Churchill Capital Corp VII — SPAC Merger (May 2024)
60 slides from Churchill Capital Corp VII's SPAC merger presentation, May 23, 2024
Slide 1: May 2024 Investor Presentation
May 2024 Investor Presentation
Slide 2: Important information and disclaimer
2 This presentation is provided for informational purposes only and has been prepared to assist interested parties in making their own evaluation with respect to a proposed business combination (together with the related transactions, the “proposed transaction”) between CorpAcq Holdings Limited (“Co
Slide 3: Forward-looking statements and financial information
3 CorpAcq, CorpAcq Group Plc and Churchill anticipate that subsequent events and developments will cause CorpAcq’s, CorpAcq Group Plc’s and Churchill’s assessments to change. However, while CorpAcq, CorpAcq Group Plc and Churchill may elect to update these forward looking statements at some point in
Slide 4: Additional information and where to find it
4 Before making any voting or other investment decisions, Churchill’s stockholders and warrantholders and other interested persons are advised to read the Registration Statement and any amendments thereto, including the post-effective amendment thereto and the proxy statement/prospectus, in connecti
Slide 5: Simon Orange, David Martin, Michael Klein
5 Simon Orange David Martin Michael Klein CorpAcq Churchill • Established CorpAcq in 2006 • Also a Founder, Investor, and Director of BOL Foods, a company supplying food products to major retailers • Joined CorpAcq as the Finance Director in 2007 and was appointed as Chief Executive Officer in 2011
Slide 6: Introduction
CHURCHILL CAPHAL iT, | Cofp Of Introduction
Slide 7: CorpAcq: A Diversified Compounder Delivering Strong, Profitable Growth
7 CorpAcq: A Diversified Compounder Delivering Strong, Profitable Growth 1 Founder-led, scaled compounder targeting profitable UK SMEs(1) Diversified and growing portfolio of 43 established businesses(2) Cash generative with ~£125mm / $161mm of Adj. EBITDA(3) in 2023E Coveted “Preferred buyer” statu
Slide 8: Churchill Capital: A Leader in Listed Equity Growth Vehicles
8 Aligned interests and complementary skills to CorpAcq Strong and experienced leadership team Extensive connections globally Infrastructure and sourcing platform to accelerate growth and enhance value Strong shareholder alignment Churchill Capital: A Leader in Listed Equity Growth Vehicles 2 Source
Slide 9: Combined: A Compelling Opportunity to Own a Differentiated Growth Story
9 Combined: A Compelling Opportunity to Own a Differentiated Growth Story 3 Optimized capital structure through leverage reduction and additional cash to balance sheet Significant firepower to facilitate increased capital deployment and acquisition pace Potential opportunity to pay a regular dividen
Slide 10: Roadmap for Compounding Free Cash Flow & Dividend Growth
10 Historical Roadmap for Achieving Compounding Free Cash Flow & Dividend Growth Organic EBITDA Growth Long-Term EBITDA Growth Attractive M&A Platform Strong Free Cash Flow(1) Growth & Dividend(2) Potential Combining its diversified portfolio of stable companies and a low-risk, high cash return acqu
Slide 11: CorpAcq Overview
" CHURCHILL CAPHAL iT, | Cofp CorpAcq Overview
Slide 12: CorpAcq Engine For Value Creation
12 CorpAcq Engine For Value Creation The CorpAcq Growth Model Stable, Cash-Generative Companies h Consistent and Accretive Acquisition Engine h Source: CorpAcq Management.
Slide 13: The CorpAcq Platform Today
13 Current Key Company Statistics(1) 43 Total Subsidiaries 47 Companies Acquired 3 Sold at Strong Returns(2) 4 Management Changes ~£696mm / ~$895mm 2023E Revenue(3) The CorpAcq Platform Today >30 Years Average Age of Subsidiaries Source: CorpAcq Management. (1) Company statistics are as of 5/1/2024.
