Gpgi, Inc. · NYSE:GPGI
Gpgi — Roman DBDR Tech Acquisition — SPAC Merger (December 2021)
59 slides from Gpgi's SPAC merger presentation, Dec 8, 2021
Slide 1: Investor Presentation December 2021
0 0 INVESTOR PRESENTATION December 2021
Slide 2: Disclaimer
1 1 Disclaimer This presentation (this “Presentation”) was prepared for use by Roman DBDR Tech Acquisition Corp . (“Roman DBDR”) and CompoSecure Holdings, L . L . C . (the “Company,” “ CompoSecure ,” “we” or “our”) in connection with their proposed business combination (the “Proposed Transaction”) .
Slide 3: Presenters
2 2 Presenters Dr. Don Basile, PhD Jon Wilk Timothy Fitzsimmons Adam Lowe, PhD Chairman & Co - CEO, Roman DBDR Chief Executive Officer, CompoSecure Chief Financial Officer, CompoSecure Chief Innovation Officer, CompoSecure 20+ years of technology industry experience across Executive, investor or boa
Slide 4: Transaction Overview
3 3 1 Includes impact of all 5.789mm founder shares vesting at close 2 Based on the midpoint of range of management projections. Please see Financial Overview section 3 Existing CompoSecure shareholders may receive 7.5mm earnout shares. 3.75mm shares are earned if the VWAP is at least $15.00 over an
Slide 5: Key Investment Highlights
4 4 Key Investment Highlights Category Leader of Next - Gen Payment Technology, Security, and Cryptocurrency Solutions “Massive” TAM across markets including payments, cryptocurrency, digital authentication/ Arculus payments, NFTs and gaming, and warranty & insurance Premier payments technology and
Slide 6: CompoSecure is Pursuing Multiple Large Growth Opportunities
5 5 CompoSecure is Pursuing Multiple Large Growth Opportunities Domestic & International Cards NFTs & Gaming Cryptocurrency Solutions/ Arculus Payments Warranty & Insurance Digital Authentication ? Three Factor Authentication Technology
Slide 7: Arculus is Live
6 6 Arculus is Live www.GetArculus.com is accepting payments and cards are shipping to consumers First shipments began on September 30 Wallet app is available for download from the Apple AppStore and the Google Play store Marketing and Business Development spend of $25 million for 2021 underway and
Slide 8: Convergence of Three Massive Market Opportunities
7 7 $0.7tn $5.5tn 2020A 2027E Convergence of Three Massive Market Opportunities 1 Edgar, Dunn & Company. 2019 Metal Cards Market Sizing and Consumer Research Report. “Total Addressable Market” is defined her e a s the estimated subset of payment cards issued globally in 2021 for which there is deman
Slide 9: Massive Global Payment Card Market
8 8 13.7 18.6 2020 2025E Massive Global Payment Card Market • CompoSecure is projected to increase its market share of cards manufactured from 0.38% to 0.48% by 2025 • The overall metal payment card industry’s global shipments are expected to grow 163% between 2020 and 2025 1 Total Number of Payment
Slide 10: Proven Track Record of Customer Acquisition
9 9 Proven Track Record of Customer Acquisition Palladium Sapphire Preferred Sapphire Reserve Platinum Venture Reserve Platinum Logo wins 2020 - 2021 2017 - 2019 2010 - 2016 2003 - 2009 2003 2009 2010 2016 2017 2018 2019 2020 2021
Slide 11: Bespoke Card Programs Have Become Critical to Our Clients
10 10 Bespoke Card Programs Have Become Critical to Our Clients Highly Customized Programs with Best - in - Class Security and Form to Meet Partner Needs CompoSecure Issuer Client Since: 2016 2003 2008 2014 Selected Metal Card Programs: 1 If CompoSecure is unable to provide its products and services
Slide 12: American Express Product Refresh
11 11 American Express Product Refresh In Q4’16, American Express enhanced its US Consumer Platinum value proposition including a new metal form factor Consumer Product Refresh Metal Cards Proactively Requested by Customers 290K Percentage of New Platinum Accounts that are Millennials 47% New Accoun
