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Globis Acquisition Corp. *

Globis Acquisition Corp. *

Nov 24, 2020 by Kristi Marvin

PROPOSED BUSINESS COMBINATION: Forafric Global PLC

ENTERPRISE VALUE: $299.6 million
ANTICIPATED SYMBOL: AFRI

Globis Acquisition Corp. proposes to combine with Forafric Global PLC, a vertically integrated agribusiness serving North Africa.

Forafric is at the forefront of strengthening food systems to serve Africa’s growing population and urbanization and addressing food insecurity and undernourishment. The Company focuses on productivity and diversification in food production, reducing pre-and post-harvest losses, and enacting effective and sustainable agricultural, financial, and trade policies. Forafric makes up more than 10% of the total market share in Morocco and maintains one of the largest industrial, logistical, and commercial footprints in the world’s second-most populous continent.

Forafric’s capabilities include 250,000 tons of storage capacity, seven production units, and 2,200 tons per day of crushing capacity. The Company also owns two leading brands, Tria and MayMouna, and maintains distribution across 45 countries. Forafric manages every step in the value chain starting at raw material sourcing and ending with a consumer brand at every home.

Forafric is a leading agribusiness player in Africa with activities in Morocco and Sub-Saharan Africa. It is the milling industry leader with a complete range of flour and semolina and secondary processing products such as pasta and couscous. The Group operates 12 industrial units and 2 logistics platforms. FORAFRIC exports its products to more than 45 countries around the world. FORAFRIC intends to continue expanding both in Morocco and in Africa and contributing to growing Africa’s food security.

SUBSEQUENT EVENT – 6/9/22 – LINK

Ahead of its extension vote on 6/7/22, Globis amended its merger agreement with Forafric and postponed the vote date to June 9, 2022.

  • Closing Payment
    • The Closing Payment shall be deferred in its entirety and Globis shall pay to the Seller the principal sum of $20,000,000 together with interest on the outstanding amount from the date of the closing of the Business Combination up to the date of payment (computed on the basis of a 360-day year consisting of twelve (12) months of thirty (30) days) accrued but unpaid thereon at the fixed per annum rate of 8%.
    • The deferred payment shall be made on the first anniversary of the closing of the Business Combination. If any amount of principal and/or interest thereon is unpaid after such due date, Globis shall pay the Seller additional interest on the outstanding amount at the per annum rate of 12%
  • Forward Purchase Agreements
    • The Company and certain unaffiliated investors entered into Forward Share Purchase Agreements to which, on the three month anniversary of the date of the closing of the Company’s business combination the Investors may elect to sell and transfer to the Company, and the Company will purchase, in the aggregate up to 1,500,000 shares of common stock of Globis
    • Consisting of (i) shares of common stock then held by the Investors and/or (ii) any additional shares of common stock that the Investors may acquire prior to the closing of the Business Combination. 
    • In exchange each Investor agreed that it will not request redemption of any of the Investor Shares in conjunction with Globis’ stockholders’ approval of the Business Combination, or tender the Investor Shares to Globis in response to any redemption or tender offer that Globis may commence for its shares of common stock.
    • Commencing on the day after the date by which shares of common stock of Globis must be tendered for redemption in conjunction with Globis’ stockholders’ approval of the Business Combination (the “Redemption Date”), the Investor may sell its Investor Shares in the open market as long as the sales price exceeds $10.80 per Investor Share.
      • If the investor decides to sell on the open market for more than $10.80, the Escrow Agent shall release from the Escrow Account to the Company an amount equal to $10.80 per Early Sale Share sold in such Early Sale.
    • Simultaneously with the closing of the Business Combination, the Company will deposit into an escrow account with Wilmington Trust, National Association (the “Escrow Agent”), subject to the terms of an escrow agreement, an amount equal to the lesser of :
      • (i) $16,200,000 and
      • (ii) $10.80 multiplied by the aggregate number of Investor Shares held by the Investors as of the closing of the Business Combination.

EXTENSION – 3/7/22 – LINK

  • The SPAC has extended the period of time it will have to consummate its initial business combination by 3 months from the current deadline of March 15, 2022 until June 15, 2022.
    • The Sponsor has deposited $1,150,000 in the Company’s trust account.

