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New Providence Acquisition Corporation

New Providence Acquisition Corporation

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: AST & Science LLC

ENTERPRISE VALUE: $1.4 billion
ANTICIPATED SYMBOL: ASTS

AST & Science LLC announced it has entered into a business combination agreement with New Providence Acquisition Corp. (“New Providence”) (NASDAQ: NPA, NPAUU and NPAWW). Upon closing of the transaction, AST SpaceMobile will become a publicly traded company, and it is expected that its common stock will be listed on the NASDAQ exchange under the symbol “ASTS” upon closing the transaction. Abel Avellan, Chairman and Chief Executive Officer of AST SpaceMobile, will continue to lead the business post-transaction. The combined company will have an implied pro forma enterprise value of approximately $1.4 billion and is expected to have an equity value of approximately $1.8 billion at closing.

AST SpaceMobile will deliver seamless broadband cellular connectivity directly to unmodified, existing mobile phones, without any need for specialized hardware. With an expected initial access to 1.3 billion subscribers of some of the world’s largest cellular operators, AST SpaceMobile will be positioned to rapidly scale its revenue streams as it deploys its space assets for nearly complete global coverage, while benefitting from operating leverage and low maintenance capital costs via its super-wholesale, business-to-business model.  Once deployed, AST SpaceMobile’s services will meet the needs of at least five billion mobile subscribers who face broadband connectivity issues when moving in and out of cellular coverage, and will enable access by more than half of the world population that do not have internet on their phone.

TRANSACTION

New Providence, which currently holds approximately $232 million in cash in trust, will combine with AST SpaceMobile at an estimated $1.4 billion pro forma enterprise value, or 1.4 times calendar year 2024’s estimated EBITDA of approximately $1 billion. The company will have no debt on the balance sheet at closing. Assuming no redemptions by New Providence’s existing public stockholders, AST SpaceMobile’s existing shareholders will hold approximately 71 percent of the issued and outstanding shares of common stock immediately following the closing of the business combination.

The combined company expects to receive up to $462 million in gross proceeds, assuming no redemptions of New Providence’s existing public stockholders, including the private placement backed by strategic partners, existing investors and a broad base of financial institutions. All AST SpaceMobile shareholders are retaining 100% of their equity in the combined company. The cash proceeds are expected to be used to fund phase one of the commercial launch of AST SpaceMobile’s space assets.

The transaction has been unanimously approved by the New Providence Board of Directors, as well as the Board of Directors of AST SpaceMobile, and is subject to the satisfaction of customary closing conditions, including the approval of the shareholders of New Providence. This will be an Up-C corporate structure.

NOTABLE CONDITIONS TO TERMINATION

  • (i) by written notice from AST or NPA to the other party if the Closing has not occurred by March 15, 2021 (the deadline for NPA to consummate an initial business combination pursuant to its existing certificate of incorporation) or if, upon NPA stockholders’ approval, such deadline is extended to the date that is 90 days after the six-month anniversary of the Effective Date, such extended deadline (the “Outside Closing Date”);
  • (ii) upon the applicable parties’ mutual written consent;

NOTABLE CONDITIONS TO CLOSING

  • Cash proceeds from the Trust Account, net of any amounts paid to NPA’s stockholders that exercise their redemption rights, plus the amounts raised in the PIPE Investment and any Additional PIPE Investment, equaling no less than $250,000,000 at the Closing

SPONSOR FORFEITURE

  • If, at the Closing, the amount in the Trust Account, and the amount raised in private transactions including any PIPE Investment or Additional PIPE Investment prior to the payment of any Transaction Expenses is less than $400,000,000, Sponsor and NPA will irrevocably terminate, forfeit and cancel, for no consideration and without further right, obligation or liability, a number of shares of Sponsor Stock (such terminated, forfeited and cancelled shares, the “Forfeited Sponsor Stock”) such that the total number of issued and outstanding shares of Sponsor Stock immediately prior to the Closing equals twenty percent (20%) of the total number of shares of issued and outstanding NPA Class A Common Stock and NPA Class B Common Stock (collectively, the “NPA Common Stock”) as of immediately prior to the Closing

