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Intention to Float on AIM

Released 07:00 24-Jan-2019

RNS Number : 9401N
Techniplas, Inc.
24 January 2019




This announcement is an advertisement and not an admission document or a prospectus. This announcement is not and does not constitute or form part of, and should not be construed as, an offer to sell or issue, or a solicitation of any offer to buy or subscribe for, any securities, to any person to whom it is unlawful to make such offer or solicitation or which may result in the requirement to register any securities under the US Securities Act. This announcement, or any part of it, should not form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Investors should not subscribe for or purchase any securities referred to in this announcement except on the basis of information in the admission document (the "Admission Document") to be published by Techniplas, Inc (the "Company") in due course in connection with the proposed admission of its entire issued and to be issued share capital to trading on AIM, a market operated by London Stock Exchange plc. Copies of the Admission Document will, following publication, be available on the Company's website at www.techniplas.com.

For Immediate Release

24 January 2019


Techniplas, Inc.

("Techniplas", the "Company" or the "Group")



Techniplas today announces its intention to apply for the admission of its entire issued and to be issued share capital to trading on AIM ("Admission"), a market operated by London Stock Exchange plc, and to conduct a placing of the Company's shares (the "Shares") with institutional and professional investors (the "Placing").  Dealings in the Shares on AIM are expected to commence in 2019.


·    Techniplas is a fully invested, global producer and support services company providing highly engineered and technically complex components, making the supply chain to original equipment manufacturers ("OEMs") more efficient.

·    The Techniplas ecosystem is comprised of Techniplas Core (the largest component of the business), Techniplas Prime (a growth platform which seeks to match excess manufacturing capacity with demand from Techniplas' customer base), and Techniplas Digital (a research and development ("R&D") incubator). It is a leading manufacturer of technically complex, niche products across a wide range of applications and end markets, including automotive and truck, industrial, and commercial. Techniplas Core has a global footprint with an emphasis on innovative design, lightweighting, cognitive lighting, ColorFuse and air-water separation.

·    The Group focuses on creating solutions for major platforms of its key customers such as Daimler, BMW, Ford, General Motors, Audi, Honda, Bosch, Delphi, Cummins, Schneider Electric, Eaton, and Moen.

·    The Company's headquarters is located in Nashotah, Wisconsin and its international headquarters is based in Kusnacht, Switzerland. The Group operates 12 production facilities in the United States, Mexico, Switzerland, Germany, Brazil and China and maintains 25 Prime partners and ten technical / sales centres globally.  As at 30 September 2018 the Group had over 2,000 employees.

·    Techniplas generated US$515 million of net sales in the year ended 31 December 2017 and US$403 million of net sales in the nine months ended 30 September 2018.  The Group has a visible and stable revenue base with contracts for customers in the automotive sector typically awarded for the entire life of the vehicle platform, which is usually five to seven years.  Approximately 90% of the Group's products are supplied to customers on the basis of sole source contracts.

The Directors believe that Admission will be an important step in the Company's development and will assist it in achieving its stated objectives by: (i) raising capital to further enhance the Group's profile and brand recognition with its customers, potential Prime Partners and targets of potential strategic bolt-on acquisitions; (ii) capitalising on investments already made in R&D and technically enhanced products to drive growth and penetrate new markets; and (iii) assisting the recruitment, retention and incentivisation of senior management and employees at all levels.  Funds will also be used to de-lever and strengthen the balance sheet.


Stifel Nicolaus Europe Limited ("Stifel") is acting as Nominated Adviser and Sole Broker to the Company.


George Votis, Executive Chairman of Techniplas, commented: "Techniplas is a global producer and support services company working with many of the best-known brands across various sectors.  We are taking the lead in developing a new smart manufacturing industry, and admission to trading on AIM is an exciting and logical step to enable us to continue our momentum in this respect."