SUBSEQUENT EVENT – 1/4/21 

PIPE Subscription

  • In connection with the proposed Business Combination, on December 31, 2021, Globis entered into a subscription agreement at a purchase price of $10.50 per share for
    • (i) 4.99% of all issued and outstanding ordinary shares, after taking into account the completion of the Business Combination and all ordinary shares issued pursuant to the FAHL Bonds and other related subscription agreements, if any, and
    • (ii) 1,904,761 ordinary shares; accordingly, the maximum aggregate amount to be paid by the PIPE Investor for the PIPE Shares is approximately $20 million.
  • The purpose of the sale of the PIPE Shares is to raise additional capital for use in connection with the Business Combination.
      • The PIPE can be terminated within 180 days of Closing has not occurred

Convertible Bonds Offering

  • In connection with the proposed Business Combination, between December 31, 2021 and January 3, 2022, affiliates of Up and Up Capital, LLC and Globis SPAC LLC, the sponsors of Globis, subscribed for convertible bonds of FAHL, as issuer, in an aggregate principal amount of $9.5 million in a private placement, issued pursuant to a Bond Subscription Deed.
  • Pursuant to the current terms of the FAHL Bonds, upon consummation of the Business Combination, the FAHL Bonds will automatically convert into ordinary shares of New Forafric at a price per share that is a 10% discount to the PIPE Investment, subject to certain adjustments. The number of ordinary shares will be equal to the quotient that results from dividing the aggregate principal amount of the respective FAHL Bond by $9.45, subject to certain adjustments.

EXTENSION – 12/10/21 – LINK

  • The SPAC has extended the period of time it will have to consummate its initial business combination by 3 months from the current deadline of December 15, 2021, until March 15, 2022.
    • The Sponsor has deposited $1,150,000 in the Company’s trust account.

TRANSACTION

  • The total consideration to be paid by the Company to the Seller in the Business Combination will be:
    • (i) 15,100,000 Ordinary Shares, subject to reduction to the extent that the Closing Payment is less than $0, provided that Seller may be issued up to 1,904,762 additional Ordinary Shares determined based on the amount of Remaining Cash at the Closing; plus
    • (ii) an amount equal to $20,000,000 minus the outstanding amount of all Funded Debt as of the Closing; provided that Seller may receive up to an additional $20,000,000 determined based on the amount of Remaining Cash at the Closing.
  • The Closing Payment shall be funded by remaining funds in the trust account after giving effect to any Buyer Share Redemptions and the proceeds of any potential private placement financing.

Globis Transaction Overview

PIPE

  • The maximum aggregate amount to be paid by the PIPE Investor for the PIPE Shares is approximately $20 million.
    • Globis entered into a subscription agreement at a purchase price of $10.50 per share

EARNOUT

  • The Seller shall be entitled to receive additional Ordinary Shares, to be issued as follows during the period from and after the Closing until the end of the calendar year 2024
    • (A) 500,000 Earnout Shares, if, during calendar year 2022, Adjusted EBITDA of the Company is equal to or greater than $27,000,000
    • (B) 500,000 Earnout Shares, if, during calendar year 2023, Adjusted EBITDA of the Company is equal to or greater than $33,000,000
    • (C) 1,000,000 Earnout Shares, if, during calendar year 2024, the Buyer Trading Price during the standard market trading hours of a trading day is greater than or equal to $16.50 for any 20 trading days within any period of 30 consecutive trading days.
      • The Seller will also be entitled to receive, as additional consideration, and without any action on behalf of the Company or the Company’s stockholders, 20% of any cash proceeds received by the Company from the exercise of the Company’s outstanding warrants.

LOCK-UP

  • We will edit once all of the documents have been submitted.

NOTABLE CONDITIONS TO CLOSING

  • The Company having at least $5,000,001 in net tangible assets as of the Closing, after giving effect to the completion of the Buyer Share Redemption and any private placement financing.

NOTABLE CONDITIONS TO TERMINATION

  • By either Globis or the Seller if the Closing has not occurred on or before March 15, 2022 (or until June 15, 2022, if Globis’s Board of Directors (in its sole discretion) has extended the period of time to consummate a business combination in accordance with its organizational documents, or such later date as Globis and the Seller may mutually agree)

ADVISORS

  • Chardan is serving as a financial advisor to Globis in connection with the business combination.
  • Cohen Tauber Spievack & Wagner P.C. is serving as legal advisor to Forafric.
  • McDermott Will & Emery LLP is serving as legal advisor to Globis.

MANAGEMENT & BOARD

Executive Officers

Paul Packer, 49
Chief Executive Officer, Chief Financial Officer and Director

Mr. Packer has served as the Managing Member of Globis Capital Advisors LLC, an investment advisory firm, since founding the firm in 2001. Since October 2017, Mr. Packer has served as Chairman of The United States Commission for the Preservation of America’s Heritage Abroad, when he was first appointed by President Donald J. Trump. He has served on the board of directors of Zedge, Inc. (NYSE AMERICAN: ZDGE), a provider of content distribution platforms, since April 2020. Mr. Packer also serves as a director on the board of Elementor Ltd., a privately held company that offers an intuitive, front-end site builder for WordPress. Previously, he served on the boards of directors of Wakingapp Ltd., an augmented reality technology company, from October 2014 until its sale to Scope AR in October 2019 and Penguin Digital, Inc., a mobile application developer, before it was acquired by Shutterfly Inc. in 2012. Mr. Packer received a B.A. from Yeshiva University.

