Maxwell Technologies to Acquire Operations of Nesscap...
Transcript of Maxwell Technologies to Acquire Operations of Nesscap...
Maxwell Technologies to Acquire Operations of Nesscap Energy
February 28, 2017
Safe Harbor
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This presentation contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. The forward-looking statements contained herein include, but are not limited to, information regarding the ability of Maxwell and Nesscap to complete the transactions contemplated by the arrangement agreement, including the satisfaction of the conditions to the transactions set forth in the arrangement agreement, and Maxwell’s and the combined company’s estimated or anticipated future results of operations. These forward-looking statements involve risks and uncertainties that could cause Maxwell’s and the combined company’s results to differ materially from management’s current expectations. Such risks and uncertainties include, but are not limited to, unforeseen changes in the strength of Maxwell’s and Nesscap’s customers’ businesses; unforeseen changes in the demand for current and new products, technologies, and services; customer purchasing decisions and timing; unforeseen changes in future revenues, earnings and profitability of Maxwell or Nesscap; the risk that Maxwell is not able to realize the savings or benefits expected from integration and restructuring activities relating to the proposed acquisition of Nesscap; the risk that the required regulatory approvals for the proposed acquisition of Nesscap are not obtained, are delayed or are subject to conditions that are not anticipated; and those risks and uncertainties discussed in Maxwell’s Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on March 1, 2016.
Maxwell Acquisition of Nesscap Business
Solidifies Ultracapacitor market leadership & uniquely positions us in energy & power delivery market Expands addressable, fast growing markets – Automotive, Industrial, Wind Strengthens product portfolio through addition of leading small cell products Diversifies global customer base & revenue streams Increases R&D leverage to deliver new products at a faster rate Accelerates top-line growth & path to break-even
Delivers immediate, positive P&L impact at close: Immediately accretive to non-GAAP EPS Enables margin expansion through economies of scale and material cost savings Expected manufacturing and operations synergies Improved revenue growth and diversification via expanded product portfolio and SAM expansion
Strong Combination
Attractive Financial
Profile
Maxwell to purchase operating entities of Nesscap for $23.175M Purchase price paid by issuance of ~4.6 million Maxwell shares
• Subject to 10% upward or downward adjustment based on Maxwell share price prior to closing• Nesscap shareholders will own ~12% of Maxwell’s total outstanding common shares post close
Expected to close in Q2 2017 Ilya Golubovich (I2BF Global Ventures and Arbat Capital) expected to join Maxwell’s Board of Directors
Transaction Overview
Overview:
Founded 1999, listed on TSX Venture Canada: NSE
Corporate Headquarters: Gyeonggi-do, South Korea
194 Employees Worldwide
Global Sales Presence: KR, CN, EU & USA
Financial Highlights:
2015 revenue: $17.2M
9-month revenue ending September 30, 2016: $15M
About Nesscap
Ultracapacitor Products & Markets
Small Cells & Modules: 3F to 360F
Wind Pitch Control
Auto (Back-up power)
Industrial (Robotics, AMR, DVR/UPS,
Actuators, Telecom)
Large Cells & Modules: 600F to 3400F
Wind Pitch Control
UPS
Bus
Truck
Rail
Industry leader in small ultracapacitor cells &
modules for Wind, Automotive & Industrial
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Combining Strengths to Become a Global Energy Storage Powerhouse
Completes Product Portfolio
Nesscap Small & Medium Cells+
Maxwell Large Cells
Solidifies Leadership
Nesscap Wind, Auto & Industrial+
Maxwell Wind, Auto, Grid & Bus
Streamlines Operations
Nesscap Agility+
Maxwell Innovation Engine+
Combined Scale
Acquisition Accelerates Growth and Time to Break Even
$0.4B$0.5B
$0.6B
$0.8B
$1.1B
$1.4B
2016 2017 2018 2019 2020 2021
Base Market Small Cell
Expanding Portfolio to Solidify Leadership in Rapidly Growing SAM
$90M to $250M
~30% CAGR
Industrial50%
Wind41%
Auto9%
2017 Small Cell SAM Profile
Strengthening Position in Wind, Automotive and Industrial MarketsEnabling Market Share Expansion in Auto & Industrial
Small cell market growing with a 5 year CAGR of 30% Nesscap is global leader with best-in-class small cell products Nesscap portfolio enables Maxwell to more effectively address key small cell markets
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Accelerated Revenue DiversificationMAXWELL CONFIDENTIAL
Reduced Dependence on China, Diversification in Europe & Americas
4 to 6% increase in Europe portion of total combined revenue mix
Increases growth opportunities in Wind, Auto & Industrials
Neutral in Americas portion of total combined revenue mix
Increases growth opportunities in Industrials and Auto
4 to 6% reduction in China portion of total combined revenue mix
Decreases dependence on Bus and solidifies Wind
Combined Volumes Drive Increased Operational Efficiencies
- Cell Volume +
Gro
ss M
argi
n
COMBINEDVOLUME
MAXWELLNESSCAP
30%
Economies of Scale, Reduction in Materials Cost, and Increased Factory Utilization Lead to Gross Margin Expansion
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Strengthening Our Product Portfolio
Maxwell
Wind Auto Industrial Bus Grid Rail
Small Cell
Medium Cell
Large Cell
Modules
Advanced Technology
Nesscap
Leveraging combined R&D to deliver more new, innovative products faster
Complementary product portfolio strengthens position in Wind, Auto and Industrial markets
Complementary Products Create Industry’s Most Complete Portfolio
Industry’s Most Complete Energy & Power Delivery Portfolio
BusWind
(Small Cell)Wind
(Large Cell)Grid and Rail Auto Industrial
Lag Lead
COMPETITOR 1
COMPETITOR 2
COMPETITOR 3
COMPETITOR 4
COMPETITOR 5
Financial Summary
Maxwell to acquire the operating entities of Nesscap Energy, Inc. Aggregate purchase price of $23,175,000 in Maxwell common stock 4,607,264 million shares issued (at $5.0301/share) to be adjusted at closing with 10% collar
• Final share number based on trailing 10 day average share price prior to close
Close Date anticipated Q2 2017 Nesscap shareholders will own ~12.3% of Maxwell
• Principal shareholders under 18 month lockup
Appointment of Ilya Golubovich to BOD (I2BF/Arbat), ~10% ownership of Maxwell
Immediate, positive P&L impact at close - accretive to non-GAAP EPS
Provides incremental scale and growth opportunities entering 2018
Combined company approaching 30% gross margin & breakeven adj. EBITDA by Q4 2017
DealTerms
Financial Impact
Key Takeaways
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Solidifies Ultracapacitor market, product and technology leadership
Accelerates Revenue Growth - Expanded Portfolio in Rapidly Growing SAM
R&D Leverage Allows Delivery of More New Products Faster
Expands Margins Driven by Manufacturing & Operational Synergies
Immediate, Positive P&L Impact
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