Slide 14: History of Portfolio Build-Up
14 History of Portfolio Build-Up 2020 Paused acquisitions during Covid to focus and invest in portfolio companies - 2007-14 7 2015 4 2016 6 2023 5 2019 5 2017 2 2021 2 2022 3 2018 8 Services Solutions The CorpAcq Acquisition Engine Source: CorpAcq Management. (1) YTD as of 5/1/2024. Average historic
Slide 15: Low-Risk Strategy to Drive Value Creation
15 Help drive organic growth Retention of founders and management teams Stable and profitable companies with proven track records “Preferred buyer” status in the market Low-Risk Strategy to Drive Value Creation Value creation ability refined since 2006, turning CorpAcq into a well-oiled acquisition
Slide 16: CorpAcq Employs a Decentralized Operating Approach
16 Simon Orange Chairman David Martin CEO Nick Cattell CFO Steve Scott COO Stuart Kissen Acquisitions Finance Operations Deal generation / acquisition team Administration Property and Leasing Health and Safety Purchasing Investor Directors Portfolio Companies Allows founders and management teams to
Slide 17: Onboarding and Post-Acquisition Support
17 • Group consolidation • Reports to Board of Directors • Capital allocation policy M&A Process Onboarding Monthly Reporting Pack Budgeting P&L KPIs Board Update Onboarding and Post-Acquisition Support How CorpAcq Helps in Professionalizing Businesses and Ensures Proper Governance Appointment of In
Slide 18: Growth Levers and Targeted Support
18 Subsidiaries Example Revenue Synergy(1) ✓ Facilitated knowledge and best-practice sharing by WPI allowing Metcalfe to diversify its workstreams into Civil Engineering ✓ FMG subcontracting specialist work to Olympus and Olympus leveraging machine supplier discounts negotiated by FMG, benefiting bo
Slide 19: Diversified Portfolio of Strong UK SMEs
19 Select End Markets Served 43(2) Portfolio companies and management teams Diversification helps mitigate overall portfolio risk as no end market contributed more than 17% of total 2023E revenue(1) Business & Management Diversity Residential Infrastructure Non-Residential Manufacturing Retail & E-C
Slide 20: UK is a Large and Attractive Market
20 UK is a Large and Attractive Market Large And Growing Market in the United Kingdom Favorable UK Trends for CorpAcq The United Kingdom market is underpinned by favorable industry trends that provide significant white space for growth ~£2.5tn 2022 GDP 4.5% 2022 – 27E Nominal GDP CAGR 3.7% 2022 Unem
Slide 21: Subsidiaries overview
21 Subsidiary Founded Acquired Description 1987 2018 • E-Commerce clothing and footwear retailer • Specializes in casual wear and rugby apparel 2000 2016 • Group of sub-contracting manufacturers • Specializes in machining, sheet metal, and electroplating 2005 2019 • Provider of construction equipmen
Slide 22: Post-Combination Company Board
22 Post-Combination Company Board Founder and Chairman, CorpAcq • Established CorpAcq in 2006 • Member of the Board of Directors and Chairman since 2014 • Director at Orange Investments One, Regency Glass, and Manchester Sale Rugby Club • Founder Investor and Director at BOL Foods Simon Orange Execu
Slide 23: Acquisition Strategy
23 CHURCHILL CAPHAL iT, | Cofp Acquisition Strategy
Slide 24: What Makes CorpAcq the Preferred Buyer?
