1 Ascend Acquisition Corp. Acquisition of e.PAK Resources (S) Pte. Ltd. Exhibit 99.7 |
2 Cautionary Statements THE ATTACHED SLIDESHOW WAS FILED ON DECEMBER 10, 2007 ON FORM 8-K. ASCEND IS HOLDING FROM TIME TO TIME PRESENTATIONS FOR CERTAIN OF ITS STOCKHOLDERS, AS WELL AS OTHER PERSONS WHO MIGHT BE INTERESTED IN PURCHASING ASCEND’S SECURITIES, REGARDING ITS ACQUISITION OF E.PAK RESOURCES (S) PTE. LTD., AS DESCRIBED IN THE REGISTRATION STATEMENT ON FORM S-4 FILED ON NOVEMBER 13, 2007. THE ATTACHED SLIDESHOW, AS WELL AS THE 8-K AND S-4, MAY BE DISTRIBUTED TO ATTENDEES OF THESE PRESENTATIONS. EARLYBIRDCAPITAL, INC. (“EBC”), THE MANAGING UNDERWRITER OF ASCEND’S INITIAL PUBLIC OFFERING (“IPO”) CONSUMMATED IN MAY 2006, IS ASSISTING ASCEND IN THESE EFFORTS AND WILL BE PAID A CASH FEE OF 1.5% OF CONSIDERATION PAID IN THE ACQUISITION PLUS INDEBTEDNESS ASSUMED AND DEFERRED COMMISSIONS OF $925,000 AS THE UNDERWRITER OF THE IPO AT THE CLOSING OF THE ACQUISITION. ASCEND AND ITS DIRECTORS AND EXECUTIVE OFFICERS AND EBC MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF PROXIES FOR THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD TO APPROVE THE ACQUISITION, AS WELL AS THE RELATED REDOMESTICATION OF ASCEND AS A BERMUDA PUBLIC COMPANY (“BERMUDA PUBCO”). STOCKHOLDERS OF ASCEND AND OTHER INTERESTED PERSONS ARE ADVISED TO READ, WHEN AVAILABLE, ASCEND’S FINAL PROSPECTUS AND PROXY STATEMENT IN CONNECTION WITH THE EXCHANGE OF BERMUDA PUBCO’S SHARES AND WARRANTS FOR THE OUTSTANDING SHARES AND WARRANTS OF ASCEND AND ASCEND’S SOLICITATION OF PROXIES FOR THE SPECIAL MEETING BECAUSE THIS DOCUMENT WILL CONTAIN IMPORTANT INFORMATION. SUCH PERSONS CAN ALSO READ ASCEND’S FINAL PROSPECTUS FROM THE IPO, DATED MAY 11, 2006, FOR A DESCRIPTION OF THE SECURITY HOLDINGS OF ASCEND’S OFFICERS AND DIRECTORS AND OF EBC AND THEIR RESPECTIVE INTERESTS IN THE SUCCESSFUL CONSUMMATION OF THIS BUSINESS COMBINATION. THE FINAL PROSPECTUS AND PROXY STATEMENT WILL BE MAILED TO STOCKHOLDERS AS OF A RECORD DATE TO BE ESTABLISHED FOR VOTING ON THE ACQUISITION. STOCKHOLDERS WILL ALSO BE ABLE TO OBTAIN A COPY OF THE FINAL PROSPECTUS AND PROXY STATEMENT, WITHOUT CHARGE, BY DIRECTING A REQUEST TO: ASCEND ACQUISITION CORP, 435 DEVON PARK DRIVE, BUILDING 400, WAYNE, PENNSYLVANIA 19087. THE PRELIMINARY AND FINAL PROSPECTUSES AND PRELIMINARY AND DEFINITIVE PROXY STATEMENTS, ONCE AVAILABLE, CAN ALSO BE OBTAINED, WITHOUT CHARGE, AT THE SECURITIES AND EXCHANGE COMMISSION’S INTERNET SITE (HTTP://WWW.SEC.GOV). ……………... |
3 Forward Looking Statements SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: THIS PRESENTATION AND ACCOMPANYING ORAL REMARKS MAY CONTAIN FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DESCRIBED. SUCH FACTORS INCLUDE, BUT ARE NOT LIMITED TO, THE COMPANY’S ABILITY TO EFFECT A BUSINESS COMBINATION, EPAK’S ABILITY TO GROW FUTURE REVENUES AND EARNINGS, CHANGES IN DEMAND FOR EPAK’S PRODUCTS, MARKET ACCEPTANCE OF THE COMPANY’S PRODUCTS, CHANGES IN THE LAWS OF THE PEOPLE’S REPUBLIC OF CHINA THAT AFFECT THE COMPANY’S OPERATIONS, AND OTHER FACTORS DETAILED FROM TIME TO TIME IN THE COMPANY'S FILINGS WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION AND OTHER REGULATORY AUTHORITIES INCLUDING THE PROSPECTUS AND PROXY STATEMENT TO BE FILED IN CONNECTION WITH THE PROPOSED ACQUISITION. THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY FORWARD- LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. AS USED HEREIN, THE "COMPANY" MEANS THE COMBINED ENTITIES ASCEND ACQUISITION CORPORATION OR THE CONTINUING ENTITY RESULTING FROM ITS AMALGAMATION WITH A WHOLLY OWNED BERMUDA SUBSIDIARY AND EPAK RESOURCES (S) PTE LTD, FOLLOWING THE INTENDED ACQUISITION OF EPAK BY ASCEND. THIS PRESENTATION SUPERSEDES ANY PRIOR INVESTOR PRESENTATION FILED UNDER A CURRENT REPORT ON FORM 8-K REGARDING THE TRANSACTIONS DESCRIBED HEREIN. EPAK’S FINANCIAL INFORMATION AND DATA CONTAINED HEREIN FOR 2002 AND 2003 IN THE EXHIBITS HERETO HAS BEEN PREPARED BY EPAK AS A PRIVATE COMPANY, AND WAS PREPARED IN ACCORDANCE WITH THE PUBLISHED RULES AND REGULATIONS OF THE SINGAPORE FINANCIAL REPORTING STANDARD AND HAS NOT BEEN AUDITED UNDER UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND MAY NOT CONFORM TO SEC REGULATION S-X. FINANCIAL INFORMATION AND DATA CONTAINED HEREIN FOR PERIODS OTHER THAN 2002 AND 2003 HAVE BEEN PREPARED IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTED PRINCIPLES. ALL FINANCIAL AMOUNTS PRESENTED HEREIN AND IN THE EXHIBITS HERETO ARE IN US DOLLARS UNLESS SPECIFICALLY NOTED OTHERWISE. |
4 ePAK Investment Merits • Leading full service supplier of semiconductor transfer and handling products • Central, PRC-based operations led by veteran semiconductor industry team • Accelerating revenue and earnings growth • Advanced low cost manufacturing • Consistent market growth, low volatility • Multiple opportunities for large scale growth in $40 billion market |
5 Semiconductor & Electronics ePAK Focus |
6 Transaction Consideration Shares Issued to ePAK (no cash out at close or warrant conversion) 8,601,002 Closing Stock Price (ASAQ.OB) on Dec 3, 2007 $5.65 Equity Consideration $48,595,661 Plus: Estimated ePAK Debt ~$7,000,000 Less: Estimated ePAK Cash ~($5,000,000) Transaction Consideration $50,595,661 Total Common Shares Outstanding Post Closing 17,167,669 Closing Stock Price (ASAQ.OB) on Dec 3, 2007 $5.65 Equity Value $96,997,330 Plus: Estimated Debt ~$7,000,000 Less: Estimated Cash (1) ~($40,000,000) Enterprise Value $63,997,330 EBITDA Earn-Outs Year EBITDA Hurdle Enterprise Value / EBITDA Earn-Out Shares 2008 $14,700,000 4.4x 88,525 2009 $24,300,000 2.6x 88,525 2010 $37,900,000 1.7x 88,525 265,575 Share Price Earn-Outs (Must Occur Within 6 Months of Closing) Share Price Hurdle Earn-Out Shares $6.00 88,525 $6.50 88,525 $7.00 88,525 $7.50 88,525 $8.00 88,525 442,625 Warrant Conversion Earn-out (ASAQW.OB) Shares Issued Upon Warrant Conversion When Share Price >= $8.50 442,625 Total Potential Earn-out Shares 1,150,825 (1) ePAK estimated cash of $5,000,000 plus Ascend estimated cash of $35,000,000 cash at closing. |
7 Comparative Valuation ePAK Trading Comparables EV / Revenue EV / EBITDA Price / Earnings Company TTM 2007E 2008E TTM 2007E 2008E TTM 2007E 2008E Amkor Technology Inc. (NasdaqGS:AMKR) 1.1x 1.1x 1.0x 4.5x 4.6x 4.4x 8.7x 8.7x 7.1x Entegris, Inc. (NasdaqGS:ENTG ) 1.4x 1.5x 1.4x 9.5x 8.5x 7.4x 22.1x 25.9x 18.8x Illinois Tool Works (NYSE:ITW) 2.0x 1.9x 1.8x 10.2x 9.4x 8.6x 17.0x 16.4x 14.6x MEMC Electronic Materials Inc. (NYSE:WFR) 9.2x 8.6x 6.9x 19.7x 17.8x 13.9x 31.1x 23.6x 18.5x Peak International Ltd. (NasdaqGM:PEAK) 0.2x NA NA NM NM NM NM NM NM Siliconware Precision (NasdaqGS:SPIL) 2.9x 2.5x 2.2x 8.0x 6.8x 6.0x 128.0x 10.6x 10.2x Mean: 2.8x 3.1x 2.7x 10.4x 9.4x 8.1x 41.4x 17.0x 13.8x ePAK (Based $50.6M transaction consideration) 1.2x NA NA 7.7x NA NA 20.2x NA NA Note: Data as of November 30, 2007. TTM as of 9/30/07. Source: CapitalIQ. |