Slide 13: Substantial Forecasted Growth in Target Digital Asset Classes
12 12 $0.7tn $5.5tn 2020A 2027E Substantial Forecasted Growth in Target Digital Asset Classes Note: Online microtransactions market consists of sales of in - game virtual goods and related services 1 Global Cryptocurrency Market Size By End User, By Type, By Component, By Process, By Geographic Scop
Slide 14: Hacking Threat Continues to Rise
13 13 Hacking Threat Continues to Rise with $8B+ Lost in 2021 YTD 2021 YTD Hacking Losses Up Double 2020 Losses 1 1 SlowMist Hacked $0.0 $0.0 $0.5 $0.1 $0.1 $1.3 $2.1 $5.5 $4.2 $8.1 - 20 40 60 80 100 120 140 160 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 2012 2013 2014 2015 2016 2017 2018 2019 2020 YTD 2021 # of
Slide 15: Industry Trading Usernames and Passwords for Secure Authentication
14 14 Industry Trading Usernames and Passwords for Secure Authentication Legacy Key Pairs Replace Shared Secrets Online Connection “shared secret” sent to the server Password O TP Easily forgotten : 65% of users 1 Too many : 100 on average 2 Slow & unreliable : 13% of 3D secure payments lost due to
Slide 16: Critical Use Cases to Penetrate Digital Authentication Market
15 15 Critical Use Cases to Penetrate Digital Authentication Market Turn Internet Payments into “Card Present” Transactions Reduce Fraud Strong Customer Authentication Improved User Experience & Customer Service Authorize High Dollar Transactions (Wire, Zelle , or ACH) Increased Security Authenticat
Slide 17: CompoSecure at a Glance
16 16 CompoSecure at a Glance Leading Developer of New, Highly Differentiated Payment and Digital Security Products 1 Figures reflect the midpoint of 2022E estimate for net revenue ($336mm to $376mm) and mid point of range for Adj. EBITDA ($10 0mm to $110mm) 2 CAGR calculated using the midpoint of 2
Slide 18: CompoSecure
@GmpeSecure security Pinnovation durability
Slide 19: Building Digital Assets Ecosystem from Foundation in Superior Hardware
18 18 Hardware Infrastructure Apps & Services 3 rd Party Apps & Services Hardware Infrastructure Apps & Services 3 rd Party Apps & Services Ecosystem Ecosystem Cryptocurrency eGaming Warranty & Insurance Digital assets Building Digital Assets Ecosystem from Foundation in Superior Hardware
Slide 20: The Arculus Ecosystem Roadmap
19 19 The Arculus Ecosystem Roadmap Sources: Accenture, Bessemer State of the Cloud 2020, Bond Capital, IDC 1 Estimated global crypto wallet users (all cold and hot) by 2025E 2 Spend on video games; increasingly monetized in - game. Source: NewZoo, 2020 Cryptocurrency Solutions NFTs & Gaming Digital
Slide 21: Arculus Enables Safe Storage for Crypto Assets
20 20 Arculus Enables Safe Storage for Crypto Assets Superior User Experience Seamlessly send, receive, and swap cryptocurrency Easily track and record historical transactions Simply tap - to - transact with the Arculus Key card Convenience of a Hot Wallet with the Security of Cold Storage Secure: A
Slide 22: Arculus Alleviates the Burdens of Other Crypto Storage Solutions
21 21 Arculus Alleviates the Burdens of Other Crypto Storage Solutions Arculus Other Cold Storage Hot Wallet Offline Storage NONE Ease of Use x x Superior Security xx x Longer - Term Storage x x Premium Experience x Arculus is the only Crypto storage product that combines ease of use and superior se
Slide 23: Cold Storage Hardware Wallet Feature Comparison
22 22 Cold Storage Hardware Wallet Feature Comparison Arculus Offers Best - In - Class User Experience Ledger Trezor Model T Form Factor Card Fob with Display Fob with Display Companion App Arculus Wallet Ledger Live Trezor Wallet Key Storage Type Cold Cold Cold Secure Element Certified Secure Eleme
Slide 24: Diversified Revenue Model