Key Strengths


·    fully invested, global, industry agnostic, manufacturing and support services company making the supply chain to OEMs more efficient through its network of 12 production facilities and 25 Techniplas Prime Partner facilities;

·    the Group is in its growth phase, having integrated the Techniplas Core platform and generating more than US$500 million in net sales per annum (on average for the past three financial years) by providing highly engineered and technically complex plastic modules;

·    Techniplas Prime constitutes the growth platform for the Group through MaaS (Manufacturing-As-A-Service) which is scaling, rationalising and localising the supply chain by utilising industry idle capacity and providing choice to OEMs for their supply chain while limiting initial capital expenditure by the Group;

·    Techniplas Digital is a virtual R&D function for the Group, acting as a curator and incubator of next generation technologies and capabilities for the Techniplas Core and Techniplas Prime platforms;

·    deep relationships with blue chip clients providing strong revenue visibility and diversification;

·    significant barriers to entry though the Group's established platform, IP and protected technologies (including 46 patent families and 168 patents), long established and entrenched relationships, reputation for quality, vertically integrated business model and defensible share of wallet given that the Group is often the sole supplier for a particular technology;

·    favourable long-term industry tailwinds in the macro automotive market: light weighting, cognitive lighting and personalisation;

·    over 95% of the Group's sales for 2019 already booked with order backlog equivalents of more than US$2.0 billion as at 30 September 2018.  This revenue visibility is enhanced by the Company's strong track record of winning repeat orders and a 1.1x book to bill ratio (i.e. the ratio of the lifetime award for orders received for the twelve months ending 30 September 2018 to orders shipped and invoiced (sales) over the same period);

·    experienced management team and board with a proven track record. The Group is led by founder and Executive Chairman George Votis, with highly experienced executive and non-executive directors combining strong sector, public company and international mergers and acquisitions expertise with a track record of building, growing and exiting businesses; and

·    Techniplas Prime's ability to capitalise on the desire of certain of the Group's large customers to localise and to consolidate their supply chains and move to fewer suppliers.


For further information please contact: -

Techniplas, Inc.

Tel: +44 (0) 20 7466 5000

George Votis, Executive Chairman


David Knill, Chief Financial Officer & Chief Administrative Officer


Stifel Nicolaus Europe Limited (Nominated Adviser and Sole Broker)

Tel: +44 (0) 20 7107 6000

Michael Hart / Fred Walsh / Alex Price / Neil Shah / Govinder Ubhi (UK)





Buchanan (Financial Communications)

Tel: +44 (0) 20 7466 5000

Henry Harrison-Topham / Chris Lane / Catriona Flint




The Business


Techniplas Ecosystem


The Group's business model is based on three interconnected operating units which form the "Techniplas ecosystem": Techniplas Core, Techniplas Prime and Techniplas Digital.

Techniplas Core


Techniplas Core is the Group's primary operating unit. It is a leading manufacturer of technically complex, niche products across a wide range of applications and end markets, including automotive and truck, industrial, and commercial. Techniplas Core has a global footprint with an emphasis on innovative design, lightweighting, cognitive lighting, ColorFuse and air-water separation. The wide variety of product categories the Group designs and manufactures includes, among others, fluid and air management systems, decorative products for the interior and exterior of vehicles, structural performance products, industrial products and cognitive lighting products.

Techniplas Prime


Techniplas Prime acts as an extension of Techniplas Core to offer customers MaaS in any location globally. Techniplas Prime operates through the Group's extensive network of hand-picked and proven Prime Partners serving as a nexus between OEMs and smaller manufacturing companies, which are typically regional players. Prime Partners are carefully reviewed prior to being added to the Group's network (the process on average takes around a year), and the Group remains accountable to end customers for the timeliness and quality of deliveries.

Techniplas Prime is highly scalable, requiring limited capital investment and primarily variable costs of production. It allows local and regional manufacturers access to OEM customer requirements to utilise and fill their idle manufacturing capacity through a proprietary branded and OEM approved supply-chain. In turn, it allows the Group's OEM customers to rationalise and localise their supply chain while being provided with consistent quality products on a global scale.  In addition, Techniplas Prime provides a captive channel for the Group's deployment of new capabilities such as ColorFuse and technologies from Techniplas Digital (e.g., 3D printing) at scale.

Techniplas Prime had 25 Prime Partners as at 30 September 2018. Going forward, Techniplas Prime intends to add the equivalent of more than one "virtual" factory per year (in terms of capacity allocations from its Prime Partners), with eight new locations targeted for 2019 and 2020.

