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Growth Capital Acquisition Corporation

Growth Capital Acquisition Corporation

Oct 16, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Cepton Technologies, Inc.

ENTERPRISE VALUE: $1.566 billion
ANTICIPATED SYMBOL: CPTN

Growth Capital Acquisition Corporation proposes to combine with Cepton Technologies, Inc., a Silicon Valley innovator and leader in high performance MMT® lidar solutions.

Cepton’s unique value proposition is its patented, directional lidar technology, known as MMT® (Micro Motion Technology), that enables high performance at low cost, with excellent manufacturability at high volume. The compact form factor and low power consumption of Cepton MMT® lidars have enabled Tier 1 partners and customers to seamlessly integrate the lidars in vehicle fascia, in headlamps, on the roof and behind windshields, making them versatile for ADAS applications. The award-winning MMT® lidars use a mirrorless, rotation-free and frictionless method for three-dimensional (3D) imaging which maximizes optical efficiency, reliability and scalability. These lidars also include Cepton’s proprietary micro-optical lidar modules, with integrated, custom lidar engine ASICs (Applications Specific Integrated Circuits) for state-of-the-art illumination control and detection. The compelling price paired with the high performance of Cepton’s lidars places Cepton in a strong position to grow its core business beyond mass-market ADAS, into the autonomous vehicles (AV) and adjacent smart infrastructure markets.

With ongoing engagements with all of the Top 10 global automotive OEMs‡, Cepton is expected to be the first lidar company to penetrate the passenger vehicle mass market across multiple vehicle classes and models in the next several years, thereby enabling lidar to become an essential safety sensor

SUBSEQUENT EVENT – 1/24/22 (8-K LINK)

  • On January 21, 2022, GCAC, Merger Sub and Cepton entered into the Amendment to the Business Combination Agreement (the “BCA Amendment”) pursuant to which the parties amended the Business Combination Agreement in order to extend the Outside Date from February 4, 2022 to March 31, 2022. 

SUBSEQUENT EVENT – (8-K LINK)

On November 29, 2021, Cepton Technologies, Inc. announced that it and Growth Capital Acquisition Corp have entered into a committed investment agreement (“Purchase Agreement”) and related registration rights agreement for up to $100 million with Lincoln Park Capital Fund, LLC (“LPC”), a Chicago-based institutional investor, effective at the close of the business combination between Cepton and GCAC.

  • Subject to the terms and conditions of the Purchase Agreement, the new Cepton will have the right, but not the obligation, to direct LPC to purchase up to an aggregate amount of $100 million of the new Cepton common stock over a 36-month period.
  • Any sales of common stock to LPC will be subject to the filing and effectiveness of a related registration statement with the Securities and Exchange Commission which will not occur until after the close of the business combination.
  • Thereafter, the new Cepton will control the timing and amount of any future sales to LPC and LPC is obligated to purchase such common stock at prevailing market prices.
  • LPC has agreed not to cause or engage in any manner whatsoever any direct or indirect short-selling or hedging of new Cepton’s shares of common stock.
  • The Purchase Agreement does not contain any restrictions on the use of any of the proceeds and there are no financial covenants, participation rights, rights of first refusal, or penalties.
  • There are no warrants or other derivative securities associated with the transaction.
  • After the closing of the business combination, the Purchase Agreement may be terminated by GCAC or the new Cepton at any time, in its sole discretion, without any additional cost or penalty.

TRANSACTION

  • Under the terms of the Business Combination Agreement, Cepton shareholders will receive consideration in the form of newly issued shares of Growth Capital common stock, valued based upon a Cepton enterprise value of $1.566 billion on a cash-free, debt-free basis.
  • Upon closing, the combined company is expected to have an estimated equity value of approximately $1.8 billion, which includes approximately $231 million in gross proceeds, comprised of $172.5 million from Growth Capital’s trust account (assuming no redemptions) and a $58.5 million fully committed common stock PIPE
    • Anchored by existing investor KOITO, which satisfies the contractual closing cash condition.
  • Cash proceeds released from Growth Capital’s initial $172.5 million trust account after any stockholder redemptions and payment of transaction expenses and other Growth Capital liabilities will remain with the combined company, and Cepton intends to use the aggregate cash proceeds to accelerate its growth strategy, including securing additional series production design wins at other Top 10 automotive OEMs.

Growth Capital Transaction Overview

PIPE

  • $58.5 million from a PIPE offering anchored by existing Cepton investor, Japan-based KOITO MANUFACTURING CO., LTD. (“KOITO”), a global Tier 1 automotive supplier.