24 ~17 years(1) Average length of current management teams in place at select subsidiaries ~75%(2) Retained owner managers at acquisition still actively engaged in business ~93%(3) At least one member of underlying management still in place across portfolio post-acquisition CorpAcq’s value propositi
Slide 25: Large Total Addressable Market and Established Acquisition Strategy
25 # of companies in CorpAcq’s existing sectors(1,2) >90k Large Total Addressable Market Established Acquisition Strategy ✓ Proprietary sourced, off-market acquisition opportunities ✓ Target strong companies with long trading histories ✓ Leverage strong network of referrals and large broker network
Slide 26: CorpAcq's Key Acquisition Criteria
26 Mature and stable businesses with long trading histories Opportunity to acquire complete ownership or majority stake UK-based companies Ability to achieve 20% annual cash returns on cash invested from Day 1(2) EBITDA in the range of £1mm – £25mm(1) Target EBITDA margin >15% and high cash-generati
Slide 27: Acquisition Structure Focuses on Lowering Risk and Driving Returns
27 Acquisition Structure Benefits Acquisition Cost (Mid-Single Digits EV / EBITDA multiple) Entry to public markets can provide the potential for equity-linked compensation to help drive returns Illustrative Sample Acquisition Structure Ability to drive +20%(1) annual cash return on cash investment
Slide 28: Acquisition Pipeline Continues to Expand
28 Current Prospects Active Dialogue Advanced Discussion £104mm Adj. EBITDA £39mm Adj. EBITDA 18 companies 10 companies £271mm Adj. EBITDA 55 companies Acquisition Pipeline Continues to Expand Source: CorpAcq Management. (1) Pipeline status is as of 12/31/2023 and reflects prospective acquisitions n
Slide 29: Significant New Capital to Accelerate Growth
29 Significant New Capital to Accelerate Growth Source: CorpAcq Management. Note: Assumes USD:GBP exchange ratio of 1.286:1. (1) Includes $129mm capacity from new acquisition facility and $183mm cash to balance sheet from trust proceeds; assumes no redemptions and CorpAcq HoldCo elects to receive $1
Slide 30: Financials
30 CHURCHILL CAPHAL iT, | Cofp 4 Financials
Slide 31: CorpAcq Consistently Grows the Portfolio
31 £351 £478 £478 £561 £638 £697 FY2018A FY2019A FY2020A FY2021A FY2022A FY2023E CorpAcq Consistently Grows the Portfolio CorpAcq has achieved strong overall revenue growth over the last 5 years through organic growth and accretive acquisitions £557 £633 Revenue (UK GAAP) Revenue (IFRS) £696 Busines
Slide 32: CorpAcq Maintains Its Margins While Being Acquisitive
32 £54 £67 £65 £92 £101 £117 FY2018A FY2019A FY2020A FY2021A FY2022A FY2023E Adj. EBITDA(1) (UK GAAP) Adj. EBITDA(1) (IFRS) Adj. EBITDA(1) Margin (UK GAAP) 15% 14% 14% 16% 16% 17% Adj. EBITDA(1) (£mm) CorpAcq Maintains Its Margins While Being Acquisitive £99 £108 £125 Source: CorpAcq Management. Not
Slide 33: Compelling Cash Profile Allows For Capital Returns
33 61% 61% 69% 75% 61% 65% 69% 57% 62% 20% 30% 40% 50% 60% 70% 80% 90% 100% FY2018A FY2019A FY2020A FY2021A FY2022A FY2023E Historical Adj. EBITDA Less Net CapEx(1) Conversion Rate(2) Decrease in conversion rate in FY2022 due to spending in advance of customer contract wins Compelling Cash Profile A
Slide 34: 2023 Performance Update: Adjusted EBITDA
34 Adj. EBITDA (£mm) & Margin (%) Highlights 2023 Performance Update: Adjusted EBITDA Source: CorpAcq Management. Note: 2022 reported financial information based on IFRS audits. FY2023E financials are estimates from CorpAcq Management and are presented on an IFRS basis. Assumes USD:GBP exchange rati
Slide 35: 2023 Performance Update: Adj. EBITDA Margin Bridge
35 Source: CorpAcq Management. Note: 2022 reported financial information based on IFRS audits. FY2023E financials are estimates from CorpAcq Management and are presented on an IFRS basis. Assumes USD:GBP exchange ratio of 1.286:1. (1) Calculates the change in total company Adjusted EBITDA margin fro