8 ePAK Overview Dedicated to servicing the semiconductor and electronics industry • 600,000 sq foot central manufacturing: Shenzhen, PRC • Executive Offices: Austin, TX • Founded in 1999 • 9 sales offices, 40 warehouses worldwide • Over 500 customers • 1,500 employees • 100+ English-speaking engineering and technical staff |
9 • Core management team 15 years in partnership • Semiconductor industry veterans • 75 top sales and senior manufacturing executives together since 1992 • 23 patents granted, 31 patents pending Peak, Compaq, TI 23 CTO Jim Thomas Ernst & Young 5 Senior VP Finance Jason Lee Officer Position Years in Industry Previous Experience Steve Dezso CEO 20 Peak, E-Systems MS Khoo COO 25 Peak, AMD, Thomson Richard Brook EVP Business Development 25 Peak, TI Chun Chok Senior VP South Asia Sales 16 Peak Jeff Blaine Senior VP North Asia Sales 23 Peak, TI Executive Team |
10 Systems Automated Handling Back End Assembly & Test Front End Wafer Fabrication ePAK Provides Solutions from “Start to Finish” ePAK Value Chain |
11 Blue Chip Customers |
12 Favorable Market Environment • Highly fragmented global semiconductor market • ePAK’s products represent <2% of customers’ total cost • Customer demand driven by semiconductor unit volumes – Consistent YOY growth – Not subject to cyclical semiconductor capital equipment volatility |
13 11% CAGR Silicon Wafer Demand 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: VLSI Research Silicon Wafer Growth |
14 Value Proposition to Customers • Design & Engineering – Outsourced engineering expertise – Proprietary products • Service – Customized vendor-managed inventory – Minimize expensive downtime • Manufacturing – Low-cost, world-class facility; clean rooms – Proprietary methods Customers’ problems are ePAK’s Opportunities |
15 Driving High Margins • Consumable Products – Single use – Rapid velocity – Multiple transport segments • Critically Important – On-time delivery – Maximize customer efficiency • High Barriers to Entry – Precision design and specifications – Highly customized |
16 • Low cost, large scale manufacturing center • Central to semiconductor manufacturing • Short supply lines drive service advantage • JIT delivery Central Manufacturing, Global Supply |
17 ePAK Diversified (ENTG, 3M, ITW) Niche (Advantek, Peak, CPAK) Regional (Dou Yee, Shinon) Global Service Large Capacity Broad Offering Same Day Delivery Vertical Integration ePAK Advantage Engineering Partnership |
$40 B TAM 2008 $500 M TAM 2005 2001 Tape & Reel 20% of Sales $150 M TAM 18 • Industry focused, rapid adoption, brand equity • Driven by new product introductions • Capitalizing on underlying business model strengths Business Strategy Builds on Strengths 1999 IC Handling Trays 40% of Sales $250 M TAM |
19 Latest Growth Driver, Wafer Handling • Entered in 2005 • ~5% of TAM • Largest ePAK performance driver • Sales: 2005 = 12%, 2006 = 22%, 9 Mo. 2007 = 35% • 50 - 60% gross margin range • Historically dominated by Entegris (80% of TAM) |
20 Sales ($ in millions) $0 $5 $10 $15 $20 $25 $30 $35 Sales $12.5 $15.4 $21.7 $27.0 $36.1 2002 2003 2004 2005 2006 30% CAGR Consistent Sales Growth Audited results for 2004-2006 prepared in accordance with US GAAP; Audited 2002 and 2003 results prepared in accordance with Singapore GAAP. |
