Hf Foods Group Inc. · NASDAQ:HFFG
Hf Foods — Atlantic Acquisition — SPAC Merger (April 2018)
28 slides from Hf Foods's SPAC merger presentation, Apr 12, 2018
Slide 1: Acquisition of HF Group Holding Corporation
1 Acquisition of HF Group Holding Corporation Investor Presentation April 2018 ATLANTIC ACQUISITION CORP.
Slide 2: Disclaimer
DISCLAIMER HF Group Holding Corporation (“HF”), Atlantic Acquisition Corp. (“Atlantic”), and their respective directors, executive offic ers and employees and other persons may be deemed to be participants in the solicitation of proxies from the holders of Atlantic comm on stock in respect of the pr
Slide 3: Disclaimer (Continued)
DISCLAIMER (CONTINUED) This presentation contains certain “forward - looking statements” within the meaning of the Securities Act of 1933 and the Securit ies Exchange Act of 1934, both as amended by the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, inclu
Slide 4: Company Overview
COMPANY OVERVIEW Company Overview History ▪ Proposition : Leading foodservice distributor for Asian/Chinese restaurants, primarily Chinese takeout restaurants mainly serving non - Chinese Americans . ▪ Market : Growing consumption trend for food - away from home, from 41 . 2 % in 2014 . to 43 . 8 %
Slide 5: Investment Highlights
INVESTMENT HIGHLIGHTS 1 Food distribution Industry serving Chinese Restaurants is highly fragmented with unsophisticated players Growing market with the increasing trend to consume food away from home and increasing consumption of Chinese cuisines Niche market with natural culture barriers for entry
Slide 6: Transaction Summary
6 TRANSACTION SUMMARY
Slide 7: Transaction Overview
TRANSACTION OVERVIEW Transaction ▪ HF Group Merger Sub Inc., a Delaware corporation and wholly - owned subsidiary of Atlantic Acquisition Corp. (“ATAC”), will merge with and into HF Group Holding Corporation, a North Carolina corporation (“HF Group”), resulting in HF Group becoming a wholly owned su
Slide 8: Capitalization and Ownership (Pro Forma)
CAPITALIZATION AND OWNERSHIP (PRO FORMA) 8
Slide 9: Management and Board After Merger
MANAGEMENT AND BOARD AFTER MERGER Management Directors * Chan Sin Wong is the wife of Zhou Min Ni. • Zhou Min Ni – CEO, Chairman of Board • Founded HF Group in 1997 • Over 20 years of experience in food distribution industry • Experienced in strategies development, financing, acquisitions, business
Slide 10: Target Market Analysis
10 TARGET MARKET ANALYSIS
Slide 11: Growing Potential from Ultimate Consumers
GROWING POTENTIAL FROM ULTIMATE CONSUMERS Market Features Food Consumption Trend 1. Source: National Restaurant Association 58.8% 57.2% 56.2% 41.2% 42.8% 43.8% 38.0% 42.0% 46.0% 50.0% 54.0% 58.0% 62.0% 2014 2015 2016 Food-at-Home (%) Food-away-from-home (%) U.S. population has a growing preference f
Slide 12: Culture Is a Natural Entry Barrier
CULTURE IS A NATURAL ENTRY BARRIER Currently, HF Group believes over 80 % of the Chinese takeout restaurants it serves are operated and owned by individual families with 2 or 3 workers, from Fuzhou, the province capital of Fujian, and continue to use Mandarin or Fuzhou dialect as their daily languag
Slide 13: Current Market Landscape
CURRENT MARKET LANDSCAPE 1. Source: National Restaurant Association ▪ Growing preference in U.S. for consuming food away from home (from 41.2% in 2014 to 43.8% in 2016) (1) ▪ The popularity of Chinese cuisines among Americans continue to increase with the growing influence of China’s economy MARKET
Slide 14: Business and Operations
14 BUSINESS AND OPERATIONS
Slide 15: Business Model
BUSINESS MODEL 1. HF Group outsources its sales and customer service to a call center located in China. Outsourced Call Center (1) Information System Private Network Distribution Centers Logistics Network Headquarter Sales Management Centralized Inventory Procurement Deliver Variety of Products and
Slide 16: Comparable Companies
COMPARABLE COMPANIES Large Distributors In Mainstream Market Niche Market • mainstream restaurants, hotels, hospitals, Schools • Chinese Restaurants with demand for specialty products A nature culture barrier to break through • large, well developed, intensive competition and sophisticated • wholesa
Slide 17: Strengths and Market Position
STRENGTHS AND MARKET POSITION • Proprietary electronic information system for customer relationship and inventory management • Private network for instant communication • Over 1,000 products • Specialty products for Chinese • Strong management with over experience of 20 years • Proven growth from ze
Slide 18: Growth Strategy
GROWTH STRATEGY —t.
Slide 19: Growth Strategy
GROWTH STRATEGY Expand distribution network through acquisitions Explore semi - prepared products and value added services Streamline infrastructure and improve productivity Enhance technology platform Integrate sales management Long Term Vision Become a nationwide leading foodservice company servin
Slide 20: Expansion Plan
EXPANSION PLAN 1. Source: The US Census Bureau, 5 - year estimate, 2011 - 2015 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 DC HI AK < 50,000 50,000 to 100,000 100,000 to 200,000 200,000+ Total Chinese Am
Slide 21: Appendix
21 APPENDIX
Slide 22: Valuation Comparison
VALUATION COMPARISON 1. Source: 4 - traders.com - Thomas Routers, data as of March 29, 2018 Enterprise Market Cap/Revenue EV/EBITDA P/E Company Name Exchange Ticker Value Market Cap 2016A 2017A 2018E 2016A 2017A 2018E 2016A 2017A 2018E (USD in millions, except multiple data) Food distributors in the
Slide 23: Key Financial Information
KEY FINANCIAL INFORMATION 1. HF Group’s management defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation and amortizatio n e xpense, and non - recurring expenses. All of the omitted items are either (i) non - cash items or (ii) items that HF Group does not consider
Slide 24: Statement of Operation
STATEMENT OF OPERATION For the Years Ended December 31, 2017 2016 Net revenue - third parties $ 277,100,116 $ 260,923,967 Net revenue - related parties 18,449,864 18,576,268 TOTAL NET REVENUE 295,549,980 279,500,235 Cost of revenue - third parties 234,421,287 225,788,934 Cost of revenue - related pa
Slide 25: Balance Sheet
BALANCE SHEET 25 As of December 31, 2017 2016 ASSETS CURRENT ASSETS: Cash $ 6,086,044 $ 5,956,145 Accounts receivable, net 14,700,854 14,119,696 Accounts receivable - related parties, net 1,586,420 2,851,441 Inventories, net 22,669,225 23,519,598 Advances to suppliers, net 1,042,554 1,127,276 Advanc
Slide 26: Balance Sheet (Continued)
BALANCE SHEET (CONTINUED) CURRENT LIABILITIES: Lines of credit $ 11,894,146 $ 13,694,146 Accounts payable 17,275,485 17,057,903 Accounts payable - related parties 4,075,927 4,041,928 Advance from customers 49,677 58,077 Advance from customers - related parties 1,350,296 975,766 Current portion of lo
Slide 27: Balance Sheet (Continued)
BALANCE SHEET (CONTINUED) 27 As of December 31, 2017 2016 SHAREHOLDERS' EQUITY: Common stock, no par value, 100,000,000 voting common shares and 100,000,000 non - voting common shares authorized; 100,000 voting shares issued and outstanding as of December 31, 2017 and 2016, respectively; no non - vo
Slide 28: Thank You
28 Thank You