Capstar (CPSR) Shareholders Approve Gelesis Deal

Capstar Special Purpose Acquisition Corp. (NYSE:CPSR) announced today that its shareholders have approved its combination with biotherapeutics firm Gelesis.

The deal was approved with a total of 24,835,281 votes in favor of the combination. A total of 25,643,831, or 74.3%, of CPSR’s issued and outstanding shares of common stock were present at yesterday’s special meeting.  Although CPSR reached a high of $12.23 on January 10th, it quickly fell to a low of $6.06 today, and closed at $6.70.

The SPAC announced on Monday that all but $3.4 million have been removed from its trust via redemptions. A total of 27,260,179 shares were redeemed, including shares held by PIPE investors. Capstar noted that GCCU VI LLC and TOCU XXIX LLC redeemed 1,000,000 shares each, although each have also agreed to purchase 1,750,000 shares through the transaction’s PIPE. But, Capstar had already secured the deal’s completion in regards to its minimum cash condition by adding a backstop in late December.

Capstar also revised its agreement with Gelesis in early November in order to be re-struck on more investor-friendly terms. The changes slashed Gelesis’ proposed equity valuation by 25%, from $900 million to $675 million, in exchange for concessions on earnout shares and the sponsor’s promote.

The parties expect to close the deal shortly, and the combined company is expected to trade on the NYSE under the symbol “GLS”.

Capstar initially announced their combination on July 19. Boston-based Gelesis is advancing a series of therapies for weight management and chronic gut conditions with a consumer-facing approach.

ADVISORS

• Citi is serving as exclusive financial advisor to Gelesis
• Goodwin Procter LLP is serving as legal counsel to Gelesis.
• UBS Investment Bank is serving as exclusive financial and lead capital markets advisor to Capstar
• Kramer Levin Naftalis & Frankel LLP is serving as Capstar’s legal counsel.
• UBS Investment Bank and Citi are serving as private placement agents to Capstar with respect to the PIPE financing.
• Winston & Strawn LLP served as counsel to the placement agents.
• BTIG, LLC is also serving as a capital markets advisor to Capstar.