Garrett Motion (GTX)
Legal Disclaimer
Disclaimer
This presentation is not an offer to sell securities of any investment fund or a solicitation of offers to buy any such securities. Securities of McIntyre
Partnerships, LP (the “Fund” or “McIntyre Partnerships”) managed by McIntyre Capital Management, LP (the “Investment Manager” or “McIntyre Capital”) are
offered to selected investors only by means of a complete offering memorandum and related subscription materials which contain significant additional
information about the terms of an investment in the Fund (such documents, the “Offering Documents”). Any decision to invest must be based solely upon the
information set forth in the Offering documents, regardless of any information investors may have been otherwise furnished, including this presentation.
An investment in any strategy, including the strategy described herein, involves a high degree of risk. There is no guarantee that the investment objective will
be achieved. Past performance of these strategies is not necessarily indicative of future results. There is the possibility of loss and all investment involves risk
including the loss of principal. Securities of the Fund are not registered with any regulatory authority, are offered pursuant to exemptions from such
registration, and are subject to significant restrictions.
The information in this presentation was prepared by McIntyre Capital GP, LLC, the general partner of the Fund (the “General Partner”), and is believed by the
General Partner to be reliable and has been obtained from public sources believed to be reliable. General Partner makes no representation as to the accuracy
or completeness of such information. Opinions, estimates and projections in this presentation constitute the current judgment of General Partner and are
subject to change without notice. Any projections, forecasts and estimates contained in this presentation are necessarily speculative in nature and are based
upon certain assumptions. It can be expected that some or all of such assumptions will not materialize or will vary significantly from actual results.
Accordingly, any projections are only estimates and actual results will differ and may vary substantially from the projections or estimates shown. This
presentation is not intended as a recommendation to purchase or sell any commodity or security. The General Partner has no obligation to update, modify or
amend this presentation or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set
forth herein, changes or subsequently becomes inaccurate.
This presentation is strictly confidential and may not be reproduced or redistributed in whole or in part nor may its contents be disclosed to any other person
without the express consent of the General Partner.
2
Legal Disclaimer
Disclaimer
As of the publication date of this report, McIntyre Capital Management and its affiliates (collectively "McIntyre Capital") have long positions in the stock and
preferred shares of Garrett Motion (“GTX”). In addition, others that contributed research to this report and others that we have shared our research with
(collectively with McIntyre Capital, the “Authors”) likewise may have long positions in the stock and preferred shares of GTX. The Authors stand to realize gains
in the event that the price of the stock increases. Following publication of the report, the Authors may transact in the securities of the company covered herein.
All content in this report represent the opinions of McIntyre Capital. The Authors have obtained all information herein from sources they believe to be accurate
and reliable. However, such information is presented “as is,” without warranty of any kind – whether express or implied. The Authors make no representation,
express or implied, as to the accuracy, timeliness, or completeness of any such information or with regard to the results obtained from its use. All expressions
of opinion are subject to change without notice, and the Authors do not undertake to update or supplement this report or any information contained herein.
