NYM — SPAC Merger (August 2016)
30 slides from NYM's SPAC merger presentation, Aug 8, 2016
Slide 1: E-Compass Acquisition Corp. Acquisition of NYM Holding, Inc.
E - COMPASS ACQUISITION CORP. Acquisition of NYM Holding, Inc. Investor Presentation August 2016
Slide 2: Disclaimer
DISCLAIMER In connection with the proposed acquisition, iFresh Inc . , a wholly owned subsidiary of E - compass Acquisition Corp . (“ECAC”), will prepare a Registration Statement containing a proxy statement/prospectus to be filed with the U . S . Securities and Exchange Commission . When completed,
Slide 3: Investment Highlights
NYM Holding, Inc . (NYM) is an established and leading grocery chain on the US East Coast, focused mainly on serving Chinese Americans and the Asian population generally . The market is currently highly fragmented, without any national leader across the country . The growth rate of Chinese - America
Slide 4: Transaction Summary
TRANSACTION SUMMARY 4
Slide 5: Transaction Summary
▪ E - Compass Acquisition Corp . (ECAC), a publicly - traded Special Purpose Acquisition Company (SPAC) will be merged with and into iFresh Inc . (iFresh), a Delaware corporation and wholly owned subsidiary of ECAC to redomesticate into Delaware from the Cayman Islands . ▪ iFresh Merger Sub Inc . (M
Slide 6: Capitalization and Ownership (Pro Forma)
CAPITALIZATION AND OWNERSHIP(Pro Forma) 6 ($ in millions except share and per share data) Purchase Consideration Pro Forma Capitalization (1) Cash $ 5.0 12,000,000 Common Stocks to be Issued (3) 120.0 Cash (2) $ 23.6 Total Consideration $ 125.0 Total Liabilities (2) $ 47.2 Net Assets (2) $ 4.5 Impli
Slide 7: Management
Management ▪ Dr . Henry Chang - Yu Lee – Independent Director • One of the world’s foremost forensic scientists • Founder of Henry C . Lee Institute of Forensic Science, University of New Haven • Chief Emeritus for Scientific Services, State of Connecticut • Visiting Professor at East China Universi
Slide 8: Company Overview
COMPANY OVERVIEW
Slide 9: Company Overview
▪ Proposition : Established Asian/Chinese grocery supermarket chain in NE USA ▪ Market : Chinese - American population growth of 14 . 3 % between 2010 and 2014 ; Asian - American immigrants bring cultural traditions with them ▪ Founded : 1995 ▪ Current Structure : 8 stores and 2 wholesale facilities
Slide 10: Entry Barrier: A Quick View
ENTRY BARRIER: A QUICK VIEW 10 Bitter Melon Chinese Yam Vine Spinach • Unique fish species not found in mainstream stores • Different recipes require unique seasonings and sauces • Prepared both in parts and in whole for different purposes • Sell both in parts and in whole Highlights • Unique vegeta
Slide 11: Highlights
HIGHLIGHTS 11 On - line grocery shopping & delivery initiative to cover Asian/Chinese population living in suburban areas Online - Grocery Pioneer - Proprietary cold chain system developed within the last 20 years - Hibernation technology ensures seafood delivered alive over long distances with surv
Slide 12: Target Market Analysis
TARGET MARKET ANALYSIS
Slide 13: Target Market Analysis
309.3 4.1 17.2 - 5.0 10.0 15.0 20.0 25.0 millions 318.9 4.7 19.7 Population and Growth Median Household Income and Growth TARGET MARKET ANALYSIS 13 Over the last five years, the population of Chinese and Asian American ethnic groups has outgrown the overall US population, representing a market with
Slide 14: Chinese Population in the US
CHINESE POPULATION IN THE US 14 < 1.00% 1.00% - 5.00% 5.00% + WA OR NV CA UT ID MT WY SD ND NE CO AZ NM TX OK KS MN IA MO AR LA MS AL GA FL SC NC TN KY IL WI MI IN OH PA NY VT CT RI NH ME NJ MA WV VA MD DE DC HI AK < 50,000 50,000 to 100,000 100,000 to 200,000 200,000+ GA FL SC NC PA NY VT CT RI NH
Slide 15: Culture Is a Natural Entry Barrier
Established Brand Premier Quality Culture CULTURE IS A NATURAL ENTRY BARRIER 15 Unique Advantage to Fill the Market Niche Our cultural background gives us an in - depth understanding of unique Chinese and Asian consumption habits, which leads us to go beyond micro - competitive features, such as mer
