Churchill Capital Corp VII — SPAC Merger (November 2023)
52 slides from Churchill Capital Corp VII's SPAC merger presentation, Nov 17, 2023
Slide 1: November 2023 Investor Presentation
November 2023 Investor Presentation
Slide 2: About This Presentation
2 About This Presentation 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 CorpA
Slide 3: Financial Information
3 Financial Information The financial information contained in this presentation has been taken from or prepared based on the historical financial statements of CorpAcq for the periods presented . CorpAcq’s historical financial information prior to 2021 was prepared in accordance with the generally
Slide 4: Participants in the Solicitation
4 Participants in the Solicitation CorpAcq, CorpAcq Group Plc, Churchill, Churchill Sponsor VII LLC and their directors and executive officers may be deemed participants in the solicitation of proxies from Churchill’s shareholders and warrantholders with respect to the proposed transaction . A list
Slide 5: Simon Orange, David Martin, Michael Klein
5 Simon Orange David Martin Michael Klein • Established CorpAcq in 2006 • Current role includes identifying and negotiating acquisitions in conjunction with CorpAcq partners and driving funding, strategic development and partnership • Has been involved in funding and managing businesses and has over
Slide 6: CorpAcq to go public via business combination with Churchill Capital Corp VII
6 1 2 3 4 5 6 CorpAcq to go public via a business combination with Churchill Capital Corp VII (NYSE: CVII) in a transaction anticipated to create a differentiated acquisition platform that offers a compelling combination of earnings growth and attractive risk - adjusted returns with a valuation of a
Slide 7: A diversified platform underpinned by proven assets and an acquisition engine
7 A diversified platform underpinned by a foundation of proven assets and supplemented by an acquisition engine that is expecte d t o drive shareholder returns Current Key Company Statistics (1) CorpAcq Engine For Value Creation Acquisition Engine Stable, Cash - Generative Companies Consistent and A
Slide 8: CorpAcq's Acquisition Structure Focuses on Lowering Risk and Driving Returns
8CorpAcq'sAcquisition Structure Focuses onLowering Risk and Driving ReturnsCorpAcq achieves consistently attractive returns on its deployed capital partially through its acquisition structuresAcquisition Structure BenefitsAcquisition Cost(MidSingle Digits EV / EBITDA multiple)Entry to public markets
Slide 9: Historical Roadmap for Achieving Compounding Free Cash Flow & Dividend Growth
9 Historical Roadmap for Achieving Compounding Free Cash Flow & Dividend Growth Combining its diversified portfolio of stable companies and a low - risk, high cash return acquisition strategy has provided the b ase for dividend capacity (2) growth Organic GDP + top - line growth combined with operat
Slide 10: Source: CorpAcq Management. Note: Financial information prior to 2021 based on UK GAAP audits
10 Source: CorpAcq Management. Note: Financial information prior to 2021 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. LTM as of 6/30/2023. FY2023E financials are estima
Slide 11: FY2022 Run Rate Metrics
11 FY2022 Reported Incremental Contribution From FY2022 Acquisitons (1,3,6) FY2022 Run Rate Metrics (1) Acquisitions Signed YTD (2,3,6) Revenue (£mm) 814 25 839 80 Adj. EBITDA (£mm) 139 5 144 12 Adj. EBITDA Margin 17% 19% 17% 15% Source: CorpAcq Management. Note: 2022 reported financial information
Slide 12: CorpAcq 1H'23 Performance Update
12 $68 $78 1H'22 1H'23 $814 $860 $938 $896 FY'22A LTM'23 FY'23E $393 $439 1H'22 1H'23 Note: 2022 and 1H’23 reported financial information based on IFRS audits. LTM as of 6/30/2023. Assumes USD:GBP exchange ratio of 1.286:1. (1) Year End 2022 net leverage is calculated as net debt at year end divided
Slide 13: Founder-led, scaled, profitable, and diversified compounder
13 Founder - led, scaled, profitable, and diversified compounder 3 Strong free cash flow (1) profile and potential ability to pay dividend from closing 3 Established M&A playbook with flexible structures in a large pool for potential acquisitions 3 Decentralized operational style empowering manageme
Slide 14: Compelling financial profile designed to deliver compounding returns
