East Resources Acquisition Company *
PROPOSED BUSINESS COMBINATION: Abacus Life, Inc
ENTERPRISE VALUE: $618 million
ANTICIPATED SYMBOL: ABAL
East Resources Acquisition Company proposes to combine with Abacus Life, Inc.
Abacus is a vertically integrated alternative asset manager specializing in life insurance products. Since 2004, the Company has purchased life insurance policies from consumers seeking liquidity and has actively managed those policies over time (via trading, holding, and / or servicing).
Over the past 18 years, the Company has built an institutionalized origination and portfolio management process that is supported by a 59-person team, long-term relationships with 78 institutional partners and 30,000 financial advisors, and the ability to operate in 49 states. The Company has serviced approximately $950 million in policies and has managed assets for large asset managers and third-party investment funds.
SUBSEQUENT EVENT – 4/20/23 – LINK
- The SPAC extended the Outside Date to July 27, 2023.
EXTENSION – 1/23/23 – LINK
- The SPAC approved the monthly extension from January 27, 2023 to July 27, 2023
- The Company will deposit $94,249.55 per month into the Trust Account.
- 6,862,925 shares were redeemed at a per-share redemption price of approximately $10.21
SUBSEQUENT EVENT – 12/2/22 – LINK
- On December 2, 2022, ERES and East Asset Management, LLC, a Delaware limited liability company, entered into an agreement (the “Termination Agreement”) to terminate that certain Forward Purchase Agreement, dated as of July 2, 2020, by and between ERES and the Purchaser, effective as of December 2, 2022.
TRANSACTION
- Abacus owners will roll 100% of their existing equity holdings into the combined company and are expected to own approximately 70% of the combined company on a non-fully diluted basis immediately following the closing of the transaction, assuming no redemptions by ERES’s public stockholders.
- The transaction, which has been unanimously approved by the boards of both ERES and Abacus.
- The combination is expected to close as early as the fourth quarter of 2022
- To the extent, the Aggregate Transaction Proceeds exceed $200.0 million, at the election of the Company Members, up to $20.0 million of consideration payable in cash on a pro rata basis to the Company Members.
PIPE
- Abacus is opportunistically seeking to raise a PIPE post-announcement
LOCK-UP
- The lock-up period for legacy Abacus equity holders & SPAC Sponsor is:
- 24 months post-closing for 85% of total shares and
- 12 months for the remaining 15%
NOTABLE CONDITIONS TO CLOSING
- The Aggregate Transaction Proceeds, plus the Sponsor PIK Note Amount (as defined below), if any, must be equal to or greater than $1,000,000 (the “Minimum Cash Amount”), and evidence thereof must have been delivered to the Companies
NOTABLE CONDITIONS TO TERMINATION
- By the Companies if any representation or warranty of the ERES Parties is not true and correct or if ERES has failed to perform any covenant or agreement made by ERES in the Merger Agreement, such that the conditions to the obligations of the ERES Parties, as described above, could not be satisfied and the breach causing such representations and warranties not to be true and correct, or the failure to perform any covenant or agreement, as applicable, is not cured or cannot be cured within the earlier of
- (i) thirty days after written notice of such breach is delivered to ERES by each of the Companies and
- (ii) January 27, 2023 (the “Outside Date”)
- The SPAC extended the Outside Date to July 27, 2023. – LINK
ADVISORS
- Aviditi Advisors is serving as exclusive strategic and financial advisor to ERES
- Latham & Watkins LLP is acting as legal counsel to ERES.
- Locke Lord LLP is acting as Abacus’s legal counsel.
EXTENSION – 7/25/22 – LINK
- The SPAC approved the extended time to complete a business combination from July 27, 2022, to January 27, 2023
- At the meeting, 24,781,028 shares were redeemed at approximately $10.01/share
SUBSEQUENT EVENT – 7/19/22 – LINK
- The SPAC announced that it has entered into a non-binding letter of intent (“LOI”) for a business combination with a vertically integrated alternative asset manager specializing in specialty insurance products, with a focus on origination, asset management, valuation, and servicing
- Under the terms of the LOI, the Company and Target would become a combined entity, with the Target’s existing equity holders rolling over 100% of their equity into the combined public company.
- The Company expects to announce additional details regarding the proposed business combination when a definitive agreement is executed, which is expected later in the third quarter of 2022.