Techniplas Digital


Techniplas Digital acts as an R&D function for Techniplas Core and Techniplas Prime.  It also enables the Group to partner with start-up companies by means of its Open Innovation Program. Techniplas Digital focuses on enhancing the Group's internal operations as well as developing advanced competencies and products for customers in order to accelerate the business' growth, without the need for significant capital expenditure and with a primarily variable cost structure. Techniplas Digital had eight tech partners as of 30 September 2018, each of which are small, start-up companies with cutting-edge technologies in areas such as 3D printing, real-time data acquisition and lightweighting (technology optimisation and generative design), who partner with the Group on a first-mover or fully exclusive basis within the Group's verticals. The Group uses the technologies developed by its partners in both Techniplas Core and Techniplas Prime, which enables it to develop products faster and at lower cost.


Business Model


The Group's diversified product and customer mix reduces dependence on any particular type of manufacturing process, technology, product or customer.  The Group maintains a high degree of operational flexibility, with a favourable cost structure that was approximately 62% variable (on average for the past three financial years).  The Directors believe that this cost structure gives the Group a high degree of organisational flexibility while maintaining low corporate overhead.  Additionally, its North American contracts are typically drafted with pass-through mechanisms for raw material costs, in order to mitigate raw material volatility.

The Group has a visible and stable revenue base with contracts normally awarded for the entire life of the vehicle platform, which on average is five to seven years.  Approximately 90% of the Group's products are supplied to customers on the basis of sole source contracts. Many of the Group's current contracts are still at the early stage of their product life cycle, generating high revenue visibility. Based on its contracts and estimated platform volumes as at 30 September 2018, the Group had order backlog equivalents of more than US$2.0 billion through to 31 December 2023.  The Group's book-to-bill ratio (i.e. the ratio of the lifetime award for orders received to orders shipped and invoiced (sales) over the same period) for the twelve months ending 30 September 2018 was 1.1x, indicating growth.

Products and End Markets


The Group's product portfolio is based on leveraging the Group's core competencies into sustainable products and product niches for various end markets.  For the year ended 31 December 2017, automotive sales constituted the Group's largest market, representing approximately 82% of the Group's net sales for the same period, out of which 60% were directly attributable to OEMs and 22% were attributable to Tier One automotive suppliers that assemble components from other suppliers and supply those assemblies to OEMs (based on the Company's categorisation of customers).  Sales to non-automotive customers constituted approximately 18% of the Group's total net sales for the year ended 31 December 2017. The Directors believe that as the Group focuses on promoting what they consider to be industry-agnostic technologies, such as cognitive lighting, lightweighting, ColorFuse and air-water separation, the percentage of the Group's total net sales attributed to non-automotive customers will increase over time.

Objectives and Strategy


The Directors believe that key to the future success of the Group is a combination of an organic and acquisitive growth strategy. Historically, the Group's strategy focused on growth through acquisitions from 2010 to 2014 (Phase 1). From 2015 to 2017, the Group then shifted to focus on operational excellence at all of its locations and streamlining, where possible, the manner in which the Group conducts its business (Phase 2), as well as focusing on digital innovation and technology through its rollout of Techniplas Prime and Techniplas Digital. The Group now aims to enter a new period of growth (Phase 3), during which it expects to continue to innovate and grow Techniplas Prime and Techniplas Digital's technological innovations for the benefit of the Group and its customers while strategically expanding its reach through acquisitions and further investment.

The Group's vision is to strengthen its position as a globally preferred provider of plastic modules and subsystems for niche markets in the automotive sector and other industries. In particular, the Directors view the following as key to the Group's ability to grow:

·    MaaS. Techniplas Prime is a highly scalable, asset-light variable capacity business model that matches excess manufacturing capacity with customer needs in any geographic location. Techniplas Prime accounted for approximately 18.5% of the Group's net sales in the nine months ended 30 September 2018 and the Directors expect this to increase in future years. Techniplas Prime is a disruptive manufacturing business model that the Directors believe is highly scalable with few fixed costs. In 2017, Techniplas Prime added the equivalent manufacturing production of one "virtual" factory;

·    Lightweighting. The Directors have identified lightweighting as being a key industry trend and increasingly important for the automotive industry moving forward. The Group has particular expertise in lightweighting and its solutions involve material substitution (for example metal to plastic), material reduction (plastic to less plastic) and topology optimisation (next generation lightweighting) which result in improved performance, less complexity and reduced costs of materials and tooling. The Directors believe that the expansion of this market will be a key driver for the Group's growth moving forwards;

