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ACELL INDUSTRIES LTD
The information in this document is confidential to the person to whom it is provided and should not be disclosed to any other person. It may not be reproduced in whole, or in part, nor may any of the information contained therein be disclosed without the prior written consent of the directors of Acell Industries Limited ('the Company'). A recipient may not solicit, directly or indirectly (whether through an agent or otherwise) the participation of another institution or person without the prior approval of the directors of the Company.
The contents of this document have not been independently verified and they do not purport to be comprehensive, or to contain all the information that a prospective investor may need. No representation, warranty or undertaking, expressed or implied is or will be made or given and no responsibility or liability is or will be accepted by the Company or by any of its directors, employees or advisors in relation to the accuracy or completeness of this document or any other written or oral information made available in connection with the Company.
Any form of reproduction, dissemination, copying, disclosure, modification, distribution and or publication of this material is strictly prohibited.
Although the information contained herein is believed to be reliable, Acell Industries Limited or its Advisors or Consultants make no representation as to the accuracy or completeness of any information contained herein or otherwise provided by Acell Industries Limited. The terms set forth herein are intended for discussion purposes only and subject to the final expression as set forth in a definitive agreement and / or confirmation.
Acell Industries Limited or its Advisors or Consultants are not providing tax; accounting or legal advice and the prospective investor should rely on its own accounting, tax, legal and investment advisors for definitive guidance as to the applicability of the enclosed information to specific circumstances.
This Business Plan includes “forward-looking statements and projections.” All such statements and projections within this Business Plan, other than statements of historical fact, regarding the Company or its strategies, plans, objectives and expectations, are all forward-looking statements. Although the Company believes that the projections reflected in this plan are reasonable at this time, it can give no assurance that these projections will prove to have been correct.
Proprietary & Confidential
TABLE OF CONTENTS
Unique selling points
Route to market
Acell Industries Limited (ACELL), an Irish material science company, develops advanced materials, manufacturing processes, products and systems.
Patent protected IP portfolio has been proven through “proof of concept” building projects and tested and validated by large multi-national companies who are respected leaders in the composites and building materials industries.
Offers applications across many industries where there is a need for lighter, stronger, greener materials, with customised performance, that can be manufactured and used more cost effectively, can be produced in high volume and can look like conventional materials.
Currently focused on building materials, in particular roofing and cladding solutions in the US and Europe.
Business model and technology are globally scalable. IP is commercialised by partnering with industry leaders to bring solutions to market, leveraging the partners market presence and expertise, capital and infrastructure and ACELL’s platform technology, in the form of a manufacturing licence.
EXECUTIVE SUMMARY (continued)
ACELL continues to invest in R&D, carried out by its multi-discipline team in Milan, Italy.
Established joint venture for manufacture of high performance roofing with Malarkey Roofing, top ten supplier of roofing in US. Earned €5mm upfront licence fee, partner committed a further $15mm to JV, to commence trade in 2017.
Recently signed agreements with leading international composites companies –Owens Corning, AOC and Andercol, to promote and develop commercial opportunities for ACELL. Having tested the technology and assessed its potential, determined there is strategic value in committing their own names and resources to ACELL’s development.
ACELL retains the manufacture and supply of a high margin proprietary raw material stipulated in ACELL manufacturing licences. Forecast to become self-financing through this revenue stream in 2018.
Forecast 2021 EBITDA >€70mm, diversified across revenue streams and markets.
Requires €10,000,000 investment now to fund growth until breakeven and repay selected debt.
Target exit from 2021 with multiple exit scenarios - sale of individual business segments or business as a whole to strategic buyer or possible IPO.
EXECUTIVE SUMMARY (continued)
Pipeline of potential JVs being work on
Promote ACELL & develop commercial opportunities in the market
Product JVs & Licensees
Demand for ACELL TECHNOLOGY™
Global trends and events are creating demand for new functional solutions:
High performance materials that are lighter, stronger, more durable, can have customised performance properties, look and feel like conventional materials and can be manufactured in high volume;
Cost efficient manufacturing processes that require low capital investment, less labour and allow more design flexibility;
Materials that are recyclable, use low energy manufacturing processes, meet green regulations and have a reduced environmental impact throughout their lifecycle;
Building materials that require less skilled labour, reduce installation time and cost, are not weather dependent for installation, increase the building’s energy performance and can withstand fire, extreme weather or planned attacks;
Simpler and less costly fire suppression systems that can handle all classes of fire, react faster and do not cause additional damage to property (sprinkler systems often cause more damage than the fire itself);
Business model that encourage collaboration between parties, combining their individual expertise to develop and bring disruptive solutions to market faster.
ACELL develops advanced materials, manufacturing processes, products and systems that create functional solutions with applications in many different industries.
Primary focus is on developing total solutions to exploit opportunities in the building industry, secondary focus on fire suppression and security & defence industries.
Research and development is carried out by ACELL’s subsidiary in Milan.
Intellectual property is licenced to market leading companies – directly or through joint ventures.
