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Sagaliam Acquisition Corp. *

Sagaliam Acquisition Corp. *

May 26, 2021 by Kristi Marvin

PROPOSED BUSINESS COMBINATION: Enzolytics Inc

ENTERPRISE VALUE: $tbd million
ANTICIPATED SYMBOL: tbd

Sagaliam Acquisition Corp. proposes to combine with Enzolytics Inc.

Enzolytics, Inc. is a company focused on the development and commercialization of proteins and monoclonal antibodies for the treatment of infectious diseases. The company is working on several therapeutics targeting a range of infectious diseases. It holds patents for a compound named ITV-1 (Immune Therapeutic Vaccine-1), which is a suspension of Inactivated Pepsin Fraction (IPF), and is documented in U.S. Patent Nos. 8,066,982 and 7,479,538. Research has indicated the potential effectiveness of ITV-1 in treating HIV/AIDS, and it has been observed to have an impact on the immune system.

The company utilizes proprietary technology to create fully human monoclonal antibodies (mAbs) aimed at combating infectious diseases. This technology is presently being used in the development of treatments for SARS-CoV-2, HIV-1, and the Feline Leukemia virus. Enzolytics has identified conserved epitopes on several viruses and intends to develop mAbs to target a variety of other viruses, including but not limited to HIV-2, Influenza A and B, and the Ebola Virus. Additionally, the company is exploring the development of mAbs to address certain animal viruses.

SUBSEQUENT EVENT – 11/20/23 – LINK

  • Sagaliam Acquisition Corp. (SAGAU, SAGA, SAGAR) announced it received a Temporary Restraining Order on its extension proxy shareholder meeting.

SUBSEQUENT EVENT – 4/21/23 – LINK

  • On March 23, 2023, GLD Sponsor Member, LLC agreed to sell all its issued and outstanding equity interests in Sagaliam Sponsor, LLC, constituting 100% of the membership interests, to BN Holdings Trust under a Membership Interest Purchase Agreement.

TRANSACTION

  • The equity value for the transaction is $450M

SPAC FUNDING

  • There is no additional funding for this transaction at this time.

EARNOUT

  • Company and Sponsor
    • Details on this transaction are pending.

LOCK-UP

  • Company and Sponsor
    • Details on this transaction are pending.

NOTABLE CONDITIONS TO CLOSING

  • There is no minimum cash closing condition

NOTABLE CONDITIONS TO TERMINATION

  • The Outside date for the transaction is December 31, 2023

ADVISORS

  • Company
  • SPAC
  • Details on this transaction are pending.

LETTER OF INTENT – 4/17/23 – LINK

  • Enzolytics, Inc. and Sagaliam Acquisition Corp. have signed a non-binding term sheet to sell Biogenysis, Inc. and Virogentics, Inc. The transaction is valued at $250 million, and the final agreement is expected to be completed by May 19, 2023.

The below-announced combination was terminated on 3/1/23.  It will remain on the page for reference purposes only. Once a new combination is announced it will be added to the top of the page.

PROPOSED BUSINESS COMBINATION: Arabian Entertainment Company Ltd. [Termianted]

ENTERPRISE VALUE: $227.28 million
ANTICIPATED SYMBOL: tbd

Sagaliam Acquisition Corp. proposes to combine with Arabian Entertainment Company Ltd., a leading food, beverage, and entertainment company in Saudi Arabia.

  • Headquartered in Jeddah, Saudi Arabia, AEC is a premier owner and operator of fast-casual restaurant franchises operating under the Applebee’s and Ocean Basket brands.
  • AEC has been in operation since 2001.
  • Together with its parent company, Supraeon, AEC is a portfolio company of GLD Partners, LP., a Los Angeles-based private equity firm (“GLD”).

EXTENSION – 12/23/22 – LINK

  • On December 22, 2022, the stockholders approved a proposal to extend the date by which the Company must complete its initial business combination from December 23, 2022, by up to ten successive one-month periods up to October 23, 2023.
  • Sagaliam Sponsor LLC, deposited $57,380.22 into the trust account on December 23, 2022, for its public stockholders.
  • This deposit enables the Company to extend the date by which the Company has to complete its business combination from December 23, 2022, to January 23, 2023.

TRANSACTION

  • The transaction is expected to provide AEC up to $151.5 million in proceeds, including $35 million from an anticipated PIPE offering described above and $116.5 million of SPAC cash in trust assuming no redemptions, based on a pre-transaction equity value of $379 million.
  • No additional funding beyond the $35 million PIPE offering is contemplated for the business combination, which includes a minimum net cash condition of $25 million in the aggregate to close.
  • Upon the closing of the proposed transaction, AEC’s senior management will continue to serve in their current roles.
  • The current AEC owners will retain approximately 50% of the ownership at close, assuming no SPAC shareholder redemptions.
  • The respective boards of directors of both Sagaliam and AEC have each approved the proposed transaction. Completion of the proposed transaction is subject to approval of Sagaliam stockholders and other customary closing conditions.
  • The parties expect that the proposed transaction will be completed in the first half of 2023.
  • The transaction, once completed, will provide AEC with significant additional capital to continue its growth, better serve customers and execute its strategic plan to become a leading provider of food and beverage and live entertainment offerings in the MENA region.
  • In addition, Sagaliam and AEC expect to raise an additional $35 million through private investment in public equities (“PIPE”).
  • The anticipated $35 million from the PIPE is expected to be primarily used by AEC to pay transaction-related expenses and fund the expansion of its business platform in Saudi Arabia and the MENA Region.