This report is not a recommendation to purchase the shares of any company, including GTX, and is only a discussion of why McIntyre Capital is long GTX. This
document is for informational purposes only and it is not intended as an official confirmation of any transaction. All market prices, data and other information
are not warranted as to completeness or accuracy and are subject to change without notice. The information included in this document is based upon selected
public market data and reflects prevailing conditions and the Authors’ views as of this date, all of which are accordingly subject to change. The Authors’
opinions and estimates constitute a best efforts judgment and should be regarded as indicative, preliminary and for illustrative purposes only. Any investment
involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This report’s
estimated fundamental value only represents a best efforts estimate of the potential fundamental valuation of a specific security, and is not expressed as, or
implied as, assessments of the quality of a security, a summary of past performance, or an actionable investment strategy for an investor. This document does
not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein or of any of the affiliates of
the Authors. Also, this document does not in any way constitute an offer or solicitation of an offer to buy or sell any security in any jurisdiction in which such an
offer would be unlawful under the securities laws of such jurisdiction. To the best of the Authors’ abilities and beliefs, all information contained herein is
accurate and reliable. The Authors reserve the rights for their affiliates, officers, and employees to hold cash or derivative positions in any company discussed
in this document at any time. As of the original publication date of this document, investors should assume that the Authors are long shares of GTX and stand
to potentially realize gains in the event that the market valuation of the company’s common equity is higher than prior to the original publication date. These
affiliates, officers, and individuals shall have no obligation to inform any investor or viewer of this report about their historical, current, and future trading
activities. In addition, the Authors may benefit from any change in the valuation of any other companies, securities, or commodities discussed in this
document. Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of the Authors’ operations and their
affiliates. The compensation structure for the Authors’ analysts is generally a derivative of their effectiveness in generating and communicating new
investment ideas and the performance of recommended strategies for the Authors. This could represent a potential conflict of interest in the statements and
opinions in the Authors’ documents. The information contained in this document may include, or incorporate by reference, forward looking statements, which
would include any statements that are not statements of historical fact. Any or all of the Authors’ forward-looking assumptions, expectations, projections,
intentions or beliefs about future events may turn out to be wrong. These forward-looking statements can be affected by inaccurate assumptions or by known
or unknown risks, uncertainties and other factors, most of which are beyond the Authors’ control. Investors should conduct independent due diligence, with
assistance from professional financial, legal and tax experts, on all securities, companies, and commodities discussed in this document and develop a standalone judgment of the relevant markets prior to making any investment decision.
3
Thesis
Thesis
▪ GTX is a recently emerged post-reorg company where a non-fundamental bankruptcy has created an
opportunity to buy a high-quality, growing business entering a cyclical recovery at a steeply discounted
