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Property Solutions Acquisition Corporation

Property Solutions Acquisition Corporation

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Faraday Future

ENTERPRISE VALUE: $2.622 billion
ANTICIPATED SYMBOL: FFIE

Faraday Future, a California-based global shared intelligent mobility ecosystem company, and Property Solutions Acquisition Corp. (NASDAQ: PSAC) today announced they have entered into a definitive agreement for a business combination.  Following the closing, the combined company will be listed on the Nasdaq Stock Market under the ticker symbol “FFIE”.

Since its inception, FF has been committed to promoting the transformation of the automotive industry through product and innovations in technology, business models, user ecosystems and governance. FF’s flagship product offering will be the FF 91, featuring industry leading 1,050 HP, 0-60 mph in less than 2.4 seconds, zero gravity seats with the largest 60-degree reclining angles and a revolutionary user experience designed to create a mobile, connected, and luxurious third Internet living space. FF 91 is targeted to launch within twelve months after closing of the merger.

Established in 2014, FF’s B2C passenger vehicle launch pipeline over the next five years includes FF 91 series, FF 81 series, and FF 71 series. FF 91 will define the FF brand DNA. This DNA will carry over to subsequent premium mass market vehicles in the portfolio – the FF 81, and FF 71. With such brand DNA, FF products are expected to be ahead of the competition in their respective segments in terms of their design, driving experience, interior comfort, connectivity, and user experience. FF 81 is expected to launch in 2023, and FF 71 in 2024. In addition to passenger vehicles, FF plans to launch a Smart Last Mile Delivery (“SLMD”) vehicle in 2023 leveraging its proprietary VPA. To implement a capital light business model, FF has adopted a global hybrid manufacturing strategy consisting of its refurbished manufacturing facility in Hanford, California and collaboration with a leading contract manufacturing partner in South Korea. The company is exploring the possibility of additional manufacturing capacity in China through a joint venture.

The transaction implies a pro forma enterprise value of $2.622 billion for Faraday.

TRANSACTION

The transaction reflects an implied equity value of the combined company of approximately $3.4 billion, based on current assumptions, with a $10.00 per share PIPE subscription price. The transaction is supported by major suppliers, many of which will become shareholders. Upon closing, the combined company will receive up to $1.0 billion in cash assuming no redemptions by PSAC shareholders. The boards of directors for both FF and PSAC have unanimously approved the proposed business combination, which is expected to be completed in the second quarter of 2021.

PIPE

  • The $775 million common stock PIPE purchased at $10.00 per share, includes over 30 leading long-term institutional shareholders from the U.S., Europe, and China. Anchor investors in the PIPE include a Top 3 Chinese OEM and long-only institutional shareholders.
  • 17,500,000 of such shares ($175 million in net proceeds) will be issued to an anchor investor and the issuance of such shares is subject to certain regulatory approvals.

LOCKUPS

1. Property Solutions Acquisition Sponsor, LLC (the “Sponsor”), agreed to enter into a lock-up agreement, pursuant to which:

  • (a) 50% of the shares of New FF common stock held by the Sponsor will not be sold, transferred or otherwise disposed of for a period ending the earlier of
    • (i) the one year anniversary of the closing of the Merger, and
    • (ii) the date on which the closing price of shares of New FF common stock on the principal securities exchange or securities market on which such shares are then traded equals or exceeds $12.50 per share for any twenty trading days within any thirty trading day period after the closing of the Merger; and
  • (b) the other 50% of the shares of New FF common stock held by the Sponsor will not be sold, transferred or otherwise disposed of for a period ending earlier of
    • (i) the one year anniversary of the closing of the Merger and
    • (ii) the date on which New FF completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of New FF’s shareholders having the right to exchange their shares for cash, securities or other property.

2.  Certain stockholders of FF will be subject to a 180-day lockup period for all shares of PSAC common stock held by such persons, subject to certain exceptions.

3.  Vendor trust established by FF (the “Vendor Trust”), and certain FF bridge lenders and warrantholders and employees issued New FF shares in respect of their reduced compensation, such parties agree that with respect to:

  • (a) 33 1/3% of the shares of New FF common stock received by such FF stakeholders in connection with the Transactions, not to sell, transfer or take certain other actions with respect to such shares of New FF common stock for a period of 30 days after the closing of the Business Combination,
  • (b) 33 1/3% of the shares of New FF common stock received by such FF stakeholders in connection with the Transactions, not to sell, transfer or take certain other actions with respect to such shares of New FF common stock for a period of 60 days after the closing of the Business Combination, and
  • (c) the remaining 33 1/3% of the shares of New FF common stock received by such FF stakeholders in connection with the Transactions, not to sell, transfer or take certain other actions with respect to such shares of New FF common stock for a period of 90 days after the closing of the Business Combination.