14 Compelling financial profile designed to deliver compounding returns Attractive entry point with a differentiated story Potential strong dividend yield from closing Potential fo r h igh risk - adjusted return on cash investment (2) Management “skin in the game” ensures alignment of interest post
Slide 15: Platform for value creation
15 1 Platform for value creation 01
Slide 16: Source: CorpAcq Management. Note: Financials based on UK GAAP audits and has not been
16 Source: CorpAcq Management. Note: Financials based on UK GAAP audits and has not been audited in accordance with PCAOB standards. (1) As of 6/30/2023. (2 ) Organic growth is calculated as the aggregate growth of s ubsidiary - level Adj. EBITDA of subsidiaries that have been in the portfolio for t
Slide 17: Diversified Portfolio of Strong UK SMEs
17 Source: CorpAcq Management. (1) As of 9/30/2023. Select End Markets Served 42 (1) Portfolio companies and management teams Diversified and large end markets help contribute to overall portfolio risk mitigation Business & Management Diversity Residential Infrastructure Non - residential Manufactur
Slide 18: CorpAcq Organizational Overview
18 Consistent reporting frameworks and best practices developed since 2006 Allows founders to focus on and grow their business Simon Orange Chairman David Martin CEO Nick Cattell CFO Steve Scott COO Stuart Kissen Acquisitions Finance Operations Deal generation / acquisition team Administration Prope
Slide 19: Growth Levers and Targeted Support
19 Subsidiaries Example revenue synergy (1) x Facilitated knowledge and best - practice sharing by WPI allowing Metcalfe to diversify its workstreams into Civil Engineering x FMG subcontracting specialist work to Olympus and Olympus leveraging machine supplier discounts negotiated by FMG, benefiting
Slide 20: Management team retention at subsidiaries
20 ~17 years (1) Average length of current management teams in place at select subsidiaries Forming deep relationships with and allowing independent businesses to execute their own strategy enables CorpAcq to purchase off - market assets for attractive multiples ~95% (3) At least one member of under
Slide 21: Executive leadership team
21 Management form deep relationships with subsidiaries , understanding their vision and giving them autonomy in running their business – this allows management to purchase off - market assets for attractive multiples Highly qualified executive leadership team, led by Simon Orange, who identified th
Slide 22: History of Portfolio Build-Up
22 $70 $129 $139 $25 $34 $ mm L4Y CAGR (%) +17% Reported + 7 % Average Subsidiary - Level Adj. EBITDA Growth (2,3) Adj. EBITDA Growth Breakdown History of Portfolio Build - Up Source: CorpAcq Management. Note: Financial information prior to 2021 is based on UK GAAP audits and has not been audited in
Slide 23: Tangible upside levers
23 2 Tangible upside levers 02
Slide 24: Multiple Opportunities to Drive Future Growth
24 Accelerate growth via access to capital Target greater scale and new geographies Secular trends in core business Continue accretive M&A strategy Large pipeline of opportunities Scale the model to larger transactions and to the US Organic growth from existing businesses A E C Proven M&A playbook f
Slide 25: Favorable UK Industry Trends in CorpAcq's End-Markets
25 Favorable UK Industry Trends in CorpAcq ’s End - Markets Select End Markets Served UK is a Large and Attractive Market Key Underlying Macro Trends: • SMEs have grown faster than total UK private business turnover (1) • UK is seeing an acceleration in net migration into the region driven by non -
Slide 26: Established Acquisition Strategy
26 Acquisition Criteria x Founder - led profitable business with long operating history x Strong management team, committed to next phase of growth x High barriers to entry x EBITDA in the range of $ 1m – $ 32m (3) x Target EBITDA margin >15% x Highly cash - generative x Attractive entry EBITDA mult
Slide 27: Capital Raised in Churchill Transaction
27 Capital Raised in Churchill Transaction Pro Forma Capital Structure (2) ( $ in mm) $ 606mm Cash in Trust (1,2) Transaction Uses Redeem preferred equity 1 De - lever / fund cash to balance sheet 2 Fund partial secondary to shareholders 3 Gross Debt 517 Pro Forma Gross Debt / FY2023E Adj. EBITDA 3.