valuation
▪ Pro-Forma GTX is trading ~5x 2021 EPS and ~4x 2022 EPS compared to peer BWA at ~13x and ~11x,
respectively, despite similar leverage
▪ GTX has already fully recovered from the 2018-2020 auto recession and is reporting record sales and
profits, far ahead of other auto suppliers
▪ Listing the equity and preferreds, updating guidance, reinitiating sellside coverage, and simplifying
the capital structure are pending catalysts
▪ Strong inside ownership and controlling shareholders Centerbridge and Oaktree create aligned board,
management, and shareholder interests
4
Model
PF Model
Q1
Sales
Cost of Sales
Gross Profits
Q2
2019A
Q3
Q4
Q1
Q2
2020A
Q3
Q4
Q1A
Q2E
2021E
Q3E
2018A
2019A
2020A
2021E
2022E
2023E
2024E
Q4E
835
(639)
196
802
(620)
182
781
(609)
172
830
(669)
161
745
(607)
138
477
(393)
84
804
(646)
158
1,008
(829)
179
997
(792)
205
1,000
(790)
210
950
(757)
193
900
(716)
185
3,375
(2,599)
776
3,248
(2,537)
711
3,034
(2,475)
559
3,847
(3,055)
792
4,309
3,404
905
4,826
3,764
1,062
5,405
4,162
1,243
SG&A
EBIT
(60)
136
(58)
124
(68)
104
(63)
98
(61)
77
(51)
33
(102)
56
(62)
117
(55)
150
(62)
148
(62)
131
(62)
123
(249)
527
(249)
462
(276)
283
(241)
551
(251)
654
(261)
801
(271)
972
EBITDA
159
154
133
137
108
63
120
149
176
177
157
149
618
583
440
658
774
921
1,092
PF Interest
Pre Tax Income
(12)
124
(12)
112
(12)
92
(12)
86
(12)
65
(12)
21
(12)
44
(12)
105
(12)
138
(12)
136
(12)
119
(12)
111
(48)
479
(48)
414
(48)
235
(48)
503
(48)
606
(48)
753
(48)
924
Taxes
(30)
(27)
(22)
(21)
(16)
(5)
(11)
(25)
(33)
(33)
(29)
(27)
(115)
(99)
(56)
(121)
(145)
(181)
(222)
PF Net Income
94
85
70
65
49
16
33
80
105
103
90
84
364
315
179
383
461
572
702
Shares Assuming Pref Conversion
313
313
313
313
313
313
313
313
313
313
313
313
313
313
313
313
313
313
313
$0.30
$0.27
$0.22
$0.21
$0.16
$0.05
$0.11
$0.25
$0.34
$0.33
$0.29
$0.27
$1.16
$1.01
$0.57
$1.22
$1.47
$1.83
$2.24
508
622
Adj. PF EPS
Margins
Gross Margins
EBITDA
D&A
Tax Rate
23.5%
19.0%
2.8%
22.7%
19.2%
3.7%
22.0%
17.0%
3.7%
19.4%
16.5%
4.7%
18.5%
14.5%
4.2%
17.6%
13.2%
6.3%
19.7%
14.9%
8.0%
17.8%
14.8%
3.2%
20.6%
17.7%
2.6%
21.0%
17.7%
2.9%
20.3%
16.5%
2.7%
20.5%
16.5%
2.9%
23.0%
18.3%
2.7%
21.9%
17.9%
3.7%
18.4%
14.5%
5.2%
20.6%
17.1%
2.8%
21.0%
18.0%
2.8%
22.0%
19.1%
2.5%
23.0%
20.2%
2.2%
24%
24%
24%
24%
24%
24%
24%
24%
24%
24%
24%
24%
24%
24%
24%
24%
24%
24%
24%
▪ MP estimates are modestly above GTX’s conservative estimates found in their most recent lender presentation:
https://www.sec.gov/Archives/edgar/data/0001735707/000119312521051551/d57069dex991.htm
▪ GTX has consistently outperformed guidance since filing for bankruptcy
▪ I adjust prior periods to GTX’s current capital structure for comparison purposes
5
Guidance
Q1 Actuals
Feb. 2021 Guidance
▪ GTX guided Q1 Sales and EBITDA to $868MM and $129MM in late Feb. 2021, yet came in at $997MM and
$176MM, respectively
▪ GTX guidance does not show GTX earning >$4B in sales until 2023, yet GTX’s quarterly sales have averaged
~$1.0B the last two quarters and is growing 1000-1500bps above market
▪ MP believes GTX’s guidance is conservative and will be positively updated as the year progresses
6
Comparables
ADNT
AXL
DAN
LEA
MGA
Average
2021
5.8x
4.5x
6.2x
7.0x
6.8x
6.1x
2022
4.7x
3.6x
5.0x
5.8x
5.8x
5.0x
2023
3.9x
2.8x
4.2x
4.8x
5.1x
4.2x
2021
13.3x
8.2x
12.0x
13.3x
12.8x
11.9x
2022
9.7x
4.4x
8.1x
10.0x
10.2x
8.5x
2023
8.2x
3.3x
6.9x
8.0x
8.8x
7.0x
2022
8.1%
16.7%
11.4%
9.1%
11.0%
11.3%
2022
2.2%
5.5%
4.3%
3.1%
4.4%
3.9%
(EBITDA-Capex)/
Sales
2022
5.9%
11.2%
7.1%
6.0%
6.6%
7.4%
BWA
5.7x
4.7x
3.9x
12.8x
10.6x
8.0x
15.4%
5.0%
10.4%
0.9x
1.3x
GTX
4.8x
4.0x
3.4x
4.9x
4.1x
3.3x
18.0%
2.8%
15.2%
1.1x
1.3x
Ticker
EV/EBITDA Multiple
P/E Multiple
EBITDA/Sales
Capex/Sales
Net
Debt/EBITDA
YE2021
1.4x
2.7x
1.5x
0.1x
0.4x
1.2x
Net Debt/
(EBITDA-capex)
YE2021
1.9x
3.9x
2.4x
0.2x
0.6x
1.8x