ACELL is due to commence manufacture and supply of a proprietary raw material and high performance roofing and cladding products.
What is ACELL TECHNOLOGY™?
ACELL FOAM™, a proprietary mineral phenolic resin-based structural foam, developed by ACELL’s founder Aldino Albertelli and first used in fire resistant panels for Heathrow Airport in the 1970s. Went on to be used in numerous high profile building projects throughout the UK and was favoured for the innovative design solutions it could provide along with its fire resistant and thermal insulation properties.
ACELL MONOLITHIC MOULDING PROCESS™, a patented technique that uses traditional SMC¹ as a skin on ACELL FOAM to create the ACELL PANEL™. During the process cycle, SMC becomes liquid and penetrates into the open cell structure of the foam, creating a true monolithic structure. By fusing together in this way, common problems that arise when a finish is glued or laminated in place are totally eliminated and the composite panel is moulded and finished on both sides in a single operation.
ACELL PANEL™ offers exceptional structural performance, is light weight, fire resistant without the emission of toxic fumes, thermally insulated, seismic resistant, mould/moisture resistant, recyclable and UV stable. Other performance materials such as carbon fibre, graphite, fire extinguishing compound or electromagnetic shielding can also be integrated or embedded into the panel.
¹ Sheet Moulding Compound (SMC), a reinforced composite material discovered in the 1960s and still widely used today in high volume production, particularly in the auto industry.
Specialist mould-making skills and surfacing techniques that allow ACELL’s composite panels’ surfaces to mimic a wide range of traditional materials in a highly realistic manner as well as offer customized finishes, giving it the potential to replace many conventional materials.
Proprietary fire suppressant compound, comprising a mixture of phenolic resin, fire retardant minerals (alumina etc.) and ACELL FOAM™. The non-toxic compound interrupts the fire via interference between the ultra-fine aerosol particulates and the flame’s free radicals.
FIRECELL, a fire retardant additive, based on ACELL FOAM™ can be incorporated in SMC skin formulation or added to resins or gel coats to dramatically increase their fire resistance.
What is ACELL TECHNOLOGY™? - Integration of components into a monolithic panel
Variety of resins used depending on performance requirements of the surface
ACELL FOAM ™
ACELL MONOLITHIC MOULDING
Proprietary Foam Moulding Compound
Proprietary process includes large amount of mineral fillers chosen for end-product performance characteristics
ACELL’s unique material attributes
Chopped strand, woven fabrics, oriented fibers and fabrics, depending on structural performance requirements
ACELL patented SMC process
ACELL proprietary foam
Only process that allows oriented-strand fibers to be used with SMC (Sheet Moulding Compound) due to full-mould coverage and lack of x/y axis distortion
Only process that picks up surface finish from the mould (sand, iron oxides, pigments, etc.)
Only foam that can incorporate large quantities of mineral fillers due to lack of blowing agents required in manufacturing process
UNIQUE SELLING POINTS
Why is ACELL different?
Intellectual property portfolio of know-how, trade secrets, patents and trade
marks. All major jurisdictions covered by patent application and a disciplined
protection strategy is followed. Successful “Freedom to Operate” report
commissioned on ACELL’s US patents.
19 patents granted across 7 patent families
55 patents pending and 17 applications under development, not yet filed
Research and development team with extensive experience in
architecture and building, structural engineering, chemistry, material
science and product development.
Award winning innovation validated by large industrial multi-nationals
with applications and strong value propositions in fire resistance,
aesthetics, strength, durability and ease of installation, across a range
Technology and business model are highly scalable at a global level. ACELL
works with partners to develop applications and prototypes which are tested by the partner to the relevant industry standards and are brought to market by the partner.
UNIQUE SELLING POINTS (continued) Why is ACELL different? - A virtually endless range of finishes
The surface finish of ACELL PANELS™ is achieved using a cast aluminium tool for texture and a finishing material applied to the mould, prior to placing the first layer of SMC. Any of the finishes become an integral part of the panel.
ACELLS PANELS ™ can accurately replicate any profile, texture, color, finish:
Slate, Stone, Brick,
Wood (texture, touch, grain, colour; unique profiles, horizontal, vertical, shakes, shingles, etc.),
Contemporary and commercial finishes,
Special “corporate branding finishes” (unique reflective & light dependant reveals),
ACELL finishes can be mass customized in accordance to architectural specifications.
UNIQUE SELLING POINTS (continued) Why is ACELL different? - High performance characteristics
All ACELL PANELS™ are fire resistant and thermally insulated due to ACELL FOAM™.
ACELL PANELS™ can be easily customised to provide required performance properties (security, acoustic, insulation, seismic, lightweight or others), in accordance with stringent industrial standards.
ACELL PANELS™ provide optimal solutions for sustainability targets, energy programs (Zonal and National), LEED’s certification.
