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Tuatara Capital Acquisition Corporation

Tuatara Capital Acquisition Corporation

Jan 27, 2021 by Kristi Marvin

PROPOSED BUSINESS COMBINATION: springbig

ENTERPRISE VALUE: $275 million
ANTICIPATED SYMBOL: SBIG

Tuatara Capital Acquisition Corporation proposes to combine with springbig, a provider of marketing solutions, consumer mobile app experiences, and omnichannel loyalty programs in the cannabis industry.

  • springbig is a provider in customer loyalty and text message communications solutions for cannabis retailers and cannabis brands.
  • Founded in 2017, springbig offers a single source of truth CRM that becomes the database of record for your in-store and online customers that captures key purchasing and behavioral data and seamlessly integrates with existing dispensary POS and eCommerce systems.
  • The platform also develops custom cannabis loyalty software embedded with advanced marketing tools to retain customers and sends targeted automated and personalized SMS campaigns based on customer preferences and purchasing behavior.
  • springbig is helping cannabis retailers and brands keep their clientele connected and engaged while allowing the store owners and major cannabis brands track their inevitable success and ROI in real-time.
  • The company offers a comprehensive suite of category-leading solutions that clients can use to help increase customer retention, build customer loyalty, and promote brand awareness through services such as digital communications, text and email messaging, and industry-leading reporting and analytics.
  • springbig provides a suite of products, including its loyalty platform and digital loyalty card, which allows retailers and brands to intelligently and automatically manage, incentivize, and segment their customers.

SUBSEQUENT EVENT – 5/2/22 – 8-K LINK

Notes and Warrants Purchase Agreement

  • On April 29, 2022, Tuatara entered into a securities purchase agreement (the “Notes and Warrants Purchase Agreement”) to sell up to
    • (i) a total of $22 million of 6% Senior Secured Original Issue Discount Convertible Notes due 2024 and
    • (ii) a number of warrants equal to one-half of the principal of the Notes divided by the VWAP on the trading day prior to the closing date of such sale (the “Warrants”) in a private placement with the investors.
  • The Notes will be convertible at the option of the holders beginning at the earlier of
    • (i) the date of effectiveness of the Resale Registration Statement or;
    • (ii) one year after the issuance of the First Tranche Closing Date at an initial conversion share price of $12.00 per share, bearing an interest rate of 6% per annum and commencing amortization after six months which may be settled in cash or shares of common stock, at the option of the Company.
    • Each Warrant will be exercisable for shares of the Company’s common stock at an exercise price of $12.00 per share.
  • The Notes and Warrants will be sold in two tranches: the first tranche will be for a total of $17,000,000 (of which $11,000,000 is subscribed to as of the date hereof) of principal amount of Notes and the number of Warrants to be calculated pursuant to:
    • (ii) in exchange for a total of $15,454,545 (of which $10,000,000 is confirmed based on the subscriptions as of the date hereof); the second tranche will be for a total of $5,000,000 principal amount of Notes and the number of Warrants to be calculated pursuant to:
    • (ii) in exchange for a total of $4,545,454. The first tranche will close upon completion of the merger (the “First Tranche Closing Date”), and the second tranche will close 60 days after the effective date of the Resale Registration Statement or at such as time as is agreed between the Company and the Investors (such date, the “Second Tranche Closing Date”).
  • Future Financing Participation Right:
    • For a period of 18 months from the First Tranche Closing Date, the Investors shall have the right to participate in up to 30% of future financings by the Company undertaken during that period.

Common Stock Purchase Agreement

  • On April 29, 2022, the Company entered into a Common Stock Purchase Agreement (the “Common Stock Purchase Agreement”) with CF Principal Investments LLC (“Cantor”) related to a committed equity facility.
    • The Company has the right, after the closing of the Merger, from time to time at its option to sell to Cantor up to $50 million in aggregate gross proceeds of newly issued common stock.
    • While there are distinct differences, the Facility is structured similarly to a traditional at-the-market equity facility, insofar as it allows the Company to raise primary equity capital on a periodic basis outside the context of a traditional underwritten follow-on offering.

