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Gores Holdings V, Inc.

Gores Holdings V, Inc.

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Ardagh Metal Packaging S.A.

ENTERPRISE VALUE: $8.5 billion
ANTICIPATED SYMBOL: AMBP

Gores Holdings V, Inc. proposes to combine with Ardagh Group S.A.’s metal packaging business that will be held by Ardagh Metal Packaging S.A. (the “Company,” “Ardagh Metal Packaging” or “AMP”). The Company intends to apply to list its shares on the New York Stock Exchange (“NYSE”) under the new ticker symbol “AMBP”.

AMP is a global leader in the supply of sustainable and infinitely-recyclable beverage cans. The Company has a leading presence in the Americas and Europe and is the second-largest beverage can producer in Europe and the third-largest in North America and Brazil. As the only pure-play beverage can company, AMP products touch billions of consumers worldwide. The Company believes that strong demand in traditional and new beverage categories coupled with environmentally-conscious end consumers are driving an inflection point in beverage can demand and the Company is well positioned to capitalize on these multifaceted growth opportunities. The Company has a compelling financial profile, with a clear and tangible growth trajectory backed by long-term customer contracts and expects to double Adjusted EBITDA from $545 million in 2020 to over $1.1 billion in 2024.

TRANSACTION

  • The combined company is expected to have an enterprise value of approximately $8.5 billion at closing, representing 10.5x AMP’s projected 2022 Adjusted EBITDA.
  • Together with the cash held in Gores Holdings V’s trust account, additional investors have committed to participate in the proposed business combination by purchasing 60 million shares of AMP for an aggregate purchase price of $600 million in a private placement (the “PIPE”) at $10.00 per share.
  • As a first step in the transaction, AMP will raise new debt of approximately $2.65 billion, (approximately $2.3 billion net), representing a multiple of 3.3x of 2021E pro forma Adjusted EBITDA.
  • Assuming no share redemptions by the public stockholders of Gores Holdings V, approximately $525 million in cash held in Gores Holdings V’s trust account, together with the $600 million in private placement proceeds and approximately $2.3 billion of the new debt raised by AMP, will be used to pay up to $3.4 billion in cash to Ardagh, as well as to pay transaction expenses.
  • Upon closing of the transactions, assuming no redemptions by Gores Holdings V’s public stockholders, Ardagh will retain an equity interest in the Company of approximately 80%, the PIPE investors in the private placement will hold approximately 10% and Gores Holdings V’s stockholders and its sponsor will hold approximately 10%.

Gores v trans overview

PIPE

  • Investors and the Sponsor agreed to purchase, and AMPSA agreed to sell to the investors and the Sponsor the PIPE Shares for an aggregate cash amount of $600,000,000 at $10.00 per share.
    • The Sponsor’s Subscription Agreement is substantially similar to the Subscription Agreement for the investors, except that
      • (i) the Sponsor has agreed to subscribe for up to an additional 9,500,000 AMPSA Shares (the “Backstop Shares”) for a purchase price of $10.00 per share in the event that redemptions of the Company’s Class A Common Stock, if any, result in an aggregate redemption price of more than $1,000,000 and
      • (ii) the Sponsor has the right to syndicate the PIPE Shares required to be purchased under the Sponsor’s Subscription Agreement in advance of the closing of the Business Combination, provided that such syndication shall not relieve the Sponsor of the obligation to ensure that all of the PIPE Shares are acquired and paid for.

EARNOUT 

  • (Company) During the five-year period commencing 180 days after the Closing 60,730,000 additional AMPSA Shares in five equal installments depending on whether the price of AMPSA Shares maintains for a certain period of time a volume weighted average price of $13.00, $15.00, $16.50, $18.00 or $19.50

LOCKUP

  • 180 days for both the Company and Gores

NOTABLE CONDITIONS TO CLOSING

  • The $600,000,000 gross proceeds from the private placement shall have been paid to AMPSA on the date the Merger is consummated

NOTABLE CONDITIONS TO TERMINATION

  • If the Business Combination has not been consummated by September 30, 2021 and the delay in closing prior to such date is not due to the breach of the Business Combination Agreement by the party seeking to terminate.

ADVISORS

  • Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC are acting as financial advisors and capital markets advisors to Gores Holdings V and as joint lead placement agents on the PIPE.
  • Weil, Gotshal & Manges, LLP and Loyens & Loeff N.V. are acting as legal advisors to Gores Holdings V.
  • Citigroup is acting as exclusive financial advisor to Ardagh and is acting as joint lead placement agent on the PIPE.
  • Shearman & Sterling LLP is acting as legal advisor to Ardagh.