CONVERSION OF SECURITES

Immediately prior to the effective time of the Merger (the “Effective Time”), Cepton will cause each share of Cepton Class F Stock and each share of Cepton preferred stock to be automatically converted into a number of shares of Cepton common stock, at the then-effective conversion rate as calculated pursuant to Cepton’s Amended and Restated Certificate of Incorporation.

  • All of the Cepton Class F Stock and the Cepton preferred stock converted into common stock of Cepton will no longer be outstanding and will cease to exist, and each holder of Cepton preferred stock of the will thereafter cease to have any rights with respect to such securities.
  • Each share of Cepton common stock will be converted into:
    • (i) the contingent right to receive Earnout Shares (which may be zero)
    • (ii) a certain number of shares of GCAC Class A common stock equal to (x) $1,500,000,000 divided by the total number of Cepton capital stock (on an “as-converted” to Cepton common stock basis) on a fully diluted basis as of the date of Closing (but excluding company options that are not vested), divided by (y) 10
  • Each option to purchase shares of Cepton common stock, whether or not exercisable and whether or not vested, that is outstanding immediately prior to the Effective Time will be assumed by GCAC and converted into an option to purchase shares of GCAC Class A common stock (each, a “Converted Option”).
    • Each Converted Option will have and be subject to the same terms and conditions as were applicable to the Cepton option from which it was converted immediately before the Effective Time, except that
      • (x) each Converted Option will be exercisable for that number of shares of GCAC Class A common stock equal to the product (rounded down to the nearest whole number) of (1) the number of shares of Cepton common stock subject to the Cepton option immediately before the Effective Time and (2) the Merger Consideration
      • (y) the per share exercise price for each share of GCAC Class A common stock issuable upon exercise of the Converted Option will be equal to the quotient (rounded up to the nearest whole cent) obtained by dividing (1) the exercise price per share of Cepton common stock of such Cepton option immediately before the Effective Time by (2) the Merger Consideration.

EARNOUT

  • If the closing share price of GCAC Class A common stock, for any 20 trading days within any consecutive 30-trading day period that occurs after the Closing Date and on or prior to the three (3)-year anniversary of the Closing Date:
    • Equals or exceeds $15.00 per share to such holder’s pro rata portion of 7,000,000 shares.
    • Equals or exceeds $17.50 per share to such holder’s pro rata portion of 6,000,000 shares.

LOCK-UP

  • Each Cepton stockholder party thereto will agree to a 180-day lock-up of its restricted GCAC securities following Closing, subject to:
    • (i) early release upon certain corporate transactions
    • (ii) certain limited permitted transfers where the recipient takes the shares subject to the restrictions in the Confidentiality and Lock-Up Agreement.
  • GCAC, Sponsor, Nautilus, HB Strategies, and Cepton entered into an Unpaid Expenses and Lock-Up Agreement:
    • Sponsor, Nautilus, and HB Strategies agree that if GCAC’s unpaid or contingent liabilities as of immediately prior to the Closing exceed $10,000,000, Sponsor, Nautilus, and HB Strategies, each will, at their election, either forfeit immediately prior to the Closing a number of Founder Shares and Founder Warrants having an aggregate value equal to the Excess Expense Amount or,
    • Pay to GCAC an amount in cash equal to the Excess Expense Amount.

SUPPORT AGREEMENT

  • The GCAC stockholders party thereto will agree to vote their shares of GCAC Class B common stock in favor of the adoption an approval of the Business Combination Agreement and the Transactions.
  • HB Strategies entered into a substantially similar Stockholder Support Agreement.

NOTABLE CONDITION TO CLOSING

  • GCAC having at least 58.5 million dollars ($58,500,000) of cash or cash equivalents.

NOTABLE CONDITION TO TERMINATION

  • Subsequent Event – On January 21, 2022, GCAC, Merger Sub and Cepton entered into the Amendment to the Business Combination Agreement (the “BCA Amendment”) pursuant to which the parties amended the Business Combination Agreement in order to extend the Outside Date from February 4, 2022 to March 31, 2022. 
  • By either GCAC or Cepton if the Closing has not occurred by the date that is six months after the execution of the Business Combination Agreement
  • By GCAC if (i) Cepton fails to obtain stockholder approval or (ii) Cepton fails to deliver to GCAC the Stockholder Support Agreements within twenty-four hours after the execution of the Business Combination Agreement

ADVISORS

  • J.P. Morgan Securities LLC (“J.P. Morgan”) is serving as financial advisor to Cepton
  • O’Melveny & Myers LLP is serving as legal counsel to Cepton.
  • Maxim Group LLC (“Maxim”) is serving as financial advisor to Growth Capital
  • Ellenoff Grossman & Schole LLP is serving as legal counsel to Growth Capital.
  • J.P. Morgan is acting as lead placement agent to Growth Capital.
  • Maxim is also serving as joint placement agent.
  • Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel to the placement agents.
  • Maxim and Craig-Hallum Capital Group LLC are acting as capital markets advisors to Growth Capital.

