Maxiparts Limited · ASX:MXI
Maxiparts — Investor Presentation (November 2023)
42 slides from Maxiparts's investor presentation, Nov 14, 2023
Slide 1: Acquisition & Capital Raising Presentation
ABN 58 006 797 173 PO Box 768, Sunshine VIC 3020 P 03 9368 7000 W maxipartslimited.com.au 14 November 2023 ASX Announcement Acquisition & Capital Raising Presentation Attached is MaxiPARTS Limited’s Acquisition & Capital Raising Presentation. Authorised for release by the MaxiPARTS Limited Board of
Slide 2: Acquisition and Capital Raising Presentation
Acquisition and Capital Raising Presentation
Slide 3: Important Information
Important Information Overview This investor presentation (‘Presentation’) has been prepared by MaxiPARTS Limited ACN 006 797 173 (MaxiPARTS or the Company) and is dated 14 November 2023. This Presentation has been prepared in relation to a proposed institutional placement of new MaxiPARTS ordinary
Slide 4: Important Information (cont.)
Important Information (cont.) Future Performance This Presentation contains certain forward looking statements and comments about future events including MaxiPARTS’ expectations about the performance of its businesses and certain strategic transactions. Forward looking statements can generally be id
Slide 5: Table of Contents
Table of Contents Executive Summary 5 About MaxiPARTS 8 Acquisitions Overview 13 IP Strategic Rationale 17 Financial Overview 23 Equity Raising Overview 25 Offer Jurisdictions 29 Key Risks 31 Appendix 36 4
Slide 6: Executive Summary
IMPORTANT INFORMATION EXECUTIVE SUMMARY
Slide 7: Executive Summary
Executive Summary • MaxiPARTS has entered into a binding agreement to acquire 100% of the issued capital of Nineteen Group Pty Ltd and its wholly owned subsidiary, Independant Parts Pty Ltd (together “IP”) for $27.0m1 (“IP Acquisition”) Acquisitions Overview • MaxiPARTS majority owned Förch Australi
Slide 8: Executive Summary (cont.)
Executive Summary (cont.) • EV of $1.9m1, implies a 3.0x EV / FY23 EBITDA (pre-AASB16)2 Förch Brisbane Acquisition • Asset acquisition including inventory, fixed assets, IP and staff Terms • To be jointly funded by MaxiPARTS and minority shareholders of Förch Australia • Expected to be completed by
Slide 9: About MaxiPARTS
IMPORTANT INFORMATION ABOUT MAXIPARTS
Slide 10: Company Snapshot
Company Snapshot MaxiPARTS Overview National Footprint Distributor of leading genuine MaxiPARTS (27 sites) National footprint with 26 brands along with extensive branches and one embedded Head Office – Truganina (VIC) range of aftermarket operation (as of October 2023) commercial vehicle parts Förch
Slide 11: Förch Australia Overview
Förch Australia Overview Background • On 1 June 2023, MaxiPARTS completed the acquisition of 80% of the Product Range equity in the Förch Australia business • Fasteners ‐ The agreements include a put and call option structured to acquire • Hardware the remaining 20% within 2-5 years under an agreed
Slide 12: MaxiPARTS FY23 Performance
MaxiPARTS FY23 Performance Revenue Commentary EBITDA1 & Margin Commentary Lower margin Trailer (in A$ millions) (in A$ millions) Solutions revenue to • Revenue of $201.7m increased +28% continue retreating by 28.1% from pcp (FY22 was a +31% • EBITDA of $18.5m increased by post-disposition 14.8% incr
Slide 13: FY24 Outlook
FY24 Outlook 1Q FY24 Revenue Performance1 • MaxiPARTS full year guidance remains inline with previously communicated MXI sales Sales to Previously owned Trailer business Forch Austalia Sales outlooks (as per FY23 Results Presentation released on 24 August 2023) 13.0% YoY Growth $57.2m • Trading in t
Slide 14: Acquisitions Overview
IMPORTANT INFORMATION ACQUISITIONS OVERVIEW