MANAGEMENT & BOARD

Executive Officers

Mark R. Stone, 56
CEO

Mr. Stone is a Senior Managing Director of The Gores Group. Mr. Stone is a member of the Investment Committee and a member of the Office of the Chairman of The Gores Group. Mr. Stone has worked at The Gores Group for more than ten years, primarily focusing on worldwide operations of all Gores’ portfolio companies and all Gores’ operational due diligence efforts. He has been a senior team member with key responsibility in several turnaround, value-oriented investment opportunities, including Stock Building Supply, a supplier of building materials and construction services to professional home builders and contractors in the Unites States; United Road Services, a provider of finished vehicle logistics services; and Sage Automotive Interiors, the largest North American manufacturer of high performance automotive seat fabrics. Mr. Stone has also been involved with the acquisitions, successful carve-outs and transformations of Lineage Power and VincoTech, manufacturers of telecom conversion products, electronic OEMs, power modules, GPS products and electronic manufacturing services, from TE Connectivity Ltd.; Therakos, a global leader in advanced technologies for extracorporeal photopheresis (ECP), from Johnson & Johnson; and Sagem Communications, a Paris-based manufacturer of set-top boxes, residential terminals, printers and other communications equipment, from the Safran Group. He has served as Executive Chairman and/or CEO of several portfolio companies including Siemens Enterprise Communications, a leading Munich-based global corporate telephony (PBX) and unified communications (UC) solutions provider, and Enterasys Networks, a global network solutions provider. Mr. Stone also served as the Chief Executive Officer of Gores Holdings I from its inception in June 2015 until completion of the Hostess acquisition in November 2016 and served as a Director of Hostess until April 2018. Additionally, Mr. Stone served as the Chief Executive Officer of Gores Holdings II since its inception in August 2016 until completion of the Verra acquisition in October 2018, as the Chief Executive Officer of Gores Holdings III since its inception in October 2017 until the completion of the PAE acquisition in February 2020 and as the Chief Executive Officer of Gores Holdings IV, since June 2019. Prior to joining The Gores Group, Mr. Stone spent nearly a decade as a chief executive transforming businesses across the services, industrial and technology sectors. Mr. Stone spent five years with The Boston Consulting Group as a member of their high technology and industrial goods practices and served in the firm’s Boston, London, Los Angeles and Seoul offices. Mr. Stone earned a B.S. in Finance with Computer Science and Mathematics concentrations from the University of Maine and an M.B.A. in Finance from The Wharton School of the University of Pennsylvania.

Andrew McBride, 39
CFO and Secretary

Mr. McBride has served as Director, Finance and Tax at The Gores Group since February 2010, where he is responsible for tax due diligence and structuring of acquisitions, compliance, planning, financial management and portfolio company reporting. Mr. McBride also served as the Chief Financial Officer and Secretary of Gores Holdings I from January 2016 until completion of the Hostess acquisition in November 2016. Additionally, Mr. McBride served as the Chief Financial Officer and Secretary of Gores Holdings II since its inception in August 2016 until completion of the Verra acquisition in October 2018 and as the Chief Financial Officer and Secretary of Gores Holdings III since its inception in October 2017 until the completion of the PAE acquisition in February 2020. Mr. McBride has also served as the Chief Financial Officer of Gores Metropouluos since its inception in August 2018 and as the Chief Financial Officer of Gores Holdings IV since June 2019. Previously, from January 2008 to January 2010, Mr. McBride worked in the High Net Worth group at Ehrhardt, Keefe, Steiner, and Hottman, P.C. From January 2004 to January 2008, Mr. McBride was with KPMG, LLP, assisting international corporations with tax planning, structuring and compliance issues. Mr. McBride holds a B.S. in Accounting and Finance from the University of Notre Dame and is licensed as a Certified Public Accountant in the State of Colorado.

Board of Directors

Alec Gores, 67
Chairman of the Board of Directors

Mr. Gores is the Founder, Chairman and Chief Executive Officer of The Gores Group, a global investment firm focused on acquiring businesses that can benefit from the firm’s operating expertise. Mr. Gores implemented an operational approach to private equity investing when he founded The Gores Group in 1987 by operating businesses alongside management, or in some cases in lieu of management, to build value in those entities. Since then, the firm has acquired more than 120 businesses including a current portfolio of 8 active companies worldwide. Mr. Gores began his career as a self-made entrepreneur and operating executive. In 1978, he self-funded and founded Executive Business Systems (EBS), a developer and distributor of vertical business software systems. Within seven years, EBS had become a leading value-added reseller in Michigan and employed over 200 people. In 1986, CONTEL purchased EBS, and Mr. Gores subsequently began acquiring and operating non-core businesses from major corporations and building value in those entities, a decision that ultimately led to the founding of what has evolved into The Gores Group today. Under his leadership, The Gores Group has continued to acquire businesses in need of operational and financial resources, while creating value and working with management teams to establish an entrepreneurial environment as a foundation for sustainable growth. This philosophy has served the firm well. Mr. Gores served as the Chairman of the Board of Directors of Gores Holdings I from its inception in June 2015 until completion of the Hostess acquisition in November 2016, as the Chairman of the Board of Directors of Gores Holdings II since its inception in August 2016 until completion of the Verra acquisition in October 2018 and as the Chairman of the Board of Directors of Gores Holdings III since its inception in October 2017 until the completion of the PAE acquisition in February 2020. Additionally, Mr. Gores has served as the Chief Executive Officer and Director of Gores Metropoulos since its inception in August 2018 and as the Chairman of the Board of Directors of Gores Holdings IV since June 2019. Mr. Gores holds a degree in Computer Science from Western Michigan University.