MANAGEMENT & BOARD

Executive Officers

Prokopios (Akis) Tsirigakis, 65
President, Chairman, Co-Chief Executive Officer & Director

Mr. Tsirigakis is currently chief executive officer of Nautilus Energy Management Corp. and chief executive officer of SevenSeas Investment Fund (Luxembourg). Mr. Tsirigakis founded three blank check companies, conducted their initial public offerings and successfully closed three business combinations. From May 2016 until December 2018, Mr. Tsirigakis served as chairman and co-chief executive officer of Stellar Acquisition III, Inc. (Nasdaq:STLR), a special purpose acquisition company that completed an initial public offering on August 16, 2016. From May 2011 until October 2013, Mr. Tsirigakis served as chairman and co-CEO of Nautilus Marine Acquisition Corp. (Nasdaq:NMAR), a special purpose acquisition company that completed an initial public offering on July 16, 2011. Mr. Tsirigakis has served as the chief executive officer of Nautilus Offshore Services Inc., an offshore service vessel owner and the successor of Nautilus Marine, since October 2013 and as a vice president of Dryships, Inc. (Nasdaq: DRYS), which acquired Nautilus Offshore Services Inc., since December 2015. From 2011 to 2015, Mr. Tsirigakis served as a director of Ocean Rig UDW Inc. (Nasdaq: ORIG). From May 2005 to November 2007, he co-founded and served as chairman of the board, chief executive officer and president of, Star Maritime (AMEX:SEA), a blank check company. From November 2007 until February 2011, he was the president and chief executive officer of, Star Bulk Carriers Corp., a dry-bulk ship-owning company and the successor of Star Maritime. From November 2003 until November 2007, he served as managing director of Oceanbulk Maritime S.A., a company that managed dry bulk vessels. From November 1998 to November 2007, Mr. Tsirigakis established and served as the managing director of Combine Marine Inc., a ship management company. From 1981 to 1998, Mr. Tsirigakis was the vice-president and technical director of Konkar Shipping Agencies S.A. of Athens and of Arkon Shipping Agencies Inc. of New York. Mr. Tsirigakis received his Master’s Degree (1979) and B.Sc. in Naval Architecture from The University of Michigan, Ann Arbor, USA.

George Syllantavos, 56
Co-Chief Executive Officer, Chief Financial Officer & Director

Mr. Syllantavos is a director of Phunware Inc. (Nasdaq: PHUN). From May 2016 until December 2018, Mr. Syllantavos co-founded and served as co-chief executive officer of Stellar Acquisition III, Inc. (Nasdaq:STLR), a special purpose acquisition company that completed an initial public offering on August 16, 2016. Mr. Syllantavos co-founded in February 2013, and is chief executive officer of, Nautilus Energy Management Corp. (not affiliated with Nautilus Offshore Services Inc.), a maritime energy services company involved in maritime project business development and ship management focusing on the drybulk and tanker sectors. From May 2011 until February 2013, Mr. Syllantavos co-founded and served as co-chief executive office and chief financial officer of Nautilus Marine Acquisition Corp. (Nasdaq:NMAR), a special purpose acquisition company that completed an initial public offering on July 16, 2011. He served as the chief financial officer of Nautilus Offshore Services Inc., an offshore service vessel owner and the successor of Nautilus Marine, from February 2013 until April 2014. From November 2007 to August 2011, he served as chief financial officer, secretary and director of Star Bulk Carriers Corp., a dry-bulk ship-owning company (Nasdaq: SBLK). From May 2005 to November 2007, he served as the chief financial officer, secretary and director of Star Maritime (AMEX:SEA), its predecessor, which was a special purpose acquisition company that completed an initial public offering on December 16, 2005 raising $189 million. From May 1999 to December 2007, he was the president and general manager of Vortex Ltd., an aviation consulting firm specializing in strategic analysis, fleet planning and asset management. From January 1998 to April 1999, he served as a financial advisor to Hellenic Telecommunications Organization S.A., where, on behalf of the chief executive officer, he coordinated and led the company’s listing on the New York Stock Exchange (NYSE:OTE) raising $1.1 billion and had responsibilities for the strategic planning and implementation of multiple acquisitions of fixed-line telecommunications companies. Mr. Syllantavos served as a financial and strategic advisor to both the Greek Ministry of Industry & Energy (from June 1995 to May 1996) and the Greek Ministry of Health (from May 1996 to January 1998), where, in 1997 and 1998, he helped structure the equivalent of a US$700 million bond issuance for the payment of outstanding debts to the suppliers of the Greek National Health System. From 1998 to 2004, he served as a member of the Investment Committee of a merchant banking firm, where he was involved in negotiating, structuring and implementing the acquisition of several small-medium sized manufacturing firms. Before that, he served for almost 5 years as a transportation consultant with an aviation focus specializing in strategic planning, corporate finance and fleet asset management. Mr. Syllantavos has a B.Sc. in Industrial Engineering from Roosevelt University in Chicago and an MBA in Operations Management, International Finance and Transportation Management from the Kellogg Graduate School of Management at Northwestern University.