Case Study: European Wall Panel & Joint Testing:
Test Results: ACELL PANEL™ 80 mm
Air & Water Permeability
Highest Level achieved: 132 Mph wind
Wind Loading Test
Highest Level achieved: 204 Mph wind
Exceeded maximum standard by 40%
Hard Body Test
Passed Highest Level
Acoustic (40mm Acell-75mm Fibre-15 GB)
Insulation customized to specification
Ballistic tests - results
UNIQUE SELLING POINTS (continued) Why is ACELL different? - Strong anti-blast & ballistic properties
ACELL PANEL™ reduced the pressure of an explosive shockwave by 98.3% in explosive testing carried out by Italian MOD
Armoured steel plate co-moulded into ACELL defence & security panel and tested to STANAG¹ ballistic ratings:
Ballistic test results
Kinetic Energy (J)
7.62 x 51 mm Nato Ball
7.62 x 39 mm API BZ
7.62 x 51 mm AP (WC)
14.5 x 114 mm AP/B32
Basic Ballistic panel
BARRETT (.50 cal Nato Ball)
PASS (10088 J)
PASS (13908 J)
PASS (15317 J)
BROWNING (.50 cal AP)
PASS (10517 J)
FAIL (14404 J)
MG (7.62 x 51 mm Nato Ball)
PASS (3313 J)
Heavy Ballistic panel
PASS (10517 J)
PASS (14404 J)
PASS (15823 J)
Results of ACELL PANEL™ ability to capture 98% of the shrapnel on its surface.
Panel protection results according to STANAG- 4569 Level 3
¹ STANAG -NATO standardization Agreement
UNIQUE SELLING POINTS (continued) Why is ACELL different? - Cost effective manufacturing process
ACELL’s MONOLITHIC MOULDING PROCESS™ out performs conventional moulding processes such as those used in the SMC industry, offering increased productivity, cost efficiencies and product properties.
Lower capital investment for press (120 metric ton) and aluminium mould.
Production of a complete monolithic panel in one single operation.
Flexible production and short cycle time.
Full-mould SMC coverage allows incorporation of oriented fibres.
No flow on the X & Y axis – prevents dragging
SMC is located flat on the mould.
Possible to use woven fabrics and printed images.
No abrasion on the mould which means that low cost high quality definition moulds can be used
During the process, the
SMC becomes liquid
and penetrates into
the open cells of the
foam, creating a true
The foam material has a
wide range of densities
(from 80Kg/m3), with
adjustable cell size.
Oriented fabric and even
can be inserted
during moulding for
the manufacture of a
UNIQUE SELLING POINTS (continued) Why are ACELL’s Roofing & Cladding solutions different?
ACELL’s proprietary panelised roofing and cladding systems address many common industry “pain points”
Project budget & time overruns
Complex project critical path dependencies between trades
Wet trades, slow & sequential component layering & dry times
Cost & availability of skilled trades
Heavy, high carbon footprint, high energy cost materials
High CAPEX manufacturing
Prohibitive pricing & small markets for high end / performance construction finishes
Combustibility & fire toxicity of many insulators
Job site industrialization, improved construction processes
Simplified project management
Pre-finished wall panels (monolithic - no wet trades)
De-skilled labor opportunities
Lightweight superior performance cladding systems
Low CAPEX manufacturing
Affordable desired aesthetics and superior performance targeting large & new markets
Mitigation by co-moulding vulnerable insulators within protective ACELL PANEL™
UNIQUE SELLING POINTS (continued) Why are ACELL’s Fire Suppression Solutions different?
ACELL’s proprietary fire fighting systems can be handheld units or panels which form part of the building’s structure. They address many common industry “pain points”
No residue, no additional damages, fully self-clearing and non-toxic
Different product design very easy to install
Discharge of the Fire suppression aerosol within 10 seconds
Basic training required for the installation
No material stagnant in a pipe
Not sensitive to low temperature
Accidental trigger will only be localised and with no consequences except recharging the unit.
Immediate intervention, dealing with fire where the fire is and not damaging any other parts of a building reducing insurance claims
Property damage from the use of conventional systems such as sprinkler systems
Costly, expensive and complicated systems to install
Time of reaction
Skilled labour required for installation
Stagnant water in Sprinkler system
Risk of bursting when exposed to lower temperature
Accidental trigger of the system causing damages in the entire area/ floor or building
Multi millions Euros claims to insurances due to damages caused by fire but also additional damages caused by Fire Intervention
UNIQUE SELLING POINTS (continued)
Why are ACELL’s Security and Defence Solutions different?
ACELL’s specially developed lightweight monolithic panels resistant to blast and ballistics, can be quickly deployed in the form of prefabricated units or as external cladding for existing structures. The modular nature of the panels allows them to be easily dismantled, stored and re-used multiple times.
The ACELL PANEL™ is engineered to withstand the harshest of field conditions.
ACELL TECHNOLOGY™ allows for product offerings in multiple configurations:
Prefabricated Units - These lightweight factory assembled units can be lifted into position by helicopter or transported by truck, offering immediate protection in the field. These are ideal for short-term deployments or during the initial stages of sustained operations.
Modular Flat-pack - Easily transportable and simple to set up, the modular panel system can be used to build a variety of structures for medium to long term use and habitation.
