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Banyan Acquisition Corporation *

Banyan Acquisition Corporation *

Aug 6, 2021 by Anthony Sozzi

PROPOSED BUSINESS COMBINATION: Pinstripes, Inc.

ENTERPRISE VALUE: $521 million
ANTICIPATED SYMBOL: PNST

Banyan Acquisition Corp. entered into a business combination agreement with Pinstripes, Inc.

  • Pinstripes, Inc. is a best-in-class experiential dining and entertainment brand combining bistro, bowling, bocce and private event space. Pinstripes offers multi-generational activities seven days a week. Its elegant and spacious 25,000 – 38,000 square foot venues can accommodate groups of 20 to 1,500 people for private events, parties, and celebrations.

EXTENSION – 12/26/23 – LINK

  • The SPAC approved the extension from December 24, 2023 and January 24, 2025.
    • 1,314,065 shares were redeemed at the meeting for $10.70 per share.
    • $0.02/Share contribution will be made into the trust account.

SUBSEQUENT EVENT – 12/19/23 – LINK

  •  2028 Notes Term Sheet:
    • The SPAC entered into a non-binding term sheet with a large institutional investor providing for the contemplated issuance by Pinstripes of $50.0 million in aggregate principal amount of senior secured notes due 2028 to the Investor pursuant to a Note Purchase Agreement, to be issued not later than December 29, 2023.
    • The 2028 Notes Term Sheet contemplates that the 2028 Notes will be issued in connection with the consummation of the Business Combination.
    • Interest on the 2028 Notes will accrue on a daily basis calculated based on a 360-day year at a rate per annum equal to:
      • (i) 12.5% payable quarterly in arrears, at Pinstripes’ option either in cash or in kind; provided that the interest payable in respect of any period following December 31, 2024, interest under this clause (i) will be required to be paid solely in cash, plus
      • (ii) 7.5% payable quarterly in arrears, at Pinstripes’ option, either in cash or in kind.
    • The 2028 Notes will mature on the date that is five years following the issuance of the 2028 Notes.
    • Any prepayment or redemption of the 2028 Notes prior to their maturity date will be subject to a customary “make-whole” premium calculated using a discount rate equal to the yield on comparable Treasury securities plus 50 basis points.
    • Upon the closing of the issuance of the 2028 Notes, the Investor will be granted fully detachable warrants exercisable for 2,500,000 shares of New Pinstripes Class A Common Stock, at a strike price equal to $0.01 per share (the “First Tranche Warrants”).
    • In the event that the VWAP per share of New Pinstripes Class A Common Stock during the period commencing on the 91st day after 2028 Notes Closing and ending 90 days thereafter is less than $8.00 per share, the Investor will be granted additional First Tranche Warrants exercisable for 187,500 shares of New Pinstripes Class A Common Stock, and in the event that the VWAP per share of New Pinstripes Class A Common Stock during the period commencing on the 91st day after 2028 Notes Closing and ending 90 days thereafter is less than $6.00 per share, the Investor will instead be granted additional First Tranche Warrants exercisable for 412,500 shares of New Pinstripes Class A Common Stock.
    • The 2028 Notes Term Sheet further provides that:
      • (i) the First Tranche Warrants may be exercised at any time after the 2028 Notes Closing, and prior to the date that is ten years from the 2028 Notes Closing and
      • (ii) subject to customary exceptions, the Investor will agree not to transfer, assign or sell any First Tranche Warrants, or the shares of New Pinstripes Class A Common Stock underlying such First Tranche Warrants, until twelve months after the 2028 Notes Closing.
    • The 2028 Notes Term Sheet also provides that the Investor will have the option at its sole discretion and election, but not the obligation, to purchase an additional $40.0 million in aggregate principal amount of 2028 Notes no earlier than nine months and no later than 12 months following the 2028 Notes Closing.

SUBSEQUENT EVENT – 11/22/23 – LINK

Company Earnout

  •  As part of an amendment to the business combination agreement, the Target can receive up to 4,000,000 shares of forfeited Class B Founder Shares.
    • The EBITDA Earnout Shares will vest if the combined company’s adjusted EBITDA for the EBITDA Earnout Period reaches or exceeds $28,000,000, and they will also vest if a change of control happens on or before January 5, 2025, or under specific conditions until the company announces earnings for the fiscal quarter ending at the EBITDA Earnout Period’s close.
    • Starting on January 8, 2024 and ending on January 5, 2025 (the “EBITDA Earnout Period”)

Amendment and Restatement of Sponsor Letter Agreement

  • On November 22, 2023, the Company, the Sponsor, and certain individuals entered into an Amended and Restated Sponsor Letter Agreement, modifying the previous agreement dated June 22, 2023.
    • In this amended agreement, the Sponsor agreed to retain a portion of the 2,000,000 Company shares (the “Reserved Shares”) if they were not transferred to investors in certain financings by the Business Combination closing.
    • Specifically, the Sponsor would retain either 50% of the Non-Transferred Reserved Shares or a maximum of 250,000 Non-Transferred Reserved Shares (referred to as the “Sponsor Non-Transferred Reserved Shares”), and any excess Non-Transferred Reserved Shares would be forfeited without compensation (referred to as the “Forfeited Shares”).