23 23 Diversified Revenue Model Multiple User Monetization Opportunities Direct - to - Consumer sales Business - to - Business sales Transaction Fees Hardware Sales Recurring Fees Customer purchases Arculus Key card CompoSecure charges consumer per Arculus Key sold Example Transactions Customer trad
Slide 25: Robust Growth from Substantial Base of Revenue and Profitability
24 24 Robust Growth from Substantial Base of Revenue and Profitability $261 $480 $612 $485 $1,577 2020A 2025E Metal Payment Card Solutions Crypto & Arculus Payments Solutions Digital Assets, eGaming & Insurance $116 $586 2020A 2025E Source: Management estimates Net Revenue by Solution ($mm) Adjusted
Slide 26: CompoSecure
ompdSecure
Slide 27: Projected Net Revenue Evolution
26 26 Projected Net Revenue Evolution 155 243 $261 $267 $316 $363 $418 $480 $93 $261 $612 $33 $168 $485 $155 $243 $261 $267 - $269 $336 - $376 $490 $847 $1,577 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 30% 42% 8% 18% 2% 2025E Payments Hardware Crypto Hardware Subscription Transaction fees Warrant
Slide 28: Strong EBITDA and Free Cash Flow
27 27 $69 $107 $116 $97 - 102 $100 - 110 $160 $274 $586 2018 2019 2020 2021E 2022E 2023E 2024E 2025E Adj. EBITDA Adj. EBITDA Margin 33% 37% 44% 45% 44% 32% Strong EBITDA and Free Cash Flow Periods impacted by: COVID - 19 impact Increased marketing and BD spend related to Arculus launch: $20mm in 202
Slide 29: Financial Information by Segment
28 28 Financial Information by Segment Metal Payment Card Solutions 2021E 2022E 2023E 2024E 2025E Unit Sales (mm) 22 25 29 33 39 % growth 7% 18% 14% 15% 15% Net Revenue ($mm) $268 $316 $363 $418 $480 % growth 3% 15% 15% 15% 15% Operating Expenses 3 (148) (178) (205) (237) (272) Marketing Expenses (0
Slide 30: Historical Levered Free Cash Flow
29 29 Historical Levered Free Cash Flow Source: Company financials 1 These figures reflect the Company’s historical legal structure as a pass - through entity for tax purposes that results in the C ompany historically not paying tax at the entity level. In the Proposed Transaction, the Company inten
Slide 31: CompoSecure
@GmpdSecure
Slide 32: Transaction Overview
31 31 Transaction Overview 1 Assumes no SPAC investors redeem their shares for cash in trust 2 Assumes $45mm in Common Equity PIPE and $130mm of 5 - year Convertible Unsecured Notes proceeds 3 Includes impact of all 5.8mm founder shares vesting at close. Excludes warrants; Excludes 7.5mm earnout sha
Slide 33: Growth and Margins Compare Favorably to Peers
32 32 29% (10%) 52% 29% 13% 18% 43% Source: FactSet as 12/7/21, company guidance Note: EUR & CAD currencies converted to USD at spot rates on 12/7/21 1 CompoSecure’s Revenue CAGR based on mid - point ($268mm) of 2021E net revenue range ($267mm - $269mm) and 2025E projection ($1,577 mm); 2 Adjusted t
Slide 34: Peer Valuation Multiples
33 33 4. 5x 55x 32x 9x 40x 20x 15x Source: FactSet as 12/7/21, company guidance Note: EUR & CAD currencies converted to USD at spot rates on 12/7/21; N/M indicates multiples that are not meaningful because th ey are either based on a negative underlying value or exceed 100x 1 Adjusted to be net reve
Slide 35: Trading Comparables: Crypto and FinTech / Payments
34 34 Revenue growth Revenue CAGR Adj. EBITDA margin EV / Revenue EV / Adj. EBITDA ($bn) Firm value CY21E CY22E CY21E - CY25E CY22E CY22E CY21E CY22E CY22E $1.2 3% 33% 56% 52% 29% 5x 3x 11x Crypto and Crypto-related $820.4 59% 21% N/A 67% 52% 32x 26x 51x 221.5 18% 18% N/A 52% 29% 9x 7x 26x 167.0 56%
Slide 36: Trading Comparables – Metal Card Payment Solutions
35 35 Revenue growth Revenue CAGR Adj. EBITDA margin EV / Revenue EV / Adj. EBITDA ($bn) Firm value CY21E CY22E CY21E - CY25E CY22E CY22E CY21E CY22E CY22E $1.2 2% 18% 16% 50% 43% 5x 4x 9x High-growth Industrial Tech $17.3 35% 34% N/A 31% 19% 9x 7x 35x 13.0 25% 12% N/A 73% 34% 13x 11x 34x 7.7 21% 69