SUBSEQUENT EVENT 4/19/22 – 8-K LINK

  • On April 14, 2022, TCAC entered into an Amended and Restated Agreement and Plan of Merger.
  • The Amended and Restated Merger Agreement provides for an amendment to the Original Merger Agreement in respect to:
    • (i) an implied equity value of $215 million
    • (ii) the issuance of a maximum of 1,000,000 shares of common stock of TCAC to holders who do not elect to redeem in connection with the consummation of the Business Combination
    • (iii) an extension to the earnout period for SpringBig’s security holders and TCAC Sponsor, LLC (“Sponsor”) to five years from the closing date (the “Earnout Period”)
    • (iv) an increase in the number of shares of common stock of TCAC receivable by SpringBig’s security holders if the closing price of the common stock of TCAC equals or exceeds $12.00 per share from 5.5 million shares to 7.0 million shares.
    • TCAC, Sponsor, and SpringBig entered into an amendment to the sponsor letter agreement (the “Sponsor Letter Agreement Amendment”), pursuant to which the Sponsor has agreed to forfeit 1,000,000 shares of its common stock of TCAC in connection with the Business Combination (to be issued to TCAC holders who do not elect to redeem – see above)

TRANSACTION

  • The estimated post-transaction equity value of the combined company is approximately $500 million, assuming $10 per share price and no redemptions by TCAC stockholders.
  • Additionally, a $13 million PIPE investment has commitments from Tuatara Capital and existing investors, including TVC Capital, Key Investment Partners, and springbig’s Founder and CEO Jeffrey Harris.
  • springbig serves over 1,000 clients across the United States and Canada, compromising more than 2,300 retail locations, and has over 41 million consumers enrolled in its proven B2B2C platform, through which more than 90 million transactions have been processed in the past twelve months with attributable gross merchandise value (“GMV”) of over $7 billion.
  • springbig has grown revenue at a CAGR of 105% since 2019 and is on track to deliver $24 million in revenue for 2021 via its B2B SaaS model.
  • High growth is expected to be sustainable in the medium-term and is likely to accelerate as springbig expects to capitalize on the steady growth in cannabis retailers as new recreational markets emerge across the U.S., in addition to capturing larger marketing spends from cannabis brands as they work to obtain direct access to consumers through high engagement, omnichannel solutions.

Tuatara Transaction Overview

 

PIPE

  • Pursuant to the Subscription Agreements, the PIPE Investors agreed to subscribe for and purchase, and TCAC agreed to issue and sell to such investors, on the closing date, an aggregate of 1,310,000 shares of New SpringBig Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $13,100,000 (the “PIPE Financing”).
  • $13.1 million fully committed Class A common stock PIPE anchored by:
    • Tuatara Capital
    • Existing investors, including:
      • TVC Capital
      • Key Investment Partners
      • springbig’s Founder and CEO Jeffrey Harris.

LOCK-UP

  • The Equityholder agrees that it will not, during the period from the date of the Closing and ending on the date that is one-hundred and eighty (180) days following the date of the Closing (the “Lock-Up Period”), transfer any equity interests of Surviving Pubco (including shares of Surviving Pubco Common Stock and Converted Options) received or retained as consideration under the Merger Agreement, including:
    • Securities held in escrow or otherwise issued or delivered after the Closing pursuant to the Merger Agreement or
    • Any exercise of Company Options, (but excluding any shares of Surviving Pubco issued pursuant to that certain Subscription Agreement, by and between Equityholder and Tuatara) (collectively, the “Restricted Securities”) (a “Prohibited Transfer”).

SPONSOR ESCROW AGREEMENT

  • TCAC Sponsor, LLC (“Sponsor”), TCAC and certain of TCAC’s board of directors’ independent directors will enter into an escrow agreement (“Sponsor Escrow Agreement”) in a form and on terms and conditions reasonably acceptable to SpringBig, providing that, immediately following the closing:
    • The Sponsor and certain of TCAC’s board of directors’ independent directors shall deposit an aggregate of 1,000,000 shares of New SpringBig Common Stock (“Sponsor Earnout Shares”) into escrow.
    • The Sponsor Escrow Agreement will provide that such Sponsor Earnout Shares will either be released to the Sponsor if the closing price of the New SpringBig Common Stock equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, and recapitalizations) on any twenty (20) trading days in a thirty (30)-trading-day period at any time after the closing date and by the third anniversary of the closing date.

