UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): August 15, 2023
two
(Exact
name of registrant as specified in its charter)
| Cayman
Islands |
|
001-40292 |
|
98-1577238 |
(State
or other jurisdiction
of
incorporation) |
|
(Commission
File Number) |
|
(IRS
Employer
Identification
No.) |
195
US HWY 50, Suite 208
Zephyr
Cove, NV 89448
(Address
of principal executive offices, including zip code)
Registrant’s
telephone number, including area code: (310) 954-9665
None
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
| ☒ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
|
| ☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
| Title
of Each Class |
|
Trading
Symbol(s) |
|
Name
of Each Exchange on Which
Registered |
| Class
A ordinary shares, par value $0.0001 per share |
|
TWOA |
|
New
York Stock Exchange |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
8.01 Other Events.
On
August 15, 2023, two (NYSE: TWOA), a Cayman Islands exempted company (the “Company”), announced the execution
of a definitive business combination agreement (the “Business Combination Agreement”) with LatAm Logistic Properties
S.A., a company organized under the laws of Panama (“LLP”), for a proposed business combination (the “Business
Combination”). LLP is a leading developer, owner, and manager of institutional quality, class A industrial and logistics
real estate in Central and South America. Pursuant to the Business Combination Agreement, each of the Company and LLP will merge with
newly-formed subsidiaries of a to-be-formed holding company (“Pubco”), which will serve as the parent company
of each of the Company and LLP following the consummation of the Business Combination.
A
copy of the press release announcing the execution of the Business Combination Agreement is furnished as Exhibit 99.1 to this Current
Report on Form 8-K and is incorporated herein by reference.
Attached
as Exhibit 99.2 to this Current Report on Form 8-K and incorporated into this Item 8.01 by reference is the investor presentation that
will be used by the Company and LLP with respect to the transactions contemplated by the Business Combination Agreement.
Attached
as Exhibit 99.3 to this Current Report on Form 8-K and incorporated into this Item 8.01 by reference is the script to the video recording
of the investor presentation that was recorded by the Company and LLP with respect to the transactions contemplated by the Business Combination
Agreement. Please note that certain portions of the investor presentation were revised or updated for immaterial matters after the video
presentation was recorded, and in the event of any conflict between such script or video and the investor presentation attached as Exhibit
99.2 to this Current Report, investors should rely on the investor presentation attached as Exhibit 99.2 to this Current Report.
The
information in this Item 8.01, including Exhibits 99.1, 99.2 and 99.3, is furnished and shall not be deemed “filed” for purposes
of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject
to the liabilities under that section, and shall not be deemed to be incorporated by reference in any filing of the Company under the
Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, regardless of any general incorporation
language in such filings. This Current Report on Form 8-K will not be deemed an admission as to the materiality of any information contained
in this Item 8.01, including Exhibits 99.1, 99.2 and 99.3.
Additional
Information About the Transaction and Where to Find It
This
Current Report on Form 8-K relates to a proposed Business Combination between the Company and LLP. This Current Report on Form 8-K does
not constitute an offer to sell or exchange, or the solicitation of an offer to buy or exchange, any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer, sale or exchange would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. In connection with the Business Combination, the parties intend to file with the
Securities and Exchange Commission (the “SEC”) a registration statement on Form F-4 (the “Registration Statement”),
which will include a preliminary proxy statement of the Company and a preliminary prospectus of Pubco, and after the Registration Statement
is declared effective, the Company will mail a definitive proxy statement/prospectus relating to the Business Combination to its shareholders.
This communication does not contain all the information that should be considered concerning the Business Combination and is not intended
to form the basis of any investment decision or any other decision in respect of the Business Combination. LLP’S AND THE COMPANY’S
SHAREHOLDERS AND OTHER INTERESTED PERSONS ARE ADVISED TO READ, WHEN AVAILABLE, THE PRELIMINARY PROXY STATEMENT/PROSPECTUS AND THE AMENDMENTS
THERETO AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED IN CONNECTION WITH THE BUSINESS COMBINATION, AS THESE
MATERIALS WILL CONTAIN IMPORTANT INFORMATION ABOUT LLP, THE COMPANY, PUBCO AND THE BUSINESS COMBINATION. After the Registration Statement
is declared effective by the SEC, the definitive proxy statement/prospectus and other relevant materials for the Business Combination
will be mailed to shareholders of the Company as of a record date to be established for voting on the Business Combination. Shareholders
will also be able to obtain copies of the preliminary proxy statement/prospectus, the definitive proxy statement/prospectus and other
documents filed with the SEC, without charge, once available, at the SEC’s website at www.sec.gov, or by directing a request to:
two, 195 US HWY 50, Suite 208, Zephyr Cove, NV 89448; Tel: (310) 954-9665.
Participants
in the Solicitation
The
Company and its directors and executive officers may be deemed participants in the solicitation of proxies from the Company’s shareholders
with respect to the Business Combination. A list of the names of those directors and executive officers of the Company is contained in
the Company’s Current Reports on Form 8-K filed with the SEC on April 6, 2023 and May 3, 2023, which are available free of charge
at the SEC’s web site at www.sec.gov, or by directing a request to: two, 195 US HWY 50, Suite 208, Zephyr Cove, NV 89448; Tel:
(310) 954-9665. Additional information regarding the interests of such participants will be set forth in the Registration Statement when
available.
LLP
and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the shareholders of
the Company in connection with the Business Combination. A list of the names of such directors and executive officers and information
regarding their interests in the Business Combination will be included in the Registration Statement when available.
Non-Solicitation
This
Current Report on Form 8-K does not constitute, and should not be construed to be, a proxy statement or the solicitation of a proxy,
solicitation of any vote or approval, consent or authorization with respect to any securities or in respect of the proposed Business
Combination described herein and shall not constitute an offer to sell or a solicitation of an offer to buy any securities nor shall
there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state or jurisdiction. No offering of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the Securities Act, or an exemption therefrom.
Forward-Looking
Statements
This
Current Report on Form 8-K contains certain statements that may be considered forward-looking statements within the meaning of federal
securities laws. Forward-looking statements include, without limitation, statements about future events or LLP’s, the Company’s
or Pubco’s future financial or operating performance. For example, statements regarding anticipated growth in the industry in which
LLP operates and anticipated growth in demand for LLP’s products and solutions, the anticipated size of LLP’s addressable
market and other metrics, statements regarding the benefits of the Business Combination, and the anticipated timing of the completion
of the Business Combination are forward-looking statements. In some cases, you can identify forward-looking statements by terminology
such as “pro forma,” “may,” “should,” “could,” “might,” “plan,”
“possible,” “project,” “strive,” “budget,” “forecast,” “expect,”
“intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,”
“potential” or “continue,” or the negatives of these terms or variations of them or similar terminology.
