Learn CW Investment Corporation (LCW) to Combine with Innventure in $385M Deal

Learn CW Investment Corporation (NYSE:LCW) has entered into a definitive agreement to combine with enterprise growth engine Innventure an enterprise value of $385 million.

Orlando, Florida-based Innventure founds, funds, operates, and rapidly scales companies in strategic collaboration with Multinational Corporations.

The parties expect to close the deal in 2024.

Transaction Overview

Learn CW has about $99.3 million in its current trust after seeing 59.4% of its shares redeemed in an extension vote earlier this month that moved its transaction deadline to October 2024.

The transaction is expected to include a $75 million committed equity facility with Yorkville in addition to the proceeds from other in-process financings. It also includes a $50M earnout payable upon achievement of certain milestones. There is no minimum cash closing condition.

Both the sponsor and the company will be subject to a 12-month lock-up following the closing or if the share price equals or exceeds $12.00 for 20/30 trading days at least 150 days after closing. 100% of Innventure’s equity holders will roll their holdings into the new public company.

The parties have not yet released an investor presentation, but Learn CW’s profile page will be updated once more information is made available.

Quick Takes: With its distinctive approach to supporting the commercialization of R&D for major corporations, Innventure has secured partnerships with iconic brands like P&G and Nokia and successfully launched three companies.

Innventure launched with initial partner Procter & Gamble (NYSE:PG), helping build PureCycle Technologies (NASDAQ:PCT), a company based on a P&G technology that helps convert recyclables into a renewable resource. PureCycle made its debut on the Nasdaq in 2021 as a SPAC combination with Roth CH Acquisition I Company. It last closed at $4.33, but is up 5.2% this morning at $4.55.

Partners, such as P&G, grant Innventure access to their established technologies. Innventure, in turn, identifies promising concepts and transforms them into new businesses, from which both parties can reap benefits.

Its second company, AeroFlexx, also emerged with P&G innovations as a catalyst. Founded in 2018 and based in Ohio, AeroFlexx’s technology utilizes flexible film to create a package for liquid products that uses up to 85% less virgin plastic versus traditional rigid bottles. Earlier this year, AeroFlexx partnered with Swiss company Mibelle Group to launch a new type of eco-friendly packaging in Europe.

Innventure’s third and final portfolio company is Orlando-based Accelsius, which has acquired the rights to the cooling technology from Nokia (NYSE:NOK).

Founded in 2022, Accelsius was born out of Innventure’s plan to collaborate with Nokia to commercialize high-performance cooling technology developed by Nokia Bell Labs for data centers and mobile network equipment. Nokia’s relationship with Innventure dates back to 2019 when it sought to commercialize intellectual property beyond its core business.

Ultimately, Innventure’s approach provides a unique twist on facilitating the commercialization of R&D for large companies. When it enters into agreements with corporations, like P&G and Nokia, Innventure examines the existing patented technologies to identify those with potential for commercialization.  They then establish their own startup dedicated to this purpose, while compensating the corporation that originated the technology through licensing or royalty fees.

It is also worth noting that Innventure has benefited from the expertise of Gregory Wasson, the former CEO of Walgreens, who now serves as Chairman and assists corporations in the identification of new technologies.

As for Learn CW, this marks the second announced financial deal with a focus on a holding company this year. In August, Churchill Capital VII (NYSE:CVII) announced its $1.58 billion business combination with private equity firm CorpAcq. While Innventure collaborates with multinational corporations and has developed just three companies, CorpAcq is a long-term corporate acquirer with a portfolio of 41 enterprises primarily in the industrial sector.

However, without financials and an investor presentation, it remains challenging to evaluate Learn CW’s deal with Innventure further. Nevertheless, it will be interesting to see if there are additional details regarding the company’s technology licensing, royalty fees, and potential future partnerships.

ADVISORS

• Innventure Advisors
  • Vedder Price and Jones Day are acting as the legal advisors
• Learn CW Advisors 
  • Sidley Austin LLP is acting as legal advisor