MANAGEMENT & BOARD
Executive Officers
Terrence (Terry) M. Pegula, 69
Chairman, Chief Executive Officer & President
Mr. Pegula is one of the most experienced Chief Executive Officers in the Appalachian Basin, with over 40 years of success forming multiple oil & gas companies. Mr. Pegula has a proven operating and investing track record in the energy sector. In 2010, he sold assets of East Resources, Inc. to Royal Dutch Shell plc (“Shell”) for $4.7 billion. In 2014, he was the majority owner of assets sold by HG Energy, LLC (“HG Energy”) to American Energy Partners, LP (“American Energy Partners”) for $1.75 billion. At the respective times that both divestures occurred, East Resources, Inc. was not burdened with significant debt. Mr. Pegula has experience operating all segments of the value-chain, including upstream, midstream, processing and local distribution company assets. Mr. Pegula is currently the Owner and Vice President of East Management Services, an affiliate of our sponsor. Mr. Pegula also currently owns entities operating small assets in Texas, Colorado and Wyoming. Mr. Pegula is married to Kim Pegula, who currently serves as a Director. Mr. and Ms. Pegula also own the Buffalo Sabres professional hockey team and the Buffalo Bills professional football team. Mr. Pegula graduated from the Pennsylvania State University in 1973 with a degree in Petroleum and Natural Gas Engineering. In 2007 he was the recipient of the University’s prestigious C. Drew Stahl Distinguished Achievement Award in Petroleum & Natural Gas Engineering. In 2011 he was appointed by Pennsylvania Governor Tom Corbett to his Marcellus Shale Advisory Commission and was also named Penn State’s Philanthropist of the Year in recognition of his past support and for the gift that provided the funds for the University to construct the Pegula Ice Arena and develop an NCAA Division I hockey program. In 2014 he received Penn State’s Distinguished Alumni Award. In 2018 he was appointed by Pennsylvania Governor Tom Wolf to Penn State’s Board of Trustees, on which he still serves. Finally, in 2020 he was appointed by the Department of Energy Secretary Dan Brouillette to serve on the National Petroleum Counsel.
Gary L. Hagerman, Jr., 42
Chief Financial Officer, Treasurer
Mr. Hagerman joined East Management Services, an affiliate of our sponsor, in August of 2015 as the Chief Accounting Officer after spending the prior twelve years at Pittsburgh-based accounting firm Sobol Veltum & Associates working as the manager overseeing all audit and assurance, tax, and advisory services provided to the entities owned by Terrence and Kim Pegula. In January of 2018, he was promoted to Chief Financial Officer of East Management Services, JKLM Energy and all the other companies owned and operated by the Pegulas. Mr. Hagerman holds a B.S. degree in Accounting from West Liberty State College and is a licensed CPA in Pennsylvania and West Virginia.
John P. Sieminski, 62
General Counsel & Secretary
Mr. Sieminski joined East Resources, Inc. in April of 2008 as the company’s first General Counsel after spending over seventeen years in private law practice with two law firms in Pittsburgh, Pennsylvania. Mr. Sieminski played key contract negotiation, due diligence and overall transactional administrative roles in East Resources, Inc.’s issuance of convertible debt instruments to Kohlberg Kravis & Roberts & Co. (“KKR”) in 2009, with a deal value of $330 million, the sale of East’s Pennsylvania, New York, and Greater Rocky Mountain assets to Shell in 2010, and the sale of West Virginia and Ohio producing assets to affiliates of American Energy Partners in 2014 with a deal value $1.75 billion. Mr. Sieminski has been involved in the formation and management of multiple entities owned by Terrence and Kim Pegula in the areas of oil & gas, professional sports, investments, real estate, and entertainment. Mr. Sieminski is currently the General Counsel and Secretary of East Management Services, JKLM Energy and East Asset Management, all affiliates of our sponsor. Mr. Sieminski received a B.A. in psychology from The Pennsylvania State University and a Juris Doctor from Duquesne University School of Law in Pittsburgh, where he was a member of the Law Review. He is actively involved in JKLM Energy’s activities as an executive board member of the Marcellus Shale Coalition.
Adam Gusky, 45
Chief Investment Officer
Mr. Gusky has served as the Chief Investment Officer of East Management Services, an affiliate of our sponsor since the inception of East Management Services in 2010. At East Resources, Inc., Mr. Gusky was responsible for all financial due diligence for acquisitions, and he was in charge of the reserve-based lending facility. He also developed and implemented the corporate hedging strategy. Mr. Gusky currently serves on the Board of Directors of Rand Capital Corporation, a publicly traded business development company, where East Asset Management made a control investment. Mr. Gusky received his B.A. in History and his MBA from Duke University.