▪ GTX is trading at a significant discount to peers
▪ MP believes BWA is the clearest comparable stock given similar exposure to legacy internal combustion
engines (ICE is >90% of profits at both), similar leverage levels, and BWA is GTX’s direct competitor
▪ While GTX’s discount is less dramatic on EV/EBITDA vs. P/E, GTX has significantly higher EBITDA-Capex
margins than competitors, which significantly increases GTX’s EBITDA to FCF conversion
▪ GTX is significantly outgrowing peers – Q1 2021 sales were up ~19% vs Q1 2019 compared to BWA at flat
and global auto SAAR down ~13%
7
Bankruptcy
Bankruptcy: An Overview
8
Bankruptcy
Three Different Types of Bankruptcy
▪ In general, there are three reasons a company files for bankruptcy:
▪ Reason #1 – Failure to cover its interest payments
▪ Reason #2 – Failure to roll over its debt when due
▪ Reason #3 – Need to restructure a contingent liability
▪ Reason #1 and #2 are by far the most common and are what most people think of when they hear the word
bankruptcy – “We ran out of money”
▪ While successful investments can be made in the these, they run into an adverse selection issue in that
most companies that file for bankruptcy are not good business, or else they would not need to file
▪ Reason #3 is entirely different in that the contingent liability often has no relevance to the current business
▪ For instance, GTX filed over an asbestos liability related to brake pads sold prior to 1985 and is entirely
unrelated to GTX’s current turbocharger business
▪ However, contingent liability bankruptcies get lumped in with “ran out of money” bankruptcies, offering
an opportunity to invest in quality companies at discounted valuations
MP believes GTX is a contingent liability bankruptcy where a growing, high-quality operating business can be
purchased at a substantial discount due to the technicalities of the bankruptcy process
9
Bankruptcy
So What Happened?
Simple Capital Structure
▪ $1.25B Term Loan
▪ $1.3B Convertible Preferred A Shares
▪ Converts at $5.25 per share to create
~248MM common shares
▪ Mandatory conversion likely by 2023
▪ $584MM Preferred B Shares
▪ Settles All HON claims
▪ Likely Repaid by YE2021
▪ 65MM current common shares outstanding
▪
▪
▪
▪
GTX filed for bankruptcy to restructure liabilities related to its spinout from former parent Honeywell (HON)
GTX never needed liquidity and maintained strong, positive results throughout the downturn
The disputed liabilities were unrelated to GTX’s current operations and are now entirely settled
GTX now has a significantly simplified capital structure that will automatically further simply in the next 24
months to a single term loan and 313MM common shares outstanding
10
Capital Structure
Preferred B Shares
Preferred A Shares
▪ $835MM book value, with an ~$584MM
Net Present Value at a 7.25% discount rate
▪ Entirely owned by HON
▪ Prepayable at any point using the 7.25%
rate
▪ HON has put option to redeem in full once
TTM EBITDA exceeds $600MM for two
consecutive quarters
▪ $1.3B outstanding which convert at $5.25
to yield 248MM shares
▪ 11% yield, payable in cash or in kind
▪ Automatically converts after two years when
1) trailing twelve-month (TTM) EBITDA is
>$600MM and 2) common shares are
trading >50% above strike price
▪ MP believes one of the significantly underestimated aspects of GTX is the speed at which its
operations have recovered and are breaking out to record growth
▪ The entire GTX capital structure is designed to collapse into a simple term loan plus equity
structure once TTM EBITDA reaches >$600MM, which was originally contemplated in 2023
▪ However, GTX’s Q1 EBITDA achieved an ~$700MM annualized run rate and we believe HON’s Pref
B put option will be triggered sometime in H2 2021
▪ MP believes the simplification of GTX’s capital structure will draw additional investors to the stock
11
What Is GTX?