These
forward-looking statements regarding future events and the future results of LLP and the Company are based on current expectations, estimates,
forecasts, and projections about the industry in which LLP operates, as well as the beliefs and assumptions of LLP’s management
and the Company’s management. These forward-looking statements are only predictions and are subject to known and unknown risks,
uncertainties, assumptions and other factors beyond LLP’s or the Company’s control that are difficult to predict because
they relate to events and depend on circumstances that will occur in the future. They are neither statements of historical fact nor promises
or guarantees of future performance. Therefore, LLP’s actual results may differ materially and adversely from those expressed or
implied in any forward-looking statements and LLP therefore cautions against relying on any of these forward-looking statements.
These
forward-looking statements are based upon estimates and assumptions that, while considered reasonable by LLP and its management, the
Company and its management, and Pubco and its management as the case may be, are inherently uncertain and are inherently subject to risks
variability and contingencies, many of which are beyond LLP’s, the Company’s or Pubco’s control. Factors that may cause
actual results to differ materially from current expectations include, but are not limited to: (i) the occurrence of any event, change
or other circumstances that could give rise to the termination of negotiations and any subsequent definitive agreements with respect
to the Business Combination; (ii) the outcome of any legal proceedings that may be instituted against LLP, the Company, Pubco or others
following the announcement of the Business Combination and any definitive agreements with respect thereto; (iii) the inability to complete
the Business Combination due to the failure to obtain consents and approvals of the shareholders of the Company, to obtain financing
to complete the Business Combination or to satisfy other conditions to closing, or delays in obtaining, adverse conditions contained
in, or the inability to obtain necessary regulatory approvals required to complete the transactions contemplated by the Business Combination
Agreement; (iv) changes to the proposed structure of the Business Combination that may be required or appropriate as a result of applicable
laws or regulations or as a condition to obtaining regulatory approval of the Business Combination; (v) LLP’s ability to manage
growth; (vi) the ability to meet stock exchange listing standards following the consummation of the Business Combination; (vii) the risk
that the Business Combination disrupts current plans and operations of LLP as a result of the announcement and consummation of the Business
Combination; (viii) the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other
things, competition, the ability of Pubco or LLP to grow and manage growth profitably, maintain key relationships and retain its management
and key employees; (ix) costs related to the Business Combination; (x) changes in applicable laws, regulations, political and economic
developments; (xi) the possibility that LLP or Pubco may be adversely affected by other economic, business and/or competitive factors;
(xii) LLP’s estimates of expenses and profitability; (xiii) the failure to realize anticipated pro forma results or projections
and underlying assumptions, including with respect to estimated shareholder redemptions, purchase price and other adjustments; and (xiv)
other risks and uncertainties set forth in the filings by the Company or Pubco with the SEC. There may be additional risks that neither
LLP nor the Company presently know or that LLP and the Company currently believe are immaterial that could also cause actual results
to differ from those contained in the forward-looking statements. Any forward-looking statements made by or on behalf of LLP or the Company
speak only as of the date they are made. Neither LLP nor the Company undertakes any obligation to update any forward-looking statements
to reflect any changes in their respective expectations with regard thereto or any changes in events, conditions or circumstances on
which any such statement is based.
Nothing
in this Current Report on Form 8-K should be regarded as a representation by any person that the forward-looking statements set forth
herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place
undue reliance on forward-looking statements, which speak only as of the date they are made.
Item
9.01. Financial Statements and Exhibits.
| (d) |
Exhibits. |
| |
|
| |
The following exhibits are being filed herewith: |
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated:
August 15, 2023
| |
two |
| |
|
|
| |
By: |
/s/
Thomas Hennessy |
| |
Name: |
Thomas
Hennessy |
| |
Title: |
Chief
Executive Officer |
Exhibit 99.1
two
and LatAm Logistic Properties S.A. Agree to Combine, Creating a Leading Publicly Traded Developer, Owner, and Manager of Modern Logistics
Real Estate in Central and South America
● LatAm Logistic Properties is one of the only Institutional Industrial Platforms operating across the region, bringing the development of class A warehouses to undersupplied markets
● Estimated post-transaction enterprise value of $578 Million based on a minimum of $25 Million in net cash proceeds to fund growth (assuming 70% redemptions from two’s trust account)
● LatAm Logistic Properties’ management will roll 100% of their existing shares into equity of the combined company
ZEPHYR
COVE, NV and SAN JOSÉ, COSTA RICA, August 15, 2023 – two (NYSE: TWOA) (“TWOA”), a special
purpose acquisition company, and LatAm Logistic Properties S.A. (d/b/a LatAm Logistic Properties) (“LLP”),
a leading developer, owner, and manager of institutional quality, class A industrial and logistics real estate in Central and South America,
have entered into a definitive business combination agreement (the “Business Combination Agreement”), pursuant to which LLP
would become publicly listed on a U.S. stock exchange.
Pursuant
to the Business Combination Agreement, each of LLP and TWOA will merge with newly-formed subsidiaries of a to-be-formed holding company
(“Pubco”) and Pubco will be the parent company of each of the Company and LLP following the consummation of the Business
Combination. Upon the closing of the transactions contemplated by the Business Combination Agreement (the “Business Combination”),
the ordinary shares of Pubco are expected to be listed on the New York Stock Exchange (“NYSE”) under the new ticker symbol
“LLP”. The Business Combination is expected to close in the fourth quarter of 2023, subject to regulatory and both companies’
shareholder approvals, among other customary closing conditions.
LLP
is one of the only vertically integrated logistics real estate platforms operating across Central and South America. LLP’s portfolio
consists of approximately 4.8 million square feet of operating gross leasable area (“GLA”) across a network of 28 facilities
in Costa Rica, Colombia, and Peru, primarily located in high-growth consumption centers with high barriers to entry. LLP’s properties
are designed and developed to offer greater accessibility, security, and maximum optionality, which provides cost efficiencies for its
multi-national and regional customers. With modern specifications, LLP is able to drive operational efficiencies in parallel with technology
advancements for timely delivery of goods, implementing forward-thinking operational processes that provide clients with best-in-class
service. Additionally, LLP’s properties comply with the highest standards of environmental sustainability with EDGE certifications,
a green building standard sponsored by the International Finance Corporation.
“We
believe LLP’s combination with TWOA is a transformational event that will position LLP to realize the massive opportunities driven
by the increased demand for logistics real estate across Central and South America,” said Esteban Saldarriaga, CEO of LLP. “LLP’s
well-established track-record of developing modern class A facilities in a cost-efficient manner provides a unique competitive advantage
to meet the new demand created by nearshoring and e-commerce. We are excited to enter this next phase in our history through the transaction
with TWOA, which will allow us to further capitalize on the macro tailwinds benefiting logistics warehouse facilities. We expect to continue
building out our strong platform across existing and new adjacent geographies with US dollar denominated markets. We believe a NYSE listing
will enable us to secure access to resources to fund these growth opportunities and position LLP for the future.”
