AIM Aimia Inc

ACQUISITION ESTABLISHES A STRONG PRESENCE IN THE AMERICAS

STARCHEM EXPECTS TO GENERATE $48 MILLION IN REVENUE IN FY2023

(All figures are in Canadian dollars unless otherwise stated and are subject to change due to currency fluctuations)

TORONTO, Nov. 6, 2023 /CNW/ - Aimia Inc. (TSX: AIM) ("Aimia"), a holding company focused on long-term global investments, has announced today that its Bozzetto Group ("Bozzetto") subsidiary has signed a definitive share purchase agreement to acquire 65% of StarChem S.A. ("StarChem") for $25 million⁽¹⁾, with a potential earn-out of $12.5 million⁽¹⁾ based on specific EBITDA targets to be met over the next two years.  The purchase price will be funded entirely from Bozzetto's existing credit facility and Bozzetto's cash on hand. The executive management team of StarChem, with whom Bozzetto has had a successful customer relationship since 2013, will retain a collective minority stake of 35%.

StarChem, headquartered in San Pedro Sula, Honduras, is a leading manufacturer of specialty chemical solutions used primarily in preparation, dyeing, and finishing processes by its large, multi-national textile industry customers. Established in 2007, StarChem operates its own production facility and also owns 100% of the Merril production facility. Together, these facilities have a total installed production capacity of approximately 20,000 Metric Tonnes (MT) per year, with potential for expansion. StarChem is expected to generate approximately $48 million^(1),(2) in revenue for the fiscal year ending December 31, 2023 and achieve an EBITDA margin of approximately 12%⁽²⁾. Honduras is one of the world's largest textile markets, with a focus on cotton production for some of the largest U.S. textile manufacturers, including Starchem customers such as Fruit of the Loom, Hanes, and Gildan.  Bozzetto's acquisition of StarChem will expand its geographical presence and advance Aimia's stated plan to enter the Americas through M&A.

Phil Mittleman, CEO of Aimia, commented: "StarChem has a reputation for excellence, and we are excited to add their highly specialized chemical manufacturing processes to Bozzetto's portfolio. The synergies with Bozzetto are significant and the combination opens up new global sales opportunities for both companies throughout the Americas."

Roberto Curreri, CEO of Bozzetto, commented: "StarChem will be a cornerstone in our company's premium product lineup, solidifying our position as a leader in specialty chemicals in Central America and the U.S., and bringing a rich history and outstanding technical expertise that aligns with our strategy to achieve a leading position in the Americas. Moreover, integration will be seamless as the two management teams have collaborated successfully for over a decade, and are equally committed to delivering a high value proposition to customers every day.  Our ambition is to bring our ESG-focused model into their existing markets while offering a full range of products and capabilities to our rapidly expanding customer base worldwide."

Mr. Mittleman added, "This acquisition further demonstrates the value Aimia adds to our portfolio companies through strategic oversight and access to capital. After 100 years of leadership in the European and Asian markets, Bozzetto will now have an established manufacturing operation in the Americas that will serve as a platform for further growth. This transaction underscores Bozzetto's commitment to becoming one of the world's leading providers of chemical solutions. We are thrilled to announce this combination, and we continue to evaluate and pursue other exciting opportunities to grow this business further."

Aimia Inc. (TSX: AIM) is a holding company that makes long-term investments in private and public businesses through controlling or minority stakes. We target companies with durable economic advantages evidenced by a track record of substantial free cash flow generation over complete business cycles, strong growth prospects, and guided by strong, experienced management teams. Headquartered in Toronto, Canada, Aimia is positioned to invest in any sector, wherever a suitable opportunity can be identified worldwide. In addition, we seek investments that may efficiently utilize the Company's operating and capital loss carry-forwards to further enhance stakeholder value.

For more information about Aimia, visit www.aimia.com.

StarChem, headquartered in San Pedro Sula, Honduras, is a leading specialty chemical solutions producer primarily involved in the preparation, dyeing, and finishing processes within the textile industry. StarChem, through its two production entities, Merril and StarChem Honduras, both of which are located in the San Pedro Sula industrial park, collectively boast an installed production capacity of approximately 20,000 MT per year.  The Honduran textile landscape primarily revolves around cotton, with a predominant focus on t-shirt production, valuing between US$200-300 million.  StarChem's core clientele comprises Honduran operations of major U.S. textile mill multinationals such as Fruit of the Loom, Hanes, and Gildan.

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 potential earn-out; the timing of closing of the transaction; StarChem's revenue and EBITDA margin for the fiscal year ending December 31, 2023; the new opportunities for Bozzetto and StarChem; and Bozzetto's expansion in Mexico, San Salvador, Guatemala and other parts of North America.

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. While Aimia considers these factors, expectations and assumptions to be reasonable, actual events or results could differ materially from the results, predictions, forecasts, conclusions or projections expressed or implied in the forward-looking statements. 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.sedarplus.ca. Aimia cautions that the list of risk factors included in such Management Discussion and Analysis is not exhaustive. 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 (i) "Adjusted EBITDA" is the unaudited pro forma earnings of StarChem before interest, taxes, depreciation, amortization as well as other income and financial expenses; and (ii) "Adjusted EBITDA margins" is StarChem's Adjusted EBITDA divided by its unaudited pro forma revenue. Adjusted EBITDA and Adjusted 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 StarChem's Adjusted EBITDA and Adjusted EBITDA margins with Adjusted EBITDA and Adjusted EBITDA margins or other financial measures of other companies having the same or similar businesses.

In addition, all financial information regarding StarChem contained in this press release has been derived from StarChem's unaudited pro forma financial statements which are prepared in accordance with Honduras Generally Accepted Accounting Principles ("Honduran GAAP"). Aimia prepares its financial statements in accordance with IFRS. Honduran GAAP differs in certain respects from IFRS.

SOURCE Aimia Inc.