Randall Bort, 55
Director

Mr. Bort is a Co-Founder of SandTree Holdings, LLC, a private commercial real estate investment firm since November 2012. Previously, Mr. Bort was an investment banker at Drexel Burnham Lambert, BT Securities, Donaldson, Lufkin & Jenrette, Credit Suisse First Boston, The Mercanti Group and Imperial Capital. Mr. Bort has significant financial, transactional and capital markets experience across multiple industries and has worked both domestically and in Asia. Mr. Bort earned a B.A. in Economics and Mathematics from Claremont McKenna College and an M.B.A. in Finance and Entrepreneurial Management from The Wharton School of the University of Pennsylvania. Mr. Bort served as a member of the Board of Directors of Gores Holdings I from August 2015 until completion of the Hostess acquisition in November 2016 and as a member of the Board of Directors of Verra Mobility Corp. (formerly Gores Holdings II) from January 2017 until completion of the Verra acquisition in October 2018. Additionally, Mr. Bort has served as a member of the Board of Directors of Gores Holdings III since its inception in October 2017 until the completion of the PAE acquisition in February 2020 and as a member of the Board of Directors of Gores Holdings IV, since January 2020. Mr. Bort also is a member of the Board of Trustees of Children’s Bureau, a non-profit organization based in Los Angeles focused on foster care and the prevention of child abuse.

William Patton, 74
Director 

Mr. Patton is Chairman, Chief Executive Officer and Co-Founder of The Four Star Group, a consulting and advisory firm focused on the civilian fields of Defense, Space, Military and Security. Mr. Patton has served as chairman, president and/or chief executive officer of a number of private and public companies including Unisys, Cado Systems, MAI Basic Four and Peerless Systems and has spent his entire career in the related fields of computer systems and telecommunications technology. Mr. Patton served as a member of the Board of Directors of Gores Holdings I from August 2015 until completion of the Hostess acquisition in November 2016 and as a member of the Board of Directors of Verra Mobility Corp. (formerly Gores Holdings II) from January 2017 until June 2019. Additionally, Mr. Patton has served as a member of the Board of Directors of Gores Holdings III since its inception in October 2017 until the completion of the PAE acquisition in February 2020 and as a member of the Board of Directors of Gores Holdings IV, since January 2020. Mr. Patton holds an undergraduate Business degree from Santa Monica City College and a B.S. in Petroleum Engineering from the Missouri School of Science & Technology graduating cum laude, and attended the Harvard Business School PMD Program. Mr. Patton was the Co-Founder and first President of the United States Academic Decathlon, now recognized as the nation’s largest high school competition emphasizing academic excellence including most of the United States and many international schools. Mr. Patton served as an officer and Ranger in the United States Army for nine years, attaining the rank of Major.

Jeffrey Rea, 55
Director 

Mr. Rea currently serves as a director of BMC Stock Holdings, Inc. (NASDAQ: STCK). Mr. Rea previously served as President, Chief Executive Officer and Director of Stock Building Supply Holdings, Inc. from November 2010 to December 1, 2015, at which time the company was merged with Building Materials Holding Corporation to create BMC Stock Holdings, Inc. Prior to that, Mr. Rea served as President of the specialty products group at TE Connectivity Ltd. from 2008 to 2010. Prior to that, Mr. Rea was the Senior Vice President of the building products group at Johns Manville, a global manufacturer of highly engineered materials and building products, which is owned by Berkshire Hathaway Company. Before joining Johns Manville, Mr. Rea served for 15 years in various leadership roles at General Electric Company, including general management, sales and marketing, distribution management and supply chain leadership positions. Mr. Rea also served for five years with its corporate audit staff. Mr. Rea served as a member of the Board of Directors of Gores Holdings I from August 2015 until completion of the Hostess acquisition in November 2016 and as a member of the Board of Directors of Verra Mobility Corp. (formerly Gores Holdings II from January 2017 until June 2019. Additionally, Mr. Rea has served as a member of the Board of Directors of Gores Holdings III since its inception in October 2017 until the completion of the PAE acquisition in February 2020 and as a member of the Board of Directors of Gores Holdings IV, since January 2020. Mr. Rea received a degree in mechanical engineering from Rose-Hulman Institute of Technology.

ByRoman Developer