Slide 15: Independant Parts – Acquisition Overview
Independant Parts – Acquisition Overview Company Overview Competitive Advantages • One of the largest remaining privately owned commercial truck & trailer 1 2 parts distribution companies in Western Australia Highly-scalable embedded In-depth specialist parts operations business model & knowledge &
Slide 16: Independant Parts – Acquisition Terms
Independant Parts – Acquisition Terms Summary Acquisition Terms • Enterprise Value of $27.0m Purchase Price • Purchase price subject to net working capital and net cash/debt adjustments at close • 7.94x FY23 adjusted EBITDA (pre-AASB16)1 • The Acquisition is intended to be funded by a combination of
Slide 17: Förch Brisbane – Acquisition Overview
Förch Brisbane – Acquisition Overview Strategic Rationale Summary Acquisition Terms 1 Consolidates Australian distribution model providing the ability to • Acquisition of 100% of Förch Brisbane by Förch Australia control service to national customers and provides a single strategy for Summary (major
Slide 18: IP Strategic Rationale
IMPORTANT INFORMATION IP STRATEGIC RATIONALE
Slide 19: Strategic Rationale of IP
Strategic Rationale of IP • Acquisition of a leading Western Australian distributor of truck & trailer parts with a recurring, high-value customer base, and an Highly complementary extensive supply network providing increased exposure to the high value commodity logistics sector acquisition aligns w
Slide 20: Strong Alignment with MaxiPARTS' Core M&A Strategy
Strong Alignment with MaxiPARTS’ Core M&A Strategy Criteria Leading distributor of truck & trailer parts in WA with a recurring, high-value customer Operating in the commercial vehicle parts market base Adds significant scale in regional WA, expanding the national network by 3 retail sites Enhances
Slide 21: Strategic Footprint Across Western Australia
Strategic Footprint Across Western Australia Retail store Embedded operations ▪ IP has established an extensive supply network, centrally located to key mining MaxiPARTS location regions (including Pilbara & Goldfields) and stocks a wide range of key products to provide cost-effective solutions to c
Slide 22: Strong Financial Performance Provides a Platform for Growth
Strong Financial Performance Provides a Platform for Growth Commentary Historical Revenue1 Historical EBITDA (pre-AASB16)1,2 • Diversified revenue base across clients, locations and $45.4m 7.7% 7.5% 10.6% commodities EBITDA Margin EBITDA Margin EBITDA Margin $36.5m • Track record of profitability (7
Slide 23: Accretive Acquisitions with Identified Synergies
Accretive Acquisitions with Identified Synergies Cost synergies of +$400k1 Further upside through revenue Expected benefits synergies ✓ Increased scale benefits ✓ Decreased costs ✓ Streamlined operations ✓ Strong revenue growth ✓ Enlarged customer base and further exposure to mining logistics sector
Slide 24: Financial Overview
IMPORTANT FINANCIALINFORMATION OVERVIEW
Slide 25: Pro Forma Balance Sheet
Pro Forma Balance Sheet Impact of Impact of Pro Forma Existing cash and proceeds of equity raise A$M FY23 Funding Acquisitions FY23 1 used to fund Acquisitions and costs of the Assets offer Cash 1 14.0 24.1 (28.9) 9.2 Receivables 31.1 6.4 37.5 High quality inventory of $11.4m acquired 2 Inventory 2
Slide 26: Equity Raising Overview
IMPORTANT EQUITY INFORMATION RAISING OVERVIEW
Slide 27: Equity Raising Summary
Equity Raising Summary • Institutional placement of 7.0m new fully paid ordinary shares (New Shares) at the Offer Price to professional, sophisticated and Offer Size and Structure institutional investors to raise gross proceeds of $17.2m (Placement) • The Placement is not subject to shareholder appr
