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Galata Acquisition Corp.

Galata Acquisition Corp.

Apr 2, 2021 by Matt Cianci

PROPOSED BUSINESS COMBINATION: Marti Technologies Inc

ENTERPRISE VALUE: $531.8 million
ANTICIPATED SYMBOL: MRT

Galata Acquisition Corp. proposes to combine with Marti Technologies Inc.

Founded in 2018, Marti is Turkey’s leading mobility app, operating a fleet of over 46,000 e-mopeds, e-bikes, and e-scooters, serviced by proprietary software systems and IoT infrastructure.

SUBSEQUENT EVENT – 5/4/23 – LINK

Amendment to Business Combination Agreement

  • (i) Removes the closing condition that SPAC have cash on hand equal to or in excess of $50,000,000, which was previously waived by Marti
  • (ii) Extends the Outside Date to July 31, 2023

Amendment to Subscription Agreements

  • On April 28, 2023, SPAC, the Company and certain PIPE Investors representing $35,500,000 aggregate principal amount of Convertible Notes entered into an amendment to the Subscription Agreements
    • Previously $47.5M of Convertible Notes
  • Among other things, the PIPE Amendment:
    • (i) removes lock-up restrictions applicable to the PIPE Investors
    • (ii) extends the outside termination date of the Subscription Agreements to July 31, 2023

Revised Indenture

  • The Revised Indenture:
    • (i) decreases the Conversion Premium to 10.0%
    • (ii) provides for multiple Reset Dates, each occurring monthly for the first twelve months following the Issuance Date
    • (iii) revises the Reset Price to be the lesser of
      • (a) the Reset Price with respect to the immediately prior Reset Date and
      • (b) the average of the Daily VWAPs over the twenty consecutive trading day period ending on the trading day immediately preceding the applicable Reset Date, subject to a minimum of $1.50 and a maximum of $10.00 per share of Common Stock.

Farragut Subscription Agreement

  • SPAC and Farragut Square Global Master Fund, LP have entered into a Convertible Note Subscription Agreement, which allows Farragut to subscribe for up to $40 million of Convertible Notes over the course of a year following the Closing Date.
    • Farragut is an affiliate of a director of SPAC, and the Farragut Subscription Agreement was unanimously approved by the SPAC board of directors

Callaway Subscription Agreement

  • SPAC and Callaway Capital Management LLC have entered into a Convertible Note Subscription Agreement, which allows Callaway to subscribe for up to $40 million of Convertible Notes over the course of a year following the Closing Date.

Amendments to Letter Agreements

  • SPAC, the Sponsor, and the Insiders agreed to remove the applicable Lock-Up Restrictions from the Letter Agreements.

SUBSEQUENT EVENT – 12/23/22 – LINK

  • On December 23, 2022, SPAC, the Company and each PIPE Investor entered into an amendment to the Subscription Agreements.
  • Pursuant to the terms of the Amendment, the Subscription Minimum Cash Condition was amended to include:
    • (a) the aggregate original principal amount of the Convertible Notes issued to the PIPE Investors (including, without duplication, the unsecured convertible promissory notes which may be funded at the subscribers’ option prior to closing and which will convert into Convertible Notes at the closing of the business combination) issued at or prior to the Closing; plus
    • (b) the aggregate amount of Qualified ABL Commitments, whether drawn or undrawn and inclusive of all drawn and invested cash; plus
    • (c) the aggregate amount of Qualified Equity Commitments; plus
    • (d) the amounts remaining in SPAC’s Trust Account (following any redemptions); plus
    • (e) the aggregate cash and cash equivalents of the Company and its controlled subsidiaries.
  • In addition, the Indenture was amended to:
    • (i) increase the interest rate on the Convertible Notes to 15.00% per annum, payable semi-annually
      • (a) at a rate per annum equal to 10% with respect to interest paid in cash and
      • (b) at a rate per annum equal to 5% with respect to payment-in-kind interest and
    • (ii) increase the aggregate principal amount of PFG Debt permitted to be incurred by the Company and its Subsidiaries to $20,000,000 at any time outstanding.
  • On December 23, 2022, the Company irrevocably and unconditionally waived the BCA Minimum Cash Condition.

