(All figures in Canadian dollars unless otherwise noted and
are subject to change due to currency fluctuations)
TORONTO, Jan. 31,
2023 /CNW/ - Aimia Inc. (TSX: AIM), a holding company
focused on long-term global investments, has announced today that
it has signed definitive agreements to acquire all of the issued
and outstanding shares of Tufropes Pvt Ltd. as well as certain
business undertakings of India Nets (together referred to as
"Tufropes" or the "Company"). Aimia will pay a purchase price of
$249.6 million (1) on a
cash-free and debt-free basis, subject to customary adjustments
related to net debt and working capital at closing.
Transaction closing, which is subject to regulatory approval and
other customary closing conditions, is expected to occur before the
end of the first quarter of 2023. Paladin Private Equity LLC
("Paladin") will act as Aimia's partner on the transaction.
Tufropes is leading global manufacturer of high-performance
synthetic fiber ropes and netting solutions for the aquaculture and
maritime sectors, as well as diversified industrial end markets.
Aquaculture is among the fastest growing sectors within the food
industry, and now supplies more than half the world's fish for
human consumption. Through its global sales network and its
cost-efficient manufacturing facilities across India, Tufropes is capable of producing
~70,000 metric tons of rope and netting solutions per year. It
boasts a product portfolio of over 35,000 individual SKUs and is
uniquely positioned to capture an increasing share of these
attractive end markets. Its revenue is geographically
diverse, with its products sold in over 70 countries, with 34% of
revenues generated in Europe, 34%
in Asia, 20% in the Americas and
12% in Australasia.
A family-owned business founded in 1992, Tufropes is expected to
achieve annual revenue of approximately $130
million (1) for the fiscal year ending
March 31, 2023, and industry-leading
EBITDA margins of 18%. Based on reasonable assumptions such as
operational improvement initiatives, as well as the optimization of
product mix, EBITDA margins are expected to grow above 20% within
the next two years. Since 2001, the company has grown revenue at a
compounded annual growth rate of approximately 20%, with limited
capital investment requirements and high free cash flow conversion.
Upon closing, Aimia intends to add key senior management and sales
& marketing positions in Canada and Europe, strategically located near key
customers and allowing Aimia to use its tax attributes.
Paladin will act as Aimia's partner on the transaction. In
connection thereto, upon closing of the transaction, Aimia and
Paladin will enter into certain agreements on customary terms and
conditions and providing for, among other things, governance
rights, preferred return for Aimia, certain carry related rights to
the benefit of Paladin, and an option for Paladin to acquire up to
19.9% minority equity position of Tufropes from Aimia within one
year of closing. Tariq Osman and
Eric Hauser of the Paladin team will
join the Board of Directors of Tufropes and support its strategic
It is anticipated that the acquisition will be initially
financed with Aimia's cash on hand. Aimia is currently
evaluating financing options with an expectation to raise a modest
level of debt at Tufropes within one year of closing.
Phil Mittleman, CEO of Aimia,
said: "Tufropes represents an outstanding opportunity for Aimia and
Paladin to invest in a global market leader, with a long track
record of organic growth and strong free cash flow generation,
while utilizing Aimia's sizeable tax attributes to further enhance
returns for its stakeholders. The new executive leadership and
expanded global sales team will support and grow Tufropes'
long-standing relationships globally. We are excited to be
partnering with Paladin Private Equity, whose experience and
investment acumen will help Tufropes grow both organically and
through potential acquisitions. We also wish to thank the
Goel family for over 31 years of stewarding this company through an
incredible period of growth and for their help in transitioning the
ownership of this company to Aimia."
Arun Goel, Founder of Tufropes,
said: "Over the past 31 years, Tufropes has grown to be a global
leader in the manufacturing of synthetic fiber rope and netting
solutions. Our dedicated team and valued business partners have
built a robust global platform and the time is right for the
business to scale to new heights. We believe that Aimia and Paladin
are the right partners to captain the next phase of this journey.
In changing hands, we have faith that the company will be able to
deepen its relationships with all of our customers and develop new
markets. We expect Tufropes' strong work ethic and culture of
teamwork to continue while our company is introduced to new
opportunities and diverse experiences and that this new chapter
will catalyse our employees' individual and personal growth. We
keenly anticipate the future of this growth story, as we pass the
baton to our new partners."
Paladin's founder and Managing Partner, Tariq Osman, added: "Tufropes' manufacturing
excellence and its modern and cost-efficient operating capabilities
have already made the business a top global producer in each of its
~US$500 million end markets. Aimia and Paladin believe these
to be a core tenant of future growth as customers continue to focus
on mission-critical materials and ever-increasing safety and
regulatory standards. We look forward to partnering with Aimia on
this transaction to realize the full growth potential of the
business." Eric Hauser, a Principal
at Paladin mentioned: "We've seen an underlying and secular
industry shift away from legacy steel wire ropes to
high-performance synthetic fibers, and from commoditized netting
solutions to high modulus polyethylene (HMPE) netting solutions.
Tufropes is well-positioned to take advantage of these trends, and
new management will seek to commercially advance the company's
existing manufacturing and newly developed products on a global
Mr. Mittleman further added: "We continue to actively pursue
other investment opportunities with similar growth, EBITDA and free
cash flow profiles, and look forward to sharing further information
Kotak Investment Banking acted as sole Financial Advisor to
Tufropes and India Nets, and Anagram Partners acted as Legal
Advisor for Tufropes and India Nets. JSA Law acted as Legal Advisor
to Aimia and Paladin.
