Form 425 - Prospectuses and communications, business combinations

 

 

 

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: [phone]

 

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: [phone].

 

 

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: [phone]. 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:

 

99.1		Press Release, dated August 15, 2023.
99.2		Investor Presentation, dated August 2023.
99.3		Script to Video Recording of the Investor Presentation.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

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: [phone]

International dial-in number: [phone]

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 [phone].

 

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: [phone].

 

 

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: [phone]. 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

[phone]

[e-mail]

 

two Contact:

 

Nick Geeza

Chief Financial Officer

[e-mail]

 

Media Relations Contact:

 

Zach Kouwe / Kendal Till

Dukas Linden Public Relations for LatAm Logistic Properties S.A.

[phone]

[e-mail]

 

 

 

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.

 

●

Why invest now in LLP?

 

○

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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