M3-Brigade Acquisition III Corp. *

M3-Brigade Acquisition III Corp. *

May 11, 2021 by Anthony Sozzi

PROPOSED BUSINESS COMBINATION: Greenfire Resources Inc.

ENTERPRISE VALUE: $950 million
ANTICIPATED SYMBOL: tbd

M3-Brigade Acquisition III Corp. proposes to combine with Greenfire Resources Inc., a Calgary-based energy company focused on the sustainable production and development of thermal energy resources from the Athabasca region of Alberta, Canada.

  • Greenfire is currently an intermediate-sized and low-cost oil sands producer focused on responsible energy development in Canada, with its registered office located in Calgary, Alberta.
  • Greenfire remains an operationally focused company with an emphasis on an entrepreneurial environment and employee ownership.
  • Greenfire continues to see a range of attractive investment opportunities in the oil and gas sector in Canada.

EXTENSION – 4/18/23 – LINK

  • M3-Brigade Acquisition III Corp. announced that its board of directors has approved an extension of the period of time the Company has to consummate its initial business combination by three months, from the current deadline of April 26, 2023 until July 26, 2023
  • In connection with the Extension, the Sponsor, or its affiliates or designees will deposit an additional $1,696,500 into the Company’s trust account.

EXTENSION – 1/18/23 – LINK

  • M3-Brigade Acquisition III Corp. announced that its board of directors has approved an extension of the period of time the Company has to consummate its initial business combination by three months, from the current deadline of January 26, 2023 until April 26, 2023.
  • In connection with the Extension, the Sponsor, or its affiliates or designees will deposit an additional $1,696,500 into the Company’s trust account.

EXTENSION – 10/12/22 – LINK

  • M3-Brigade Acquisition III Corp. announced that its board of directors has approved an extension of the period of time the Company has to consummate its initial business combination by three months, from the current deadline of October 26, 2022, until January 26, 2023.
  • In connection with the Extension, the Sponsor, or its affiliates or designees will deposit an additional $1,696,500 into the Company’s trust account.

TRANSACTION

  • The Business Combination, which was unanimously recommended and approved by the boards of directors of both Greenfire and MBSC, values Greenfire at a $950 million total enterprise value.
  • This includes Greenfire’s debt, net of cash, of $170 million.
  • The post-money equity value of the Combined Company is expected to be $780 million, assuming approximately 67% redemptions of MBSC common stock, and $730 million, assuming 100% redemptions of MBSC common stock.
  • In addition to other closing conditions, the Arrangement will require the approval of the Alberta Court of King’s Bench.
  • These amendments provide for the Business Combination and Transaction Financing to proceed and substantially maintains the existing terms for Senior Secured Notes due August 2025 for the Combined Company.
  • The current shareholders of Greenfire will become the majority owners of the Combined Company.
  • Existing shareholders of Greenfire will own approximately 81% of the common shares of the Combined Company that are expected to be outstanding on closing of the Business Combination, assuming a share price of $10.10 for the Combined Company, if approximately 33% or 9.9 million shares of MBSC common stock are not redeemed in connection with the consummation of the Business Combination.
  • The percentage ownership of Greenfire’s existing shareholders of the common shares of the Combined Company expected to be outstanding on closing of the Business Combination, assuming a share price of $10.10 for the Combined Company, will be approximately 87% if 100% of MBSC’s shareholders redeem their common stock holdings of MBSC in connection with the consummation of the Business Combination.

PIPE

  • Financing commitments comprised of approximately $50 million of common equity and $50 million of convertible notes are being provided as part of the Business Combination.
  • The Transaction Financing will only be drawn if redemptions exceed $203 million, and then only to extent it is required to generate net minimum cash of $100 million.
  • The $100 million of cash raised will be used to fund $75 million of Greenfire shareholder distributions pursuant to the Business Combination with the balance of $25 million being used for transaction expenses.
  • The common shares to be issued pursuant to the Transaction Financing will be issued at a price of $10.10 per share.
  • The convertible notes to be issued pursuant to the Transaction Financing will bear interest at a rate of 9.0% per annum to be paid quarterly and will have a maturity date of five years from the issue date.
  • The convertible notes will be convertible into common shares of GRL at a price of $13.00 per share.
  • The convertible notes will be redeemable at the option of the Company at any time upon payment of the principal and accrued and unpaid interest owing on the convertible notes; provided that if the Combined Company exercises its option to redeem the convertible notes at any time prior to the date that is 18 months from the maturity date there will be a premium payable by the Company in addition to the principal and accrued and unpaid interest on the convertible notes to be redeemed.
  • The trustee under the trust indenture for Greenfire’s existing 12.0% senior secured notes due August 2025, with the support of a simple majority of existing Senior Secured Note holders, has agreed to amendments to the existing indenture pursuant to a supplemental indenture.
  • There is presently approximately $218 million of principal outstanding under the Senior Secured Notes.