External Cladding - The panels can be applied to the exterior of existing buildings to provide additional protection, to change a building’s appearance or to offer additional capabilities. A vast range of panel finishes allows for a high aesthetic value to any project.
Development of roofing and cladding products for supply to UK and Dutch contractors to seed the market – page 34
Agreements signed with Owens Corning, Andercol and AOC to commercialise ACELL TECHNOLOGY™ - page 35
Working towards establishing next product joint venture – page 36
Proof of Concept
Four building projects completed –pages 26 to 31
Establishment of joint venture with Malarkey Roofing, €5mm licence fee earned – page 33
Discovery of fire retardant performance additive
Angel Investor round of financing
Hire of business development team
Pursuit of IP commercialisation through JVs
Establishment of Pelta Protection Systems, JV with Ingegneria Dei Sistemi S.p.A. (IDS) in security & defence – page 32
ACELL incorporated and acquired IP developed by its founder.
Continued to expand and protect the IP portfolio.
PROGRESS - PROOF OF CONCEPT Historical restoration with ACELL TECHNOLOGY™
Concept was to renew the facade of an 18th century neo-classical building in the historic centre of Trapani, Italy using composite materials to replicate the original materials and design.
Technical challenges – panels that replicate large stone blocks, joins between panels, moulds to make panels and decorations (between floors, eaves around windows) different fixing methods.
PROGRESS - PROOF OF CONCEPT(continued) Historical restoration Trapani (Italy) – before and after
PROGRESS - PROOF OF CONCEPT (continued) Total project construction – Devon (UK)
An old rusty corrugated steel tennis court building, was transformed with ACELL PANELS™ into a high end Reception Hall. ACELL replicated local Devon stone and had the entire building clad and roofed in 1/18th the time of using actual stone, at 1/3 the cost. The high quality finish met the exacting standards of local planning authorities, geologists and architects. Gold award for the best Venue and Business Tourism Award in February 2016.
PROGRESS - PROOF OF CONCEPT (continued) Total project construction – Devon (UK), before and after….
PROGRESS - PROOF OF CONCEPT (continued) A quick building solution (France)
The architect and the final customer were looking for a quick building solution, which would require no maintenance, provide security and be resistant to wear and tear. It needed to be erected fast, thermally insulated and all within a very tight budget. ACELL created an American oak wood grain finish panel for an authentic look and feel.
PROGRESS - PROOF OF CONCEPT (continued) Replication of organic materials
Concept was to replicate the soil of Piacenza from a 3D rendering.
Researched sand of the same colour, did soil investigations, took samples of grounds, shells (Piacenza is close to the sea) and fossils. The architectural shape was chosen as an iconic symbol for the city, filled by the colours of its soil and fields and required fixing 6m long panels onto a suspended structure
PROGRESS (continued) Establishment of Security Joint Venture
January 2014 joint venture formed with IDS Ingegneria Dei Sistemi S.p.A. (IDS), an
independent engineering and systems technologies company, with expertise in the
electromagnetic, radar and air navigation fields.
ACELL granted a royalty free, manufacturing licence to the joint venture in return for 50% ownership.
Licence covers the use of ACELL TECHNOLOGY™ in the field of military defence and civil protection. IDS granted a similar licence covering the use of their radar technology by the JV. Both companies retain the rights to exploit their respective technologies outside of the JV.
Separate supply agreement put in place for the supply of ACELL FOAM™ to the JV.
JV has developed “DEFENDER” a multi-functional panel construction system which increases the performance of an ACELL PANEL™ with IDS technologies such as HPM electromagnetic shielding, antennas, communication protection, radar absorbing materials and acoustic systems.
Partners are working together toward commercialisation in this specialist market.
PROGRESS (continued) Establishment of Roofing Joint Venture in USA
October 2015, product joint venture formed with Malarkey Roofing a top 10
supplier of roofing in the US with turnover of approx. $500mm.
Malarkey have a strong record for innovation and since 1956, have lead the way in introducing many new technologies and products to the North American roofing industry.
ACELL granted a 20 year royalty free, manufacturing licence to the joint venture in return for 50% ownership.
Joint venture will manufacture high performance roofing panels to be supplied to Malarkey Roofing and distributed through its existing channels.
ACELL earned €5mm non-refundable, upfront licence fee from Malarkey for exclusivity on the North American roofing market that ACELL will create. Malarkey also committed $15MM to the JV to fund start-up and working capital.
JV to commence trading early
2017 and ACELL will manufacture
and supply ACELL FOAM™ to JV.
Forecast JV turnover - $000
Forecast JV EBITDA - $000
Progress (continued) Development of Roofing & Cladding Products for pilot projects
“Energiesprong”, is a Dutch government supported initiative, aimed at delivering net zero-energy retrofits to existing homes in Netherlands.
ACELL engaged by DeGroot Vroomshoop to develop and supply a range of insulated cladding panels that are quick and easy to install.
Panels developed, supply to begin early 2017.