21 CF from Ops ($ in millions) $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 CF from Ops $0.7 $1.2 $5.2 $6.5 $12.4 2002 2003 2004 2005 2006 Accelerating Cash Flow 103% CAGR Audited results for 2004-2006 prepared in accordance with US GAAP; Audited 2002 and 2003 results prepared in accordance with Singapore GAAP. |
22 Capital Expenditures ($ in millions) $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 Cap Ex $2.2 $2.6 $3.3 $3.3 $5.1 2002 2003 2004 2005 2006 Capital Expenditures • Historically: $1 capex drives $2 in revenue |
23 (US$ in millions) Sep 30, 2007 Cash and equivalents $ 1.9 Total assets $ 38.0 Short-term debt $ 5.8 Working capital* $ 1.2 Days sales outstanding 76 Days inventory outstanding 121 Days payables outstanding 142 Current ratio* 1.06:1 Long-term debt $ 0.9 Total liabilities* $ 21.3 Shareholders equity* $ 16.7 Balance Sheet Metrics Prepared in accordance with U.S. GAAP. * Liabilities excludes $4.8 million due to parent holding co and equity includes $25.7 million contingent redeemable common. |
24 • Consistent and Strong Revenue Growth • Strong Gross Profit Margins • Improving Margins with Scale Summary Income Statement (US$ in '000s) 2004 2005 2006 LTM Sep 07 Target (unaudited) Revenues 21,732 $ 27,013 $ 36,146 $ 42,833 $ Growth 44.6% 24.3% 33.8% 24.9% 45.0% Gross Profit 7,175 9,052 13,063 14,853 GP% 33.0% 33.5% 36.1% 34.7% 42.0% EBITDA 2,025 3,436 5,750 6,558 EBITDA% 9.3% 12.7% 15.9% 15.3% 24.0% Net Income (88) 103 2,179 2,411 NI% -0.4% 0.4% 6.0% 5.6% 18.0% Capital Expenditures 3,321 3,306 5,099 4,927 Capex/Revenues 15.3% 12.2% 14.1% 11.5% Prepared in accordance with US GAAP. EBITDA excludes certain non-cash expense items as shown on the U.S. GAAP statement of cash flows. |
25 Use of Proceeds • Increase capacity to accelerate growth • New product development – High purity silicon handling – High density disk drive – Customer driven • Acquisition candidates – Semi materials space: $40B, highly fragmented – Targets: inefficient business models, high cost structures 25 |
26 Amalgamation/Redomicile in Bermuda • Surviving company ePAK International Limited • Bermuda registered corporation • All common stock and warrants outstanding exchanged 1:1 • Tax efficient corporate structure • Preserves capital and retained earnings where they are most efficiently deployed • Nasdaq listed, prospective ticker EPAK |
27 Investment Summary • Leading full service supplier of semiconductor transfer and handling products • Central, PRC-based operations led by veteran semiconductor industry team • Accelerating revenue and earnings growth • Advanced low cost manufacturing • Consistent market growth, low volatility • Multiple opportunities for large scale growth in $40 billion market |
28 Ascend Acquisition Corporation Don K. Rice, Chairman and CEO 435 Devon Park Drive, Bldg. 400 Wayne, PA 19087 Phone: 610-519-1336 don@ascendgrowth.com www.ascendgrowth.com ePAK International Inc. Steve Dezso, CEO 4926 Spicewood Springs, #200 Austin, TX 78759 Phone: 512-231-8083 steve.dezso@epak.com www.epak.com Investor Relations Crocker Coulson, President CCG Elite 1325 Avenue of the Americas, Suite 2800 New York, NY 10019 Phone: 646-213-1915 crocker.coulson@ccgir.com www.ccgir.com Contact Information |