·    Smart Lighting & Personalisation. According to Yole Development (2017), interior lighting is expected to be the fastest growing lighting segment from 2016 to 2022. The Group is able to address this market through its smart lighting products which also address the growing interest in vehicle customisation, not only on the exterior, but within the interior of the vehicle. Smart Lighting helps to create a personalised interior at affordable prices that can be changed by the user at the touch of a button. Additional personalisation provided by the Group also include its ColorFuse technology; and

·    Manufacturing process innovation. The Group uses advanced manufacturing solutions in order to seek to create technically complex products and deliver innovative solution offerings to its global blue chip customer base. The Directors intend to utilise the Group's technical capabilities, automation excellence, equipment and experience to focus on highly complex parts, for example its ColorFuse products. In so doing, the Directors believe that the Group will be able to increase its customers' reliance on the Group, as 90% of the Group's products are supplied on sole source status, and thereby increase its share of customer spend at higher margins.

Over the short- to medium-term, the Directors intend to continue the alignment of a unified global organisation in order to drive revenue, accelerate growth, reduce structural costs and promote best practices. The Group plans to further expand into existing territories, including Asia Pacific, and improve capacity utilisation in North America through consolidation. Finally, the Group plans to accelerate the rollout of new technologies and significant scaling of Techniplas Prime in order to drive growth.

The Directors also intend to increase the Group's current weighting towards the non-automotive sector which accounted for approximately 18% of the Group's net sales for the financial year ended 31 December 2017. The Directors believe the percentage of the Group's total net sales attributed to non-automotive customers will increase over time as the Group focuses on promoting its cognitive lighting, lightweighting and ColorFuse technologies, which the Directors believe are industry agnostic.

At the same time, a significant proportion of growth to date has been generated through the Group's successful execution of its buy-and-build strategy. These acquisitions were carried out across multiple geographies and product segments. The Directors intend to continue this strategy and pursue external growth through strategic bolt-on acquisitions.

Board of Directors


George Votis (age 57) - Executive Chairman

George is the founder, Executive Chairman and principal shareholder of the Company. He is the Chairman and CEO of Galt Industries, Inc., a private management company with expertise in the consolidation of businesses within fragmented industries. He is also an active investor in early stage technology ventures. Mr. Votis is a member of the Big Apple Chapter of the Young Presidents Organization. He was chosen by The World Economic Forum as a Global Leader for Tomorrow. He has served as a Corporate Member of The Council on Foreign Relations, and is a founding Board Member of the New York Center for Children. He was a past Chairman of the New York Metro Chapter of the Young Presidents Organization and served on the Tufts University International Board of Overseers. Mr. Votis sits on the Innovation Board of the X Prize Foundation, a philanthropic organization which uses incentive based competitions to help solve some of the world's challenges. He received a BA from Tufts University, and an MBA from the Wharton School at the University of Pennsylvania.


David Knill (age 53) - Chief Financial Officer, Director and Chief Administrative Officer

David Knill has served as Chief Financial Officer and Director of the Company since August 2015 and as Chief Administrative Officer since May 2017. Mr. Knill brings more than 30 years of financial and automotive experience to Techniplas, most recently serving as executive director, executive vice president and global finance director at TI Automotive from 2012 to 2015. Additionally, he worked at BBK as managing director from 2009 to 2012; Delphi Corporation in a variety of senior corporate and operational finance roles from 1999 to 2009; and began his career with General Motors, initially in manufacturing engineering followed by various roles with GM's Treasurer's Office, from 1989 to 1998. Mr. Knill graduated from Kettering University with a Bachelor of Science degree in electrical and computer engineering and received a MBA from the University of Western Ontario's Ivey School of Business.


Avi Reichental (age 62) - Vice Chairman, CEO Techniplas Digital

Avi Reichental joined the Company as Vice Chairman of the Board in May 2017 and serves as CEO of Techniplas Digital. Avi is the founder, Chairman and Chief Executive Officer of XponentialWorks, a venture investment advisory and product development company and currently also serves as general partner at OurCrowd First, one of Israel's most active early-stage venture funds. Avi also spent 12 years as President, CEO and Director of 3D Systems Corporation from 2003 to 2015 and served on the board of directors for Harman International from 2015 to 2017, a leading provider of connected products and solutions for automakers, consumers and enterprises worldwide. From 1981 to 2003, he held senior executive leadership positions with Sealed Air, where he also served as corporate officer for more than a decade.