Thomas
D. Hennessy, Chairman and CEO of TWOA, commented: “Industrial real estate continues to attract significant capital inflows due
to the macroeconomic tailwinds supporting logistics and distribution demand. As one of the only vertically integrated logistics operating
platforms in its regions, LLP is a dominant player in Central and South America. LLP’s class A US institutional asset quality,
predictable cash flows, growth prospects, and management team’s strong track record offer a compelling opportunity. We are thrilled
to partner with LLP and enter into this business combination.”
Upon
closing of the Business Combination, the senior leadership of Pubco will consist of Thomas McDonald, as Chairman; Esteban Saldarriaga,
as CEO; and Annette Fernández, as CFO.
Transaction
Terms & Financing
The
combined company will have an estimated post-transaction enterprise value of $578 million, based on a pre-money equity value of LLP of
$286 million, with a minimum of $25 million in net cash proceeds from the Business Combination and assuming 70% redemptions by TWOA’s
existing public shareholders. Net proceeds raised from the Business Combination will be used to fund future growth opportunities.
The
Business Combination Agreement has been unanimously approved by the Boards of Directors of both LLP and TWOA.
For
a summary of the material terms of the Business Combination Agreement, as well as a supplemental investor presentation, please see TWOA’s
Current Report on Form 8-K to be filed with the U.S. Securities and Exchange Commission (the “SEC”). Additional information
about the proposed Business Combination will be described in Pubco’s registration statement on Form F-4 to be filed with the SEC,
which will include a proxy statement/prospectus. Pubco and TWOA also will file other documents regarding the proposed Business Combination
with the SEC.
Advisors
BTG
Pactual is acting as exclusive M&A advisor to LLP. Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC
(“CCM”), is acting as exclusive financial advisor and lead capital markets advisor to TWOA. Baker & McKenzie LLP is acting
as U.S. counsel to LLP. Ellenoff Grossman & Schole LLP is acting as U.S. counsel to TWOA. Gateway Group is acting as investor relations
advisors to both TWOA and LLP. Dukas Linden Public Relations is acting as public relations advisors to both TWOA and LLP.
Webcast
Information
TWOA
and LLP management will host a webcast to discuss the proposed Business Combination today, August 15, 2023, at 8:00 a.m. Eastern time.
The webcast will be accompanied by a detailed investor presentation. The investor presentation will be available at www.latamlp.com
and www.twoaspac.com.
Date:
August 15, 2023
Time:
8:00 a.m. Eastern time
The
conference call will be broadcast live here. To dial in via telephone see details below.
Toll-free
dial-in number: (800) 715-9871
International
dial-in number: (646) 307-1963
Conference
ID: 6625255
Please
dial the conference telephone number 5 to 10 minutes prior to the start time. An operator will register your name and organization. If
you have any difficulty connecting with the conference call, please contact Gateway Group at (949) 574-3860.
A
recorded replay of the conference call will be available here after 12:00 p.m. Eastern time today,
and
at www.latamlp.com and www.twoaspac.com.
About
LatAm Logistic Properties
LatAm
Logistic Properties, S.A. is a leading developer, owner, and manager of institutional quality, class A industrial and logistics real
estate in Central and South America. LLP’s customers are multinational and regional e-commerce retailers, third-party logistic
operators, business-to-business distributors, and retail distribution companies. LLP’s strong customer relationships and insight
is expected to enable future growth through the development and acquisition of high-quality, strategically located facilities in its
target markets. As of June 30, 2023, LLP consisted of an operating and development portfolio of twenty-eight logistic facilities in Colombia,
Peru and Costa Rica, totaling more than 650,000 square meters of gross leasable area.
About
two
two
is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with one or more businesses. For more information, visit twoaspac.com.
Forward-Looking
Statements
This
communication contains certain forward-looking information with respect to the Business Combination, which may not be included in future
public filings or investor guidance. The inclusion of financial statements or metrics in this communication should not be construed as
a commitment by LLP, Pubco or TWOA to provide guidance on such information in the future. Certain statements in this communication may
be considered forward-looking statements within the meaning of federal securities laws. Forward-looking statements include, without limitation,
statements about future events or LLP’s, TWOA’s or Pubco’s future financial or operating performance. For example,
statements regarding anticipated growth in the industry in which LLP operates and anticipated growth in demand for LLP’s products
and solutions, the anticipated size of LLP’s addressable market and other metrics, statements regarding the benefits of the Business
Combination, and the anticipated timing of the completion of the Business Combination are forward-looking statements. In some cases,
you can identify forward-looking statements by terminology such as “pro forma,” “may,” “should,”
“could,” “might,” “plan,” “possible,” “project,” “strive,” “budget,”
“forecast,” “expect,” “intend,” “will,” “estimate,” “anticipate,”
“believe,” “predict,” “potential” or “continue,” or the negatives of these terms or variations
of them or similar terminology.
These
forward-looking statements regarding future events and the future results of LLP, Pubco and TWOA are based on current expectations, estimates,
forecasts, and projections about the industry in which LLP operates, as well as the beliefs and assumptions of LLP’s management.
These forward-looking statements are only predictions and are subject to known and unknown risks, uncertainties, assumptions and other
factors beyond LLP’s, Pubco’s or TWOA’s control that are difficult to predict because they relate to events and depend
on circumstances that will occur in the future. They are neither statements of historical fact nor promises or guarantees of future performance.
Therefore, LLP’s and Pubco’s actual results may differ materially and adversely from those expressed or implied in any forward-looking
statements and LLP, Pubco and Two therefore cautions against relying on any of these forward-looking statements.
These
forward-looking statements are based upon estimates and assumptions that, while considered reasonable by LLP and its management, TWOA
and its management, and Pubco and its management, as the case may be, are inherently uncertain and are inherently subject to risks variability
and contingencies, many of which are beyond LLP’s, TWOA’s or Pubco’s control. Factors that may cause actual results
to differ materially from current expectations include, but are not limited to: (i) the occurrence of any event, change or other circumstances
that could give rise to the termination of negotiations and any subsequent definitive agreements with respect to the Business Combination;
(ii) the outcome of any legal proceedings that may be instituted against LLP, TWOA, Pubco or others following the announcement of the
Business Combination and any definitive agreements with respect thereto; (iii) the inability to complete the Business Combination due
to the failure to obtain consents and approvals of the shareholders of TWOA, to obtain financing to complete the Business Combination
or to satisfy other conditions to closing, or delays in obtaining, adverse conditions contained in, or the inability to obtain necessary
regulatory approvals required to complete the transactions contemplated by the business combination agreement; (iv) changes to the proposed
structure of the Business Combination that may be required or appropriate as a result of applicable laws or regulations or as a condition
to obtaining regulatory approval of the Business Combination; (v) LLP’s and Pubco’s ability to manage growth; (vi) the ability
to meet stock exchange listing standards following the consummation of the Business Combination; (vii) the risk that the Business Combination
disrupts current plans and operations of LLP as a result of the announcement and consummation of the Business Combination; (viii) the
ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition,
the ability of Pubco or LLP to grow and manage growth profitably, maintain key relationships and retain its management and key employees;
(ix) costs related to the Business Combination; (x) changes in applicable laws, regulations, political and economic developments; (xi)
the possibility that LLP or Pubco may be adversely affected by other economic, business and/or competitive factors; (xii) LLP’s
estimates of expenses and profitability; and (xiii) other risks and uncertainties set forth in the filings by TWOA or Pubco with the
SEC. There may be additional risks that neither LLP nor TWOA presently know or that LLP and TWOA currently believe are immaterial that
could also cause actual results to differ from those contained in the forward-looking statements. Any forward-looking statements made
by or on behalf of LLP, TWOA or Pubco speak only as of the date they are made. None of LLP, Pubco or TWOA undertakes any obligation to
update any forward-looking statements to reflect any changes in their respective expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is based. Accordingly, attendees and recipients should not place undue reliance
on forward-looking statements due to their inherent uncertainty.