TRANSACTION

  • The transaction values the combined company at a pro forma enterprise value of approximately $532 million.
  • The parties have received commitments for $57.5 million in new investments from GLTA’s sponsors and outside investors through a convertible note PIPE.
    • The parties intend to raise additional capital of $92.5 million post-announcement, though there is no guarantee that such funds will be able to be raised
  • The transaction is expected to close in the fourth quarter of 2022

marti

PIPE

Subscription Agreements

  • The SPAC has agreed to issue and sell to the PIPE Investors, and the PIPE Investors have agreed to subscribe for and purchase from SPAC, convertible notes (the “Convertible Notes”) which are convertible into SPAC Class A Ordinary Shares, in an aggregate principal amount of $47,500,000
    • Pursuant to the Indenture, the Convertible Notes bear interest at a rate of 12.00% per annum, payable semi-annually
      • (a) at a rate per annum equal to 8% with respect to interest paid in cash and
      • (b) a rate per annum equal to 4% with respect to payment-in-kind interest, plus any additional interest or special interest that may accrue pursuant to the terms of the Indenture.
        • The Convertible Notes are convertible into SPAC Class A Ordinary Shares (the “Underlying Shares”) at an initial conversion rate equal to approximately 87 SPAC Class A Ordinary Shares per $1,000 of principal amount of the Convertible Notes (subject to customary adjustment provisions set forth in the Indenture), and shall mature on the fifth year anniversary of the date of issuance.
  • The parties intend to raise additional capital of $92.5 million post-announcement, though there is no guarantee that such funds will be able to be raised

Pre-Fund Subscriptions Agreements

  • In connection with the execution of the Business Combination Agreement, the Company entered into a convertible note subscription agreement with Farragut Square Global Master Fund, LP, pursuant to which the Subscriber shall subscribe for and agree to purchase from the Company a minimum of $10,000,000 in unsecured convertible promissory notes, which will convert into Convertible Notes at Closing.
    • The Subscriber may fund at its option prior to Closing.

Amendment to Subscription Agreements

  • On April 28, 2023, SPAC, the Company and certain PIPE Investors representing $35,500,000 aggregate principal amount of Convertible Notes entered into an amendment to the Subscription Agreements
    • Previously $47.5M of Convertible Notes
  • Among other things, the PIPE Amendment:
    • (i) removes lock-up restrictions applicable to the PIPE Investors
    • (ii) extends the outside termination date of the Subscription Agreements to July 31, 2023

Revised Indenture

  • The Revised Indenture:
    • (i) increases the Conversion Premium to 15.0%
    • (ii) provides for multiple Reset Dates, each occurring monthly for the first twelve months following the Issuance Date
    • (iii) revises the Reset Price to be the lesser of
      • (a) the Reset Price with respect to the immediately prior Reset Date and
      • (b) the average of the Daily VWAPs over the twenty (20) consecutive trading day period ending on the trading day immediately preceding the applicable Reset Date, subject to a minimum of $1.50 and maximum of $10.00 per share of Common Stock.

Farragut Subscription Agreement

  • SPAC and Farragut Square Global Master Fund, LP have entered into a Convertible Note Subscription Agreement, which allows Farragut to subscribe for up to $40 million of Convertible Notes over the course of a year following the Closing Date.
    • Farragut is an affiliate of a director of SPAC, and the Farragut Subscription Agreement was unanimously approved by the SPAC board of directors

EARNOUT

  • During the five-year period following the Closing Date, SPAC may issue to eligible holders of securities of the Company 9,000,000 additional SPAC Class A Ordinary Shares in the aggregate (the “Earnout Shares”), upon the achievement of a $20.00 per share price target, which will be based upon the:
    • Daily volume-weighted average sale price of one SPAC Class A Ordinary Share quoted on the New York Stock Exchange for any ten trading days (which may or may not be consecutive) within any 20 consecutive trading day period within the Earnout Period

LOCK-UP

  • Sponsor
    • The earlier of 13 months following the Closing and the date on which the last reported sale price of the shares surpasses a certain threshold to be agreed upon by the parties prior to the Closing.
  • Company
    • Not mentioned

NOTABLE CONDITIONS TO CLOSING

  • Subsequent Event – Removes the closing condition that SPAC have cash on hand equal to or in excess of $50,000,000, which was previously waived by Marti
  • Subsequent Event -On December 23, 2022, the Company irrevocably and unconditionally waived the BCA Minimum Cash Condition.
  • As of the Closing, after consummation of the Subscription and after distribution of the funds in the Trust Account and deducting all amounts to be paid pursuant to the exercise of redemption rights of public shareholders, SPAC having cash on hand equal to or in excess of $50,000,000 (without, for the avoidance of doubt, taking into account any transaction fees, costs and expenses paid or required to be paid in connection with the Transactions and the Subscription).
  • A $150,000,000 minimum cash condition

