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SVF Investment Corp. 3

SVF Investment Corp. 3

Feb 5, 2021 by Matt Cianci

PROPOSED BUSINESS COMBINATION: Symbotic LLC

ENTERPRISE VALUE: $4.8 billion
ANTICIPATED SYMBOL: SYM

SVF Investment Corp. 3 proposes to combine with Symbotic LLC, a revolutionary A.I.-enabled technology platform for the supply chain.

  • Symbotic’s A.I.-powered software acts as the conductor of a team of robots that receive, store and retrieve a virtually unlimited number of products.
  • At the core of the system is a fleet of several hundred autonomous, intelligent, mobile robots called “Symbots.”
  • These fully autonomous fleets of Symbots move products at speeds up to 25 mph with 99.9999% accuracy to and from random access storage structures.
  • As products exit the system, A.I.-enabled robots use proprietary end of arm tools and vision to output cases, totes and packages at some of the fastest speeds in the industry.
  • The system enhances storage density, increases available SKUs, reduces product damage and improves throughput and speed to customers.

TRANSACTION

  • The transaction values Symbotic at a pro forma enterprise value of $4.8 billion, representing 4.8x Symbotic’s forecast 2023 calendar year end estimated revenues, and a pro forma equity value of approximately $5.5 billion.
  • The transaction is expected to deliver up to $725 million of primary gross proceeds, consisting of $320 million of cash in trust from SVFC, assuming no public shareholders of SVFC exercise their redemption rights, a $205 million common equity PIPE at a $10.00 per share entry price, including a $150 million PIPE participation from Walmart, and a $200 million forward purchase of common equity at $10.00 per share by an affiliate of SoftBank Vision Fund 2.
  • The minimum cash of the transaction is fully covered by the $405 million of committed equity capital that Symbotic and SVFC have raised, reducing potential transaction uncertainty.
  • Symbotic also expects to receive an additional $174 million in cash from Walmart by the end of December to be used for general corporate purposes as a result of Walmart gross exercising warrants it holds in the Company.
  • The proceeds of the transaction will enable Symbotic to accelerate its growth plans, provide Symbotic with the flexibility to continue innovating to streamline its customers’ supply chains, and to efficiently deliver on its contracted backlog while achieving its growth targets.
  • The Company also continues to invest in innovation to expand the application of its core technology to new use cases.
  • This includes expansion into new verticals such as auto parts, home improvement and apparel as well as entering new geographies

SVF 3 Transaction Overview

PIPE

  • $205 million common equity PIPE at a $10.00 per share entry price from a select group of leading strategic and institutional investors, including a $150 million PIPE participation from Walmart.
  • A $200 million forward purchase of common equity at $10.00 per share by an affiliate of SoftBank Vision Fund 2.
  • Symbotic also expects to receive an additional $174 million in cash from Walmart by the end of December to be used for general corporate purposes as a result of Walmart gross exercising warrants it holds in the Company.

LOCK-UP

  • The Sponsor, the SVF Insiders, SVF and Warehouse (the “Sponsor Letter Agreement Parties”) entered into a letter agreement (the “Sponsor Letter Agreement”) pursuant to which the Sponsor and the SVF Insiders agreed not to transfer any Sponsor Shares until the earlier of:
    • (i) one year after the completion of an initial business combination or
    • (ii) the date following the completion of an initial business combination on which SVF completes a liquidation, merger, share exchange or other similar transaction that results in all of SVF’s shareholders having the right to exchange their SVF Ordinary Shares for cash, securities or other property.
  • If, subsequent to the Closing, the last reported sale price of the Surviving Pubco Class A Common Stock equals or exceeds $12.00 per share for any 20 trading days within a 30-trading day period commencing at least 150 days after the Closing, the Sponsor Shares shall be released from the foregoing lock-up.

EARNOUT

  • The holders of outstanding Symbotic Common Units as of the Effective Time will also have contingent rights to receive up to an aggregate of 20,000,000 Earnout Interests.
  • Each holder will be entitled to receive Earnout Interests in accordance with their Earnout Pro Rata Share in three tranches upon the occurrence of the following milestones on or prior to the seventh anniversary of the Closing:
    • (i) a one-time issuance of 6,666,667 Earnout Interests on the first date on which the volume-weighted average price of shares of Surviving Pubco Class A Common Stock over any 20 trading days within the preceding 30 consecutive trading day period (the “VWAP Price”) is greater than or equal to $12.00 (“Triggering Event I”).
    • (ii) a one-time issuance of 6,666,667 Earnout Interests on the first date on which the VWAP Price is greater than or equal to $14.00 (“Triggering Event II”).
    • (iii) a one-time issuance of 6,666,666 Earnout Interests on the first date on which the VWAP Price is greater than or equal to $16.00 (“Triggering Event III”).