“Energiesprong” model is spreading throughout Europe as countries seek to fulfil their C02 reduction commitments.
Partnered with Phil Coppell Limited, UK specialist in home improvements, to develop range of roofing and cladding for UK domestic retail and commercial sectors.
Product range approved by client, ACELL to commence supply to PCL before year end.
Objectives are to establish an immediate revenue stream, seed the market and gain commercial validation.
Progress (continued) Agreements signed 2016
Memorandum of agreement signed 1st Sept. 2016.
AOC is a leading global supplier of resins, gel coats, colorants, and additives for the composites industry, number one supplier in North America.
AOC introduced to ACELL by OC, are working to identify and develop commercial composite applications for ACELL’s Firecell. Once an application is considered technically viable, commercial negotiations will commence.
AOC tested Firecell’s performance relative to rudimentary industry standards prior to signing. Established that it significantly outperformed.
LOI for strategic alliance agreement signed 11th Oct. 2016
OC introduced ACELL to Grupo Orbis, a multi-business conglomerate with turnover of >$1.8bn, present in 23 countries in Latin America.
LOI signed with Andercol, its composite subsidiary to promote and develop ACELL in Latin America.
Andercol working towards completing a business plan before 31/12/16, outlining specific ACELL demand projects that will be pursued, resource allocations etc.
Already introduced ACELL to a number of companies that have potential to progress to commercial projects.
Supply & Services agreement signed 25th Sept. 2016.
Owens Corning (OC) to provide assistance in preparing ACELL’s value proposition for commercial opportunities OC bring to ACELL.
Currently working on value proposition with Core Molding Technologies, leading molder particularly in the heavy duty truck market, has extensive manufacturing facilities throughout North America.
Core’s interest in the technology:
- develop truck roof module
- become contract manufacturer for product JVs and reduce its dependence on current sectors.
- Expressed interest in manufacturing US siding
ROUTE TO MARKET JOINT VENTURES OPPORTUNITIES Pipeline of open dialogues – product joint ventures/ licensees
¹ EIFS – Exterior insulation & finish system
Globally the volume and number of applications for advanced composite materials offering reduced weight, increased strength, corrosion resistance and other enhanced properties are growing steadily. ¹
Advanced materials are penetrating and conquering new markets persistently. ¹
The challenge is to increase performance while reducing material cost and processing time so innovation can be brought to high volume manufacturing – what ACELL offers
¹ Markets and Markets “Advanced composites market” August 2015, Markets and Markets “Composites market” May 2016
² Internal presentation prepared by Owens Corning on applications for ACELL TECHNOLOGY™
MARKETS (continued) US & European, Roofing & Cladding
ACELL PANEL™ highlights:
Lightweight, durable, fire resistant
Is inherently an insulator (ACELL FOAM™ core) and can co-mould 3rd party insulation while protecting it from fire
Can be used to design roofing / siding panels & systems
Addresses virtually all roofing & siding pain points (weight, hail resistance etc.)
Unmatched aesthetic realism (wood, brick, stone, contemporary finishes)
Removes barriers to accelerated renovation/energy retrofit goals (including historical restoration markets)
Provides energy efficient outcomes for NEW builds & retrofits
Reduces labour costs, shorter install times, disruption of job site
Designed to improve Health & Safety on the job site
Provides unique solutions to $B roofing and siding markets for residential and commercial applications
Countless additional applications for affordable, temporary, emergency, and pre-fab/modular housing.
ACELL TECHNOLOGY™ enables the manufacture of roofing and siding - high volume/large area products, from an advanced composite material, in a commercially viable way. This was not possible before.
ACELL is targeting these markets in the US & Europe because of their size/value and ACELL’s potential for disruption in them.
ACELL is well positioned to capitalize on high growth segments (energy retrofits) within the building & construction industry.
The building industry is evolving towards increased use of advanced materials & composites – ACELL TECHNOLOGY™ leads in these key areas.
MARKETS US Roofing
Asphalt shingles continue to lose share to alternative roofing materials. In the last decade the asphalt market has dropped over 37%
Metal is gaining share the fastest due to its longevity/durability over asphalt shingles and its relative lighter weight but does not deliver realistic ”replicas” of preferred aesthetics like wood or slate etc.
During the roofing downturn between 2006 to 2013 residential metal roofing grew their share 50% for re-roofing and 350% in new-build
Wood shingles are prone to rot & have poor fire resistance despite having popular & desirable aesthetics
Roofing products like concrete, clay and slate are too heavy and costly to effectively become an alternative to asphalt
Insurance Industry is tiring of replacing asphalt shingle roofs and are investing MM$ in R&D to find viable alternative solutions while simultaneously limiting coverage to homeowners
Total USA residential roofing 2013: $12.3bn, 147 MM SQ.
Asphalt held the largest market share in $ value ($8.4bn) and volume (110 MM SQ) [1 SQ=100 s.f.]