Board of Directors

Claude Benitah, 71
Director

Mr. Benitah has more than 35 years’ duty free and travel retail experience, including extensive experience in African markets. He currently serves as a consultant to public and private companies advising on, among other things, optimization of production, procurement, budgeting, and strategy formation. He has served as a Senior Advisor to Africa Projects Corporation since January 2017, a Management Advisor to TAXFRY AFRICA since 2012 and Manager at Duty Free Africa since 2010. Previously, he served as a Manager of Worldwide Development at Flemingo Duty Free, an operator of duty free stores across the world in airports and seaports of various sizes. Prior to that, from 2001 to 2009, Mr. Benitah served as the Chief Executive Officer of Saresco Afrique, an owner and operator of Duty Free shops in Western and Central Africa. He also previously held several senior positions at SAGA Group, a provider of global transportation and logistics services.

The Honorable Michael A. Ferguson, 50
Director

Mr. Ferguson is currently a senior advisor at BakerHostetler, where he serves as the leader of their Federal Policy team since joining the firm in June 2016. Prior to this, Mr. Ferguson founded and served as the chief executive officer and chairman of Ferguson Strategies, LLC, a government affairs and strategic business consulting firm, from January 2009 until June 2016. From 2001 to January 2009, he served in the U.S. House of Representatives, representing New Jersey’s 7th congressional district. While in Congress, he was a member of the House Energy and Commerce Committee, which has wide jurisdiction over the healthcare, telecommunications and energy industries. He served as vice chairman of the panel’s Health Subcommittee, where he became a key member on health care issues and helped to ensure passage of the Medicare Part D prescription drug benefit in 2003. In addition, he served as a member of the Telecommunications and Internet Subcommittee as well as the Oversight and Investigations Subcommittee. Mr. Ferguson was also a member of the House Financial Services Committee, where he cosponsored the Sarbanes-Oxley Act of 2002 and helped enact the initial terrorism risk insurance law. Mr. Ferguson was the former chairman of the Board of Commissioners of the New Jersey Sports and Exhibition Authority and also serves as a senior fellow of the Center for Medicine in the Public Interest’s Odyssey Initiative for Biomedical Innovation and Human Health. Since April 2015, he has served on the Board of Directors of NanoVibronix, Inc. (NASDAQ: NAOV Previously, he served as the Chairman of the Board of Ohr Pharmaceutical Inc. (n/k/a Neubase Therapeutics Inc. (NASDAQ: NSBE)) from May 2017 until its merger with Neubase Therapeutics Inc. in July 2019. He has also served on various corporate advisory boards and committees, including for Pfizer, Inc., the National Italian American Foundation and the United States Golf Association. Mr. Ferguson received a B.A. in government from the University of Notre Dame and a Master of Public Policy degree with a specialization in education policy from Georgetown University.

John M. Horne, 53
Director 

Mr. Horne is an entrepreneur and venture capitalist. Over the past twenty-five years, Mr. Horne has had a diverse career in both the private and public sectors, including recently serving as both Deputy Assistant to President Donald J. Trump and Deputy Chief of Staff to Vice President Michael R. Pence from May 2018 to October 2019. In addition, in September 2019, President Trump nominated Mr. Horne to become a member of The United States Commission for the Preservation of America’s Heritage Aboard, where he continues to serve. Mr. Horne is also the founder and President of multiple successful private companies, and has served as President of Zurmos, Inc., a consulting company which focuses on providing U.S. and International companies with strategic international market sector analyzes, strategic expansion plans, risk and political stability assessments and international government affairs plans, since founding the company in December 2006. Mr. Horne has significant political experience, including serving as a Member of the Executive Roundtable of the Republican Governors Association since its inception in 2009, serving as a Senior Advisor to Governor Mike Huckabee during the 2008 Presidential campaign and working with the Trump Presidential Finance and Transition and Inaugural Committees. He has also served as a Senior Advisor to Secretary of Commerce Don Evans and was appointed by President George W. Bush to serve as the Executive Director of Export Assistance and Business Outreach for the International Trade Administration. Mr. Horne holds an MBA degree from the University of Arkansas, a Finance degree from the University of Tulsa, and studied International Business at the University of Salzburg, Austria.

 

ByKristi Marvin