Slide 1: Comprehensive Presentation
Comprehensive Presentation March 16, 2023
Slide 2: Forward-Looking and Cautionary Statements
FORWARD-LOOKING AND CAUTIONARY STATEMENTS This presentation contains statements that constitute “forward-looking information” within the meaning of Canadian securities laws (“forward-looking statements”), which are based upon our current expectations, estimates, projections, assumptions and beliefs.
Slide 3: Presentation of Financial Information
PRESENTATION OF FINANCIAL INFORMATION All financial information regarding Tufropes contained in this presentation has been derived from Tufropes' financial statements which are prepared in accordance with Indian Generally Accepted Accounting Principles ("Indian GAAP"). Aimia prepares its financial s
Slide 4: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Reference to (i) “Adjusted EBITDA” is the unaudited earnings of Tufropes before interest, taxes, depreciation and amortization, (ii) “Adjusted EBITDA margins” is Tufropes’ Adjusted EBITDA divided by its revenue, (iii) “free-cash flow” is Tufropes’ operating cash flow less
Slide 5: Executive Summary
EXECUTIVE SUMMARY The Tufropes transaction represents a unique opportunity for Aimia shareholders to own a global, high-growth, cash flow generating business Tufropes is well-positioned to capture the many benefits of India’s economic trajectory Poised to become the world’s third largest econo
Slide 6: Table of Contents
TABLE OF CONTENTS I. Detailed Company Overview III. II. Transaction Investment Thesis Background
Slide 7: Tufropes is a manufacturer of highly-engineered, mission-critical products
TUFROPES IS A MANUFACTURER OF HIGHLY-ENGINEERED, MISSION- CRITICAL PRODUCTS FOR LARGE, ATTRACTIVE, AND GROWING END MARKETS Huge range of 35,000 highly-engineered …providing mission-critical services… …to attractive end markets products… % of Tufropes % Forecasted Revenue Market CAGR Maritime End Mar
Slide 8: Non-Cyclical & Shock Resistant Historical Financial Performance
NON-CYCLICAL & SHOCK RESISTANT HISTORICAL FINANCIAL PERFORMANCE Tufropes has shown impressive long-term historical financial performance across major global crises – including GFC, COVID and global supply chain crises The business Tufropes Revenue (In Indian Rupees) remained resilient despite the CO
Slide 9: Geographically Diverse Global Stream of Revenues
TUFROPES HAS A GEOGRAPHICALLY DIVERSE GLOBAL STREAM OF REVENUES Within its exports business, Tufropes’ revenues are highly levered to Europe and the Americas % of Revenues Export Country Qty (in MTs) FY20 FY21 FY22 Ropes USA 3,147 4,304 4,056 Norway 3,171 3,124 2,141 Netherland 2,357 2,165 3,025 ~20
Slide 10: Historical Milestones of Tufropes
HISTORICAL MILESTONES OF TUFROPES New product New product New product New product development: development: developments: Tufropes enters New factories set up development: First Dyneema 12 Strand & 24 3 synthetic rope the global fiber at Vadodara and Snap-back aquaculture net strand rope, & 2 net ro
Slide 11: Current & Future Go-To-Market Strategy
TUFROPES’ CURRENT & FUTURE GO-TO-MARKET STRATEGY Tufropes is positioned at the most attractive place along the value chain, but also has an opportunity to direct sell to end users Raw Material Synthetic Rope / Netting Rope / Netting End Users Suppliers Manufacturers Distributors EBITDA Margin Attrac
Slide 12: Highly Diverse Revenue Streams
TUFROPES HAS HIGHLY DIVERSE REVENUE STREAMS Based on FY’22 Revenue Tufropes’ diverse streams of revenue provide both downside protection and a platform for growth across distinct opportunities Sales by Product Category Sales by Geography Range of ~76% ~24% 35,000+ Rope Products Netting Products (& I
Slide 13: Non-Commoditized, High-Performance Products
TUFROPES MANUFACTURES NON-COMMODITIZED, HIGH-PERFORMANCE PRODUCTS FOR END MARKETS WITH MISSION CRITICAL STANDARDS Tufropes’ product portfolio of over 35,000 SKUs services the harshest, mission-critical environments where commoditized alternatives do not suffice Shipping, Offshore & Other (Commercial
Slide 14: Organizational Structure Supplemented by New Senior Management