EARNOUT

  • Subsequent Event – On April 14, 2022 the parties amended the earnout period for SpringBig’s security holders and TCAC Sponsor, LLC (“Sponsor”) to five years from the closing date (the “Earnout Period”).
  • The amendment also provides for an increase in the number of shares of common stock of TCAC receivable by SpringBig’s security holders if the closing price of the common stock of TCAC equals or exceeds $12.00 per share from 5.5 million shares to 7.0 million shares.
  • Total earnout shares of 9 million for springbig pre-closing shareholders and equity incentive holders to be achieved in installments:
    • 5.5 million shares issued at $12.00
    • 2.25 million shares issued at $15.00
    • 1.25 million shares issued at $18.00
  • In each case if the common stock exceeds the respective share price for 20 trading days within any 30-trading day period occurring no later than 36 months following the closing of the merger

NOTABLE CONDITIONS TO CLOSING

  • There is no minimum cash requirement at closing for TCAC.

NOTABLE CONDITIONS TO TERMINATION

  • The Merger Agreement may be terminated prior to the closing of the Business Combination by either TCAC or SpringBig if the Business Combination is not consummated by July 8, 2022.

ADVISORS

  • Cantor Fitzgerald & Co. is serving as exclusive capital markets advisor to TCAC.
  • Jefferies LLC is serving as exclusive financial advisor and exclusive capital markets advisor to springbig.
  • Davis Polk & Wardwell LLP and Dentons US LLP are acting as legal counsel to TCAC.
  • Benesch, Friedlander, Coplan & Aronoff LLP is acting as legal counsel for springbig.

MANAGEMENT & BOARD

Executive Officers

Albert Foreman, 47
Chief Executive Officer and Director

Mr. Foreman has over 20 years of professional experience in private equity, corporate finance, financial technology and a broad range of transaction experience that includes the origination, structuring and execution of debt, equity and M&A transactions globally as both a principal and an agent. Mr. Foreman co-founded Tuatara Capital in 2014 and currently acts as Managing Partner and Chief Investment Officer, in which roles he is responsible for formulating Tuatara’s macro-investment strategy and for the structuring and oversight of portfolio investments. Prior to co-founding Tuatara, Mr. Foreman was a Managing Director at Highbridge Principal Strategies, LLC (“Highbridge”), a $45 billion alternative investment management business. Before Highbridge, he worked as a Managing Director in J.P. Morgan’s Financial Sponsors Group and he joined the bank as Managing Director and founding member of the management team for the J.P. Morgan Private Equity Fund Services business. Prior to his time at J.P. Morgan, Mr. Foreman was a financial technology executive at Vitech Systems Group and Virtual Growth Incorporated, and he began his career as a Management Associate in Citigroup’s Private Bank, where he co-founded Citibank’s Professional Sports Group. Academically, Mr. Foreman earned a B.S. in Finance from the University of Connecticut, a J.D. from the Sandra Day O’Connor College of Law at Arizona State University, and an MBA from Arizona State University’s W.P. Carey School of Business.

Mark Zittman, 55
Chief Operating Officer and Director

Mr. Zittman has over 30 years of professional experience with most of that time having been spent in structured finance and private investments, with most of his experience centered on sales, account management, structuring and execution of structured products in fixed income. Mr. Zittman co-founded Tuatara Capital in 2014 and currently acts as a senior advisor. For more than five years, he led the firm’s fundraising activity, deal generation and driving the co-investment process, as well as acting as the General Partners’ representative on the Limited Partner Advisory Committee. Prior to co-founding Tuatara, Mr. Zittman spent over 15 years as Senior Managing Director in Guggenheim Partners Capital Markets Group, providing customized services to hedge funds, mutual funds, insurance companies and other financial institutions. Before Guggenheim, Mr. Zittman spent three years at Greenwich Capital and specialized in structured products and other fixed income securities after working at Morgan Stanley in mortgage- and asset-backed securities and Kidder Peabody in their mortgage-backed securities sales department. Mr. Zittman began his Wall Street tenure at Merrill Lynch in their Fixed Income Futures and Options Group and prior to Wall Street, worked at Electronic Data Systems (“EDS”) in their Accounting and Financial Development training program. At EDS, Mr. Zittman worked in a variety of finance and accounting roles in various locations in the United States and Europe after earning his B.S. in Business Administration from the University of Florida and an MBA in Finance and Marketing from Columbia Business School.