Slide 28: Sources & Uses and Leverage Ratios
Sources & Uses and Leverage Ratios Source and Use of Funds Debt facility increased by $10.0 million to $30.0 Sources of funds A$m Uses of funds A$m million to partly fund the acquisition and provide further capacity to continue to invest Equity raise $17.2m Acquisition of IP $27.0m <0.8x MaxiPARTS p
Slide 29: Indicative Timetable
Indicative Timetable Event Date Trading Halt and Announcement of the Acquisition and Placement Tuesday, 14 November 2023 Placement Book closes 4.00PM Tuesday, 14 November 2023 Announce completion of Placement and return to trading on ASX Wednesday, 15 November 2023 Settlement of Placement Thursday,
Slide 30: Offer Jurisdictions
IMPORTANT INFORMATION OFFER JURISDICTIONS
Slide 31: Offer Jurisdictions
Offer Jurisdictions WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong Kong pursuant to the Securi
Slide 32: Key Risks
IMPORTANT KEYINFORMATION RISKS
Slide 33: Key Risks – Acquisition Specific
Key Risks – Acquisition Specific The Company has undertaken financial, tax, legal, commercial and other analysis in relation to the Acquisitions in order to determine its attractiveness to the Company and whether to proceed with the Acquisitions. It is possible that despite such analysis and the bes
Slide 34: Key Risks – Business Risks
Key Risks – Business Risks MaxiPARTS is exposed to the risk of disruptive technologies such as electric vehicles (EV), autonomous vehicles and digital disruption, leading to obsolescence of technologies and products (e.g. internal combustion engine (ICE)) which may impact portions of MaxiPARTS' mark
Slide 35: Key Risks – Business Risks
Key Risks – Business Risks MaxiPARTS has a large number of leased premises. The growth prospects of MaxiPARTS are likely to result from increased contri bution from existing stores and MaxiPARTS’ ability to continue to open and operate new stores on a profitable basis (notwithstanding the circumstan
Slide 36: Key Risks – Equity Raising Risks
Key Risks – Equity Raising Risks Prior to launch of the Offer, the Company has entered into an underwriting agreement with the Lead Managers (UWA) pursuant to which the Lead Managers will agree to fully underwrite the Offer. If certain Underwriting risk conditions are not satisfied or certain events
Slide 37: Appendix
IMPORTANT INFORMATION APPENDIX
Slide 38: EBITDA Reconciliation (AASB16 treatment)
EBITDA Reconciliation (AASB16 treatment) A$M FY23 FY22 Change AASB16 Lease Information Depreciation expense of right-of-use assets 4.6 4.0 0.6 Interest expense on lease liabilities 1.3 1.1 0.2 Total Lease Expense 5.9 5.1 0.9 Payments (5.2) (4.7) (0.6) Cash difference 0.7 0.4 0.3 EBITDA 18.5 14.1 4.4
Slide 39: Board of Directors
Board of Directors Mary Verschuer Peter Loimaranta Debra Stirling Gino Butera Frank Micallef Chair, Independent Non- Chief Executive Officer and Independent Non-Executive Independent Non-Executive Independent Non-Executive Executive Director Managing Director Director Director Director • Currently a
Slide 40: Key Management
Key Management Peter Loimaranta Liz Blockley Neil Auld Narelle Banfield Heath Mooney Chief Executive Officer and Chief Financial Officer and GM – Product and GM – People, Safety and GM – Sales and Distribution Managing Director Company Secretary Procurement Culture • Appointed Managing • Appointed t
Slide 41: Underwriting Agreement
Underwriting Agreement MaxiPARTS proposes to enter an Underwriting Agreement (Agreement) with Canaccord Genuity (Australia) Limited ACN 075 071 466 (Canaccord) and Ord Minnett Limited ACN 002 733 048 (Ord Minnett) (together the Lead Managers) under which the Lead Managers have agreed to act as the l
Slide 42: Slide 42