TUFROPES ORGANIZATIONAL STRUCTURE SUPPLEMENTED BY NEW SENIOR MANAGEMENT All existing Tufropes personnel will be retained & complemented by new senior hires (President, CFO, and COO) and a new international direct sales team Board of Directors President Chief Financial Officer International Direct Sa
Slide 15: Low-Cost Manufacturing Footprint with Massive Installed Capacity
LOW-COST MANUFACTURING FOOTPRINT WITH MASSIVE INSTALLED BASE OF CAPACITY Using existing capacity and no growth capex to fund manufacturing demand, 1 1 Tufropes can grow at 10-12% for the next five years and service another Mumbai Head office Silvassa Rakholi ~$60mm+ of revenue Established: 1992 Esta
Slide 16: Table of Contents
TABLE OF CONTENTS I. Detailed Company Overview III. II. Transaction Investment Thesis Background
Slide 17: Investment Thesis
INVESTMENT THESIS 1 Global Market Leader with Sustainable Competitive Advantages Leading global provider of synthetic ropes to attractive maritime, industrial, and commercial end markets. Top 3 global market share across all ropes with an expanding segment of premium nets to drive a two-pronged orga
Slide 18: Mission Critical Product Portfolio with High-Cost of Failure Maritime Applications
Global Market Leader with 1 MISSION CRITICAL PRODUCT PORTFOLIO Sustainable Competitive Advantages WITH HIGH-COST OF FAILURE MARITIME APPLICATIONS Tufropes' differentiated technical products are used in the most critical maritime applications, where reliability, safety, and performance are paramount
Slide 19: Leading Global Manufacturer of High-Performance Synthetic Fiber Rope
Global Market Leader with 1 TUFROPES IS A LEADING GLOBAL Sustainable Competitive Advantages MANUFACTURER OF HIGH-PERFORMANCE SYNTHETIC FIBER ROPE Tufropes is a true market leader, already a global top 3 player in the high-performance synthetic rope market of US$500mm+ and growing Global Rope Market
Slide 20: Second Largest Manufacturer of Aquaculture Nets Globally
Global Market Leader with 1 TUFROPES IS THE SECOND LARGEST Sustainable Competitive Advantages MANUFACTURER OF AQUACULTURE NETS GLOBALLY Global Aquaculture Nets Market (2022) | $450mm USD Tufropes is the second largest global manufacturer of aquaculture nets despite breaking into the industry only
Slide 21: Competitive Landscape Within Rope Manufacturers
Global Market Leader with 1 COMPETITIVE LANDSCAPE WITHIN ROPE Sustainable Competitive Advantages MANUFACTURERS Tufropes has become a global leader in synthetic rope manufacturing; the business has an opportunity to become the clear global leader and take share from a more specialized, regional-produ
Slide 22: Competitive Landscape Within Netting Manufacturers
Global Market Leader with 1 COMPETITIVE LANDSCAPE WITHIN NETTING Sustainable Competitive Advantages MANUFACTURERS With industry-leading capacity and a strong & balanced product offering, Tufropes offers an extremely compelling opportunity for customers that can be unlocked through a strong commercia
Slide 23: Competitive Advantages, Barriers to Entry, and Switching Costs
Global Market Leader with 1 TUFROPES’ COMPETITIVE ADVANTAGES, Sustainable Competitive Advantages INDUSTRY BARRIERS TO ENTRY, AND COSTS FOR CUSTOMER SWITCHING Sticky, Long-Term Vertically Integrated Technical Know-How and One-Stop-Shop with Relationships Manufacturing Base with New Product Developmen
Slide 24: Highly Attractive, Secular End Market Dynamics
Highly Attractive, Growing End Markets 2 HIGHLY ATTRACTIVE, SECULAR END MARKET Supported by Steel to Fiber Conversion DYNAMICS Seafood Sector Global megatrends to drive sustainable growth within Global megatrends expected to increase protein Salmon has favorable ESG attributes compared to other aqua
Slide 25: Highly Attractive, Secular End Market Dynamics
HIGHLY ATTRACTIVE, SECULAR END MARKET 2 Highly Attractive, Growing End Markets Supported by Steel to Fiber Conversion DYNAMICS Container Shipping As container trade has evolved, larger ships are being used by fewer, healthier, ESG-focused corporate entities; larger vessels are inherently harder and
Slide 26: High-Performance Fiber Ropes Are the Solution of Choice
Highly Attractive, Growing End Markets 2 HIGH-PERFORMANCE FIBER ROPES ARE THE Supported by Steel to Fiber Conversion SOLUTION OF CHOICE FOR DEMANDING MARITIME APPLICATIONS High-Performance fiber ropes have become the rope of choice for demanding maritime applications with benefits of unique technica