So… What Is Garrett Motion?
12
Turbochargers
▪ GTX is a leader in the moat-rich automotive turbocharger (TB) market, with ~35% market share
▪ GTX shares a duopoly position with BWA as TB technology leaders, while the remaining players are
smaller, “fast followers” who imitate GTX and BWA’s technology later with lower margin
▪ GTX has one of the highest margins across automotive suppliers
▪ In the late 2000s, Bosche and Mahle, two of the largest global auto suppliers, setup a JV with the goal
of cracking the GTX/BWA duopoly
▪ Despite a decade of trying, the explicit backing of auto OEMs, and hundreds of millions in start up
expenses, Bosche-Mahle were unable to crack the duopoly and gave up by selling the business to
Chinese private equity in 2017
▪ MP believes GTX has one of the strongest competitive moats we have ever analyzed
13
Turbochargers
▪ GTX is diversified across both geography and auto OEM, implying limited risk from specific country or
OEM issues
▪ In addition, TBs are designed into engines years in advance, with very high switching costs once
production has begun, giving GTX strong visibility into revenues with ~88% of 2023 products booked
▪ Strong end market and customer diversification and TB’s sticky nature give GTX significant visibility
into its business over multiyear periods
14
Turbochargers
▪ TBs are high-tech products which use exhaust
fumes to give car engines additional power, which
in addition to speed can significantly improve gas
mileage, making TBs a critical component of
OEMs CO2 reduction strategies over the next
decade
▪ This demand for C02 savings is currently driving
GTX sales 500-1500bps above market growth
▪ IHS projects turbocharger penetration will
increase from 47% of passenger vehicles in 2017
to 53% by 2023
▪ In addition, global automotive sales are expected
to recover sharply from the 2018-2020
automotive bear market
▪ MP believes TB’s growing market penetration into an automotive recovery can drive GTX to low double
digits sales growth over the next four years
15
Turbochargers
“There is less technology content, at least today in a gasoline
turbocharger compared to a diesel turbocharger. It's more basic,
what we call waste gate turbo technology. There is a trend change
there that gasoline turbochargers are evolving towards the same
technology as diesel turbochargers, which is called the variable
nozzle technology. So that would increase the average sales price,
that will increase the average sales price of a gasoline turbocharger,
and that will also be accretive to the overall margins and reduce the
gap of margins between gasoline and diesel over time. But that's
going to take a few more years. Many of the gasoline programs
currently bet, or I would almost say most of them that we are
currently betting on globally are these VNT, these variable nozzle
technology programs. But we know there is a gap of approximately 4
years between quoting or winning a business and starting
production. So it’s definitely a trend, but it's going to take a few
more years before we see the benefits from that.”
-- GTX CTO Peter Bracke, July 2020 Deutsche Bank's Global
Automotive Conference
▪ In addition to leveraging fixed costs, GTX will see a significant margin benefit in the next few years
as higher tech VNT gas turbos are launched
▪ VNTs have ~30-50% higher ASPs and >500bps higher gross margins
▪ MP believes expanding margins and high-visibility revenue growth should drive substantial
EBITDA growth over the next few years
16
Risks
So… What Are the Risks?