NOTABLE CONDITIONS TO CLOSING

  • The obligation of Warehouse to consummate the Merger is also subject to the fulfillment of the amount of Closing SVF Cash being equal to or exceeding $350,000,000.

NOTABLE CONDITIONS TO TERMINATION

  • The Merger Agreement may be terminated at any time, but not later than the Closing, by SVF if Warehouse fails to deliver the PCAOB Audited Financials by February 28, 2022

ADVISORS

  • Goldman Sachs & Co. LLC is serving as exclusive financial advisor and Sullivan & Cromwell LLP is serving as legal advisor to Symbotic.
  • Deutsche Bank Securities is serving as exclusive financial advisor as well as capital markets advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal advisor to SVFC.
  • Goldman Sachs & Co. LLC and Deutsche Bank Securities are also serving as lead Placement Agents on behalf of SVFC.

MANAGEMENT & BOARD

Executive Officers

Ioannis Pipilis, 44
Chairman of the Board and Chief Executive Officer

Mr. Pipilis serves as Managing Partner at Softbank Investment Advisers in London. In addition to his investing and portfolio management responsibilities he is also responsible for the financing activities of the fund. Prior to joining SBIA, he was Global Head of Fixed Income & Currencies at Deutsche Bank AG. He was responsible for all trading, lending and structuring activities across public and private credit, rates, currencies and emerging markets. He had been at Deutsche Bank since 2000 and held various previous roles in London and New York including co-Head of Global Credit Trading, Head of the Institutional Client Group and Global Head of Credit Structuring. He also served on the board of the Association for Financial Markets in Europe. He holds an MSc in Finance and an MSc in Civil Engineering from Imperial College London and a Bachelor of Engineering in Civil and Environmental Engineering from University College London.

Navneet Govil, 48
Director and Chief Financial Officer

Mr. Govil currently serves as a Managing Partner and Chief Financial Officer of SoftBank Investment Advisers (SBIA). Prior to joining SoftBank, Mr. Govil served in senior corporate officer roles for publicly traded multinational corporations. At CA Technologies, Mr. Govil was Senior Vice President of Finance and Strategic Pricing, where he led treasury, corporate business development, pricing and business unit finance functions. Previously, he was Vice President of Corporate Development and Project Finance as well as Treasurer at SunPower Corporation. Mr. Govil also served in several capacities during his eight-year tenure at Sun Microsystems, most recently as Controller for its Microelectronics Group. He also held finance positions at Hewlett-Packard, Pfizer and Fortistar Capital. Mr. Govil currently serves as a member of the Audit Committee for the board of directors of ARM Holdings and as board director of SBIA US. Mr. Govil earned MBA and Master of Engineering degrees from Cornell University.

Board of Directors

Michael Carpenter, 73
Director

As an executive, Mr. Carpenter served as Chief Executive Officer of Ally Financial, Inc., formerly GMAC. from November 2009 to February 2015. From 2002 to 2006, he was Chairman and Chief Executive Officer of Citigroup Alternative Investments. From 1998 to 2002, Mr. Carpenter was Chairman and Chief Executive Officer of Citigroup’s Global Corporate & Investment Bank with responsibility for Salomon Smith Barney Inc. and Citibank’s corporate banking activities globally. Michael Carpenter is currently a Director of CIT and CIT Bank, N.A. He also serves on the boards of AutoWeb, Inc., Rewards Network, Client 4 Life Group, Validity Capital and as Chairman of Law Finance Group. Mr. Carpenter received a Bachelor of Science degree from the University of Nottingham, England, and an MBA from Harvard Business School, where he was a Baker Scholar. He also holds an honorary degree of Doctor of Laws from the University of Nottingham.

Michael Tobin, 57
Director

As Chief Executive, Michael Tobin OBE led TelecityGroup plc, a leading FTSE250 Technology company from 2002 to 2014. He grew the business organically & acquired businesses transforming the company from £6m market cap in 2002 to being a top performer in the FTSE250 worth over £2.5Bn. Prior to joining TelecityGroup, Tobin headed-up Fujitsu’s e-Commerce operations in Frankfurt, Germany. Before that, he ran ICL’s Danish outsourcing subsidiary out of Copenhagen Denmark. He also held several senior positions based in Paris for over 11 years including Business Development Director at International Computer Group coordinating global distribution of IT infrastructure. As a Non-Exec, he holds numerous Technology Directorships including Instrumental Ltd in London & is the Chair of AIM listed Audioboom and BigBlu Broadband plc, and also Pulsant and Ultraleap in the UK. In addition he is advisor to the board at Leaseweb in the Netherlands. Previous notable Non Exec roles held include PACNET in Hong Kong, ITConic in Spain, Datapipe in New York, Teraco in South Africa, and Basefarm in Norway.

 

ByMatt Cianci