Market trending towards:
More durable roofing – hail resistant, weather
More natural looking finishes
Lighter roofing – capable of replacing asphalt without additional roof reinforcement
Improved wind uplift resistance and fire resistance
Faster and higher quality installs,
More energy efficient roofing solutions
ACELL PANEL™ Roofing Systems:
Tested against hail, wind, driven rain, impact, UV, energy saving reflectivity etc.
Can be designed to more easily integrate solar panel systems
Outperform any (tile, shingle) material for wind uplift, drainage, water resistance.
Can replicate the desired natural aesthetics of wood, slate, and clay better than any other existing roofing material (metal, concrete, asphalt)
MARKETS Western Europe Roofing
In sharp contrast to USA, it is Tile Roofing and not Asphalt that dominates demand in every country in Western Europe.
Roofing Tile Products will represent 41.2% of all 2018 Roofing Demand
Roofing Tile “labour and install costs” are a huge % (in the range of 42 to 48%) of Total Roofing Job Costs in EU
Due to the extremely heavy weight of Clay & Concrete Tiles and their relatively small sizes (ex: 60 tiles/m2)
Due to the long install times required (ex: 14 days for 180 m2 roof)
Each type of Roofing Tile has its own weight, price, install requirements, roof pitch limits, fixings, and roof structure requirements.
Tile “material only” costs merely contribute one element to the complex total job cost scenario.
3x lighter than Fibre Cement roofs with a far more realistic look
7 to 10x lighter than typical clay/concrete/slate roofing tiles with none of the roof pitch limitations
Designed for drastic reduction in batten & other under-tile requirements (to code)
Can replicate any tile size, format, profile, texture, color scheme within a roofing panel
Much faster to install, with no sacrifice in quality & reduced labour costs
Shortening Project times up to almost 80 %
Increase # of projects/profit achievable in a season regardless of weather
Lighter building construction trend is driving desire for Lighter Roofing
Lighter roofing contributes to less costly seismic design
More contemporary roofing designs
Easier incorporation of solar panel systems
Faster, cheaper and higher quality installs
Desire for shortened install times, labour and wet trade reductions
Mix of siding material types on a single building façade
Increased interest in wall systems vs individual components
Greater Interest in Protective Architecture (including “Blast Protection”) for critical infrastructure
Light weight building materials to avoid high shipping costs & expand geographic markets
Macro trend toward pre-fabrication
Unmet need for more realistic aesthetic options than Vinyl Siding and Fiber Cement can provide with better performance
MARKETS US Siding
100MM SQ by 2019 ($10.6B)
ACELL PANEL™ Siding Systems:
2x faster than vinyl, 3x faster than fiber cement,
5x faster than brick siding, 12x faster than stone veneers
Can incorporate mix of siding material ”looks” onto one panel (brick & stone)
Easy field modifications to siding panels without the toxic “silica dust” of fiber cement and without special equipment for cuts, penetrations.
Lighter than any siding material except vinyl & aluminium, 2x lighter than fiber cement and engineered wood, 8x lighter than brick & stone thin veneers, 24x lighter than some stone siding and “thin” pre-cast panels
Can be used as a veneer alone or as complete Building Envelope Wall Systems incorporating windows and doors, insulation, and structural elements.
Vinyl share dropping as Fiber Cement gains share
Engineered Wood is growing share
Thin individual Brick & Stone veneers and “panelized veneer” systems are on the rise including use as veneers on Pre-Cast panels
Wood shingles and shakes are still a preferred aesthetic but due to maintenance issues and insurability (due to fire) consumer demand has reduced
Thin brick and stone gaining share vs full bricks
The Masonry & Concrete siding “grouping” accounts for 84% of 2019 Western EU Siding demand by coverage area: 493 (MM m2)
Included in Masonry & Concrete “grouping” are:
Stucco & EIFS (45% of the grouping, 220.5 MM m2)
Brick & Tile (33% of the grouping, 163.5 MM m2)
Concrete & Stone (19% of the grouping, 92.5 MM m2)
Fiber Cement (3% of the grouping, 16.5 MM m2)
Metal siding (11%) and Wood siding (2.5%) are two other key materials in Western EU siding demand in MM m2
MARKETS Western Europe Siding
Monolithic solution for veneers alone or entire “building envelope wall systems”
15x to 30x lighter than conventional Brick & Mortar
Up to 57x lighter than precast panels
28 x lighter than THIN precast panels with veneer
Up to 15x lighter than stone veneer composite wall systems
Up to 2x lighter than glass fibre reinforced siding
Contributes to seismic resiliency
Faster installation and improved project times
Improved Acoustic insulation & Structural performance through co-moulding materials
Can replicate the look and texture of stone, brick, stucco at orders of magnitude less weight. Can replicate wood with better fire resistance and durability
Desire for alternatives to heavy, wet trade, labour intensive siding
Control of CO2 emissions are a priority
Energy Efficiency focusing on reducing energy requirements of existing stock of buildings
Usage of new energy efficient systems-solutions for NEW builds
Goal is to improve the rate of energy renovations through gov’t programs and R&D into new technologies and materials
Historical/Heritage authorities are looking for affordable and more realistic reproductions of traditional materials
MARKETS Addressable Markets
MARKETS (continued) Addressable fire suppression market
In Europe 70,000 people are hospitalised annually as a result of fire and smoke injuries.¹
Fire damage eats up about 1% of global GDP per annum ¹
The global fire protection systems market size is expected to grow from USD 47.96 Billion in 2015 to USD 98.24 Billion by 2022, at a CAGR of 10.1% between 2016 and 2022. ²
Fire protection systems market is currently dominated by active fire protection systems with
passive fire protection systems market expected to gain traction and grow at the highest
rate during the forecast period.