NOTABLE CONDITIONS TO TERMINATION

  • By either SPAC or the Company if the Effective Time shall not have occurred prior to the date that is nine months after the signing of the Business Combination Agreement 3/1/23 (the “Outside Date”)
    • Subsequent Event – Extends the Outside Date to July 31, 2023
  • By either SPAC or the Company if any governmental order has become final and non-appealable and has the effect of making consummation of the Transactions, including the Merger, illegal or otherwise preventing or prohibiting consummation of the Transactions, including the Merger
  • By SPAC if the Company shall have failed to deliver to SPAC the audited consolidated balance sheet of the Company and its subsidiaries as of December 31, 2020 and December 31, 2021, and the related audited consolidated statements of operations and cash flows of the Company and its subsidiaries for the year then ended (collectively, the “Audited Financial Statements”) within 15 calendar days from the date of the Business Combination Agreement (such date, as it may be extended, the “Financial Statement Delivery Date”);
    • provided, that if the Company has not delivered the Audited Financial Statements by the Financial Statement Delivery Date, the Financial Statement Delivery Date shall be extended by 15 calendar days if the Company continues to use its reasonable best efforts to deliver the Audited Financial Statements as soon as reasonably practicable.

ADVISORS

  • B. Riley Securities is acting as capital markets advisor and placement agent to Galata.
  • MZ Group is serving as an investor relations advisor to Marti.
  • Latham & Watkins LLP is acting as legal counsel to Marti.
  • Willkie Farr & Gallagher LLP is acting as legal counsel to Galata.
  • White & Case LLP is acting as legal counsel to B. Riley Securities.

MANAGEMENT & BOARD

Executive Officers

Kemal Kaya, 60
Chief Executive Officer and Director

Kemal is a leading figure in Turkish banking and has more than 35 years of experience in financial services. Since 2008, Kemal has served as a Senior Advisor to The Blackstone Group, focused on transactions in the region. Before joining Blackstone, Kemal was the CEO of Yapi Kredi Group, one of the leading financial groups in Turkey. He assumed this position after leading Turkey’s first and largest privately owned bank acquisition by Koc Financial Services. Under his leadership, Yapi Kredi Bank and Kocbank were merged, the biggest merger to date in the Turkish banking sector. Before the merger, Kemal served as General Manager of Kocbank and CEO of Koc Financial Services, the financial holding company of a strategic partnership between Koc Holding and UniCredit, in which Kemal also played a leading role in realizing in 2002. Earlier in his career, he held various senior positions in financial institutions and investor relations management with Yapi Kredi Bank. Kemal was educated in the United States and received his Bachelor of Science in Business Administration from the University of Kansas.

Daniel Freifeld, 40
President, Chief Investment Officer and Director

Daniel Freifeld is the founder of Callaway and serves as the firm’s Chief Investment Officer. He plays a central role in the identification, development, and execution of investment opportunities for the firm and leads the development and implementation of the firm’s stakeholder engagement strategies. Prior to founding Callaway, Mr. Freifeld served as Senior Advisor to the Special Envoy for Eurasian Energy at the U.S. Department of State, where he was responsible for oil and gas issues in Iraq, Turkey, Russia, and the eastern Mediterranean and as a program coordinator for the Near East South Asia Center at the U.S. Department of Defense, working in more than ten Middle Eastern countries. He has been an associate of the Geopolitics of Energy Project at Harvard University and a term member of the Council on Foreign Relations and is a member of the state bars of Massachusetts and the District of Columbia. He speaks Turkish and French and conversational Arabic, Farsi, and Spanish and holds a bachelor’s degree in political science summa cum laude from Emory University and a juris doctor from New York University School of Law.

Michael Tanzer, 32
Chief Financial Officer

Michael Tanzer serves as a Portfolio Manager for Callaway’s flagship investment fund, focusing on the identification, development, and execution of investment opportunities in corporate credit special situations. Prior to joining Callaway, Mr. Tanzer was a Senior Analyst at Southpaw Asset Management, where he focused on distressed investments across the capital structure, as well as litigation finance opportunities. Prior to joining Southpaw, he was a senior analyst at DG Capital Management, a special situations hedge fund based in New York. He began his career at Oberon Asset Management, also based in New York. He speaks conversational French and holds bachelor’s degrees in economic theory and philosophy from New York University.