17
Risks
Battery Electric vs. Self-Driving
▪ Beyond macro risks, MP believes there are two main LT risks to GTX’s business model:
▪ Battery Electric Vehicles (BEV)
▪ Autonomous Vehicles (AV)
▪ Battery Electric Vehicles
▪ MP believes BEV is a very real technology set to disrupt the automotive industry over the next 20 years
▪ Pure BEVs have no exhaust fumes, thus they have no use for a TB
▪ BEV growth will inevitably turn TB manufacturers into “shrinking ice cubes”
▪ However, MP believes this will take a long time, TBs will grow for the next decade, and proper capital
returns and/or reinvestment can offset this inevitable decline
▪ Autonomous Vehicles
▪ MP believes AV technology is too far away to negatively impact GTX in the next decade
▪ While sensors and machine learning have greatly improved cars’ AV features, the AI needed to safely
drive hundreds of millions of cars at high speeds without a driver is still years away, at best
▪ As long as cars need drivers, MP does not believe AV technology will result in an overall decline in
automobiles sold and is thus not a threat to GTX at present
18
BEV
BEV Transition to Take Time
▪ While MP concedes BEVs are the future, MP believes the BEV transition will take a very long time and GTX is
10+ years from declining sales
▪ Pure BEVs are currently under 3% of global automotive sales and MP believes GTX will grow even if
production increases 10x in the next decade
▪ Unlike say software disruption, where the push of a button can distribute game-changing products
instantaneously on global basis, the BEV transition is a fundamental reshaping of the entire global
transportation industry, which requires substantial and costly changes in physical infrastructure that will take
many years to scale
▪ For instance, industry consultants estimate for BEVs to reach 30% of cars produced, global cobalt
supply, a key battery component, must increase ~4x from current levels. However, ~70% of the world’s
cobalt is sourced from the Democratic Republic of Congo, a country that has in recent memory fought
multiple civil wars and large parts of the country are still under guerilla rule. Further, ~15-30% of Congolese
cobalt is mined in “artisanal and small scale” mining, which is a polite way of saying unsafe child labor that,
in addition to being unethical, does not rapidly scale.
▪ In the meantime GTX’s cash flows have very real value as long as they are returned to shareholders or
properly reinvested
▪ Peer BWA generates >90% of profits from legacy ICE sales, yet still trades 11x 2022 FCF
19
BEV
TB Market to Grow Through 2030
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Total Vehicles and Engines
- y/y chg
BEV
-%
ICE (Including Hybrids)
-%
97.0
1.5
2%
95.5
99%
73.0
-33%
2.0
3%
71.0
97%
84.0
13%
2.9
3%
81.1
97%
92.0
9%
4.6
5%
87.4
95%
96.0
4%
6.7
7%
89.3
93%
99.0
3%
8.4
9%
90.6
92%
101.0
2%
10.1
10%
90.9
90%
103.0
2%
13.4
13%
89.6
87%
105.1
2%
17.9
17%
87.2
83%
107.2
2%
22.5
21%
84.7
79%
109.3
2%
27.3
25%
82.0
75%
111.5
2%
33.4
30%
78.0
70%
% of ICE TB penetrated
50%
52%
54%
55%
57%
59%
61%
63%
65%
67%
69%
71%
TBs Total
48.0
38.0
44.0
48.3
51.1
53.7
55.7
56.7
56.9
56.9
56.8
55.6
▪ TBs are currently growing rapidly due to demand for hybrid electric vehicles as a bridge to lower CO2 BEVs
▪ Even if BEVs reach 30% by 2030, MP believes the TB market will be larger at the end of the decade than at
present, and substantial declines will not take place until the 2030s
20
BEV
2030 DCF Valuation
1
2022
Sales
2
2023
3
2024
4
2025
5
2026
6
2027
7
2028
8
2029
9
2030
4,309
4,826
5,405
5,892
6,346
6,715
7,010
7,295
7,566
774
921
1,092
1,208
1,301
1,377
1,437
1,495
1,551
(120)
654
(120)
801
(120)
972
(130)
1,078
(140)
1,161
(151)
1,226
(163)
1,274
(176)
1,319
(190)
1,361
(48)
606
(48)
753
(48)
924
(48)
1,030
(48)
1,113
(48)
1,178
(48)
1,226
(48)
1,271
(48)
1,313
Tax
(145)
(181)
(222)
(247)
(267)
(283)
(294)
(305)
(315)
FCF
461
572
702
783
846
895
932
966
998
EBITDA
D&A/Capex
EBIT
Interest
EBT
Exit Value -->
PV FCF
419
473
528
535
525
505
478
451
5,985
Discount Rate
Exit Multiple
PV FCF Total