LOCK-UP

  • Sponsor and Company
    • 180 days after the Closing Date and if the share price equals or exceeds $12.00/share for any 20/30 trading days at least 75 days after the Closing Date

SPONSOR FORFEITURE

  • In addition, immediately prior to the Merger, the following will occur:
    • If the amount of the PubCo Debt Financing (as defined below) issued at the Closing exceeds $25,000,000, then 750,000 SPAC Class B Shares held by M3-Brigade Sponsor III LP, a Delaware limited partnership (the “Sponsor”), will be forfeited and cancelled for no consideration
    • 2,500,000 SPAC Class B Shares held by the Sponsor will be forfeited and cancelled for no consideration
    • 3,260,000 SPAC Warrants held by the Sponsor will be forfeited and cancelled for no consideration

NOTABLE CONDITIONS TO CLOSING

  • In addition, each party’s obligation to consummate the Closing is conditional on the sum of (a) the aggregate cash proceeds available for release from the Trust Account in connection with the Transactions plus (b) the aggregate proceeds of the Transaction Financing equaling or exceeding $100,000,000.

NOTABLE CONDITIONS TO TERMINATION

  • By either MBSC or Greenfire, if the Closing has not occurred on or before September 14, 2023 [Outside Date extended to September 28, 2023]
  • by MBSC if Greenfire has not delivered certain specified financial statements by April 15, 2023.

ADVISORS

  • Carter Ledyard & Milburn LLP, Burnet, Duckworth & Palmer LLP and Felesky Flynn LLP are acting as counsel to Greenfire.
  • Wachtell, Lipton, Rosen & Katz and Osler, Hoskin & Harcourt LLP are acting as counsel to MBSC.
  • BDO LLP serves as MBSC’s auditor.

MANAGEMENT & BOARD


Executive Officers

Matthew Perkal, 35
Chief Executive Officer

Matthew Perkal has led Brigade’s industry coverage for various sectors including retail, consumer, gaming and lodging. He also serves as Executive Vice President – Mergers & Acquisitions of M3-Brigade Acquisition II Corp. since February 2021. Mr. Perkal has structured and led many of the firm’s successful deals in the private credit space including Barney’s and Sears. Mr. Perkal currently serves on Guitar Center Inc.’s board of directors. Prior to joining Brigade, Mr. Perkal worked at Deutsche Bank as an Analyst in the Leveraged Finance Group. In that capacity, Mr. Perkal also spent time on the Leveraged Debt Capital Markets Desk, selling both bank and bond deals. Mr. Perkal received a BS in Economics with a concentration in Finance and Accounting from the University of Pennsylvania’s Wharton School. Additionally, Mr. Perkal serves on The One Love Foundation’s New York Board.


Chris Chaice, 50
Executive Vice President

Chris Chaice, the Executive Vice President since April 2021. has advised the Brigade investment team since November 2012 with respect to structuring investments, restructurings, bond and bank debt covenants, and litigations. Prior to joining Brigade, from July 2008 to October 2012, Mr. Chaice worked at Covenant Review, a fixed-income research firm, where he analyzed debt covenants, complex capital structures, and bankruptcy issues. Additionally, from August 2006 to May 2008, Mr. Chaice worked as an Analyst at Southpaw Asset Management, where he analyzed event-driven investment opportunities relating to bankruptcies, restructurings, liquidations and litigation. Prior to Southpaw, Mr. Chaice practiced law at Cahill Gordon & Reindel from September 1999 to September 2005, and at Willkie Farr & Gallagher from September 2005 to August 2006, where he specialized in capital markets transactions, primarily representing underwriters of high yield bonds and leveraged loans. Mr. Chaice received a BA in Political Science from Syracuse University and a law degree, cum laude, from New York University School of Law.