Saga Transaction Overview

PIPE

  • The anticipated $35 million from the PIPE is expected to be primarily used by AEC to pay transaction-related expenses and fund the expansion of its business platform in Saudi Arabia and the MENA Region.

LOCK-UP

Company & Sponsor:

  • Under the Lock-Up Agreement, Company & Sponsor will agree not to effect any transfer, or make a public announcement of any intention to effect such transfer of all of Seller’s covered shares (as defined in the Lock-Up Agreement) until the date that is the earlier of:
    • (i) 12 months after the Closing Date or
    • (ii) the date on which the closing price of Seller’s covered shares on the Nasdaq equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations, and recapitalizations and the like) for any 20 trading days within any consecutive 30-trading-day period commencing after the 180th day after the Closing Date.

EARNOUT

  • Following the Closing, and as additional contingent consideration for the Merger and the other Transactions, within 10 Business Days after the occurrence, if any, of a Triggering Event, PubCo shall issue to Seller the following additional PubCo Ordinary Shares:
    • (i) 20,000,000 PubCo Ordinary Shares released at $15.00 Share Price Level is reached following the one-year anniversary of the Closing Date.
    • (ii) 10,000,000 PubCo Ordinary Shares released at $20.00 Share Price Level is reached following the one-year anniversary of the Closing Date.
    • (iii) 5,000,000 PubCo Ordinary Shares released at $25.00 Share Price Level is reached following the one-year anniversary of the Closing Date.

NOTABLE CONDITIONS TO CLOSING

  • The obligations of the Company to consummate (and cause to be consummated) the Transactions are also subject to the Sagaliam Cash Amount shall be no less than $25,000,000 in the aggregate.

NOTABLE CONDITIONS TO TERMINATION

  • The Business Combination Agreement contains certain termination rights, including:
    • By either Sagaliam or the Company if Sagaliam has not received commitments for at least 50% of the Minimum Cash Amount before December 15, 2022.
    • The date by which Sagaliam must consummate its initial business combination (the “Business Combination Deadline”) may be extended for up to 10 successive one-month periods up to October 23, 2023 by the deposit by Sponsor of additional funds into the trust account at each extension election.
  • If the Company terminates this Agreement as a result of:
    • (i) the failure of the Sagaliam Proposals to receive the requisite vote for approval at the Sagaliam Stockholders’ Meeting (but only if the Sagaliam Board has made a Sagaliam Adverse Recommendation Change or
    • (ii) the failure of Sagaliam to have obtained commitments for at least 50% of the Minimum Cash Amount before December 15, 2022,
  • Sagaliam is required to pay or cause to be paid to the Company a fee of $1,000,000.
  • If Sagaliam terminates the Agreement as a result of
    • (i) the failure of the Sagaliam Proposals to receive the requisite vote for approval at the Sagaliam Stockholders’ Meeting or
    • (ii) the failure of Sagaliam to have obtained commitments for at least 50% of the Minimum Cash Amount before December 15, 2022,
  • Sagaliam shall pay or cause to be paid to the Company a fee of $1,500,000, in each case, prior to such termination being deemed effective; provided that, no termination by Sagaliam shall be effective pursuant to clause (i) if the Sagaliam Board has made a Sagaliam Adverse Recommendation Change.

ADVISORS

  • King & Spalding LLP is serving as legal advisor to AEC.
  • Mayer Brown LLP and Al Akeel & Partners are serving as legal advisors to Sagaliam.
  • Marshall & Stevens, Inc. has delivered a fairness opinion to a Special Committee of the Board of Directors of Sagaliam in connection with the proposed transaction.