PF YE2021 Debt
Equity Value
Per Share
10%
6.0x
6,875
800
6,075
$19.41
2,961
▪ MP believes GTX will grow sales rapidly until 2026, slow in the back half of the decade, and enter secular
decline sometime in the 2030s
▪ GTX will generate substantial cash flows before then, which are worth multiples of GTX current share price
even using conservative assumptions on discount rate and exit multiple
▪ Basically, as long as GTX manages its cash flows intelligently, GTX stock is deeply undervalued
21
AV
Autonomous… Is Not Here Yet
▪ MP believes AV technology is simply no where near deployment at a scale that could impact GTX
▪ In theory, fully autonomous cars could cut costs for car sharing services like Uber so substantially that
overall demand for cars and trucks begins to decline
▪ However, current AVs are limited to driver assist features, like Tesla autopilot, or driverless cars operating in
small, preset areas that still need occasional human input, such as Waymo’s robo-taxis in Phoenix
▪ AIs simply cannot make routine decisions – Is the Amazon delivery person getting into his car or about to run
across street? – that make large-scale deployment years away at the earliest
22
Inside Ownership
▪ As a result of the bankruptcy, roughly 80% of GTX shares are owned by private equity and hedge funds that
participated in and lead the restructuring
▪ The largest owners are Centerbridge and Oaktree, who combined control roughly 50% of PF shares,
have board seats, and other control mechanisms
▪ Numerous other well-known distressed funds are also owners, such as Baupost, Sessa, and Cyrus
▪ While MP is cautious in control situations, we believe there are enough intelligent third-party shareholders to
ensure reasonable behavior and given their significant ownership, the controlling funds are highly
incentivized to get the share price higher
▪ Further, given looming BEV risks, proper capital allocation is a critical component of GTX’s stock realizing its
intrinsic value, and MP believes the significant involvement and aligned ownership of skilled capital
allocators is a strong positive
▪ MP believes the strong pedigree of GTX’s shareholder base speaks to the substantial opportunity
23
Preferred
Preferred vs. Equity and Timing
▪ This presentation is geared towards GTX equity. However, the majority of GTX PF shares outstanding are in
the convertible preferred shares issued as part of the bankruptcy
▪ MP believes the structure will collapse in 2023 when the preferred shares’ automatic conversion features
are triggered
▪ In the meantime, GTX’s preferred shares are currently illiquid and only traded in an OTC “grey market”
▪ However, GTX plans to submit a registration statement to the SEC and the preferred shares should be listed
and exchange traded sometime before the end of July
▪ The preferred share listing should substantially increase GTX’s liquidity, thus broadening the investor base
and increasing investor interest in the story
▪ Prior to filing, GTX was covered by several sellside brokers who could reinstate coverage upon listing
▪ MP believes listing the preferred shares presents a strong catalyst
24
Background
Fund Background
McIntyre Partnerships is a concentrated value fund launched in 2017. The
fund employs a selective-contrarian strategy, with a focus on event driven,
GARP, and distressed investments. We believe a concentrated portfolio of
five-to-ten thoroughly researched investments provides the best risk/reward
returns over the economic cycle.
Founder Biography
Chris McIntyre has fifteen years of investment experience across several
funds: MAK Capital, Cobalt Capital, MDR Capital, and FNY Securities. Most
recently he was a Managing Director at MAK Capital, a value focused equity
and credit fund, where he managed investments in consumer, telecom, and
special situations. Chris is a CFA charterholder. He is a University of Virginia
graduate with degrees in Economics and Government.
25
Contact
McIntyre Partnerships
433 Broadway, Suite 633
New York, NY 10013
Chris McIntyre, Founder
(929) 399-5485
chris@mcintyrepartnerships.com
26