Slide 27: HMPE Fibers Provide Technical Advantage
Highly Attractive, Growing End Markets 2 HMPE FIBERS PROVIDE TECHNICAL Supported by Steel to Fiber Conversion ADVANTAGE, ESPECIALLY IN TUFROPES’ CORE MARITIME END MARKETS Compared to alternative materials, synthetic fibers (and in particular, HMPE) have proven to be stronger, more durable, safer, an
Slide 28: Fiber Ropes Address Historical Safety Issues with Mooring
Highly Attractive, Growing End Markets 2 FIBER ROPES ADDRESS HISTORICAL SAFETY Supported by Steel to Fiber Conversion ISSUES THE MARITIME INDUSTRY HAS HAD WITH MOORING Safety concerns are a primary driver for mooring operations converting from steel wire and standard fiber rope to high-performance,
Slide 29: Key Factors Support HMPE Rope as Optimal for Mooring
Highly Attractive, Growing End Markets 2 THE 6 KEY FACTORS SUPPORT HMPE ROPE AS Supported by Steel to Fiber Conversion OPTIMAL FOR MOORING EQUIPMENT SOLUTIONS 1 2 3 Tension Fatigue Abrasion Resistance Creep Life Durability is an essential part of performance All synthetic fiber ropes are subject
Slide 30: Aquaculture Net Systems Are the Most Mission-Critical Element
Highly Attractive, Growing End Markets 2 AQUACULTURE NET SYSTEMS ARE THE MOST Supported by Steel to Fiber Conversion MISSION-CRITICAL ELEMENT TO FISH FARMING Aquaculture net systems represent a major economic investment; due to the criticality of net performance, customers have a strong willingness
Slide 31: Case Study: Large-Scale Aquaculture Net Systems at 40% EBITDA Margins
Highly Attractive, Growing End Markets 2 CASE STUDY: TECHNICAL, LARGE-SCALE AQUACULTURE Supported by Steel to Fiber Conversion NET SYSTEMS PROVIDE TUFROPES HIGH-GROWTH PROJECTS AT 40% EBITDA MARGINS Tufropes’ most complex stream of revenue comes from the production of aquaculture net systems; it is
Slide 32: Fiber Ropes Replacing Steel Wire
Highly Attractive, Growing End Markets 2 SECULAR TREND OF FIBER ROPES REPLACING Supported by Steel to Fiber Conversion STEEL WIRE FOR HIGH-PERFORMANCE AND MISSION CRITICAL APPLICATIONS Synthetic rope increasingly replacing steel wire rope due to its superior Fiber has ideal technical characteristics
Slide 33: Synthetic vs. Steel Product & Application Comparison
Highly Attractive, Growing End Markets 2 SYNTHETIC VS. STEEL PRODUCT & Supported by Steel to Fiber Conversion APPLICATION COMPARISON Synthetic products are primarily used in offshore and maritime applications, but the market is expanding to other technical applications where high-strength and low-we
Slide 34: HMPE Ropes Better Than Wire for Large Vessels: Economic Payback Analysis
Highly Attractive, Growing End Markets 2 HMPE ROPES ARE A BETTER OPTION THAN WIRE Supported by Steel to Fiber Conversion FOR LARGE VESSEL MARITIME OPERATIONS - ECONOMIC PAYBACK ANALYSIS The economic payback analysis indicates a four-year year payback period, or ~$1.4mm lifetime cost savings The es
Slide 35: Regulators Focused on Increased Safety During Mooring
Highly Attractive, Growing End Markets 2 REGULATORS AND INSPECTION AUTHORITIES Supported by Steel to Fiber Conversion ARE FOCUSED ON INCREASED SAFETY DURING MOORING Regulatory bodies increasing the safety and performance standards for mooring vessels will lead to a further HMPE adoption In an effo
Slide 36: Still in the Early Innings of Conversion to Fiber from Steel
Highly Attractive, Growing End Markets 2 WE ARE STILL IN THE EARLY INNINGS OF Supported by Steel to Fiber Conversion CONVERSION TO FIBER FROM STEEL ALTERNATIVES The vast majority of industrial businesses have yet to convert to fiber alternatives, representing a massive growth avenue through direct s
Slide 37: Barriers for Customers Switching to Fiber Rope Are Being Overcome
Highly Attractive, Growing End Markets 2 BARRIERS FOR CUSTOMERS SWITCHING TO Supported by Steel to Fiber Conversion FIBER ROPE ARE GRADUALLY BEING OVERCOME The major conversion hurdle for legacy steel wire users is headline price; Barriers to switching are expected to fall significantly as the costs
Slide 38: Case Study: Largest Crane Manufacturer Explores Switching to Fiber Rope