NOTABLE CONDITIONS TO CLOSING

  • The amount of cash available to PSAC as of immediately prior to the closing of the Merger shall not be less than $450 million after giving effect to payment of amounts that PSAC will be required to pay to redeeming stockholders upon consummation of the Merger

NOTABLE CONDITIOINS TO TERMINATION

  • By either PSAC or FF if the Transactions are not consummated on or before six months after the date of the Merger Agreement, provided that the terminating party shall not have been the primary cause of the failure to close by such date. (Approx. June 28, 2021)

ADVISORS

  • Credit Suisse and Stifel are serving as financial and capital markets advisors to FF
  • Miller Buckfire is serving as financial advisor to FF
  • RMG and Deutsche Bank are serving as financial advisors to PSAC
  • Credit Suisse served as lead placement agent and Stifel also served as a placement agent for the PIPE
  • Sidley Austin LLP and O’Melveny & Myers are serving as legal advisors to FF
  • Latham & Watkins is serving as legal advisor to PSAC

MANAGEMENT & BOARD

Executive Officers

Jordan Vogel, 41
Chairman and Co-Chief Executive Officer & Secretary

Mr. Vogel has been actively investing in and managing residential real estate in New York City since 2001. Since April 2009, Mr. Vogel has served as Co-Founder and Managing Member of Benchmark Real Estate Group, LLC, a real estate investment company. Mr. Vogel oversees all of the firm’s acquisitions and is a member of its Investment Committee. Prior to founding Benchmark, Mr. Vogel worked under Stephen Siegel (Global Chairman of CBRE) at SG2 Properties, LLC, or SG2, heading their acquisitions group from 2004 to 2009. While at SG2, the company successfully acquired over $600 million worth of residential real estate. Prior to SG2, Mr. Vogel worked at William Moses Co., Inc., an owner-operator of luxury apartments in Manhattan, from 2002 to 2004. He was responsible for asset management and the day-to-day operation of the entire portfolio. Mr. Vogel began his career in private equity in 2000 at Cramer Rosenthal McGlynn, LLC, a $5 billion money management firm located in New York City. While working for its private equity fund, he originated over $350 million of private equity deals. Mr. Vogel graduated with a B.S. in Economics from the University of Pennsylvania and received an M.S. in Real Estate Development from New York University.

Aaron Feldman, 40
Co-Chief Executive Officer, Treasurer & Director

Mr. Feldman has been actively investing in and managing residential real estate in New York City since 2004. Since April 2009, Mr. Feldman has served as Co-Founder and Managing Member of Benchmark Real Estate Group, LLC. Mr. Feldman is in charge of the firm’s capital markets, overseeing all investor relations, and is on the firm’s Investment Committee. Prior to founding Benchmark, Mr. Feldman worked at SG2, heading its Manhattan Property and Asset Management Group and overseeing a portfolio of 700 apartments with a value of $300 million. He was directly responsible for investment performance, which included all aspects of redevelopment, construction, revenue and expense management, marketing and leasing. Mr. Feldman graduated with a B.S. in Management from Tulane University and is an active member of the Tulane University Dean’s Advisory Board and National Campaign Council. He was inducted into Tulane’s Athletic Hall of Fame in 2011 for his accomplishments as a member of the baseball team. Mr. Feldman actively participates in several charities, including ReThink Food and Restoration NY.

 

Board of Directors

David Amsterdam
Director

Mr. Amsterdam has served as President — Investments and Eastern Region and Co-Head of US Capital Markets for Colliers International, a publicly traded real estate services and investment management firm, since March 2018. His responsibilities include advising investors, corporate users and landlords across the full spectrum of commercial real estate transactions. Prior to Colliers International, Mr. Amsterdam worked with real estate executive, Paul Massey, on his New York City mayoral campaign in 2017. Mr. Amsterdam previously served in various positions with Cushman & Wakefield from 2005 to 2011 and SL Green Realty Corp. from 2011 to 2016. While with SL Green, Mr. Amsterdam was responsible for structuring and negotiating lease transactions for a portfolio of 10 million square feet of trophy Class A assets and routinely completed nearly 100 transactions per year. He implemented redevelopment, repositioning and strategic upgrading programs throughout the portfolio and assisted with equity and structured finance investments, acquisitions and dispositions and joint ventures. He graduated with a B.A. in Political Science from Syracuse University.

Avi Savar, 46
Director

Over the last two decades, Mr. Savar has helped leading organizations drive change by leveraging digital as a transformative force to build and grow their brands. In March 2011, Mr. Savar established Hyper Focus LLC (formerly Savar Ventures), an advisory and investment firm, and also joined venture capital firm Dreamit Ventures, where he currently serves as Partner and Board Director. Mr. Savar was named President of consumer intelligence platform SUZY, Inc. in February 2018. In 2004, Mr. Savar founded Big Fuel, a global digital marketing agency, which he grew from a one-man shop to an industry leader with over 130 employees worldwide. Over the following years, Big Fuel consulted with some of the world’s leading brands, including American Express, GM, Budweiser, Samsung, Gatorade, Colgate-Palmolive, Fisher-Price, Weight Watchers, AFLAC, T-Mobile and Carnival Cruises. Big Fuel was acquired by Publicis Group in 2011. Mr. Savar is the author of Content to Commerce: Engaging Consumers Across Paid, Owned and Earned Channels (published by Wiley in 2013) and was named the inaugural President of the Cannes Lions Branded Content Jury in 2010. Mr. Savar is a director of Arccos Golf and sits on advisory boards for American Express, DCP Midstream and AgAge’s Publisher’s Council. Mr. Savar graduated with a BS in Communications from Boston University.

Eduardo Abush, 43
Director 

Mr. Abush has served as Managing Partner and Portfolio Manager of Waterfront Capital Partners LLC, a hedge fund based in New York City, since he founded the firm in January 2013. Previously, Mr. Abush was a Portfolio Manager at Millennium Partners LLC (New York) from 2005 to 2013 and a Senior Analyst at Zimmer Lucas Partners LLC from 2003 to 2005. Mr. Abush graduated Suma Cum Laude and received his BA in Economics from the Instituto Tecnologico Autonomo de Mexico and an MBA from Stanford University-Graduate School of Business.

ByRoman Developer