Both markets are addressable by ACELL
ACELL has partnered with Phil Coppell Ltd. (UK) & P’eonac (FR) to apply for an EU Horizon 2020, Fast Track to Innovation Grant.
If awarded the €2.23mm grant (ACELL’s share €1.39mm) would fund the development and commercialisation of a “market ready” hand held and fixed fire suppression unit, suitable for new builds and retrofits.
ACELL to develop & design the products, partners responsible for testing and accreditation, route to market etc.
Embedded in building products
Ceiling tiles, wall section, trims
Fixed unit designed to be added to a range of alarms systems
¹ Geneva Association Media, April 2014
² Marketsandmarkets.com, report SE 3049, April 2016
MARKETS (continued) Other addressable markets
Owens Corning, global supplier of fibre glass for reinforcement of high performance composites across multiple industries studied ACELL TECHNOLOGY™ and the markets it could address:
North America mkt
Problem to solve
Pick-up truck boxes
Light weight, impact resistance
RV/truck bus parts
Fire resistant, insulation
Auto load floors, underbody floors
Printing, hurricane resistance
Fire resistance, ballistic resistance
Life cycle, heat deflection, moisture resistance
Fire resistance, aesthetics
Deck, engine room, lightweight personal watercraft body
Fire resistance, light weight
Screw retention, aesthetics (wood applique)
Military housing, barriers
Aesthetics in addition to performance
BUSINESS MODEL Overview
ACELL TECHNOLOGY™ provides a platform for growth and profitability across multiple industries.
It enables ACELL to connect with partners in different markets, countries and points in the supply chain.
Leveraging its technology & innovation, ACELL will align interests, capture synergies and exploit expertise to create value for its shareholders and partners.
Contract manufacturers – as required
Manufacturing licence & ACELL FOAM
Promotion & development of ACELL
ACELL licenced product
BUSINESS MODEL (continued) How value and revenue will be generated
ACELL manufacturing licence granted to counterpart.
Licence specifies the field of application/product that can be manufactured, relevant territory and whether licence is exclusive or non-exclusive.
ACELL manufacturing licence specifies that it is a condition of the licence that products are manufactured using ACELL FOAM™.
A separate supply agreement is put in place between the licensee and ACELL for the supply of foam. This specifies the price at which foam is to be supplied and only allows for price variations if the cost of raw materials changes.
Two types of licencing arrangement:
IP licenced to joint ventures formed with industry partner;
ACELL receives JV equity, equity to appreciate over the life of the JV
This is the arrangement entered into with Malarkey Roofing
IP to be licenced directly to third party;
ACELL to earn royalty income, % at which royalty be charged will be determined based on product margins
This is the arrangement planned as per memo of agreement signed with AOC for commercialisation of fire performance additive
Manufacture and supply of ACELL FOAM™ to licensees, ACELL gross margin 50%. ACELL to become self-financing through sale of foam.
Supply of roofing and cladding panels to a limited number of contractors to seed the market. ACELL has manufacturing capacity for panels but is exploring sub-contracting as an option.
Phil Coppell Ltd and DeGroot Vroomshoop
Low volume – seeding the mkt.
Roofing & cladding panels
BUSINESS MODEL (continued) Value creation through JV
ACELL looks to form joint ventures with partners already strategically positioned within targeted industries.
ACELL selects partners who can offer product and market expertise, have manufacturing, distribution and marketing capabilities and who will provide an accelerated route to market.
ACELL will grant royalty free licence to the JV.
A foam supply agreement is put in place between ACELL and the JV.
The partner invests start-up capital.
Together ACELL and the partner develop a market focused product, leveraging ACELL’s technology and both partners’ expertise.
Either the JV manufactures the product and it is sold to a distributor or
to reduce JV operating leverage and accelerate time to market a contract manufacturer will be engaged by the JV to manufacture & deliver to the distributor.
This model reduces investment and risk for ACELL, partner benefits from an “open innovation” model.
ACELL equity in JV appreciates in value over life of JV
Ongoing, fixed supply, fixed price ACELL FOAM revenue stream
Sale of ACELL FOAM
Product Joint Venture
Sale of licenced product
This is the model used for product JV formed with Malarkey Roofing
BUSINESS MODEL ( continued) Value Proposition – US Siding JV
ACELL is working towards forming its next product JV in US Siding.