William Gallagher, 62
Executive Vice President

William Gallagher is a Managing Director of M-III Partners, LP. Mr. Gallagher also has served as Executive Vice President of M3-Brigade Acquisition II Corp. from its inception in December 2020. Mr. Gallagher has more than 35 years of experience in finance, investment and financial restructurings. He brings deep expertise in credit analysis and has long-term management experience in the financial services industry. Prior to joining M3 Partners in October 2018, Mr. Gallagher was the Chief Executive Officer at WMIH Corp (NASDAQ:WMIH), a public acquisition corporation which was the successor to Washington Mutual, Inc., from May 2015 to July 2018. He was recruited to WMIH to oversee its acquisition strategy and manage its day-to-day affairs and his responsibilities included reviewing, vetting and analyzing a large number of potential target companies from a variety of different sectors and industry groups. Ultimately, WMIH acquired Nationstar Mortgage Holdings (NYSE symbol NSM) to form Mr. Cooper Group (NASDAQ:COOP). Mr. Gallagher departed from WMIH upon the closing of the acquisition of Nationstar as his job at WMIH was completed. Prior to WMIH, Mr. Gallagher was CEO and Chief Risk Officer at Capmark Financial Group, formerly known as GMAC Commercial Mortgage, from March 2009 to May 2015. Mr. Gallagher was retained by Capmark to manage its financial restructuring following the global economic crisis. Capmark was a highly successful restructuring as Mr. Gallagher and his colleagues significantly increased the recovery value to Capmark’s creditors. Before joining Capmark, he was the Chief Credit Officer of RBS Greenwich Capital from 1989 to 2009, the US fixed income investment banking business of the Royal Bank of Scotland, where he was responsible for all aspects of credit risk management. While at RBS Greenwich, Mr. Gallagher was responsible for a wide variety of US corporations and buy-side companies, including corporate borrowers and debt issuers, financial institutions, industrial companies with captive finance businesses, and a variety of US corporations who traded various securities with or through RBS Greenwich. Earlier in his career, Mr. Gallagher was a Vice President at First Boston Corporation in that firm’s credit risk management department from 1985 to 1989. He began his career at Chemical Bank, where he completed the bank’s credit training program and then worked as a loan officer in the middle market division and a credit officer in the financial institutions division from 1981 to 1984. Mr. Gallagher has a B.S. in business administration from Syracuse University and an MBA from New York University.


Charles Garner, 58
Executive Vice President and Secretary

Charles Garner is Managing Director and General Counsel of M-III Partners, LP. He also serves as Executive Vice President and Secretary of M3-Brigade Acquisition III Corp. since its inception in December 2020. Mr. Garner has over 30 years of legal and management experience across a range of industries. Prior to joining M3 Partners in May 2015, Mr. Garner served as Managing Member of Long Mountain Advisors LLC, a privately-held financial advisory firm since April 2014 and also was Of Counsel to Duval & Stachenfeld, a boutique real estate-focused law firm, from May 2011 to May 2014. Mr. Garner began his career in 1987 at Simpson Thacher & Bartlett, a premier international law firm, where he rose to be a Partner in the corporate/banking department. From 2000 to 2002, Mr. Garner served as an executive at IDT Corporation, a publicly-traded telecommunications company (NYSE:IDT), where he held a series of roles of increasing responsibility culminating with his appointment as Executive Vice President of IDT Corporation and Chief Executive Officer of its IDT Ventures division. He also served as Interim Chief Executive Officer of Winstar Communications following its purchase by IDT out of bankruptcy in 2001. Mr. Garner served as Executive Managing Director of Island Capital Group LLC, a privately-held real estate-focused merchant banking firm, from 2004 to 2010, where he also served as President of Island Global Yachting, a controlled affiliate of Island Capital which is the leading developer, owner and operator of luxury and megayacht marinas, from 2007 to 2010. Mr. Garner has also served as an advisor to, and held interim executive management roles with, Ferranti Computer Systems, a Belgian industrial software company, and Citynet Telecommunications, a telecom infrastructure provider. Mr. Garner has served as a director of Infrastructure & Energy Alternatives, Inc., a leading engineering, procurement and construction company with a focus on renewable energy, since from March 2018 through May 2019 and from September 2018 to the present. Mr. Garner earned a J.D. from New York University School of Law and a B.A. in Urban Studies and Political Science from the University of Pennsylvania.