Nothing
in this communication should be regarded as a representation by any person that the forward-looking statements set forth herein will
be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance
on forward-looking statements, which speak only as of the date they are made.
LLP,
TWOA and Pubco disclaim any and all liability for any loss or damage (whether foreseeable or not) suffered or incurred by any person
or entity as a result of anything contained or omitted from this communication and such liability is expressly disclaimed. The recipient
agrees that it shall not seek to sue or otherwise hold LLP, TWOA, Pubco or any of their respective directors, officers, employees, affiliates,
agents, advisors or representatives liable in any respect for the provision of this communication, the information contained in this
communication, or the omission of any information from this communication. Only those particular representations and warranties of LLP,
Pubco or TWOA made in a definitive written agreement regarding the Business Combination (which will not contain any representation or
warranty relating to this communication), when and if executed, and subject to such limitations and restrictions as specified therein,
shall have any legal effect.
Industry
and Market Data
This
communication also contains estimates and other statistical data made by independent parties which they believe to be reliable and by
LLP relating to market size and growth and other data about LLP’s industry. This data involves a number of assumptions and limitations,
and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions, and estimates of the future
performance of the markets in which LLP operates are necessarily subject to a high degree of uncertainty and risk. LLP has not independently
verified the accuracy or completeness of the independent parties’ information. No representation is made as to the reasonableness
of the assumptions made within or the accuracy or completeness of such independent information.
Trademarks
LLP
owns or has rights to various trademarks, service marks and trade names used is connection with the operation of its business. This communication
may also contain trademarks, service marks, trade names and copyrights of other companies or third parties, which are the property of
their respective owners. LLP’s use thereof does not imply an affiliation with, or endorsement by, the owners of such trademarks,
service marks, trade names and copyrights. Solely for convenience, some of the trademarks, service marks, trade names and copyrights
referred to in this communication may be listed without the TM, SM or symbols, but LLP will assert, to the fullest extent under applicable
law, the rights of the applicable owners to these trademarks, service marks, trade names and copyrights.
Additional
Information
This
communication relates to the Business Combination. This communication does not constitute an offer to sell or exchange, or the solicitation
of an offer to buy or exchange, any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, sale
or exchange would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection
with the Business Combination, Pubco intends to file with the SEC a registration statement on Form F-4 containing a preliminary proxy
statement of TWOA and a preliminary prospectus of Pubco, and after the registration statement is declared effective, TWOA will mail a
definitive proxy statement/prospectus relating to the Business Combination to its shareholders. This communication does not contain all
the information that should be considered concerning the Business Combination and is not intended to form the basis of any investment
decision or any other decision in respect of the Business Combination. LLP’s and TWOA’s shareholders and other interested
persons are advised to read, when available, the preliminary proxy statement/prospectus and the amendments thereto and the definitive
proxy statement/prospectus and other documents filed in connection with the Business Combination, as these materials will contain important
information about LLP, TWOA, Pubco and the Business Combination. When available, the definitive proxy statement/prospectus and other
relevant materials for the Business Combination will be mailed to shareholders of TWOA as of a record date to be established for voting
on the Business Combination. Shareholders will also be able to obtain copies of the preliminary proxy statement/prospectus, the definitive
proxy statement/prospectus and other documents filed with the SEC, without charge, once available, at the SEC’s website at www.sec.gov,
or by directing a request to: two, 195 US HWY 50, Suite 208, Zephyr Cove, NV 89448; Tel: (310) 954-9665.
Participants
in the Solicitation
TWOA
and its directors and executive officers may be deemed participants in the solicitation of proxies from TWOA’s shareholders with
respect to the Business Combination. A list of the names of those directors and executive officers and a description of their interests
in TWOA is contained in TWOA’s filings with the SEC, which are available free of charge at the SEC’s web site at www.sec.gov,
or by directing a request to: two, 195 US HWY 50, Suite 208, Zephyr Cove, NV 89448; Tel: (310) 954-9665. Additional information regarding
the interests of such participants will be contained in the proxy statement/prospectus for the Business Combination when available.
LLP,
Pubco and their respective directors and executive officers may also be deemed to be participants in the solicitation of proxies from
the shareholders of TWOA in connection with the Business Combination. A list of the names of such directors and executive officers and
information regarding their interests in the Business Combination will be included in the proxy statement/prospectus for the Business
Combination when available.
Investor
Relations Contact:
Gateway
Group, Inc.
Cody
Slach, Matthew Hausch
(949)
574-3860
TWOA@gateway-grp.com
two
Contact:
Nick
Geeza
Chief
Financial Officer
ngeeza@hennessycapitalgroup.com
Media
Relations Contact:
Zach
Kouwe / Kendal Till
Dukas
Linden Public Relations for LatAm Logistic Properties S.A.
+1
646-722-6533
LLP@dlpr.com
Exhibit 99.2
Exhibit
99.3
Script
to Video Recording of the Investor Presentation
Operator
Welcome
to the “two” business combination announcement call. The slide presentation on today’s webcast has been
made available for download.
The
presentation can be found in two’s Current Report on Form 8-K at the website of the U.S. Securities and Exchange Commission at
www.sec.gov. A copy of the business combination agreement will be filed in two’s Current Report on Form 8-K within
four business days after the signing of business combination agreement. The presentation is also available for download on two’s
website at www.twoaspac.com as well as on LatAm Logistics Properties’ website at www.latamlp.com. Today’s call has
been prerecorded and will not include a Q&A session.
Before
we begin, let me remind you that some information provided during this webcast may include forward-looking statements that are based
on estimates and assumptions that, while considered reasonable by LatAm Logistics Properties and two, are subject to risks,
uncertainties, contingencies and other factors which could cause actual results to differ materially from those expressed or implied
by such forward-looking statements. Some of such statements reference financial information of LatAm Logistics Properties, which have
not been audited or reviewed by LatAm Logistics Properties’ auditors, are subject to a wide variety of significant business, economic
and competitive risks and uncertainties, and should not be relied upon as being necessarily indicative of future results. Nothing in
this webcast should be regarded as a representation by any person that the forward-looking statements will be achieved or that any of
the contemplated results of such forward-looking statements will be achieved. We encourage you to carefully review the disclaimers in
the slide presentation.