Slide 36: Strong Run-Rate Contribution From Acquisitions
36 FY2023E Incremental Contribution From FY2023E Acquisitons(1,2,4) FY2023E Run Rate Metrics(1) Acquisitions Signed YTD(2,4,5) Revenue (£mm) 696 3 6 1 6 Adj. EBITDA (£mm) 125 6 2 Adj. EBITDA Margin 18% 16% 18% 12% (3,4) Portfolio Companies: 37 (as of January 1st) + 5 (acquired during year) Portfolio
Slide 37: Transaction Details
37 © CHURCHILL CAPHAL iT, | Cofp Transaction Details
Slide 38: Illustrative Transaction Sources and Uses
38 Cash in Trust $609mm Illustrative Transaction Sources and Uses Sources Source: CorpAcq Management. Note: Financials based on IFRS audits. Assumes USD:GBP exchange ratio of 1.286:1. (1) Assumes no additional redemptions. (2) Reflects CVII cash-in-trust available for redemption as of as of 3/31/202
Slide 39: Illustrative Post-Money Valuation
39 Illustrative Post-Money Valuation Source: CorpAcq Management. Note: Financials based on IFRS audits. Assumes USD:GBP exchange ratio of 1.286:1. Debt balances as of 12/31/2023. Transaction overview reflects minimum cash to balance sheet of $129mm before any secondary proceeds. (1) Assumes no addit
Slide 40: Recent Refinancing Provides New Runway for Growth
40 Term Loan Facility £200mm(1) Acquisition Facility £100mm flexible capacity Maturity January 2028 Pricing SONIA + 5.25 – 6.50%(2) New Facility Terms • New term loan replaced previous facility with Alcentra • Provides flexibility to pay up to £100mm with transaction proceeds at no cost and re-drawa
Slide 41: Net Leverage Overview
41 2.9x 1.8x 2.1x Current Net Leverage Pro Forma Net Leverage Net Leverage(1) Based on FY2023E Adj. EBITDA(2) Assumes no additional redemptions (3) (4) Net Leverage Overview Transaction allows CorpAcq to reduce Net Leverage with significant cash added to balance sheet • Repayment of existing preferr
Slide 42: CorpAcq vs. Key Public Peers
42 CorpAcq vs. Key Public Peers (3) (1) (2) (5) Primary End-Markets Diversified Industrials P P P P P P Trade P Life Sciences P P P Other P P P P Key Geographies UK Nordics, DACH, UK Global (>30 Countries) Global (>30 Countries) North America, Europe, Australia Europe, Asia, North America M&A Approa
Slide 43: Market Leadership Analysis – Key Financial Metrics
43 Sales Growth EBITDA Growth EPS CAGR EBITDA Margin Net Debt / EBITDA ROIC FY2018A - FY2023E FY2018A - FY2023E 3-Year(1) FY2023E FY2023E FY2023E 14.7% 16.6% 20.1% 18.0% 2.9x / 2.1x 15.0% 14.3% 22.7% 19.6% 15.7% 1.5x 20.2% 13.6% 19.2% 21.7% 17.7% 1.1x 16.9% 15.4% 21.8% 22.7% 25.5% 1.2x 16.6% 20.7% 2
Slide 44: Attractive Entry Valuation – Discount to Other Acquisitive Companies
44 NA 20.9x 20.3x 18.1x 15.8x 11.3x 14.1x 13.1x 12.0x 10.3x 21.7x 20.9x 18.1x 17.8x 12.5x 17.7x 16.1x 12.7x 10.8x Total Enterprise Value / FY2023E EBITDA(1,2) Total Enterprise Value / FY2024E EBITDA(1,2) European Compounders US Diversified Industrials Average: 18.2x Average: 15.5x Average: 17.3x Ave
Slide 45: Appendix: Case Studies
45 6 Appendix: 06 Case Studies
Slide 46: Carrylift: Driving Profitability Through Targeted Operational Improvements
46 CorpAcq Initiatives The Results 10% EBITDA CAGR(1) From 65% to 80% Improved fleet utilisation(1) Consistent sustainable income and better margins Improved flow of equipment and supplier rebates 11% EBITDA margin increase(1) Carrylift: Driving Profitability Through Targeted Operational Improvement
Slide 47: CaviTech: Repositioning for Sustainable, Profitable Growth
47 10% Revenue CAGR(1) Reduced customer concentration Improved accuracy, repeatability and customer demand forecast Channelling capacity towards high-value work Sustainable access to highly-skilled workforce CaviTech: Repositioning for Sustainable, Profitable Growth CorpAcq Initiatives The Results ✓
Slide 48: Cwmtillery Glass: Template Acquisition in a Familiar Industry