Slide 28: UK private business universe and acquisition pipeline
28 >90k 2.7mm x There are a total of ~ 5.5mm private sector businesses in the UK – # of private businesses grew at c. 1.4% over the last 10 years – Aggregate turnover is ~ $ 5,400bn x Aligned with CorpAcq’s subsidiaries in construction, manufacturing, industrials, oil & gas services, transport, and
Slide 29: Opportunity Set Over Time
29 Opportunity Set Over Time Larger UK Opportunities US Expansion UK Core Opportunities Source: CorpAcq Management. CorpAcq has a deep set of potential targets in its core UK market and over time will also have the opportunity to expand into acquiring larger companies and companies in the US market
Slide 30: Profile for compounding returns
30 3 Profile for compounding returns 03
Slide 31: Compelling Financial Profile For Compounding
31 Pro Forma Enterprise Value of ~ $ 1.7bn (1) Attractive Entry Point With Total Return Strategy Strong Dividend Capacity (5) Potential High Risk - Adjusted Cash Returns Via Lower - Risk Acquisition Strategy Significant Skin - in - the - Game of CorpAcq Management Ensures Alignment with Shareholders
Slide 32: Historical Roadmap for Achieving Compounding Free Cash Flow & Dividend Growth
32 Historical Roadmap for Achieving Compounding Free Cash Flow & Dividend Growth Organic GDP+ top - line growth combined with operational support and exposure to essential UK end - markets Organic + Acquisition - driven growth Source: CorpAcq Management. (1) Free Cash Flow is defined as Cash Flow fr
Slide 33: Revenue, Adj. EBITDA and Gross Profit history
33 $42 $50 $57 $82 $73 $74 $92 FY2018A FY2019A FY2020A FY2021A FY2022A LTM FY2023E $174 $222 $213 $257 $294 $313 $351 FY2018A FY2019A FY2020A FY2021A FY2022A LTM FY2023E 15% 14% 14% 16% 16% 16% 16% $70 $86 $84 $118 $129 $139 $152 FY2018A FY2019A FY2020A FY2021A FY2022A LTM FY2023E $451 $615 $615 $72
Slide 34: Illustrative Pro Forma Capitalization
34 Illustrative Pro Forma Capitalization ( $ mm) Net Leverage (8) Based on FY2023E Adj. EBITDA (9) Current (3) Pro Forma (7) Debt: Revolving Credit Facility - - Existing Term Loan (1) 253 - Total Other Debt (2) 253 253 New Term Loan Facility - 253 Total Debt (3) 506 506 (+) Debt for Acquisitions sin
Slide 35: CorpAcq vs. Key Public Peers
35 CorpAcq vs. Key Public Peers Source: Company filings and websites; market prices as of 11/15 /2023. Note: Assumes USD:GBP exchange ratio of 1.286:1. (1) As of 8/31/2023. (2) Reflects CorpAcq post - money equity value at announcement. Assumes no additional redemptions from cash i n trust and redem
Slide 36: Peer operating metrics comparison
36 Source: CorpAcq Management , FactSet market data as of 11/15/2023. (1) Period of FY2019 – FY2022. (2) LTM figures as of 6/30/2023. (3) Reflects net income CAGR (adjusted for non - controlling inter est) rather than EPS. CorpAcq figure based on UK GAAP audits and has not been audited in accordance
Slide 37: Attractive Entry Valuation – Discount to Other Acquisitive Companies
37 NA 18.7x 17.4x 15.8x 14.1x 9.8x 12.4x 10.0x 9.7x 10.4x 18.0x 17.8x 15.5x 16.2x 10.7x 13.8x 10.4x 10.4x Total Enterprise Value / FY2023E EBITDA (1,2) Total Enterprise Value / FY2024E EBITDA (1,2) Source: FactSet market data as of 11/15 /2023. (1) Metrics reflect non - GAAP financial measures. (2)
Slide 38: Valuation vs EPS Growth
38 8x 10x 12x 14x 16x 18x 20x 0% 5% 10% 15% 20% 25% 30% TEV / 2023E EBITDA Historical 3 - Year EPS CAGR Comparable Companies (1) : Valuation vs EPS Growth Source: FactSet as of 11/15 /2023. Note: CorpAcq financials based on UK GAAP audits and has not been audited in accordance with PCAOB standards.