Ben Wingard, 33
Vice President, Business Development
Mr. Wingard has extensive experience across upstream oil and gas and has served as Mr. Pegula’s main oil and gas advisor since 2013. As Vice President of Business Development at East Management Services, an affiliate of our sponsor, Mr. Wingard put together three drilling partnerships and led acquisition and divestiture efforts. Mr. Wingard joined East Resources, Inc. in 2008 and worked in both operational and corporate strategy capacities, culminating in the 2010 asset sale to Shell. Following the sale, Mr. Wingard worked at Shell for two years in asset development and midstream roles before returning to the East portfolio of companies in 2013. Mr. Wingard has experience in drilling and reservoir engineering in offshore Gulf of Mexico. He holds a B.S. degree in Petroleum and Natural Gas Engineering from the Schreyer Honors College of the Pennsylvania State University.
Jacob Long, 32
Vice President, Operations
. Long has served as Operations Manager and Vice President of Operations for JKLM Energy, an affiliate of the Company, since January 2016, overseeing the development of 38 deep, high-pressured Utica wells in north-central Pennsylvania. Mr. Long concurrently managed the West Texas exploration program and legacy oil production in Colorado. Prior to JKLM Energy, Mr. Long worked at HG Energy in various management roles related to production, reservoir, and A&D evaluation for conventional and unconventional assets. He was also a part of the team for the 2014 sale to American Energy Partners. Mr. Long holds a B.S. degree in Petroleum Engineering from Marietta College.
Board of Directors
James S. Morrow, 48
Director
Mr. Morrow is a veteran portfolio manager with over 20 years of experience. Mr. Morrow has served as Chief Executive Officer of Callodine Capital Management, LP (“Callodine”) since founding Callodine in 2018. Prior to this, Mr. Morrow spent 19 years at Fidelity Investments Inc. (“Fidelity”) where he managed $40 billion of assets across multiple equity-income strategies, including a $3-5 billion energy portfolio. Prior to Fidelity, Mr. Morrow worked in distressed debt for Chase Manhattan Bank. Mr. Morrow received his Bachelor of Science in Finance from the University of Buffalo and his MBA from the University of Chicago.
Kim S. Pegula, 51
Director
Ms. Pegula has served as the President and Chief Executive Officer of East Management Services, an affiliate of our sponsor, since 2011. She is also the President and Chief Executive Officer of Pegula Sports and Entertainment and President of both the Buffalo Bills and Buffalo Sabres. A native of Fairport, NY, she attended nearby Houghton College and graduated in 1991 with a degree in communications. She began her professional career with East Resources, Inc. in 1991 and was involved with the company until its sale in 2010. She has served as an independent director of Republic Services, Inc. (NYSE: RSG) since 2017. Ms. Pegula is married to Terry Pegula, our Chairman, Chief Executive Officer and President.
William A. Fustos, 62
Director
Mr. Fustos has worked in the oil and gas industry for more than 35 years, first with Texaco as a reservoir engineer, and then with several independent oil companies. In 1994, he formed Fustos Energy Services, an engineering firm whose work included reservoir engineering consulting along with a contract well servicing business. In 1998, he joined East Resources, Inc. as Vice President of Operations, eventually holding the position of Chief Operating Officer. As COO, Mr. Fustos’s duties included supervision and oversight of all the operational and strategic activities of East Resources, Inc. He was elected a Director of the Marcellus Shale Coalition in 2009, an industry organization founded to lead the oil and gas industry’s regulatory and political efforts in Pennsylvania. He has served as chair of Penn State’s Corporate Relations Subcommittee the College of Earth and Mineral Sciences’ Development Council and in 2012 was the recipient of Penn State’s prestigious C. Drew Stahl Distinguished Achievement Award in Petroleum & Natural Gas Engineering. Since 2017, Mr. Fustos has served as a member of the Board of Directors for HG Energy II, LLC, a large independent upstream oil and gas company based in Parkersburg, WV. Also since 2017, Mr. Fustos has served on the board of Penn Hills Resources, LLC. He graduated from Penn State in 1979 with a degree in Petroleum and Natural Gas Engineering and has been licensed as a Professional Engineer in the Commonwealth of Pennsylvania.
Thomas A. Lopus, [Appointed 9/10/21]
Independent Director
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Thomas W. Corbett, Jr., 71
Director
Mr. Corbett has been the principal member of Corbett Consulting, LLC since 2015 and, from 2011 to 2015, served as the Governor of Pennsylvania. He has also served as the state’s Attorney General and as the US Attorney for the Western District of Pennsylvania. Mr. Corbett received a B.A. in political science from Lebanon Valley College and a Juris Doctor from St. Mary’s University Law School. He was a member of the board of directors for Composites Consolidation Company LLC from 2015 to 2016 and was a member of the board for Animal Friends of Pittsburgh until 2019. He currently serves on the board of the Variety Club, The Children’s Charity Pittsburgh.