Friday Happy Hour Update: Gig Capital and DD3 + Two New IPO Filings
The Happiest of Hours is in full effect tonight with two updates.
In no particular order, the below is a round-up of current SPAC news.
GIGCAPITAL, INC. (GIG)
GigCapital, Inc. (GIG) filed an 8-K late this afternoon with some updates to its agreement with Greenhaven regarding its GIG Rights Shares. In particular, this arrangement is now formally being called a “Forward Purchase Agreement”. Furthermore, there is additional language that has been included that clarifies two important items:
“Notwithstanding the forgoing, the parties agreed that Greenhaven shall after the closing of the Business Combination have the right but not the obligation to sell any or all of its Shares into in the open market if the share price equals or exceeds $10.50 per Share. Furthermore, the parties agreed that nothing in the Purchase Agreement shall prohibit Greenhaven from entering into a contract to purchase and/or sell warrants of GigCapital.
So Greenhaven, regardless of whatever is happening with it’s Rights purchase(s), can sell its shares of GIG if the price is above $10.50 and it is not limited in its regards to warrants. Which makes sense and accounts for the clarity in the agreement.
DD3 ACQUISITION CORP. (DDMX)
DD3 Acquisition Corp. (DDMX), also released an 8-K this evening highlighting an amendment, to the Combination and Stock Purchase Agreements with Betterware, their target. Specifically, in regards to the Net Debt:
On September 23, 2019, DD3, the Sellers, Betterware, BLSM and DD3 Mexico entered into an Amendment Agreement to the Combination and Stock Purchase Agreement (the “Amendment”). Pursuant to the Amendment, the definition of “Companies Valuation” under Article I of the Agreement was revised to eliminate the inclusion of Net Debt (as defined in the Agreement) in such valuation. Other than as modified pursuant to the Amendment, the Agreement remains in full force and effect.
Bettware’s Net Debt, as of June 30th, was $35.8 million, which would make their new Enterprise Value $330.9 million and more importantly, the new 2020E EV/EBITDA multiple 6.3x, down from 7.0x. However, DD3 did not give an explanantion as to why they were no longer including the Net Debt in the valuation, but maybe we’ll get additional information in a forthcoming new presentation.
Additionally, DD3 also makes mention that it filed a preliminary proxy under an F-4 filing for Betterware de Mexico, so take note and make sure to follow those filings as well (we’ve updated too).
TWO NEW IPO FILINGS
We also had two new IPO filings tonight, both being underwritten by Cantor. They are the $150 million, cannabis-focused Stable Road Acquisition Corp., and the $175 million Union Acquisition corp. II (yes, that Union). More to come on both in future posts.