Gordon Pointe (GPAQ) Announces “Agreement in Principle”

Alert

Gordon Pointe (GPAQ) Announces “Agreement in Principle”

Are you ready for some football?

Note:  Only a press release was provided tonight, but additional presentation materials are noted in the release to be forthcoming (presumably tomorrow). As such, the below is a short excerpt with additional analysis to be provided once the slides are filed.

Gordon Pointe Acquisition Corp. (GPAQ). announced late this evening that it had entered into a non-binding Agreement in Principle to merge with an affiliate of HOF Village, LLC (“The Hall of Fame Village”, “HOFV”), a sports, entertainment and media company founded by the Pro Football Hall of Fame.

The Johnson Controls Hall of Fame Village is a multi-use destination attraction and media company extending the mission, values and vision of The Pro Football Hall of Fame and the game of football in the birthplace of The National Football League, Canton, Ohio. The Company is a themed sports, entertainment and media destination which capitalizes on the popularity and fandom associated with NFL football and the legends of the game, enabling the region’s and nation’s fans to be immersed in the first football and sports themed entertainment venue.

Additionally, the Village is within an 8-hour drive of 15 NFL franchises and within 5 hours of over 32 million people. In addition, the Hall of Fame Village is developing original media programming to capitalize on its exclusive access to the Pro Football Hall of Fame’s deep library of unique content, combined with the production and broadcast of multiple youth sporting events. Furthermore, Johnson Controls has an 18-year naming rights deal the with Hall of Fame Village. Additional corporate sponsor agreements with Constellation Energy and First Data have recently been signed.

The Company has already invested approximately $250 million of capital to build Phase 1 of the Hall of Fame Village including a 23,000 seat, best-in-class, sports and entertainment stadium, a youth sports complex and the infrastructure to support additional expansion plans. The stadium hosts the Hall of Fame Game (always the first nationally televised NFL game of the season), Hall of Fame Enshrinement for NFL players, the Concert for Legends (hosted previously by Tim McGraw, Maroon 5 and Imagine Dragons), and is becoming an elite entertainment venue for the region.

The merger, if completed, is anticipated to provide additional growth capital to execute the Company’s strategic plan and expansion. The next and immediate planned phase of expansion includes the potential addition of two premium branded hotels, an indoor waterpark, an office complex, a convention center/field house and a retail promenade, which are collectively designed to increase attendance, repeat visitation, length of visitor stay and allow for better year-round programming. This second phase is anticipated to also accelerate growth through additional sports and entertainment programming, the potential for new corporate sponsor partnerships and further development of original media content.

Upon substantial completion of its expansion, the Company contemplates executing its next phase of growth (“Phase 3”), including the addition of a virtual reality attraction, a luxury hotel, an arena and possibly multi-family housing and an independent & assisted living facility targeting Pro Football Hall of Famers, other former NFL players and their families. When stabilized and completed, Phase 3 of the Johnson Controls Hall of Fame Village is projected to substantially increase EBITDA.

Key Transaction Terms

Under the terms of the proposed transaction, it is anticipated that a subsidiary of the Company holding all of the Company’s operations will merge into a wholly-owned subsidiary of GPAQ in exchange for GPAQ common stock. The Company’s management and equity holders have committed to roll 100% of their equity into the combined entity. Proceeds from GPAQ’s trust account or other proceeds, if any are available, will be used by the Company to repay certain debt and to fund continued growth of the Company’s operations. The Company and GPAQ anticipate that there will be sufficient funds in GPAQ’s trust account following the merger such that the Company is expected to have a clean, debt-free balance sheet post-transaction allowing it to raise capital efficiently to fund its strategic growth plans.

The transaction is expected to close in the fourth quarter of 2019 and is not subject to a minimum cash investment by GPAQ.  Certain of the private placement warrants held by GPAQ’s sponsor will be allocated to the Pro Football Hall of Fame for the benefit of Gold Jacket and former NFL player programs.