TRANSACTION

  • Pinstripes is led by Founder and CEO Dale Schwartz, who will continue to lead the company with his seasoned leadership team.
  • The transaction values the combined company at a pro forma enterprise value of approximately $521 million, at $10.00 per share, and includes an upfront equity investment of more than $20 million directly in Pinstripes by Middleton Partners.
  • Existing Pinstripes shareholders will receive consideration consisting entirely of shares of the surviving public combined company.
  • Upon the closing of the transaction, Pinstripes’ common stock and warrants are expected to be listed on the NYSE under the ticker symbols “PNST” and “PNST WS”, respectively.
  • The transaction is expected to close in the fourth quarter of 2023.

Updated Transaction Overview

GRAPHIC

SPAC FUNDING

  • PIPE:
    • The Parties shall use reasonable best efforts to obtain additional equity or equity-linked financing commitments for up to $57 million of gross proceeds (the “PIPE Investment”) at or prior to the closing of the Business Combination.
  • Bridge Financing:
    • Middleton Partners entered into a securities purchase agreement with Pinstripes to provide $18 million of bridge financing in exchange for an aggregate number of 720,000 shares of the Company’s Series I Convertible Preferred Stock.
    • The shares of Series I Convertible Preferred Stock received by Middleton Partners will convert into shares of Company Common Stock in connection with the consummation of the Business Combination.

EARNOUT

Company Earnout

  •  As part of an amendment to the business combination agreement, the Target can receive up to 4,000,000 shares of forfeited Class B Founder Shares.
    • The EBITDA Earnout Shares will vest if the combined company’s adjusted EBITDA for the EBITDA Earnout Period reaches or exceeds $28,000,000, and they will also vest if a change of control happens on or before January 5, 2025, or under specific conditions until the company announces earnings for the fiscal quarter ending at the EBITDA Earnout Period’s close.

LOCK-UP

  • Sponsor and Company Lock-ups:
    • Each Security Holder (Sponsor and Company) agreed that it will not transfer any Company Common Stock or warrants owned by such Security Holder, until the earlier of:
      • (i) for a period of six months following the Closing, and
      • (ii) the closing price of the Company Common Stock reaches or exceeds $12.00 per share for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing.
  • Sponsor Vesting and Forfeiture Shares:
    • The Sponsor Parties agreed that two-thirds of the Class B Shares held by the Sponsor Parties (excluding up to 1,000,000 shares that will be transferred by the Sponsor to investors pursuant to certain non-redemption agreements and up to 2,000,000 shares that may be transferred by the Sponsor to investors in the Bridge Financing and the PIPE Investment, the “Vesting Shares”) shall be subject to vesting conditions and forfeiture as follows:
      • (i) 50% of the Vesting Shares shall vest and no longer be subject to forfeiture if the volume weighted average share price of the Company Common Stock equals or exceeds $12.00 per share for any 20 trading days within any consecutive 30-trading day period commencing five months after the Closing; and
      • (ii) 100% of the Vesting Shares shall vest and no longer be subject to forfeiture if the volume weighted average share price of the Company Common Stock equals or exceeds $14.00 per share for any 20 trading days within any consecutive 30-trading day period commencing five months after the Closing.
    • Any Vesting Shares that remain unvested upon the five-year anniversary of the Closing will be forfeited by the Sponsor Parties.

NOTABLE CONDITIONS TO CLOSING

  • Closing Requirements:
    • Banyan and Pinstripes shareholder approvals
    • The aggregate cash proceeds from the trust account (after deducting any amounts paid to redeeming shareholders), together with the gross proceeds from the PIPE Investment, the gross proceeds from the Bridge Financing, and 50% of the gross amount of any additional financing in connection with the Business Combination shall be equal to or greater than $75,000,000 (“Minimum Cash Amount“).

NOTABLE CONDITIONS TO TERMINATION

  • The Agreement may be terminated by either the SPAC or Pinstripes if the Closing does not occur on or prior to December 24, 2023 (the “Outside Date“).
  • On 12/18/23, the Outside Date was amended to December 29, 2023.

ADVISORS

  • Pinstripes Advisors:
    • Katten Muchin Rosenman LLP is acting as legal advisor
    • Piper Sandler is serving as financial advisor (on the equity investment funded by Middleton Partners)
  • Banyan Advisors:
    • Kirkland & Ellis is acting as legal advisor
    • William Blair & Company, L.L.C. is serving as financial and capital markets advisor
    • BTIG, LLC is serving as capital markets advisor
    • DLA Piper LLP (US) is serving as legal counsel to William Blair & Company, L.L.C. and BTIG, LLC.