ROUTE TO MARKET
“ACELL - Versatile, game changing, disruptive innovation, that can create $1-5bn composite business globally”
- Owens Corning, venture board presentation , August 2015
ACELL’s primary route to market is through the distribution channels of its licensees.
Brand strength, market share and distribution network are some of the factors taken into account by the business development team when identifying potential partners to connect with.
To accelerate IP commercialisation, ACELL has signed strategic alliance agreements with Owens Corning and Andercol, raw material suppliers in the ACELL supply chain.
They will use their expertise and resources to develop commercial opportunities for ACELL TECHNOLOGY™ in return they will be specified as supplier of the relevant material, increasing demand and creating new markets for their materials.
Both Owens Corning & Andercol are more than just suppliers, they have built strong reputations working with their customers to develop and invest in solutions. They understand the needs of their markets and see ACELL as a solution to many of them.
Access to customers, suppliers, compounders and others.
Exposure at trade shows
Identification of additional sales opportunities
Product testing in their labs.
Owens Corning – fibre glass
Operations & partners around the world, group turnover $5.4bn
Supply chains positioned in - building, transport, consumer goods & electronics, industrial and energy generation.
Andercol – Polyester resins, SMC
Create sustainable solutions through collaborative work in the value chain.
Supply chains positioned in - building, transport, industry, paint & coatings, nautical
ROUTE TO MARKET (continued)
ACELL, promoted by Andercol at “Colombiaplast-Expoempaque 2016” International trade show held in Bogotá, Colombia
Two structures created to showcase applications for ACELL TECHNOLOGY™
ACELL Siding compared to alternative materials
ACELL has studied the competitive landscape in each of its targeted markets.
Found that US & Western Europe, roofing and siding markets are characterised by a small number of large players holding significant market share.
Principal methods of competition include innovation and product design, proximity to customers, quality and price. Competition both from competing suppliers and alternative materials.
Key barriers to entry, include economies of scale, brand identification and access to distribution channels.
ACELL’s differentiated value proposition, serves to increase the competitive advantage of its industry partner.
By partnering with an industry leader, ACELL can circumvent many industry barriers to entry.
Relative scoring 10 highest score
Aldino Albertelli, Founder and CTO: More than 40 years of experience in material and building science. Founded Openwood PLC, predecessor to ACELL which grew to become the 2nd largest in its field in UK. Negotiated JV with BP Chemicals for acquisition of Openwood PLC. 18 patents to his name relating to chemical and manufacturing processes.
Michael Frieh, Executive Director: Significant expertise in the composites field, supply chain management, production and technical support.
Cameron McConnell, Vice President Strategy and Business Development: Experienced in product development, marketing and new business development within global and emerging markets.
Rudy DePaoli, Vice President Global Commercialisation: Business experience in sales and marketing in entities ranging from entrepreneurial start-ups to billion dollar global businesses.
Marjorie Packham, Finance Director: Fellow of the Institute of Chartered Accountants in Ireland, over 18 years in practice and a broad range of experience in audit, financial accounting, management reporting and specialist business consultancy projects.
FINANCIALS Direct Supply Projections
FINANCIALS ( continued) Consolidated Projections
Note –these projections only include US & European roofing and cladding and a limited amount of panel sales.
Detailed value propositions have been prepared for these activities and ACELL either has, or is engaged with a potential partner.
FINANCIALS Historical Information
Investment required €10,000,000
Offering approx. 18% equity
Exact percentage is dependent on exercise of warrants and conversion of convertible debt
Based on pre-money equity value of €40mm
Use of funds:
Repayment of selected notes & interest €4,600,000
Fund operating expenses until break-even €4,800,000
Upgrade manufacturing facilities €600,000
Sector and model with several possible exits and strategic buyers
Sale of segments within application sectors. For example sale of roofing JV equity to JV partner or to a strategic buyer within that industry or
ACELL could be sold whole, in part or go for an IPO
Target exit from year 5, 2021
Target exit value at >€500mm (approx. 8 × EBITDA)
ACELL TECHNOLOGY is a highly differentiated, disruptive solution that can exploit opportunities created by the global need for cost effective, sustainable, high performance materials.
The technology has been proven through highly successful “proof of concept” projects and has been tested and validated by a number of large multi-nationals who are leaders in the composites world.
These companies have confirmed ACELL’s view of the many markets it can address and that it can create and convert markets. It is for this reason, they want to promote and commercialise ACELL and to secure their position with this emerging technology.
ACELL has made significant progress commercialising the technology on its own and has already established one product joint venture with forecast revenues of >$170mm by 2021.
The endorsement of ACELL’s newly signed industry partners has already raised its profile and increased exposure to potential partners. With their combined resources and expertise ACELL is poised to rapidly accelerate its commercialisation and execute its forecast financials.
Investment is required to fund growth until the company becomes self-financing through the sale of foam and panels and to repay existing debt.
Sound exit strategy with many potential strategic buyers and the possibility of selling the business whole or as individual segments.
Compelling return on investment, potential to return 10 times capital after 5 years.
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Aldino Albertelli, Founder and CTO: More than 40 years of experience in