PIPE

  • PIPE investors will purchase an aggregate of 23,000,000 shares of PubCo Class A Common Stock at $10.00 per share for an aggregate purchase price of $230,000,000. Pursuant to the terms of the Subscription Agreements, the PIPE Investors have agreed to cooperate in good faith with NPA, AST and any governmental authority and take any and all actions required to satisfy applicable regulatory approvals and to consummate the Business Combination and the transactions contemplated by the Subscription Agreements.  In addition, pursuant to the terms of the Subscription Agreements, the PIPE Investors have agreed to waive any claims they may have at the Closing or in the future, in or to any monies held in the Trust Account, subject to certain exceptions as specified therein.
  • The Subscription Agreements will be terminated, and be of no further force and effect, upon the earlier to occur of:
    • (i) such date and time as the Equity Purchase Agreement is terminated in accordance with its terms
    • (ii) upon the mutual written agreement of NPA, AST and the applicable PIPE Investor
    • (iii) if any of the conditions to closing set forth in the Subscription Agreements that are not waived by the PIPE Investors are not satisfied, or are not capable of being satisfied, on or prior to the Closing and, as a result thereof, the transactions contemplated by the Subscription Agreements are not and will not be consummated at the Closing, or (iv) 11:59 p.m. New York time on the Outside Closing Date.

ADVISORS

  • Barclays is acting as financial advisor and capital markets advisor to AST SpaceMobile
  • Barclays and Deutsche Bank Securities Inc. acted as placement agents to New Providence in connection with the PIPE offering
  • Deutsche Bank Securities Inc. and BTIG LLC are acting as financial and capital markets advisors to New Providence
  • Latham & Watkins LLP and Foley & Lardner LLP are acting as legal counsel to AST SpaceMobile
  • Kirkland & Ellis LLP is acting as legal counsel to New Providence

MANAGEMENT & BOARD

Executive Officers

Alexander Coleman, 52
Chairman & Chief Executive Officer

Mr.Coleman served as Chief Executive Officer of Tilt Holdings and as a Managing Partner at Annex Capital Management. Mr. Coleman also previously served as a Managing Partner at Sea Hunter Therapeutics from 2016 to 2018. Prior experience also includes serving as Chairman of Big Red and as a Managing Partner at Citicorp Venture Capital. Prior to these positions, from 1996 through to 2004, Mr. Coleman was a Managing Investment Partner and co-Head of Dresdner Kleinwort Capital LLC, Dresdner Bank’s North American merchant banking group. While at Dresdner, Mr. Coleman oversaw the bank’s U.S. based private equity businesses, which included control and minority equity investing, mezzanine, distressed senior debt and, for a period of time, a fund-of-funds program. From 1989 to 1995, Mr. Coleman worked with several groups while at Citi, including the Media Group, the Restructuring Group and Citicorp Venture Capital. Mr. Coleman received an MBA from the University of Cambridge and a BA in Economics from the University of Vermont. Mr. Coleman has served as a Director and Chairman of the Board for numerous private and public companies, including Remy Inc., StackTeck Systems Ltd., Maxcess International, TeleCorp PCS, Hypercube (f/k/a KMC Telecom), Mrs. Field’s Famous Brands Inc., Gardenburger Inc., NurseFinders Inc., Waddington International, Inc. and JAC Products, Inc.

Gary P. Smith, 56
Co-Chief Executive Officer and Director

Mr. Smith has held senior management positions at PepsiCo, Red Bull and Big Red. During his most recent position as CEO of Big Red, Inc., Mr. Smith built a diversified beverage company by acquiring numerous, complementary brands across many segments of the market over a 10-year period, ultimately selling the business to Keurig Dr Pepper. Prior to Big Red, Mr. Smith joined Red Bull as the executive vice president of a three person board of directors each operating as the co-CEO. Mr. Smith held direct responsibility for sales, trade marketing, motorsports marketing, finance, information systems, legal department, supply chain, operations and human resources. Mr. Smith continued to serve as the senior board member and corporate secretary from 2000 to 2007 while leading all day to day efforts as the Chief Operating Officer. Before taking over the leadership role at Red Bull, Mr. Smith enjoyed a successful career with PepsiCo, Inc. from 1986 to 2000. Mr. Smith began his career in Dallas with PepsiCo Food Systems where he held positions with increasing responsibility that led up to his role as division president. In his last role with PepsiCo, Mr. Smith led the West Florida Bottling Operations for Pepsi Bottling Group. Mr. Smith holds an M.B.A. degree with a concentration in finance from The University of Dallas. Mr. Smith also holds a Bachelor of Business Administration degree in finance from Mississippi State University. Mr. Smith serves on the board of Tilt Holdings and various philanthropic organizations including the Dr Pepper Museum and the American Beverage Association.