Sergey Sherman, 50
Chief Financial Officer

Mr. Sherman brings over 20 years of professional experience across investment banking and finance with expertise in private equity, mergers and acquisitions, leveraged finance and credit. Mr. Sherman joined Tuatara Capital in 2019 and as Managing Director – Investments is responsible for all aspects of the investment process including origination, transaction structuring, due diligence, financing and portfolio management. Prior to Tuatara, Mr. Sherman was a Managing Director at Société Générale’s investment banking group in the U.S. and was previously in the financial sponsors groups at RBC Capital Markets and J.P. Morgan. Prior to investment banking, he was an executive in the business development/mergers and acquisitions group at GE Capital. Mr. Sherman started his career as a nuclear submarine officer in the U.S. Navy. Mr. Sherman has a B.S. in Electrical Engineering from Carnegie Mellon University and holds an MBA from The George Washington University.

 

Board of Directors

Richard Taney, 64
Director and Chairman

From 2017 to 2019 Mr. Taney was a Managing Director of Tuatara Capital and he currently is a senior advisor to the firm. From its founding in 2010 until 2016, Mr. Taney was the President, Chief Executive Officer and a board member of Curaleaf, Inc., which is a multi-state operator in the U.S. cannabis industry. Curaleaf, Inc. currently produces and/or dispenses cannabinoid-based products in twenty-three states. Since 2019, Mr. Taney has also served on the board of directors of Greenlane Holdings, Inc., a distributor of smoking accessories to the cannabis and tobacco industries. Richard earned a Bachelor of Arts degree from Tufts University and a Juris Doctor from the Temple University School of Law. Mr. Taney brings to our board of directors professional experience in public and private finance, executive management, operations and his expertise in the cannabis industry.

Jeffrey Bornstein, 55
Director 

Mr. Bornstein brings more than 30 years of corporate and investing leadership roles to our board, including as Vice Chairman and Chief Financial Officer at GE. Mr. Bornstein is presently Managing Partner of Generation Capital Partners, a private investment fund that targets small and mid-sized companies, and Managing Partner of Whipstick Ventures, LLC, an advisory firm focused on investing in and advising early stage companies. Prior to serving as Vice Chairman and CFO of General Electric from 2013 to 2017, Mr. Bornstein served in various capacities throughout GE, including as SVP and CFO of GE Capital from 2009 to 2013, SVP and CFO of GE Capital Commercial Finance from 2002 to 2008, CFO of GE Plastics from 2000 to 2002, CFO of GE Aircraft Engine Services from 1996 to 1999, Executive Audit Manager – GE Audit Staff from 1992 to 1996, and a participant of GE’s Financial Management Program from 1989 to 1992. Mr. Bornstein also currently serves as investor and board advisor to OrionPartners.ai, Four Trees Management, AlloVir, Foodspace, Noble, GS Thermal Solutions, Eos Energy Storage, ZincFive, Inc. and Emulate, Inc. Mr. Bornstein graduated with a B.S. in Business from Northeastern University in 1989.

Aris Kekedjian, 54 [Resigned 4-30-21]
Director 

Mr. Kekedjian brings more than 30 years of corporate and investing leadership roles to our board, including as Chief Investment Officer at GE. Mr. Kekedjian is presently Managing Partner of Webbs Hill Partners, providing strategic and financial solutions in the fintech, sustainability and industrial internet sectors. He is the Chairman of KreditForce, a private credit platform focused on emerging industries. Prior to serving as CIO of General Electric from 2016 to 2019, Mr. Kekedjian served in various capacities throughout GE, including as Vice President of Business Development at GE Capital from 2011 to 2016, CEO of GE Capital – MEA region from 2008-2010, CFO of GE Money – EMEA from 2004-2008, Deputy Treasurer & Managing Director, Investor Relations from 2003-2004. He began his career as a participant of GE’s Financial Management Program from 1989 to 1992, Executive Audit Manager – GE Audit Staff from 1992 to 1996 and subsequent finance and business development leadership roles across the company. Mr. Kekedjian is also senior strategic advisor to ECN Capital (TSE: ECN) and serves on the board of FinServ Acquisition Corp (Nasdaq: FSRV). Mr. Kekedjian graduated with a Bachelor of Commerce Degree in Finance from Concordia University in 1989.

 

 

 

ByKristi Marvin