SilverBox I (NYSE:IVAN) announced this morning that it expects to receive shareholder approval for its business combination with Black Rifle Coffee, but indicated that the company faced not insignificant redemptions.
The SPAC now expects the deal to deliver $373 million in gross proceeds. Because the deal included a $100 million PIPE and $100 million forward purchase agreement, this indicates as much as half of SilverBox I’s $345 million trust was removed via redemptions. This is still well above the transaction’s $300 million minimum cash condition and SilverBox I expects the deal to secure official approval at the special meeting scheduled for February 3 at 10 am.
The deal is expected to close on Wednesday, February 9, after which it is to trade on the NYSE under the symbol “BRCC”.
Although 50% redemptions would make for the second best result for any vote since the beginning of the year, it is nonetheless high given the early enthusiasm the Black Rifle deal spurred on announcement. Black Rifle has branded itself as a consumer lifestyle company made by and for military veterans, and, as such, has developed a particularly strong brand presence among politically conservative users and social media platforms.
SilverBox I spiked to $15.70 November 2 on the news of the transaction but has since trickled back down. Its announcement followed a week after Digital World’s (NASDAQ:DWAC) announced combination with Trump Media & Technology, which took the market by storm, breaking all single day performance records for SPACs.
As such, Black Rifle’s results may be an indication that even buzzy conservative stocks are not immune to the broader market conditions. CF VI (NASDAQ:CFVI), which announced a combination with conservative social content platform Rumble one month after Black Rifle, similarly soared above $15 on announcement but has since settled down to a Tuesday close at $11.93.
Trading around Digital World has largely been undeterred, however, with the most direct Trump play closing Tuesday at $83.25, although it may have a longer wait to close as the SEC examines its unique funding terms.
- William Blair is serving as Lead Financial Advisor, and BDT & Company, LLC is serving as Financial Advisor to Black Rifle Coffee Company.
- Citigroup and Deutsche Bank Securities Inc. are serving as Lead Capital Markets Advisors, and Guggenheim Securities, LLC, Raymond James & Associates, Inc., Truist Securities, Inc., D.A. Davidson & Co. and Telsey Advisory Group are serving as Capital Markets Advisors to SBEA.
- Kirkland and Ellis LLP is serving as legal counsel to Black Rifle Coffee Company. Paul Hastings is serving as legal counsel to SBEA.