Christopher Good, 33
Chief Financial Officer

Christopher Good joined M3 Partners, LP in 2015 and has been a Managing Director since January 2021. Prior to joining M3, Mr. Good served as a Private Equity Associate at Grey Mountain Partners, which focused on providing deep operational expertise to middle market companies, from 2013 to 2014. During his tenure there, Mr. Good was involved in the acquisition of middle-market industrial and distribution companies. Over his career, Mr. Good has served in the role of Interim Chief Financial Officer of a music entertainment company and a cloud-based “Infrastructure-as-a-Service” provider. Prior to Grey Mountain, Mr. Good served as an investment banker in the Financial Institutions Groups at Citigroup from 2011 to 2013 and RBC Capital Markets from 2010 to 2011. During his time at Citigroup and RBC, he advised leading private equity firms and companies in M&A advisory and capital markets transactions. Mr. Good earned his Bachelor of Science degree in Business Administration with a Finance Concentration from the University of North Carolina at Chapel Hill.


Kallie Steffes, 38
Executive Vice President

Ms. Steffes was a founding partner of Chalk Point Capital LP where, from January 2019 to January 2021, she focused on private special situation investments across a wide variety of industries. Prior to starting Chalk Point, from July 2009 to March 2018, Ms. Steffes was a Principal on the investment team at MHR Fund Management LLC, an approximately $5 billion private equity firm that invests in undervalued middle market companies and assets. Ms. Steffes started her career in as an Investment Banking Analyst at Deutsche Bank, from June 2005 to October 2005, and Morgan Stanley, from October 2005 to August 2006, after which she spent three years from August 2006 to July 2009 as an Analyst at Owl Creek Asset Management LP, a multi-billion dollar, value-oriented hedge fund in New York City. Ms. Steffes holds a BBA, with honors, from the University of Michigan Stephen M. Ross School of Business and was a full scholarship athlete and member of the University of Michigan Varsity Women’s Gymnastics team.


