Cerberus Telecom (CTAC) Further Postpones Shareholder Vote

Cerberus Telecom Acquisition Corp. (NYSE:CTAC) has again postponed its special meeting to vote to approve its combination with internet-of-things (IoT) provider KORE Wireless.

The meeting, which was originally supposed to be held September 16th, but was first postponed to today, September 22nd, has been further postponed to next Wednesday, September 29th at 10:00 am. However, it’s for a good reason. CTAC and Kore have managed to secure additional funding to support its combination.

As background, CTAC and Kore, despite a heavy number of redemptions by shareholders, was still able to meet its minimum cash closing condition of $345 million thanks to its backstop arrangement with Fortress Credit Corp., which allowed the Company to borrow up to $120 million via unsecured exchangeable notes due in 2028. However, in the past week, CTAC and Kore have rounded up an additional $65 million in financing on top of that.

$40 million will come from certain holders of preferred shares of the ultimate parent entity of KORE Wireless Group, Inc. (“KORE”) electing to receive share consideration in lieu of $40 million of cash consideration. Additionally, in order to facilitate this, CTAC’s sponsor has agreed to contribute 600,000 Founder Shares to the Electing Holders.  A further $25 million is via Fortress Credit Corp. in additional notes as part of their original backstop arrangement.

Moreover, CTAC reported that as of the date of the press release approximately 86.32% of CTAC’s public shareholders had tendered their shares for redemption, which is down from last week’s reported 90.39% redemptions. Perhaps an additional week whittles that number down even further.

CTAC’s public shareholders now have until 5:00 p.m. on Tuesday, September 28, 2021 to withdraw their redemptions and the business combination is expected to close on or about September 30, 2021.

CTAC initially announced its $1.01 billion deal with KORE on March 12. Alpharetta, Georgia-based KORE provides connectivity hardware and service for smart devices and is working to move into the new world of 5G.