Comparison to Public Comparables Revenue Growth ( USD mms ) 30 Sources: Company Filings; consensus estimates from CapitalIQ Note: APOG data for calendar year (fiscal year ended February of following year) and LTM as of 8/31/13 ; PGTI LTM as of 9/30/13; TG LTM as of 6/30/13 2011 - 2013E CAGR = 5.9% 2
Slide 31: Comparison to Public Comparables: Adj. EBITDA Growth
Comparison to Public Comparables Adj. EBITDA Growth ( USD mms ) 31 $31.1 $53.9 $59.6 $63.7 2011 2012 LTM 2013E $12.7 $24.7 $35.2 $37.1 2011 2012 LTM 2013E $7.9 $22.3 $30.8 $35.0 2011 2012 LTM 2013E 2011 - 2013E CAGR = 43.1% 2011 - 2013E CAGR = 70.8% 2011 - 2013E CAGR = 110.3% Note: APOG data for cal
Slide 32: Prior SPAC Merger Success Stories
32 Prior SPAC Merger Success Stories Spotlight on two notable recent transactions: Tile Shop Holdings / JWC Acquisition Corp. – Specialty retailer of tiles and related products – Strong historical and projected growth – Vertically integrated supply chain – $456 million enterprise value; transaction