Forward-looking
statements made on this call are as of August 15, 2023, and we undertake no duty to update them as actual events unfold. Today’s
remarks also include certain non-GAAP financial measures. You can find a reconciliation of such measures in the table included in the
slide presentation.
I
would like to remind everyone that this webcast will be available for replay starting at approximately 12:00 pm ET this afternoon. The
webcast replay is available via the link provided in today’s press release, as well as on two’s website at www.twoaspac.com.
Now,
I would like to turn the call over to the CEO of two, Tom Hennessy. Tom?
Tom
Hennessy
Slide
4
We
are pleased to be here with you today to discuss the proposed business combination of TWO and LatAm Logistic Properties or LLP. I’m
Tom Hennessy, and I serve as the CEO of Two and I’m joined by my partner and CFO, Nick Geeza and from LLP – Esteban Saldarriaga,
the CEO and Annette Fernandez, the CFO.
We
have an exciting and comprehensive 35-minute presentation today. We look forward to sharing it with you.
For
1x1 [We have a 35-minute presentation so we will have ample opportunity for Q&A at the end, but feel free to interrupt us as we go
along.]
Slide
5
Before
I turn it over to the LLP team, I’d like to take a few minutes to share our industrial real estate investment thesis.
We
have spent a considerable amount of time studying industrial real estate because as the top left chart shows, industrial capital values
have grown over 300% over the past 20 years. This is driven, in large part, by e-commerce, or the Amazon effect or in South America,
the Mercado Libre effect, as shown on the top right. E-commerce relies on class A industrial logistics warehouses and sophisticated distribution
operations. This demand will continue to be a tailwind for industrial asset values.
On
the bottom left, capital inflows follow macro tailwinds. For example, nearly 1 in 4 dollars is now being deployed into U.S. industrial
real estate, up from 1 in 10 dollars, 15 years ago. In other words, industrial RE is taking significant marketshare from other real estate
asset classes like office or retail. Finally, on the bottom right, we think industrial RE has a long runway and lots of room to grow.
Industrial rents remain a fraction of total supply chain costs at only 5%. Meaning rents can grow meaningfully without materially affecting
the profit margins of tenants.
The
global industrial logistics opportunity is massive.
Slide
6
Latam
Logistic Properties is the leading developer, owner and manager of industrial real estate of Class A international institutional quality
in Central and South America. We selected LLP because LLP checks all of our boxes. Number 1, OPERATING MODEL, LLP is the only vertically
integrated logistics operator across multiple markets. Number 2, MARKET POSITION, they are the proven market leader with coveted multinational,
investment grade tenants. Number 3, BUSINESS PLAN. LLP has an attainable business plan with long-term lease contracts. Their business
plan is anchored by a durable competitive advantage through a landbank, tenant pipeline and operating expertise. Number 4, FINANCIAL
PROFILE. LLP has predictable cash flows, proven profit margins and unit economics. Number 5, TEAM. the Company has an accomplished leadership
team with deep industrial and logistics industry expertise. I believe that you will find LLP to be a compelling investment opportunity.
Slide
7
Regarding
the transaction and closing timeline.
●
We expect to close prior to YE 2023 and post-closing, LLP will be listed on NYSE.
On
Valuation…
●
The transaction implies a pro forma enterprise value of $578 million, equating to a 6.5% cap rate based on contracted 2023E NOI.
On
Capital Structure…
●
We have structured the deal to align incentives with our public investors, and to ensure deal certainty. Post-closing, we expect LLP
to be capitalized to fund the future growth opportunities that management will walk through shortly.
Slide
8
With
that, I’m very pleased to introduce Esteban and Annette.
Esteban
Saldarriaga
Slide
8
Thank
you very much, Tom.
| |
● |
My
name is Esteban Saldarriaga, and I am Chief Executive Officer of LatAm Logistics Properties, or LLP for short. Our company is a leading
logistics real estate platform, and I have been involved with it almost since its inception back in 2015. |
| |
|
|
| |
● |
To
start off, I can speak briefly about my background, which lies at the intersection of professional investing and real estate. |
| |
○ |
For
the better part of the last decade, I’ve worked in the Investments Team of Jaguar Growth Partners, a global private equity
firm led by the former CEO of Equity International, with a deep trajectory in real estate operating companies, primarily in the logistics
segment. |
| |
|
|
| |
○ |
Before
that, I held banking and investing roles at major institutions in Latin America, where I had the chance to work in many cross-border
transactions in countries such as Colombia, Peru, Ecuador, Chile and Brazil, among others, AND in multiple sectors, including real
estate, infrastructure and other hard-asset industries. |
Slide
9
| |
● |
Allow
me to first set the table by defining who we are as company. |
| |
● |
LLP
is a leading developer, owner, and manager of Class A logistics real estate in Central and South America. |
| |
|
|
| |
● |
LLP
is the only institutional, and vertically integrated, industrial platform operating across our region. |
| |
|
|
| |
● |
As
a relevant reference, our portfolio assets look like the ones in this picture. |
| |
○ |
Here
you can see one of our logistics parks in Colombia. |
| |
○ |
This
is a big reason why the largest companies in the world choose us, as you’ll see later in the presentation. |
Slide
10
| |
● |
From
a 30-thousand-foot view, LLP is a full service, real estate operating company, catering to markets where no other international player
has been able to achieve scale. |
| |
|
|
| |
● |
We
have taken the time and effort to build a network that currently operates in three countries: Costa Rica, Colombia and Peru. This
is not easy to replicate, and we have internalized this process and made it second nature for us. |
| |
○ |
Roughly
speaking, we have almost five million square feet (or half a million square meters) of operating gross leasable area, or GLA, and
owned or controlled landbank that can take us up to seven million square feet. |
| |
|
|
| |
○ |
Amid
what others might perceive as a challenging backdrop, we have successfully reached approximately 36 million dollars of Net Operating
Income under contract. |
| |
|
|
| |
○ |
And,
we have done so, achieving industry-leading occupancy metrics… built on the back of long-term leases, out of which almost
80%, are denominated in US dollars. |
| |
○ |
The
answer is that we believe our company is at an inflection point where, the macroeconomic effects from nearshoring and e-commerce
are coupling with LLP’s established franchise… and this can be expanded to adjacent markets in the Americas, in hand
with the growth of our tenants. |
Slide
11
| |
● |
We
have a meaningful track-record of performance. Our growth over the last few years speaks volumes to the embedded dynamics of the
countries we operate in, which are deeply underserved and underpenetrated. |
| |
○ |
We
have multiplied our occupied GLA by 2.5 times since 2019, equating to a compounded annual growth rate of approximately 30%, and in
the same period we have almost tripled our NOI. |
| |
|
|
| |
○ |
As
brought up earlier, most of our NOI is dollarized, and we want to manage our company to keep it that way. |
| |
○ |
Moreover,
we are beginning to see the effects of economies of scale, materialized in our growing EBITDA margins and progressive deleveraging,
typical of a high-growth platform. |
Slide
12
| ● | As
we see on this page. Our new buildings are up to institutional specifications, both inside
and outside, similar to what you can find in the most competitive U.S. markets. |