Board of Directors

Adam S. Metz, 59
Independent Director 

Adam Metz serves on the board of directors of Morgan Stanley Direct Lending Fund, a private externally managed specialty finance company focused on lending to middle market companies, in connection with which he also serves on the board of directors of SL Investment Corp., a sidecar investment vehicle of the Morgan Stanley Direct Lending Fund. Adam also serves as non-executive director of Hammerson PLC (LON: HMSO), a property development and investment company. Previously, Adam served as Managing Director and Head of International Real Estate at The Carlyle Group Inc. (NASDAQ: CG), a private equity, alternative asset management and financial services company, from September 2013 to April 2018. From March 2011 to August 2013, Adam served as a Senior Advisor at the dedicated real estate equity investment platform of global alternative asset management firm TPG Capital. From October 2008 to December 2010, Adam served as Chief Executive Officer at General Growth Properties, Inc. (formerly NYSE: GGP) (“General Growth Properties”), a shopping mall operator. From 2003 to 2008, Mr. Metz served as Co-Founding Partner at Polaris Capital LLC, a private investment management company. From 2000 to 2002, Adam served as Executive Vice President and Chief Investment Officer at Rodamco North America N.V., a closed-end real estate fund. From 1993 to 2000, Mr. Metz served as Chief Financial Officer and then as President at Urban Shopping Centers, Inc. (formerly NYSE: URB), a real estate investment trust. From 1987 to 1993, Adam served as Vice President at JMB Realty Corp., a real estate investment company. From 1983 to 1987, Adam served as a corporate lending officer and then as Vice President at First National Bank of Chicago (formerly NYSE: FNB), a retail and commercial bank. Previously, Adam served on the boards of directors of Forest City Realty Trust, Inc. (formerly NYSE: FCE.A), a real estate company, from April 2018 to January 2019, Parkway Properties Inc. (formerly NYSE: PKY), a real estate investment firm, from June 2012 to November 2016, General Growth Properties, from 2005 to 2010, Howard Hughes Corporation (NYSE: HHC), a real estate development and management company, during 2010 following its spin-off from General Growth Properties, AMLI Residential Properties Trust (formerly NYSE: AML), a trust specializing in management, acquisition, development, and co-investment of multifamily apartment communities, from 2003 to 2004, Aliansce Sonae Shopping Centers SA (BVMF: ALSO3), a Brazilian shopping mall company, Bally Total Fitness Holding Corporation (formerly NYSE: BLLY), a fitness club chain, from 2005 to 2006, and Chiasso Acquisition LLC, a home furnishing retailer from 2006 to 2008. Adam holds a Bachelor of Arts degree in history from Cornell University and an Master’s in Business Administration degree from the Kellogg School of Management at Northwestern University.

Shelley Guiley, 48
Independent Director 

Shelley Guiley served as Managing Director and Chief Operating Officer of Fundraising at The Carlyle Group Inc. (NASDAQ: CG), a private equity, alternative asset management and financial services company, from July 2010 to February 2020. In that role, Shelley led the execution of Carlyle’s fundraising strategy, working with Management to define fundraising goals, create a systematic approach and drive the fundraising processes. Prior to joining Carlyle, Shelley was a Senior Vice President and the Director of Investor Relations at Allied Capital Corporation (NYSE: ALD) from March 2005 to July 2010, where she managed the firm’s relationships with institutional and individual investors. Prior to that, she was employed by Capital One Financial Corporation (NYSE: COF) and Price Waterhouse LLP. Shelley has over twenty years of experience in the financial services industry, primarily in the Investor Relations field. Shelley earned her Bachelor of Science degree in commerce from The University of Virginia and a Master’s in Business Administration degree from The Tuck School at Dartmouth College. She is a licensed CPA and has held a Series 24 license since October 2020, an 82 license since April 2011 and a Series 63 license since November 2011.

Tim Shannon, 36
Independent Director 

Tim Shannon serves as the Managing Partner of Cedar Investors LLC, an investment firm with private equity holdings in industries including veterinary and dental practice management. Prior to founding Cedar Investors, Tim was an operator at DaVita Inc. (NYSE: DVA) where he focused on initiatives including strategic partnerships with health insurance companies. Previously, Tim was an investor at Zweig-DiMenna Associates, a hedge fund with holdings across global equities and credit. He started his career at J.P. Morgan Chase & Co. as a research analyst covering sectors including health and life insurance. Tim is a CFA charterholder. He holds a bachelor’s degree in healthcare management and policy magna cum laude from Georgetown University and a master’s in business administration with distinction from the Kellogg School of Management at Northwestern University.

ByMatt Cianci