Board of Directors

Mohsin Meghji, 56
Executive Chairman of the Board of Directors

Mohsin Meghji has been the Managing Partner of M-III Partners, LP (or its predecessor, M-III Partners, LLC) since February 2014. Mr. Meghji also serves as Chairman and Chief Executive Officer of M3-Brigade Acquisition II Corp. from its inception in December 2020 and has served as Chairman and Chief Executive Officer of M III Acquisition Corp. (NASDAQ:MIII) from its inception in August 2015 through the consummation of its initial business combination in March 2018 to create Infrastructure and Energy Alternatives, Inc. Mr. Meghji served as Chairman of the Board of Directors of that company (NASDAQ:IEA) from the consummation of such initial business combination through January 2020. His career of more than 30 years has focused primarily identifying the financial, operational and strategic changes needed to maximize value in companies at inflection points in their growth trajectories and working with the relevant constituencies to implement those changes. He has accomplished this through management and advisory roles in partnership with some of the world’s leading financial institutions, private equity funds and hedge funds. Mr. Meghji’s most recent corporate role was as Executive Vice President and Head of Strategy at Springleaf, as well as Chief Executive Officer of its captive insurance companies, from January 2012 to February 2014. Springleaf was listed on the NYSE in late 2013. Prior to Springleaf, Mr. Meghji served as a Senior Managing Director at C-III Capital Partners, LLC, a real-estate focused merchant banking firm, from October to December 2011. Mr. Meghji co-founded Loughlin Meghji + Company, a privately-held financial advisory firm which became one of the leading restructuring boutiques in the U.S. Mr. Meghji was a Principal and Managing Director of Loughlin Meghji + Company from February 2002 to October 2011. Earlier in his career, Mr. Meghji was with Arthur Andersen & Co. from 1987 to 2002 in the firm’s London, Toronto and New York offices, including as a Partner in the Global Corporate Finance group from 2001 to 2002. In his capacity as a restructuring and financial advisory professional, Mr. Meghji has periodically served as Chief Restructuring Officer (or in an analogous position) of companies which elected to utilize bankruptcy proceedings as a part of their financial restructuring process and, as such, he served as an executive officer of various companies which filed bankruptcy petitions under federal law, including, without limitation, Pappas Telecasting in 2008, Capmark Finance, Inc. in 2009, Medical Staffing Network in 2010, Real Alloy Intermediate Holding, LLC in 2017, Sears Holdings Corporation in 2018, Barneys Inc. in 2019, Sanchez Energy Corporation in 2020, and Sable Permian Resources, LLC in 2020. In that same capacity, Mr. Meghji also has periodically served as an independent director of companies, some of which similarly elected to utilize bankruptcy proceedings, including Mariner Health Care Inc. from 2002 to 2004, Cascade Timberlands, LLC from 2004 to 2005, MS Resorts from January 2011 through February 2013, Philadelphia Energy Solutions Refining and Marketing LLC from August 2017 through March 2018, Toys ’r Us from September 2017 through September 2018, Full Beauty Brands from August 2018 through February 2019, and Intelsat Envision Holdings from May 2020 through the present. He is a director of the Equity Group International Foundation, which provides funding for underprivileged high-potential students in Kenya. Previously, he served on the Board of HealthRight International from 2004 to 2012 and the Children’s Museum of Manhattan from 2013 to 2018. Mr. Meghji is a graduate of the Schulich School of Business, York University, Canada and has taken executive courses at the INSEAD School of Business in France. He has previously qualified as a U.K. and Canadian Chartered Accountant as well as a U.S. Certified Turnaround Professional.


Alan Carr, — [Appointed 11/2/22]
Director Nominee

TBD


William Transier, — [Appointed 11/2/22]
Director Nominee

TBD


Steven Vincent, 64
Director Nominee

Steven Vincent is currently a Partner, Chief Operating Officer and Chief Legal Officer of Brigade Capital Management, LP, an approximately $30 billion diversified global investment management firm specializing in investment credit strategies also serves as a Director of M3-Brigade Acquisition II Corp. since March 2021. Mr. Vincent has been at Brigade Capital since February 2008. Prior to Brigade Capital, Mr. Vincent served as the Associate Director of Litigation and Regulatory Proceedings at Goldman Sachs from May 2002 to September 2008. Mr. Vincent also served as Senior Vice President and Senior Attorney at Lehman Brothers from October 1993 to April 2002. Mr. Vincent’s private practice experience includes having worked at Jones Day from September 1990 to September 1993; Anderson Kill P.C. from December 1984 to August 1990; and Windels Marx from September 1983 to November 1984. Mr. Vincent has been a member of the Boston College Wall Street Executive Committee since 2009; is a former Trustee of the Gregorian University Foundation (2013 – 2020); a former Trustee of Sacred Heart Academy (Hempstead, New York) (2011 – 2016); and a former Trustee of Xavier High School from 1992 – 2001 (Chair 1998 – 2001). Mr. Vincent earned a B.A., magna cum laude, in Political Science from Boston College and a J.D. from Fordham University School of Law.


Benjamin Fader-Rattner, 40
Director Nominee

Benjamin Fader-Rattner is the Managing Member of Space Summit Capital LLC, a hedge fund which he founded in January 2021. Mr. Fader-Rattner has been serving as President and a director of Osiris Acquisition Corp., a publicly listed special purpose acquisition company, since May 2021, and also has been employed by Fortinbras SPAC Holdings, as a sponsor of Osiris, since March 2021. Previously, Mr. Fader-Rattner was a Managing Director at Canyon Partners, where he led investments across the capital structure in several industries including retail and consumer, from 2008 to July 2020. At Canyon, Mr. Fader-Rattner served on various ad hoc creditor steering committees across multiple industries including in retail and consumer companies such as Guitar Center, Boardriders, JC Penney and Red Lobster. Prior to Canyon, Mr. Fader-Rattner was an analyst at Glenview Capital in 2007, where he invested primarily in debt opportunities. Prior to Glenview, Mr. Fader-Rattner was an associate at The Carlyle Group from 2005 to 2007, where he focused on leveraged buyout transactions, and an analyst at Bear, Stearns & Co. Inc. from 2003 to 2005. Mr. Fader-Rattner received a B.S. in Economics, summa cum laude, from The Wharton School at the University of Pennsylvania.