The Company also plans to appoint suitably qualified independent non-executive directors prior to Admission.




The information contained in this announcement is for background purposes only and does not purport to be full or complete. This announcement is not an offer for securities and investors should not purchase or subscribe for any securities referred to in this announcement except on the basis of information in the Admission Document issued by the Company in connection with Admission. No reliance may or should be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness. The information in this announcement is subject to change.

This announcement is not for publication or distribution, in whole or in part, directly or indirectly, to US persons, as defined in Regulation S under the US Securities Act of 1933, as amended (the "US Securities Act"), or in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia) (collectively, the "United States"), Australia, Canada, Japan, the Republic of South Africa, or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein come should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, the securities referred to herein to any person in any jurisdiction, including the United States, Australia, Canada, Japan or the Republic of South Africa or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

The securities referred to herein may not be offered or sold, transferred or delivered directly or indirectly, in the United States or to, or for the account of, US persons, as defined in Regulation S under the US Securities Act, except if such transfer is effected (1) in a transaction meeting the requirements of rules 901 through 905 (including the preliminary notes) of Regulation S under the US Securities Act, (2) pursuant to an effective registration statement under the US Securities Act, or (3) pursuant to an available exemption from the registration requirements of the US Securities Act, in each case in accordance with all applicable US federal and state securities laws. Hedging transactions involving the common stock may not be conducted, directly or indirectly, unless in compliance with the US Securities Act. The securities referred to herein have not been and will not be registered under the US Securities Act or under the applicable securities laws of Australia, Canada, Japan or the Republic of South Africa. There will be no public offer of the Shares in the United States, Australia, Canada, Japan or the Republic of South Africa. Subject to certain exceptions, the Shares referred to herein may not be offered or sold in Australia, Canada, Japan or the Republic of South Africa or any national, resident or citizen of Australia, Canada, Japan or the Republic of South Africa.

This announcement is only addressed to and directed at persons in member states of the European Economic Area ("EEA") who are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC), as amended ("Qualified Investors"). In addition, in the United Kingdom, this announcement is addressed and directed only at Qualified Investors who (i) are persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (ii) are persons who are high net worth entities falling within Article 49(2)(a) to (d) of the Order and (iii) to persons to whom it may otherwise be lawful to communicate it to (all such persons being referred to as "relevant persons"). Any investment or investment activity to which this announcement relates is available only to relevant persons in the United Kingdom and Qualified Investors in any member state of the EEA other than the United Kingdom and will be engaged in only with such persons. Other persons should not rely or act upon this announcement or any of its contents.

Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all or part of the amount invested. Persons considering making such an investment should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning Admission or the Shares. The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements.  When you sell your investment you may get back less than you originally invested. Potential investors should consult a professional adviser as to the suitability of the shares for the person concerned. Past performance cannot be relied upon as a guide to future performance.

Stifel, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and no-one else in connection with Admission and the Placing. They will not regard any other person as their respective clients in relation to Admission and the Placing and will not be responsible to anyone other than the Company for providing the regulatory protections afforded to their respective clients, nor for providing advice in relation to the contents of this announcement or any transaction, arrangement or other matter referred to herein.

No representation or warranty, express or implied, is made by Stifel, nor any of its  directors, officers, employees, advisers or agents, as to any of the contents of this announcement, including its accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

This announcement contains certain statements that are, or may be, forward looking statements with

respect to the financial condition, results of operations, business achievements and/or investment

strategy of the Company. Such forward looking statements are based on the board's expectations of

external conditions and events, current business strategy, plans and the other objectives of management

for future operations, and estimates and projections of the Company's financial performance. Though the board believes these expectations to be reasonable at the date of this document they may prove to be erroneous. Forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, achievements or performance of the Group, or the industry in which the Group operates, to be materially different from any future results, achievements or performance expressed or implied by such forward looking statements.


Certain figures contained in this announcement, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this document may not conform exactly with the total figure given.

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Intention to Float on AIM - RNS