Slide 37: Key Investment Highlights
36 36 Key Investment Highlights Category Leader of Next - Gen Payment Technology, Security, and Cryptocurrency Solutions “Massive” TAM across markets including payments, cryptocurrency, digital authentication/ Arculus payments, NFTs and gaming, and warranty & insurance Premier payments technology an
Slide 38: CompoSecure
@Gmpdecure security Pinnovation durability
Slide 39: CompoSecure's Products are Prominently Featured in Issuer Advertising
38 38 CompoSecure’s Products are Prominently Featured in Issuer Advertising Metal is a Marketing Tool to Stay “Top of Wallet” 1 Edgar, Dunn & Company. 2019 Metal Cards Market Sizing and Consumer Research Report 2 See more in CompoSecure’s video gallery at composecure.com/media/#videoanchor Demonstra
Slide 40: Strong Consumer Demand for Metal Cards
39 39 Strong Consumer Demand for Metal Cards 1 Edgar, Dunn & Company. 2019 Metal Cards Market Sizing and Consumer Research Report Surveys were completed at different times acr oss different markets – UK, USA, Brazil, Japan, Hong Kong, Singapore (May 2018); Australia, Canada, India, Mexico (December
Slide 41: Favorable Shift in Consumer Behavior Achieves Top of Wallet Status
40 40 Favorable Shift in Consumer Behavior Achieves “Top of Wallet” Status > 50% Lift on Chase Spend 1 + €7/month Due to Metal Form Factor ~ $450 - $450k Range of Crypto.com Coin Stakes Qualifying for Lowest and Higher Tier Memberships that Feature Metal Card 2 1 JP Morgan Chase 2/27/18 Investor Day
Slide 42: Why We Continue to Win
41 41 Why We Continue to Win • First metal credit card (2003) • First metal “tap - to - pay” credit card (2016) • Arculus launch in 2021 • Pipeline of new tech including biometric security, dynamic CVV, keychain cards, LED 100+ Card Programs We Enable Clients to Grow Customer Acquisition, Spending,
Slide 43: Building Digital Assets Ecosystem From Foundation in Superior Hardware
42 42 Hardware Infrastructure Apps & Services 3 rd Party Apps & Services Hardware Infrastructure Apps & Services 3 rd Party Apps & Services Ecosystem Ecosystem Cryptocurrency eGaming Warranty & Insurance Digital assets Building Digital Assets Ecosystem From Foundation in Superior Hardware
Slide 44: Roman DBDR Management and Board
43 43 1 Key DCM Investments 2 Prior Board Involvement Tech Industry Veterans with Extensive Operating and Investing Experience Year Partnership 20+ Years of Tech Industry Experience, with Expertise in Data Storage, Security and Blockchain 45+ Successful IPOs/ Sale Processes Multiple Dr. Don Basile,
Slide 45: Large and Growing Addressable Market
44 44 Large and Growing Addressable Market Sources: Accenture, Bessemer State of the Cloud 2020, Bond Capital, IDC 1 Estimated global crypto wallet users (all cold and hot) by 2025E 2 Spend on video games; increasingly monetized in - game. Source: NewZoo, 2020 Global Debt $185tn M1 Money Supply $35t
Slide 46: Cryptocurrency is a Burgeoning Asset Class
45 45 Cryptocurrency is a Burgeoning Asset Class Requiring Bespoke Solutions 65% CAGR of Total BTC and ETH Addresses 5 $162bn Avg. Daily Trading Volume for Top 200 Cryptocurrencies by Market Cap 1 234mm Crypto Wallets by 2025E 3 $5.5tn Expected Market Value of All Cryptocurrencies by 2027E 2 87mm BT
Slide 47: Unlocking Value Through Partnership with Roman DBDR
46 46 Unlocking Value Through Partnership with Roman DBDR Key CompoSecure differentiators x Payments and security x Proprietary, highly scaled manufacturing x Significant base of growing, profitable revenue x IP and patents x Three - factor authentication x Air - gapped hardware wallet x Containeriz
Slide 48: Rapid Acceleration of Digital Asset Adoption