EXTENSION – 4/21/23 – LINK

  • The SPAC approved the extension from April 24, 2023 to December 24, 2023.
    • 20,151,313 shares were redeemed at the meeting for $10.42 per share.
    • No contribution will be made into the trust account.

SUBSEQUENT EVENT – 4/13/23 – LINK

  • The SPAC entered into non-redemption agreements with several unaffiliated third parties in exchange for them agreeing not to redeem an aggregate of 2,240,400 shares
    • The Sponsor will transfer 560,100 Class B shares to the non-redeeming shareholders

SUBSEQUENT EVENT – 4/12/23 – LINK

  • The SPAC entered into non-redemption agreements with several unaffiliated third parties in exchange for them agreeing not to redeem an aggregate of 1,200,000 shares
    • The Sponsor will transfer 300,000 Class B shares to the non-redeeming shareholders

SUBSEQUENT EVENT – 4/6/23 – LINK

  • The SPAC entered into a non-redemption agreement with several unaffiliated third parties in exchange for them agreeing not to redeem an aggregate of 559,600 shares
    • The Sponsor will transfer 139,900 Class B shares to the non-redeeming shareholders

MANAGEMENT & BOARD

Executive Officers

Keith Jaffee, 61
Chief Executive Officer and Director

Mr. Jaffee has served as Chairman of Middleton Partners since 2010. From 2001 to 2009 Mr. Jaffee was Chairman and Chief Executive Officer of Focus Products, a collection of brands and businesses in the housewares, foodservice, and hospitality industry. Prior to that, Mr. Jaffee was President of Storage Products Group at Leggett & Platt from 1997 to 2001 and President of the Leggett & Platt Store Fixture Group from 1997 to 2001. Previously, Mr. Jaffee was President of NAFEM (North American Food Equipment Manufacturers).

George Courtot, 66
Chief Financial Officer

Mr. Courtot served as Chief Financial Officer of TriMark USA from January 2016 to December 2018 and as Business Liaison?—?Information Technology at TriMark USA from January 2019 to July 2019. Prior to TriMark USA, Mr. Courtot spent 16 years at V.P. Winter Distributing Company where he most recently held the position of Chief Financial Officer.

Board of Directors

Jerry Hyman, 66
Chairman

Mr. Hyman is a foodservice industry veteran who serves as Chairman of TriMark USA and previously served as Chief Executive Officer of TriMark USA, from 2003 to January 2020. Mr. Hyman joined the business that became TriMark USA in 1981. In addition, from 2008 until January 2020, Mr. Hyman served as President and member of the board of directors of NexGen Procurement Corp, a unique industry buying group. My Hyman is also a Director of Deiorios Foods.

Bruce Lubin, 68
Director

Since January 2020, Mr. Lubin has served as the Vice Chairman of CIBC USA and prior to that was President, Commercial Banking from September 2017 to January 2020. From 2007 to 2017 he was President of Commercial Banking at Private Bank, which was acquired by CIBC. Prior to that, Mr. Lubin held several leadership roles at LaSalle National Bank, from 1989 to 2007. Mr. Lubin also serves as the Chairman for the Chicagoland Chamber of Commerce, board member of the Governing Committee of AJC, and board member of the Civic Consulting Alliance.

Peter Cameron, 75
Director

Mr. Cameron is the Co-Owner of Farberware Licensing and Chairman and CEO of Acuity Management Inc. Acuity is an investment management company that owns and operates several commercial real estate and manufacturing enterprises. From 2009 to 2016, Mr. Cameron served as the CEO and later as the Co-Chairman of the Board of Directors of the Lenox Corporation, a manufacturer of tableware, giftware and collectible products. From 2005 to 2008, Mr. Cameron served as CEO of Waterford Wedgwood plc, a manufacturer of fine china and crystal products, and from 1997 to 2003 Mr. Cameron was the CEO and president of All Clad Holdings, a manufacturer of cookware products that was acquired by Waterford in 2004. From 1988 to 1995, Mr. Cameron served in various senior level management capacities within Hanson plc, including as chairman of U.S. Industries Housewares Group, and president and CEO of Farberware, Inc. Prior to that, Cameron was CEO and president of Revereware, a leading manufacturer of branded cookware sold to department store and mass merchant channels. Cameron has also held senior management positions at Polaroid Corp., Bowmar Instrumental Corporation, and Starcraft. Mr. Cameron also serves on the boards of Northeastern University, Chapel Hill, The International Housewares Charity Foundation, Acuity Management, Farberware Licensing Co., Hartmann and Lenox Corporation.

Otis Carter, 43
Director

Mr. Carter has served as General Counsel of CMS/Nextech, a portfolio company of Audax Group, since January 2021. Prior to that he served as General Counsel and Corporate Secretary for TriMark USA from 2014 to January 2021. Before joining TriMark USA, Mr. Carter was a private equity attorney with Kirkland & Ellis LLP and Ropes & Gray LLP, representing private equity sponsors, alternative asset managers and their portfolio companies on M&A and financing transactions.

 

ByAnthony Sozzi