|
○ | We
have the know-how and capabilities to develop high quality specs in a cost-effective way. |
| ● | Everything
we develop looks like this. Our spaces are characterized by: |
| |
○ |
Minimum
clearing heights of 39 feet throughout the building. |
| |
○ |
Optimized
column spacing to maximize racking layout. |
| |
○ |
Structures
ready to incorporate systems that are compliant with the National Fire Protection Association guidelines. |
| |
○ |
Extra
flat floors with high load capacities. |
| |
○ |
Energy-saving
skylights. |
| |
○ |
And
acoustic and thermal insulation on the roofs. |
Slide
13
| ● | Moving
on to the outside, we have several defining features. |
| |
○ |
While
other mom-and-pop players seek to maximize land coverage, they do so at the expense of having ample truck courts, an adequate number
of parking spaces and appropriate door-to-area ratios. |
| |
○ |
Important
to note as well, we incorporate amenities for our tenants’ employees who work on site. This brings higher work satisfaction
and lowers clients’ headcount turnover. |
| |
● |
Let
me point out that our space is full of optionality, since multiple types of users are suitable for any given space. |
| |
|
|
| |
● |
That
is because our assets are core distributions centers, as opposed to highly specialized manufacturing facilities. From a risk-adjusted
viewpoint, we think we can create a premium since our warehouses are not irreversibly, or uneconomically, customized to any single
tenant. |
| |
|
|
| |
● |
So…
what do these specifications mean for our clients: … it all comes down to efficiency. We can offer up to 67% more pallet positions
per unit of GLA than existing warehouses in our markets. |
| |
|
|
| |
● |
The
simple summary: lower real estate occupancy costs for any given volume of merchandise. |
Slide
14
| |
● |
Moving
over to the next page, we believe we are bringing a differentiated company to the public market landscape. |
| |
● |
We
compare favorably with other players in the industrial space in Latin America, |
| |
○ |
First,
LLP is the only vertically integrated company with a multi-country footprint, |
| |
○ |
We
have a keen focus on Class A logistics property, not specialized industrial or manufacturing buildings, |
| |
○ |
We
bring local expertise but retain global access to capital as well as strong relationships with multinational tenants, |
| |
○ |
Fourth,
we offer built-to-suit solutions that not only require development know-how, but also financial expertise. |
| |
○ |
Lastly,
as a company of less than 30 employees in total, we are nimble with our speed to market capabilities and bring to bear the contractual
sophistication present in more developed markets. |
Slide
15
| ● | Transitioning
to our next section… LLP’s Investment Thesis. |
Slide
16
| ● | Our
strategy is straightforward: |
|
○ | We
want to participate in high growth markets, which are quite underserved, and |
|
○ | Keep
proximity to major cities, ports, and airports, with good access to labor for our clients. |
| ● | This
way, we believe, will set our platform for success. |
Slide
17
| ● | As
we look through the fundamentals, we can see that e-commerce and nearshoring will be powerful
forces that shape our demand. |
| ○ | Shown
on the left, E-commerce structurally accelerated with the pandemic, expanding at double digit
pace, in markets where penetration is still in its infancy. |
| | | |
| ○ | Players
like Mercado Libre, the Latin American Amazon, are expanding like never before, and traditional
retailers and not standing still either: their omnichannel strategies are also crystallizing
demand for us. |
| | | |
| ○ | Additionally,
there are two less known, but fundamental, aspects that compound to LLP’s benefit: |
| ● | First,
sophisticated operations in today’s digital commerce require modern space and lager
formats, creating a flight to quality away from our local competitors. |
| | | |
| ● | And
secondly, E-commerce uses three (3) times as much logistics space as brick-and-mortar does.
This is due to several factors, such as greater product variety, reverse logistics for exchanges
and returns, and the shift towards direct-to-consumer distribution models. |
Slide
18
| ● | Moreover,
on the next slide, you can see that LLP is a dominant player in the undersupplied markets
where we operate. |
| ○ | We
have captured the lion share of class A warehouses in capital cities like San Jose, Bogota
and Lima. |
Slide
19
| ○ | And
simultaneously, Central and South America are way behind more developed markets in terms
of logistics GLA per capita, which reveals a major opportunity for us to close that gap. |
Slide
20
| ● | Also,
from a macroeconomic standpoint, middle-class consumption growth is a key propellant in our
markets. |
| ○ | We
benefit from sustained GDP growth, as seen on the top left chart. |
| ○ | And
equally important, trade-driven economic policies seek to capitalize on nearshoring trends. |
Slide
21
| ● | This
takes us to the second point in LLP’s investment case. |
| ○ | Our
company is a market leader with trusted and highly desirable customer relationships. |
Slide
22
| |
● |
LLP
holds leading KPIs when benchmarked against its industrial peers, coming out ahead in terms of i) pure logistics focus, ii) occupancy,
iii) contract duration, and iv) average rental rates. |
| |
|
|
| |
● |
Also,
we are in line with Mexican peers in terms of US dollar exposure, reaching almost 80% of our asset base. |
| |
|
|
| |
● |
All-in-all,
Vesta is probably our closest comparable. We hold Vesta in very high regard, especially considering our shared history of having
the same investor base. Jaguar, the capital behind LLP, was also an investor in Vesta from 2016 until recently and held a seat on
Vesta’s board for several years. |
Slide
23
| ● | And
pivotal to those performance metrics, are LLP’s coveted tenant relationships, which
include household names, major multinational corporations, and high-credit-quality regional
champions. |
| ○ | We
proudly house logistics for IKEA, Samsung, DHL, Expeditors, Cargill and other well-known
names. |
| ● | These
clients see LLP as a differentiated value proposition, because we i) can serve them in multiple
markets with a single point of contact, ii) offer the best available product and locations,
and iii) provide expansion optionality within our network. |
| ● | Our
purpose is to truly partner with our clients for the long term, with high-level on-going
service, and want to follow and grow with them as they expand in adjacent markets. |
Slide
24
| ● | This
leads me to my next point: At LLP, our aim is to maintain a well-balanced lease portfolio,
carefully analyzed from various perspectives. |
| ○ | As
you can see on the top right, no single customer comprises more than 6% of our NOI. |
| ○ | On
the bottom left, you can see that we strive for a balanced representation of underlying industries,
including consumer goods companies, retailers, and 3PLs. |
| ○ | And,
finally, in terms of lease expiration tenors, we wish to even out the benefits of cashflow
predictability of long-term contracts, with the positive lease spreads we typically capture
as we roll-over our shorter duration leases. |
Slide
25
| ● | To
give you an anecdotal example of what LLP can do and how our relationships travel across
borders, let me mention two cases. |
| ○ | Kuehne
Nagel, the global transportation giant, had their operations in a sub-optimal facility in
Peru and sought a more efficient and green-certified building for their operations
in Colombia. |
| ■ | Given
our capabilities and product quality, we were able to onboard them as a dual market customer
for LLP. Moreover, the relationship has grown from its initial GLA requirement and has expanded
within our parks. |
| ○ | Similarly,
Natura, the Brazilian cosmetics and personal care company, requested high quality specs,
elevated safety standards, and automation-ready warehouses in both Peru and Costa Rica. |
| ● | In