47 47 Rapid Acceleration of Digital Asset Adoption Sources: Investor presentations, management estimates 1 Projected Active Users at year end across Arculus digital assets, eGaming, and cryptocurrency services 2 Source: Blockchain.com 3 Historical data from studio.glassnode.com/metrics; 2021E non -
Slide 49: Highly Seasoned and Experienced Management Team
48 4 8 48 Highly Seasoned and Experienced Management Team Stephen Luft VP, Global Head of Sales 20+ Years Industry Experience Notable Experience Lewis Rubovitz VP, Global Strategy & Business Development 15+ Years Industry Experience Notable Experience Adam Lowe, PhD Chief Innovation Officer 10+ Year
Slide 50: LLR Partners Overview
49 49 LLR Partners Overview Source: LLR Partners website and materials LLR Partners Select Investments ▪ Philadelphia - based middle market financial sponsor that initially invested in CompoSecure in 2015 and will continue to be the company’s largest shareholder post closing ▪ Since founded in 1999,
Slide 51: Select Investors Estimated Returns Summary Case Study
50 50 Select Investors Estimated Returns Summary Case Study: Forming and Scaling Leadership: Led company through Series B raising $66.5 million from leading investors including Dell, NEA and Lightspeed Business Development: Secured three major OEM deals (HP, IBM, Dell) and initial commercial deals w
Slide 52: Convertible Notes Private Placement – Summary Terms
51 51 Convertible Notes Private Placement – Summary Terms Instrument: Exchangeable Senior Unsecured Notes Issuer: CompoSecure Holdings, L.L.C. Amount: $130 million Maturity: 5 years, NC - 3 customary provisional call right at 130% of conversion price (initially $14.95) Ranking: Senior Unsecured Note
Slide 53: Financial Summary
52 52 Financial Summary Source: Company financials Note: Margins are calculated on Net revenues ($mm) 2018A 2019A 2020A Total Gross Revenue $160 $249 $267 % YoY Growth 56% 7% Rebates & Discounts ($4) ($6) ($7) Total Net Revenue $155 $243 $261 COGS ($76) ($115) ($128) Gross Profit $79 $128 $133 % Mar
Slide 54: Adjusted EBITDA Adjustment Definitions
53 53 1 ISO Litigation Costs : Adds back nonrecurring expenses associated with the ISO litigation 2 Non - Cash Stock Option Expense : Non - cash stock option expenses related to the executive incentive plan 3 Nonrecurring Transaction Costs : Transaction related costs associated with prior transactio
Slide 55: Balance Sheets
54 54 Balance Sheets Source: Company financials Note: Audits completed to PCAOB standards. Financial position has been derived from CompoSecure’s consolidated financial statements for the years ended December 31, 2018, 2019 and 2020 respectively. ($mm) 2018A 2019A 2020A Assets Current Assets Cash &
Slide 56: Statements of Operations
55 55 Statements of Operations Source: Company financials Note: Audits completed to PCAOB standards. Financial position has been derived from CompoSecure’s consolidated financial statements for the years ended December 31, 2018, 2019 and 2020 respectively. These figures reflect th e Company’s histor
Slide 57: Statements of Cash Flows
56 56 Statements of Cash Flows Source: Company financials Note: Audits completed to PCAOB standards. Financial position has been derived from CompoSecure’s consolidated financial statements for the years ended December 31, 2018, 2019 and 2020 respectively. ($mm) 2018A 2019A 2020A Cash flows from ope
Slide 58: Risk Factors
57 57 Risk Factors The COVID - 19 pandemic has had a negative impact on our business and, if the pandemic continues or worsens, these impacts could b e amplified and have a material adverse effect on our business, financial condition and results of operations. We may not be able to sustain our reven
Slide 59: Thank You
A = oath, THANK YOU @Gompdecure
Roman DBDR Tech Acquisition — SPAC Merger (December 2021) on 6ix