Slide 16: Current Market Landscape
▪ From 2010 to 2014, the Chinese - American population has outgrown (at ~14.3%) the overall US population (at ~3.1%) and the Hispanic - American population (at ~8.9%) (1) ▪ Avg. household income for Chinese - American ($70.2K) also grew by ~7% during this period and was significantly higher than the
Slide 17: Business and Operations Overview
BUSINESS AND OPERATIONS OVERVIEW
Slide 18: Our Presence Along the Value Chain
Our Presence Along the Value Chain – Both Forward and Backward Integration BUSINESS MODEL 18 Upstream Downstream NYM: A Market Leader that not only expands horizontally, but is also vertically integrated FARM VENDORS - Focus on most popular fruit & vegetables - Long - standing relationship - Good co
Slide 19: Established Cold Chain & Logistics
Leading Brand on East Coast Over 20 years of Experience Established Cold Chain & Logistics ▪ History • Proprietary cold - chain logistics system built 20 years ago ▪ Key Attributes • Frozen Goods - Unique packing and temperature control enables NYM to deliver frozen goods to more than 20 states on t
Slide 20: Historical Growth Strategy
Acquisitions : • Selective Acquisitions : o Each acquisition was made as part of a consistent long - term strategic expansion plan • Steady Acquisition Progress : o Acquisition funds derived from retained earnings of current operations • Effective Management and Infrastructure : o Ensure management
Slide 21: Case Study: Organic Growth
▪ Self - owned brands ▪ Farm Vendors Reliable supply from organic farms ensuring stable supplies of the most popular vegetables, fruits and seafood . Case 1: Vertical Integration Case 3: Progress of Online Model Case 2: New Stores CASE STUDY: ORGANIC GROWTH 21 ▪ Officially launched in January 2016 ▪
Slide 22: Case Study – Successful Acquisitions
Case 1: Turn loser to winner – 8th Ave, acquired in 2011 CASE STUDY – SUCCESSFUL ACQUISITIONS Case 2: Proven Operation Expertise – Ming, acquired in 2009 22 Highlights and 1 Year Post Acquisition Performance ▪ Acquisition & Additional Investment $ 1 . 3 M ▪ One year Sales Growth after acquisition 63
Slide 23: Future Growth Plan
FUTURE GROWTH PLAN
Slide 24: Growth Prospect
GROWTH PROSPECT 24 < 50,000 50,000 to 100,000 100,000 to 200,000 200,000 + Total Chinese Population Current - 10 3/31/17E - 4 US I 95 Highway 3/31/18E - 6 3/31/19E - 20 FL CT NJ MA MD TX IL VA NC SC GA NY MA FL Shrimp, Fish Fruits, Vegetables FL MA Lobster, Vegetables, Groceries Make most efficient
Slide 25: Future Growth Strategy
Strategic Growth Trajectory New Store Economics Online Business FUTURE GROWTH STRATEGY 25 Metrics Estimate Store Size AVG 10,000+ sq. ft. Average Investment $2.0 - 2.5 Million Conversion Period 1 - 1.5 Years 1 st Year Sales/Adjusted EBITDA $9 Million/$0.3 Million 2 nd Year Sales/Adjusted EBITDA $16
Slide 26: Appendix
APPENDIX
Slide 27: Valuation Comparison
VALUATION COMPARISON Equity Enterprise EV/Revenue EV/EBITDA P/Diluted EPS Company Name Exchang e Ticker Value Value CY16 CY17 CY 18 CY16 CY17 CY 18 CY16 CY17 CY 18 (USD in millions, except per share data) High - growth Supermarket Yonghui Superstores Co., Ltd. SHSE 601933 5297.1 4,501.2 0.6x 0.5x 0.
Slide 28: Adjusted EBITDA & Statement of Operation
ADJUSTED EBITDA (1) & STATEMENT OF OPERATION 24 GAAP Net Income and Adjusted EBITDA (1) Reconciliation Year Ended March 31, 2016 2015 Net income $ 3,641,009 $ 774,729 Interests expenses 215,494 227,889 Income tax provision 3,016,874 974,222 Depreciation 1,397,031 1,285,506 Amortization 133,334 133,3
Slide 29: Balance Sheet
BALANCE SHEET 29 Year Ended March 31, 2016 2015 ASSETS Current assets: Cash and cash equivalents $ 551,782 $ 494,738 Accounts receivable, net 1,814,533 2,073,380 Inventories, net 8,200,557 9,716,899 Prepaid expenses and other current assets 473,608 526,505 Total current assets 11,040,480 12,811,522
Slide 30: E-Compass Acquisition Corp. Acquisition of NYM Holding, Inc.
30 E - COMPASS ACQUISITION CORP. August 2016 Acquisition of NYM Holding, Inc.