both cases, we were the only provider capable of delivering to their demanding standards
and in two countries simultaneously. |
| | | |
| ● | As
you can imagine, we aspire to have these types of clients expand even further within our
ecosystem. |
Slide
26
| ● | As
a next stop, I’ll go over our summarized business plan. |
| ● | Our
roadmap for the coming years is straightforward and grounded on a durable competitive advantage. |
Slide
27
| |
○ |
Through
this transaction’s primary capital raise, we aspire to roughly double in size over the next few years. |
| |
|
|
| |
○ |
We
have multiple levers and avenues through which we can materialize our growth. |
| |
|
|
| |
○ |
First,
we expect to deliver in the next few months our pre-stabilized GLA, adding about half a million square feet. |
| |
|
|
| |
○ |
As
a second step, we have immediate growth visibility, thanks to our owned or controlled landbank, which provides an advantage versus
other players. |
| |
|
|
| |
○ |
Furthermore,
as we roll out, our integrated team continues sourcing and feeding our development pipeline of future projects. |
| |
|
|
| |
○ |
And
lastly, by bolting-on strategic acquisitions in dollarized markets where our tenants have expansion plans, we have line of sight
on our expansion strategy. |
| |
|
|
| |
○ |
In
the longer term, we estimate that 60% of our growth will be organic, and 40% inorganic. |
Slide
28
| ● | Related
to our growth plan, let me expand on our land holdings and how they create an advantage versus
our competitors. |
| ● | Importantly,
we have a thoughtful approach for buying land and seek innovative approaches to reduce the
attending carrying cost. |
| ○ | For
example, we have pioneered with long-term land leases, to build modern logistics product
adjacent to the Lima airport in Peru. |
| ● | Also,
due to LLP’s established track record and reputation, landowners proactively approach
us, showing a willingness to engage in land contribution agreements. |
| ○ | This
allows us to secure strategic positions with favorable financing conditions, creating the
potential to enhance returns. |
| ● | With
this strategy, we can demonstrably propose alternatives to our clients and shorten go-to-market
times. |
| ○ | As
referenced earlier, we have owned and controlled a land bank that would allow for the development
of around 2 million sq ft of GLA, and we’re constantly feeding that pipeline. |
| | | |
| ○ | To
illustrate, we have around 8 million sq ft of potential GLA under various stages of review,
just in our current markets. |
Slide
29
| ● | Now
touching on LLP’s geographic expansion strategy, we have a few simple but effective
guiding principles. |
| ○ | One,
we want to follow our tenants in the markets where their respective businesses are growing. |
| | | |
| ○ | Two,
we want to favor markets with dollar denominated logistics leases, as is the case in Mexico,
Ecuador, Central America and the Caribbean. |
| ■ | For
us, keeping a high dollar denominated asset base will remain paramount. |
| ○ | And
lastly, we want to enter markets where we see a path to achieve a minimum scale of around
one million square feet in about three years after entry. |
Slide
30
| ● | This
takes us to our next point. Unit economics. |
| ● | At
a granular level, LLP’s business has the potential for highly attractive risk-adjusted
returns. This is the result of strong CAPEX management and the ability to secure predictable
cashflows, via long-term leases, from credit-worthy tenants. |
Slide
31
| ● | Organically,
on a standalone basis, LLP can develop assets to double digit unlevered yields. |
| ● | Given
our special market position, we can obtain accretive debt financing for roughly 60% of project
cost, which typically means we can comfortably leverage our equity returns into the mid-to-high
teens on a cash flow basis. |
Slide
32
| ● | However,
those returns can be further magnified, at the same time risk is controlled and mitigated. |
| ● | By
securing financial partnerships and Joint Ventures with local equity partners, LLP can charge
for its development and asset management services, creating additional income streams. This
also reduces equity requirements and improves overall return on equity (ROE) for our company. |
| ● | And
to tie it all out, once we account for expected asset appreciation on a fair market value
basis, an additional two to five hundred basis points could be added to the returns you see
on this page. |
Slide
33
| ● | This
takes me to a crucial point, which is the lynchpin for the returns explained earlier: LLP
has a track record of executing on time and within budget. |
| ○ | For
example, on one of our latest projects, we budgeted 532 dollars of construction costs per
sqm, but we delivered at around 516. |
| | | |
| ○ | Also,
despite supply chain disruptions, we scheduled around 8 months for vertical construction
per building and, on average, we delivered in 7 months. |
| ● | We
have a strong network of local contractors, with whom we have proven results and who strictly
adhere to our Class A specifications. |
| ● | Our
modular layouts give us flexibility to properly pace our demand, typically pre-leasing buildings
before they are finished, and thus maximizing occupancy and capital efficiency. |
Slide
34
| ● | Lastly,
we must highlight our Executive Team and their proven history of delivering results for shareholders,
and in compliance with sustainability objectives. |
Slide
35
| ● | We
believe real estate is predominantly a local game. |
| ● | Our
team is composed of logistic real estate experts, native and based in their markets, with
solid networks, and with a special commitment to serving customers through a long-term and
sustainability lens. |
| ○ | The
team we have today has a longstanding history working together, and our senior executives
have been with the company essentially since its foundation. |
Slide
36
| ● | Importantly
as well, our controlling shareholder, before and after the proposed transaction, is and will
be Jaguar Growth Partners, a global specialist in real estate operating platforms, with roots
that go all the way back to Equity International. |
| ○ | Its
partners and TWO’s management have a prior and established relationship, having known
each other for many years. |
| ○ | And
key to LLP’s DNA, over the last two decades, Jaguar’s partners have not only
built deep experience in Latin America but have also helped build multiple real estate operating
companies, eight of which are in the logistics sector, covering the Andean region, Mexico,
Brazil and even China. |
Slide
37
| ● | And
through Jaguar’s involvement we have championed strong governance policies. |
| ○ | The
majority of our directors are independent, and we have a well-defined framework for corporate
decision-making. |
Slide
38
| ● | As
we approach the end of this section, we think it is important to feature LLP’s commitment
to high standards of environmental and social sustainability. |
| ○ | Having
the World Bank’s EDGE certification on all of our new developments is paying dividends,
since multinational clients seek out more responsible solutions and proactively choose providers
that have these differentiators. |
| ○ | Also,
as opposed to what might happen in other markets, our logistic parks are not challenged by
the community but rather embraced as a source of good quality jobs. |
| ■ | LLP
is a good neighbor and has a positive impact in the locations where it operates. |
Slide
38
| ● | Finally,
given our growth and development capabilities, we are set up as a C-Corp and not a REIT. |
| ○ | This
is important because it allows us to offer a more compelling investment proposition, with
internalized and aligned management. |
| ○ | And,
very importantly, this positions us to participate throughout the entire value creation chain,
starting with project structuring, financing, development, lease-up, and ongoing asset management. |
[With
that, allow me to pass it on to our CFO, Annette Fernández.]