James Bradley, 46
Chief Financial Officer

Prior to this, Mr. Bradley spent nearly 10 years as CFO of Big Red until it was acquired by Keurig Dr Pepper in 2018. While at Big Red, Mr.Bradley was instrumental in the sales transaction, four recapitalizations and three acquisitions. Mr. Bradley transformed Big Red’s financial, accounting, tax and back office functions as the business grew from a simple family run business with a single brand to a sponsor backed, diversified beverage company. Prior to joining Big Red, Mr. Bradley spent nearly 10 years in KPMG’s Transaction Services practice leading buy-side and sell-sidetransactions ranging in size from a few million to several-billion dollars in North America and Europe. Prior to KPMG, Mr. Bradley spent four years in investment banking in Arthur Andersen’s Corporate Finance practice. Mr. Bradley earned a Bachelors of Business Administration in Finance from the University of Texas in Austin, graduating with honors. Mr. Bradley is a Chartered Financial Analyst.

 

Board of Directors

Timothy Gannon, 70
Director

Mr. Gannon is a Co-Founder of Outback Steakhouse, where he was a senior executive responsible for food and menu oversight through its public offering in 2012. In 2006, Mr. Gannon co-founded OSI Restaurant Partners, an operator of Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill, Roy’s Restaurant and Fleming’s Prime Steakhouse & Wine Bar units. Prior to co-founding Outback Steakhouse, Mr. Gannon spent 14 years at other restaurant groups including Steak & Ale and Copeland’s Cajun Café. In 1994, Mr. Gannon was named Entrepreneur of the Year by Inc. magazine. Other honors include the Florida Restaurant Association’s Lifetime Achievement Award, an honorary Doctorate in Business Administration and Food Service Management from Johnson & Wales University, and induction into both the U.S. Business Hall of Fame and the Tampa Bay Chamber of Commerce Business Hall of Fame. Mr. Gannon received a BA in Art History from Florida State University.

Daniel Ginsberg, 67
Director

Mr. Ginsberg has served as Chairman of Potbelly Corporation since 2014. Mr. Ginsberg previously served as Chief Executive Officer of Dermalogica from 2011 to 2014, and has a comprehensive background in branding strategy, marketing, and advertising. Prior to these positions, Mr. Ginsberg served as Chief Executive Officer of Red Bull North America until 2007. Before taking over the leadership role at Red Bull, Mr. Ginsberg was an advertising and marketing executive who held executive positions at agencies such as NW Ayer, Cunningham & Walsh and dGWB. Mr. Ginsberg also served as Chief Marketing Officer at Hardee’s. Mr. Ginsberg received an MA in Communications and Marketing from Boston University.

Rick Mazer, 73
Director

Mr. Mazer has served as Chairman of The Culinary Institute of America since 2017, and has also been a member of the boards of Food for All, Gardenburger, Thrifty Foods of Burlington, and Hospital Cost Consultants and Accountants, Inc. Mr. Mazer previously served as President and Chief Executive Officer of Ventura Foods from 1997 to 2009, where he played a key role in growing the company’s sales from $500 million to more than $2 billion annually. Prior to joining Ventura Foods, Mr. Mazer was a consultant to producers, manufacturers, retailers, and grocery and convenience store wholesalers. Mr. Mazer also previously held management positions at Deloitte and Touche, Kidder, Peabody & Co. and Boston Consulting Group. Mr. Mazer received degrees in Economics and Industrial Management from the Massachusetts Institute of Technology.

ByRoman Developer