 

Board of Directors

Harry Braunstein, 71
Director

Mr. Braunstein has been practicing law for over 45 years with a focus on corporate and commercial real estate transactions. He has been serving as the managing partner of Braunstein Turkish LLP since 2010, which specializes in mergers and acquisitions, joint ventures, private placements, transactional real estate, commercial lending, and franchise law. Prior to founding Braunstein Turkish LLP, Mr. Braunstein practiced with the Wall Street law firm Herzfeld & Rubin, P.C. for over twenty years, ultimately becoming head of the real estate group before establishing his own firm. Mr. Braunstein was a substantial shareholder and the Chairman of the Board of, Gotham Bank of New York, a commercial bank and member of the Federal Reserve. Gotham Bank was sold to Provident Bank, a subsidiary of Provident New York Bancorp (NYSE: PBNY) in August of 2012 and in April of 2013 Provident Bank acquired Sterling National Bank. (NYSE: STL). Following the sale, he became a member of the New York advisory board of Sterling. Mr. Braunstein was admitted to the New York and Federal bar and holds a BA in Political Science from Queens College and a Juris Doctor degree from Brooklyn Law School.

Gary Leibler, 54
Director

Mr. Leibler is the founder of Shavit Capital, a private equity practice that specializes in investing in late stage Israeli technology companies, and has been serving as the managing partner of Shavit Capital since 2007. Shavit Capital has over $400 million under management across five private equity funds. Mr. Leibler has been involved in many successful technology companies including over 20 companies that completed IPOs in the U.S. or other public capital markets. Portfolio companies led by him were sold to leading multinational companies including Microsoft, AOL, Amdocs and Alcatel-Lucent. He has served as director of various high-tech and investment advisory companies. Mr. Leibler was also the founder and managing partner of AIG Orion Venture Capital Fund, which was managed in partnership with the international private equity practice of American International Group (NYSE: AIG). The AIG Orion Fund, with investors including Microsoft, Comcast and the World Bank, was one of Israel’s most successful venture capital funds from the 1999/2000 vintage. Mr. Leibleralso served as a manager of the private equity practice of AIG Global Emerging Markets which at the time managed the world’s largest investment firm that specialized in emerging economies. Mr. Leibler holds a B.Sc. degree in laws and a BSc degree in economics from Monash University, Melbourne, Australia.

Evan Breibart, 56
Director

Mr. Breibart is an experienced shipping executive, investor and lawyer. Mr. Breibart co-founded Jelco Delta Holding Corp., a company focusing on investment in shipping companies, in 2013 and has served as a director of Jelco since then. From 2001 to 2012, he served as general counsel of Restis Group, one of the largest private shipping companies in Greece. During that period, he was instrumental in growing the family fleet from 18 reefer vessels to over 120 dry bulk and tanker vessels. He was responsible for negotiating and executing a broad range of high value strategic transactions and also instrumental in establishing a number of shipping related joint venture companies. Prior to that, Mr. Breibart practiced shipping law with leading solicitors Watson Farley William and Holman Fenwick Willan. He holds a BA in English and a Juris Doctor degree from University of Georgia and a Master of Law in European Law from Universite Libre de Bruxelles in Belgium.

ByRoman Developer