Annette
Fernandez
Thanks
Esteban,
Before
talking about LLP’s Financial Highlights, I would like to briefly introduce myself. My name is Annette Fernandez and I have been
the CFO of LLP since 2017. I have more than 15 years of experience in the industrial logistic sector with 12 years of experience working
in Prologis in different groups such as financial analysis, accounting, investor relations and capital deployment for the Latin American
region.
Slide
41 - Financial Highlights
This
slide showcases LLP’s remarkable growth, increasing revenues and a proven track record in execution. Turning our land bank into
production and stabilizing the construction have driven our success in growing revenues, NOI and EBITDA, as well as achieving economies
of scale of the platform.
NOI
from 2020 to 2023 LLP grew a compounded annual growth rate of around 27% due to the stabilization of 215,000 square meters during this
period. The growth in the stabilized portfolio will allow us to achieve in 2023 an estimated 40.1 million dollars in revenues and 33.9
million in NOI.
We
continue to see a high demand for modern logistic real estate in the countries we operate. This high demand for modern logistic real
estate is mainly driven by the continues growth in consumption, e-commerce, supply chain consolidation and flight to quality. As we approach
2024, LLP has high confidence and visibility in achieving 42.4 million dollars of NOI which represents a 25% increase from the NOI estimated
for 2023. The increase in NOI in 2024 will be driven mainly by organic growth through the stabilization of our development platform and
some acquisitions at the back end of the year. I want to point out that LLP annual growth track record have been an average of 25% over
the last three years.
Slide
42 - Solid Fundamentals Enhanced by Significant US$ Exposure
The
quality and durability of our revenues comes from (1) Credit Quality of our Tenants, (2) Tenor and Guarantees of our leases, which were
discussed by Esteban earlier and (3) Lease Currency and (4) Inflation protections.
LLP’s
NOI is close to 80% US dollar denominated reducing risk to US investors to foreign currencies and enhances stability in the returns of
the portfolio in dollar terms. Almost all the contracts have annual contractual increases of at least 2.5% with half of them exposed
to either US-CPI in the case of US dollars denominated leases and to Colombia CPI in the case of Colombian leases.
Slide
43 – Capital Structure
LLP’s
as a policy tries to avoid currency mismatches between debt and revenues. US dollar debt is placed only in properties with US dollar
denominated leases and Colombian Peso denominated debt is only in properties with Peso denominated leases. This leads us to more than
80% of our debt denominated in US dollar.
The
quality of our portfolio and LLP’s platform institutionality are key to our ability to improve the financial position of LLP. As
an example, earlier this year LLP refinanced US$87 million of the debt portfolio in Costa Rica with a new secured credit facility of
more than US$100 million. This refinancing improved our Balance Sheet by increasing our weighted average debt maturity from 10 years
to 16 years and decreased our overall cost of debt by 140 basis points from the previous quarter.
As
of June 30, 2023, our outstanding net debt is US$215 million from which 85% expires after 2031 and around 45% is fixed for the next two
years at annual interest rate of 6.0%
With
this I will pass the presentation to Nick Geeza to discuss the business combination overview.
Nick
Geeza
Slide
44
Thanks,
Annette and Good afternoon everyone, my name is Nick Geeza, the CFO of T-W-O and I’ll use the remaining time to discuss our business
combination overview.
Slide
45
When
we evaluated public comps, it became clear to us that we should concentrate on LLP’s two defining characteristics: 1) the company’s
focus on customer-first, EDGE certified, modern Class A industrial real estate, which are similar to the NYSE-listed companies on the
left and 2) LLP’s Central and South American geographic presence in underserved, high-growth markets, similar to the Bolsa-listed
companies on the right.
In
the industrial real estate universe, on the left, the listed companies focus on predominantly Class A industrial real estate properties
that are crucial to the supply chain and distribution networks for their clients – generating consistent rental income, maintaining
high occupancy rates and in some cases providing property and asset management services to their tenants.
Regarding
the geographic focus, on the right, we included Mexican Bolsa-listed comps that share a similar business focus. However unlike these
predominantly Mexico-focused companies, we believe LLP benefits from greater geographic diversification across multiple underserved and
high growth markets.
Slide
46
As
shown here, LLP stacks up well on financial benchmarking. On revenue growth, LLP’s expected 2023 growth rate of 25.7% is at the
top end of the range for NYSE listed comps and more than double that of the best performing Bolsa comps.
When
it comes to NOI margin – a key distinction in the comp set is the internally vs externally managed structures of the companies
listed. The NYSE listed companies on the left, similar to LLP, are all internally managed while the Bolsa listed companies on the right
are all externally managed. Here as you can see – LLP outperforms the NYSE peers with higher operating efficiencies.
Slide
47
If
we turn to slide 47, we show valuation benchmarking here based on 2023 and 2024 cap rates. LLP offers a compelling return relative to
its peers evidenced by higher cap rates compared to the NYSE listed comps but lower than the median of Bolsa listed companies –
reflecting the company’s lower risk due to its expected NYSE listing where LLP will have greater access to liquidity and global
investors.
Although
LLP’s revenue growth and NOI outperform NYSE peers, the valuation of LLP is priced at a meaningful discount, allowing investors
to participate in its future returns.
Slide
48
Now
on to our transaction summary. On the Sources side, the transaction will be funded with a combination of the following: rolled equity
from existing LLP shareholders and FIF-TEEN MILLION estimated cash in trust. Here we are assuming 70% redemptions and have confidence
in our trust delivery, given our strong investor relationships and the overall improvement in the SPAC market.
I
should also note that T-W-O does not have any outstanding warrants. We believe that this lack of warrants should improve the transaction
execution and post-trading performance. We are targeting $25MM in PIPE from strategic investors, and $200MM of existing net debt, which
as footnoted is asset level debt. There is no corporate level debt at LLP.
On
the Uses side, $25M of cash will go directly to the LLP balance sheet, we are estimating FIFTEEN MILLION for transaction fees and expenses
and the $200MM of net debt rolled over. The resulting pro forma Enterprise Value is $578MM.
To
conclude, we at T-W-O are thrilled to enter into a business combination with LatAm Logistic Properties. We are impressed by LLP’s
vertically integrated operating platform, class A US institutional asset quality, and future growth prospects.
Class
A industrial real estate continues to be a resilient outperforming asset class that benefits from broad macro consumption trends and
we believe our SPAC will provide LLP a path to capitalize on that TAM and the tailwinds that are driving it. And lastly and most importantly,
we believe that Esteban and Annette have the management expertise and the vision to take LLP to the next level as a public company and
create long-term value for shareholders.
Thank
you for your time and we look forward to discussing with you further.
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