Slide 39: Framework for Dividend Potential
39 Source: CorpAcq Management. Note: Financials based on IFRS audits. LTM as of 6/30/2023. Adjusted EBITDA and net CapEx are Non - GAAP measures. See appendix fo r definition and reconciliation. Assumes USD:GBP exchange ratio of 1.286:1. (1) Net CapEx includes net cash spend for tangible assets and
Slide 40: Illustrative Transaction Sources and Uses
40 Illustrative Transaction Sources and Uses Sources Illustrative Post - Money Valuation at Announcement Source: CorpAcq Management. Note: Financials based on IFRS audits. Assumes USD:GBP exchange ratio of 1.286:1. Debt balances as of 6/30/2023, adjusted for recently completed acquisitions since Jun
Slide 41: Differentiated opportunity to own a platform of UK SMEs
41 Differentiated opportunity to own a platform composed of UK SMEs with a proven acquisition model that generates high risk - adjusted cash returns supported by mature, stable businesses 1 Experienced management team that has executed and proven CorpAcq’s repeatable and scalable acquisition strateg
Slide 42: Appendix
42 CHURCHILL | G55, CAPITAL. ¥iIE | SOFP: Appendix
Slide 43: Illustrative Sample of Portfolio Companies
43 Source: CorpAcq Management. Illustrative Sample of Portfolio Companies Portfolio Company Description Key Markets Manufacturer of polythene packaging for industrial & food applications Retail, food & beverage Supplier of decorative aggregates, sand, gravel, slate and other stone products Residenti
Slide 44: EBITDA Adjustments Overview (UK GAAP)
44 Commentary EBITDA Adjustments Overview (UK GAAP) $ mm Source: CorpAcq Management. Note: Financial information based on UK GAAP audits and has not been audited in accordance with PCAOB standards. LTM as of 6/ 20/ 2023. FY 2023E financials are estimates from CorpAcq Management. Assumes USD:GBP exch
Slide 45: EBITDA Adjustments Overview (IFRS)
45 Commentary EBITDA Adjustments Overview (IFRS) $ mm Source: CorpAcq Management. Note: Financial information based on IFRS audits. FY 2023E financials are estimates from CorpAcq Management. LTM as of 6/30/2023. Assumes USD:GBP exchange ratio of 1.286:1. (1) Net income margin is defined as net incom
Slide 46: EBITDA Adjustments Overview (IFRS) 1H
46 Commentary EBITDA Adjustments Overview (IFRS) $ mm Source: CorpAcq Management. Note: Financial information based on IFRS audits. FY 2023E financials are estimates from CorpAcq Management. LTM as of 6/30/2023. Assumes USD:GBP exchange ratio of 1.286:1. (1) Net income margin is defined as net incom
Slide 47: CapEx Calculations
47 FY2018A FY2019A FY2020A FY2021A FY2022A LTM FY2023E Payments for PP&E 40 57 40 54 62 69 60 (-) Proceeds from Sale of PP&E (20) (26) (22) (27) (25) (29) (32) (+) Additions - Hire Purchase (1) 8 11 8 16 20 25 31 (-) One-Time Property Purchases - (6) - (7) - - - Net CapEx 28 36 27 35 57 65 60 CapEx
Slide 48: ROIC Calculations (IFRS)
48 Source: CorpAcq Management. Note: Financial information based on IFRS audits. Assumes USD:GBP exchange ratio of 1.286:1. ROIC Calculations (IFRS) Reconciliation of Non - GAAP Financials (Cont’d) $ mm FY2021A FY2022A LTM EBIT 77 77 85 (+) Amortization 5 6 6 EBITA 82 83 91 (+) One-Time Costs 1 8 6
Slide 49: Risk Factors
49 Unless the context otherwise requires, all reference in this subsection to the “Company,” “CorpAcq,” “we,” “us” or “our” refe r t o 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, Church
Slide 50: Risks Related to the Company's Employees and Human Resources
50 Risks Related to the Company’s Employees and Human Resources • There are no guarantees that we are able to retain and recruit key personnel, including our senior management, and other empl oye es to meet current or future needs at all or at a reasonable cost. • There are no guarantees that our po
Slide 51: Risks Related to the Post-Combination Company
51 Risks Related to the Post - Combination Company Following the Proposed Transaction • If the proposed transaction’s benefits do not meet the expectations of investors, stockholders or financial analysts, the mar ket price of the Post - Combination Company’s securities may decline. • Investors will
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