MANAGEMENT & BOARD

Executive Officers

Barry Kostiner, 49
Chairman and Chief Executive Officer

Mr. Kostiner has served as the President of Legacy Tech Partners, LLC (LTP), a microcap-focused EdTech investment vehicle, since February 2021 and has also been a Manager of Capital Markets at Legacy Education (OTC: LEAI) since March 2021. Mr. Kostiner joined the Board of Directors of LEAI in May 2021. LEAI has had cumulative education revenues in excess of $500 million over the past decade, prior to the Covid-19 pandemic. Mr. Kostiner was the CFO of Ameri Holdings Inc. (Nasdaq: AMRH) from October 2018 through December 2020. The operations of AMRH, including its global IT services business focused on SAP with operations in both the US and India, was acquired by management, with the residual Nasdaq vehicle acquired by Enveric Biosciences (Nasdaq: ENVB), an evidence-based cannabinoid pharma company focused on palliative therapies for cancer patients. Mr. Kostiner has been a consultant to ENVB since January 2021. From May 2016 through October 2018, Mr. Kostiner was a consultant to Cypress Skilled Nursing, a healthcare facility operator and from May 2017 through October 2018 he was a consultant to LinKay Technologies Inc., an artificial intelligence incubator with a portfolio of intellectual property focused on AI and LiDAR / geospatial technology, with research staff in India and New York. Mr. Kostiner’s 20-year career in energy includes eight years at Goldman Sachs and Merrill Lynch and their affiliates, with a focus on energy trading and portfolio management, as well as serving as the CEO of an oil & gas SPAC (Nasdaq: PGRI) from 2005 through 2009. Mr. Kostiner earned a Bachelor’s of Science degree in Electrical Engineering and a Master’s of Science in Operations Research from MIT. His thesis on the mathematics of electric industry deregulation was sponsored by Harvard’s Kennedy School of Government.

Thomas W. Neukranz, 63 [Resigned]
Chief Financial Officer and Director

Mr. Neukranz has served as Managing Director of Capital Markets for GLD Partners, LP since July 2020. Prior to joining GLD, Mr. Neukranz served as Head of Capital Markets for CleanFund Inc., from July 2017 to August 2019, and as Executive Vice President and a member of the Executive Committee of Aegon Investment Management, from February 2017 to August 2018. From 1993 to 2000, Mr. Neukranz was a Partner and Head of the Institutional businesses at RS Investments, Vice President, Global Head of Exchange Derivatives at Goldman Sachs and Head of Exchange Traded Derivatives at JP Morgan. Previously, Mr. Neukranz was responsible for derivative hedging for Bank of America and Lehman Brothers. Mr. Neukranz began his career on the floor of the Board of Trade in Chicago. Mr. Neukranz has serves on the Board of the Stanford Cancer Institute since 2016 and served as Chairman from 2017 through 2019. Mr. Neukranz received a B.S. in Industrial Management from Purdue University, and holds Series 7 and 63 FINRA licenses.

Jane Liu, 29
Vice President, Business Development

Ms. Liu has served as Director of Finance for GLD Partners, LP since July 2020. Prior thereto, Ms. Liu served as Senior Financial Analyst for CleanFund Commercial PACE Capital, Inc., from March 2017 to June 2020, and served as Business Analyst for Industrial and Commercial Bank of China in 2015. Ms. Liu received a B.S. in Economics and Finance from the University of Western Ontario, and a Master’s Degree in Financial Analysis from the University of San Francisco.

Board of Directors

 

George Caruolo, 68 [Appointed Chairman 6/23/22]
Chairman 

Mr. Caruolo has been the principal of his own law firm for over 30 years and a government relations strategy advisor based in Rhode Island for over 10 years. He has represented privately held and publicly traded clients in the areas of healthcare, electric utilities, solar energy, gaming, heavy construction, developmental disabilities and Native American tribal affairs, as well as in other areas, both regionally and nationally. He is a director of Allegro, LLC, a fintech company. He was an elected state representative and majority leader of the Rhode Island General Assembly, has chaired the Rhode Island Education Board and has served on other boards of directors. Mr. Caruolo received a Bachelor’s Degree from Harvard University and a Juris Doctor degree from Suffolk University Law School.

Gabriel Del Virginia, 63 [Appointed Secretary 6/23/22]
Director

Mr. Del Virginia has more than 30 years of experience providing legal representation in various types of public and private business entities in corporate, mergers and acquisitions, financing, litigation and financial restructuring matters, as an associate at several prominent national law firms, including Milbank Tweed Hadley & McCloy, and thereafter as principal of his own law firm, where he has practiced for over 10 years. Mr. Del Virginia also served on the board of directors Sysorex Global Holdings Corp. (SYRX), a Nasdaq-listed technology company that provides data analytics and location-based solutions and services to commercial and government customers worldwide.

Glauco Lolli-Ghetti, 44
Director

Since 2019, Mr. Lolli-Ghetti has served as Head of Development at Palatine Capital Partners, a real estate private equity firm, where he is responsible for development investment strategies across acquisition and entitlement. Prior to joining Palatine, Mr. Lolli-Ghetti founded Urban Muse, a real estate investment company responsible for developing 372,000 square feet of mixed-use properties with an aggregate cost of $397 million. Prior to forming Urban Muse, Mr. Lolli-Ghetti was development manager at Federal Realty Investment Trust, a publicly traded REIT with a market cap of $6.75 billion. Mr. Lolli-Ghetti received a Bachelor’s Degree from Lehigh University.

ByKristi Marvin