Frederick Arnold, 67
Director Nominee

Frederick Arnold has over 40 years of experience in investment banking, corporate management and board governance. Mr. Arnold has served as a member of the boards of directors of Lehman Brothers Holdings Inc. since 2012 (including serving as current Chairman of the Board from April 2014 – April 2015 and from January 2019 – present) and Navient Corporation (NASDAQ: NAVI) since August 2018. He also has served as a director of Valaris PLC (NYSE: VAL) from November 2019 – April 2021, The We Company (and as a member of the New Committee) from June 2020 – July 2020, Corporate Capital Trust II from 2015 – 2016, Corporate Capital Trust (NYSE: CCT) from 2011 – December 2018 (Chairman 2017-2018), various members of the family of funds advised by FS/KKR Advisor, LLC (including FS KKR Capital Corp. (NYSE: FSK), FS Investment Corp II, FS Investment Corp. III and FS Investment Corp. IV) from December 2018 – November 2019, Syncora Holdings Ltd. (OTC BB: SYCRF) from September 2016 – January 2020, and CIFC Corp. (NASDAQ: CIFC) from 2011 – 2014. From 2015 – 2017, Mr. Arnold served as Managing Director and Chief Financial Officer of Convergex Group, LLC. Prior to that, he served as Executive Vice President and Chief Financial Officer of Capmark Financial Group Inc. from 2009 – 2011 and as Executive Vice President, Finance, for Masonite International Inc. from 2006 – 2007. From 2000 – 2004, Mr. Arnold served in various executive capacities for Willis Group Holdings and its subsidiaries, including as EVP of Finance, Development and Administration of Willis NA, and Group Chief Administrative Officer and Group Executive Vice President, Strategic Development, for Willis Group Holdings. Mr. Arnold began his career in investment banking at Lehman Brothers in 1980 and spent the following twenty years as an international investment banker, primarily at Lehman Brothers and at Smith Barney, where he served as Managing Director and Head of European Corporate Finance. Mr. Arnold earned a B.A. summa cum laude, in Economics from Amherst College, a MA in Jurisprudence from Oxford University and a J.D. from Yale Law School.


Scott Malpass, 59
Director Nominee

Scott Malpass is the managing member of Grafton Street LLC, an advisor to family offices on investment strategy, asset allocation and manager selection criteria. Prior to founding Grafton Street in July 2020, Mr. Malpass served as the Vice President and Chief Investment Officer for the University of Notre Dame beginning in 1988, where he was responsible for management of the University’s endowment over a 32-year period and supported its growth to approximately $12 billion. He began his career as an Associate at Irving Trust Company from 1986 – 1988. In addition, Mr. Malpass currently serves as a Professor at University of Notre Dame, where he has been a professor of Applied Investment Management since 1994 and of Global Portfolio Management since 2009. Mr. Malpass has served on the Board of Directors of The Vanguard Group since 2013, as the founder and chair of Catholic Investment Services since 2012, on the Board of Superintendence of The Institute for the Works of the Religion (more commonly known as the Vatican Bank) since March 2017 and on the board of directors of Paxos Trust Company since April 2021. Mr. Malpass has received numerous awards for his service and expertise from the University of Notre Dame, including the James E. Armstrong Award in 2000, the Honorary Monogram Award in 2006, the Mendoza College of Business MBA Alumnus of the Year award in 2011, and the Spirit of Holy Cross Award (from the founding religious order of the University) in 2016. He also has been recognized as Large Endowment Manager of the Year by Institutional Investor Magazine in 2011 and has received the Rodney H. Adams Endowment Award from the Nasional Association of College and University Business Officers in 2012, and the Lifetime Achievement Award from Chief Investment Officer magazine in 2014. Mr. Malpass earned a B.S. in Biological Sciences from the University of Notre Dame in 1984 and an M.B.A. in Finance from the University of Notre Dame in 1986.