Highly Attractive, Growing End Markets 2 CASE STUDY: WORLD’S LARGEST CRANE Supported by Steel to Fiber Conversion MANUFACTURER EXPLORES SWITCHING FROM STEEL WIRE TO FIBER ROPE Liebherr, the world’s largest crane manufacturer, has developed a new type of high-strength fiber rope for hoisting operatio
Slide 39: Diverse Set of High-Performance Products
One-Stop-Shop with Attractive Financial Profile DIVERSE SET OF HIGH-PERFORMANCE PRODUCTS 3 and Cash Flow Dynamics POSITIONS TUFROPES AS A “DO-IT-ALL” ROPES & NETS PROVIDER Tufropes’ product portfolio of over 35,000 SKUs services the harshest, mission-critical environments where commoditized alternat
Slide 40: Multiple Strategic Growth Opportunities for Performance Improvement
Multi-Pronged Approach to 4 MULTIPLE STRATEGIC GROWTH Growth Opportunities OPPORTUNITIES FOR PERFORMANCE IMPROVEMENT As Tufropes enters into its next phase of ownership, there are several identified ways to accelerate future growth and margin expansion organically and inorganically 1 2 New product d
Slide 41: Strategic Evolution to Global Market Leader (A)
Strategic Evolution to 5 STRATEGIC EVOLUTION TO GLOBAL MARKET Global Ropes & Nets Provider LEADER FOR HIGH-PERFORMANCE FIBER ROPES & NETS A: From Family-Owned, Single Focus to Regional Expert Over its 30-year history, Tufropes has captured a market-leading position within ropes, both domestically an
Slide 42: Strategic Evolution to Global Market Leader (B)
Strategic Evolution to 5 STRATEGIC EVOLUTION TO GLOBAL MARKET Global Ropes & Nets Provider LEADER FOR HIGH-PERFORMANCE FIBER ROPES & NETS B: From Regional Expert to Global Enterprise and Market Leader …and Aimia & Paladin believe that the business has reached a mature scale and passive operational s
Slide 43: Table of Contents
TABLE OF CONTENTS I. Detailed Company Overview III. II. Transaction Investment Thesis Background
Slide 44: Transaction Background
TRANSACTION BACKGROUND Since its founding in 1992, Tufropes has been owned by two families Tufropes’ family owners have been extremely conservative in pursuing growth initiatives (e.g. avoiding M&A, not Multi-family, passive investing in an international direct sales team). They have, however, i
Slide 45: Transaction Pricing Overview
TRANSACTION PRICING OVERVIEW ($CAD in millions) 15.0x Purchase Price Analysis Effective Purchase Price Multiples Tufropes trades at an effective discount to its closest high-performance peers $252.6 $252.8 while maintaining a substantially higher growth rate over the past two decades 20.4x 10.5x 9.9
Slide 46: Paladin Private Equity LLC Background (1/2)
PALADIN PRIVATE EQUITY LLC BACKGROUND (1/2) Paladin Private Equity LLC (“Paladin”) is a global private equity firm based in the US (Los Angeles & New York) and Germany (Hamburg) with a focus on investing in and building global market leaders within the industrial technology sector (website) Pala
Slide 47: Paladin Private Equity LLC Background (2/2)
PALADIN PRIVATE EQUITY LLC BACKGROUND (2/2) On January 26th, 2023, Aimia and Paladin entered into a binding Memorandum of Understanding that provides for the following key terms: Paladin will be entitled to a customary success fee upon a successful closing of the Tufropes transaction. Paladin will
Slide 48: Tufropes Senior Management Team
TUFROPES SENIOR MANAGEMENT TEAM Jack Wang President Mr. Wang is a Senior Executive with over 20 years of leadership experience in sales & marketing, business strategy, and corporate transformations. Jack has held various leadership roles across Asia, Europe and Americas. Most recently, he was the
Slide 49: Independent Non-Executive Directors to Join Tufropes Board
WORLD-CLASS INDEPENDENT NON-EXECUTIVE DIRECTORS TO JOIN TUFROPES BOARD Paladin & Aimia have identified tenured non-executive directors with deep industry knowledge to support the business plan, identify future M&A prospects, and offer key insights into Tufropes’ core and prospective end markets Mr
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Slide 51: Investor Relations Contact
INVESTOR RELATIONS CONTACT Albert Matousek, MBA, CFA Head, Investor Relations & Communications Email: albert.matousek@aimia.com www.aimia.com