TitanCrete Readymix — The Investment Proposition

The investment proposition — the case for a scaled, multi-plant ready-mix concrete and aggregates platform, the value drivers and the returns underpinning the opportunity.

TitanCrete Readymix Business PlanSection 2 › The Investment Proposition

Section 2 · Business Plan

The Investment Proposition

The investment proposition — the case for a scaled, multi-plant ready-mix concrete and aggregates platform, the value drivers and the returns underpinning the opportunity.

TitanCrete offers investors exposure to a defensive, asset-backed
materials business positioned at the convergence of three reinforcing
tailwinds: a record public-infrastructure budget, a cement-and-concrete
sector running well below installed capacity, and a fragmented ready-mix
market in which scale, logistics and quality assurance are the principal
sources of durable advantage.

Sources and uses of funds

The opening raise of R420 million is allocated across a balanced mix
of long-life productive assets, working capital and a prudent
contingency. Roughly two-thirds is directed to land, plant civils,
batching systems and the initial fleet — the revenue-generating core —
with the balance reserved for technology, pre-launch commercial
activity, working capital and a debt-service reserve.

Table 2. Sources of funds at financial close

Sources of funds R’m %
Equity capital (institutional) 220 52.4%
Founder capital 30 7.1%
Senior term debt 170 40.5%
Total sources 420 100.0%

Table 2. Opening capital structure: 60% equity
(institutional plus founder) and 40% senior secured term debt.

Table 3. Uses of funds at financial close

Uses of funds R’m %
Land & plant infrastructure 150 35.7%
Fleet acquisition 120 28.6%
Equipment & batching systems 65 15.5%
Working capital & DSRA 40 9.5%
Technology infrastructure 15 3.6%
Pre-launch sales & marketing 10 2.4%
Contingency 20 4.8%
Total uses 420 100.0%

Table 3. Land, plant civils, batching systems
and fleet absorb the majority of the raise; a R20m contingency (4.8%)
cushions construction and ramp risk.

Figure 1.
Figure 1. Sources and uses of the R420 million opening capital raise.

What investors are backing

  1. A demand-led, not supply-led, entry. TitanCrete
    does not need to create demand; it needs to capture a defined, budgeted
    share of public and private concrete consumption with reliable service
    and consistent quality.
  2. Vertical integration. Owning batching, mixing,
    pumping and aggregate supply protects margin, improves on-time-in-full
    delivery, and reduces dependence on third-party logistics in a market
    where freight cost dictates competitiveness.
  3. A conservative, structured balance sheet. Modest
    opening leverage, a grace period, a debt-service reserve and a committed
    revolver are deliberately layered to carry the business through a
    loss-making ramp without covenant breach.
  4. A clear deleveraging and exit path. Net debt /
    EBITDA compresses to roughly 1.0× by Year 5, creating a clean platform
    for trade sale, secondary buyout or recapitalisation.
KEY INSIGHT — Return summary (conservative base
case)

On preserved sponsor EBITDA, a 5.5× EV/EBITDA exit at the end of Year
5 implies an enterprise value of approximately R1,441m and equity value
of R1,169m after deducting net debt of R272m. Against R250m of invested
equity this yields a base-case IRR of 36.1% and a money multiple of
4.67×. The grid in Section 18 shows the return holding above 22% even if
the business achieves only 85% of projected EBITDA and exits at
4.5×.

Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of TitanCrete Readymix South Africa (Pty) Ltd.