48 Cwmtillery Glass: Template Acquisition in a Familiar Industry Acquisition Overview Alignment to CorpAcq Acquisition Criteria ✓ Business: Manufacture and distribution of insulated glass units and toughened glass products for windows and roofs ✓ Origination: Advisor network introduction in November
Slide 49: Heritage Trade Frames: Proprietary Origination Meeting Key Criteria
49 Heritage Trade Frames: Proprietary Origination Meeting Key Criteria Acquisition Overview Alignment to CorpAcq Acquisition Criteria ✓ Business: Fabricator of PVC, composite doors, and aluminium windows and doors ✓ Origination: Internal proprietary sourcing Source: CorpAcq Management. (1) FY2023E f
Slide 50: Appendix: Financials
50 of CHURCHILL CAPHAL iT, | Cofp Appendix: Financials
Slide 51: Revenue Growth Over Time (USD)
51 Revenue Growth Over Time (USD) Source: CorpAcq Management. Note: Assumes USD:GBP exchange ratio of 1.286:1. (1) Financial information prior to 2021 is based on UK GAAP audits and has not been audited in accordance with PCAOB standards. Financial information beginning in 2021 is presented based on
Slide 52: Adj. EBITDA Growth Over Time (USD)
52 Adj. EBITDA Growth Over Time (USD) Source: CorpAcq Management. Note: Financial information prior to 2021 is based on UK GAAP audits and has not been audited in accordance with PCAOB standards. Financial information beginning in 2021 is presented based on both UK GAAP and IFRS audits. (1) Adj. EBI
Slide 53: Reconciliation of Non-GAAP Financials (UK GAAP)
53 Commentary EBITDA Adjustments Overview (UK GAAP) £mm 1 2 FY2018A FY2019A FY2020A FY2021A FY2022A FY2023E Revenue 351 478 478 561 638 697 Net Income 1 9 0 17 20 (24) Net Income Margin (1) 0% 2% 0% 3% 3% N A Interest Expense 22 26 26 25 28 61 Tax Expense 4 4 4 11 7 10 Other Adjustments (0) (3) (0)
Slide 54: Reconciliation of Non-GAAP Financials (IFRS)
54 FY2021A FY2022A FY2023E Revenue 557 633 696 Net Income 5 (2) (20) Net Income Margin(1) 1% NA NA Interest Expense 44 54 68 Tax Expense 11 7 9 Depreciation & Amortization 38 43 50 EBITDA 98 102 106 Non-core professional fees - 2 12 Non-core capital raise costs - 2 - Share-based compensation 1 2 9 G
Slide 55: CapEx Calculations
55 CapEx Calculations (UK GAAP) CapEx Calculations (IFRS) Reconciliation of Non-GAAP Financials (Cont’d) Source: CorpAcq Management. Note: Financial information is based on UK GAAP audits has not been audited in accordance with PCAOB standards. FY2023E financials are estimates from CorpAcq Managemen
Slide 56: ROIC Calculations (IFRS)
56 ROIC Calculations (IFRS) Reconciliation of Non-GAAP Financials (Cont’d) Source: CorpAcq Management. Note: Financial information based on IFRS audits. £mm FY2021A FY2022A FY2023E EBIT 6 0 6 0 5 6 (+) Amortization 4 5 6 EBITA 6 4 6 4 6 2 (+) One-Time Costs 1 6 1 9 Adj. EBITA 6 5 7 0 8 1 Tax Rate 22
Slide 57: Risk factors
57 Unless the context otherwise requires, all reference in this subsection to the “Company,” “CorpAcq,” “we,” “us” or “our” refer to CorpAcq Limited and its subsidiaries and CorpAcq Group Plc. The risks presented below are some of the general risks to the business and operations of CorpAcq, Churchil
Slide 58: Risks related to CorpAcq
58 • We and our portfolio companies could be subject to increased regulation or changes in regulatory regimes which will impact our financial performance. • The industries we serve can be seasonal, cyclical and affected by weather conditions, the combined effects of which can adversely impact our re
Slide 59: Risks Related to Churchill
59 Risks Related to Churchill • Churchill's public shareholders will experience dilution as a consequence of the issuance of Post-Combination Company securities as consideration in the proposed transaction and may experience dilution from several additional sources in connection with and after the c
Slide 60: Slide 60