Based on CAD/INR of
60.96 as of January 30, 2023.
Conference Call Information
Aimia will host a conference call and live webcast to discuss
the acquisition on January 31, 2023,
at 8:30 a.m. Eastern Standard Time.
The webcast will be accompanied by presentation slides which are
now available at
which will be filed on SEDAR and will be available at
www.sedar.com. All interested participants may access this
call on a listen-only basis via our simultaneous audio webcast:
https://app.webinar.net/4ABW87XD97Y. The webcast will be accessible
on Aimia's Investors page
Aimia Inc. (TSX: AIM) is a holding company with a focus on
making long-term investments in public and private companies, on a
global basis, through controlling or minority stakes.
The company owns a portfolio of investments which include: a
10.85% stake in Clear Media Limited, one of the largest outdoor
advertising firms in China, a
48.8% equity stake in Kognitiv, a B2B technology company enabling
collaborative commerce, a 10.8% equity stake in TRADE X, a global
B2B cross-border automotive trading platform as well as a wholly
owned investment advisory business, Mittleman Investment
For more information about Aimia, visit www.aimia.com.
About Paladin Private Equity
Paladin Private Equity LLC ("Paladin") is a global private
equity firm based in the US (Los
Angeles & New York) and
Germany (Hamburg) with a focus on investing in and
building global market leaders within the industrial technology
sector. Paladin's investment strategy targets unique companies that
dominate highly attractive niche markets encompassing
highly-engineered, manufactured products and technology-enabled,
business services. These companies are distinguished by deep and
sustainable competitive advantages and with as yet unfulfilled
global growth, lean management and digital technology performance
improvement potential. Paladin's investment team, board of
directors and senior advisor network have extensive experience
advising management teams on global sales & marketing growth
strategies (including new product development and geographic
expansion), executing and integrating global M&A, optimizing
complex global manufacturing, procurement, and supply chains and
pioneering the use of lean management and cutting-edge digital
technology to automate and modernize operations for maximum
efficiency, quality, innovation and safe operations.
Founded in 1992, Tufropes is a global leader in the
manufacturing of high-performance synthetic fiber ropes and netting
solutions for global aquaculture, maritime, and other various
industrial customers. Tufropes' products are known for their unique
combination of design and performance characteristics (including
resistance to UV radiation and abrasion, high strength vs. weight).
The Company is uniquely positioned to serve the global maritime
sector across a huge range of SKUs (>35,000), a global network
of sales distributors, 60+ sales employees, 70+ countries with
distributors, and at unprecedented scale (manufacturing capacity of
~70,000 MT p.a.).
Find out more at www.tufropes.com.
This press release contains statements that constitute
"forward-looking information" within the meaning of Canadian
securities laws ("forward-looking statements"), which are based
upon our current expectations, estimates, projections, assumptions
and beliefs. All information that is not clearly historical in
nature may constitute forward-looking statements. Forward-looking
statements are typically identified by the use of terms such
phrases such as "anticipate", "believe", "could", "estimate",
"expect", "intend", "may", "plan", "predict", "project", "will",
"would" and "should", and similar terms and phrases, including
references to assumptions.
Forward-looking statements in this press release include, but
are not limited to, statements with respect to the closing of the
Tufropes acquisition; the growth of Tufropes' EBITDA margins; the
transition of key senior management and sales & marketing
positions to Canada and
Europe; the use of Aimia's tax
losses; the multiple financing options currently evaluated; the
leverage of the Company; Paladin's option to acquire a minority
stake in Tufropes; Aimia's current and futures investment
Forward-looking statements, by their nature, are based on
assumptions and are subject to known and unknown risks and
uncertainties, both general and specific, that contribute to the
possibility that the forward-looking statement will not occur. The
forward-looking statements in this press release speak only as of
the date hereof and reflect several material factors, expectations
and assumptions. Undue reliance should not be placed on any
predictions or forward-looking statements as these may be affected
by, among other things, changing external events and general
uncertainties of the business. A discussion of the material risks
applicable to us can be found in our current Management Discussion
and Analysis and Annual Information Form, each of which have been
or will be filed on SEDAR and can be accessed at www.sedar.com.
Except as required by applicable securities laws, forward-looking
statements speak only as of the date on which they are made and we
disclaim any intention and assume no obligation to publicly update
or revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
Reference to "EBITDA" are to the unaudited earnings of Tufropes
before interest, taxes, depreciation and amortization and to
"EBITDA margins" are to Tufropes' EBITDA divided by its revenue.
EBITDA and EBITDA margins are non-standardized financial measures
that are not calculated or presented in accordance with
International Financial Reporting Standards ("IFRS"). Accordingly,
it may not be possible to compare Tufropes' EBITDA or EBITDA
margins with EBITDA, EBITDA margins or other financial measures of
other companies having the same or similar businesses.
In addition, all financial information regarding Tufropes
contained in this press release has been derived from Tufropes'
financial statements which are prepared in accordance with Indian
Generally Accepted Accounting Principles ("Indian GAAP"). Aimia
prepares its financial statements in accordance with IFRS. Indian
GAAP differs in certain respects from IFRS.
SOURCE Aimia Inc.