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Ackrell SPAC Partners I Co *

Ackrell SPAC Partners I Co *

Dec 1, 2020 by Kristi Marvin

PROPOSED BUSINESS COMBINATION: Blackstone Products

ENTERPRISE VALUE: $900 million
ANTICIPATED SYMBOL: BLKS

Ackrell SPAC Partners I Co. proposes to combine with Blackstone Products, an innovative and design-driven company that is redefining the outdoor cooking experience with griddle cooking appliances and accessories.

  • Blackstone Products, headquartered in Logan, UT, is fundamentally redefining how people cook outdoors.
  • The company specializes in outdoor griddles which allow users to cook a wider variety of foods faster and more often.
  • Blackstone’s product line features innovative and easy-to-use griddles, accessories, and consumables that enhance outdoor cooking and make it more enjoyable and accessible to all for every meal.

Griddle cooking is redefining the rapidly expanding outdoor cooking market by providing consumers with a faster, more convenient, and versatile cooking experience as opposed to the more traditional cooking methods offered by charcoal, gas, and pellet grills. Since launching its first griddle design in 2008 with its core 36-inch griddle, Blackstone products have been empowering home chefs of all skill levels to cook outdoors for breakfast, lunch, and dinner. By allowing consumers to cook outdoors more often and for more meal occasions, griddling has higher customer engagement than other outdoor cooking styles allowing Blackstone to rapidly penetrate the traditional outdoor cooking market and to expand the overall category.

SUBSEQUENT EVENT – 8/25/22 – LINK

  • Ackrell SPAC Partners I Co. announced that Blackstone declined to fund the final $200,000 pursuant to the promissory note the Company issued to Blackstone on June 21, 2022, to extend the date by which the Company must complete its initial business combination from August 24, 2022, through and including September 23, 2022 (the “Extension”).
  • The Company’s Amended and Restated Certificate of Incorporation requires the Company to deposit into the Company’s trust account $200,000 no later than August 31, 2022, as a condition to the Extension.
  • The counsel to Blackstone has advised the Company that it is Blackstone’s position that Blackstone has no legal obligation to loan to the Company the final $200,000 pursuant to the Note to fund the Extension. The Company disagrees.
  • Unless the Company is able to secure $200,000 from another source by the close of business on August 31, 2022, as to which the Company cannot provide assurance, under the Company Charter the Company will be forced to:
    • (i) cease all operations, except for the purposes of winding up,
    • (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem 100% of the shares of common stock underlying the subunits included in its initial public offering for cash for a redemption price per share equal to the amount then held in the Trust Account, but net of taxes payable, divided by the total number of Public Shares then outstanding (which redemption will completely extinguish such holders’ rights as stockholders, including the right to receive further liquidation distributions, if any).
    • As of the close of business on August 23, 2022, there was approximately $53.5 million in the Trust Account, representing a per-share redemption amount of approximately $10.38 as of that date.
    • If the Company is forced to liquidate, the Public Shares will be deemed canceled and will represent only the right to receive the redemption amount.

EXTENSION – 6/21/22 – LINK

  • The company approved the extension from June 23, 2022, to September 23, 2022.
    • For each month the company needs to extend, it will deposit $200,000 into the trust account.
    • 8,645,776 (62.651%) shares were redeemed.

SUBSEQUENT EVENT – 6/14/22 – LINK

  • The SPAC announced it will increase the contribution to trust by an amount equal to the lesser of $0.043/share and $200,000.
    • The initial amount the SPAC was going to contribute was $0.03/Share

EXTENSION – 3/16/22 – LINK

  • The company issued an unsecured promissory note for $1.38 million, which represents $0.10/Unit in the trust account, to extend the time to complete a business combination from March 23, 2022, to June 23, 2022.

EXTENSION – 12/23/22 – LINK

  • The company issued an unsecured promissory note for $1.38 million, which represents $0.10/Unit in the trust account, to extend the time to complete a business combination from December 23, 2021, to March 23, 2022.

TRANSACTION

  • The business combination implies a pro forma enterprise valuation for Blackstone of $900 million, or approximately 11.1x 2022 estimated adjusted EBITDA.
  • The transaction will provide approximately $95 million in estimated gross proceeds to the Company, assuming no redemption by Ackrell shareholders, including a PIPE of $31 million common stock at $10.00 per share and $111 million of convertible notes due 2027 (the “Notes”), subject to applicable discounts and the terms and conditions of sale, including certain minimum cash and business performance requirements.
  • The Notes will be subordinated unsecured obligations of the Company, and interest will be payable semi-annually in arrears, beginning six months following the closing of the transaction, at a rate of 9.875% per year.
  • The Notes will mature on April 15, 2027, unless earlier repurchased, redeemed, or converted in accordance with their terms.
  • The initial conversion price of $11.50 represents a premium of 15% to the issue price of the common stock.
  • The Notes will be convertible into shares of common stock at the option of investors at any time.
  • The Company will have the option to redeem all or any portion of the Notes after April 15, 2025, if certain stock price and liquidity conditions are satisfied.

In connection with the transaction, Ackrell has deposited an extension payment of $1,380,000 into the trust account for its public stockholders enabling Ackrell to extend the period of time it has to consummate its initial business combination by three months from December 23, 2021 to March 23, 2022. Ackrell SPAC Sponsors I LLC and the sponsor of Ackrell, loaned the extension payment to Ackrell using funds received under a third-party loan from Blackstone.

Ackrell Transaction Overview

PIPE

  • The transaction includes a PIPE of $31 million common stock at $10.00 per share and $111 million of convertible notes due 2027 (the “Notes”), subject to applicable discounts and the terms and conditions of sale, including certain minimum cash and business performance requirements.
    • The Notes will be subordinated unsecured obligations of the Company, and interest will be payable semi-annually in arrears, beginning six months following the closing of the transaction, at a rate of 9.875% per year.
    • The Notes will mature on April 15, 2027, unless earlier repurchased, redeemed, or converted in accordance with their terms.
    • The initial conversion price of $11.50 represents a premium of 15% to the issue price of the common stock.
    • The Notes will be convertible into shares of common stock at the option of investors at any time.
    • The Company will have the option to redeem all or any portion of the Notes after April 15, 2025, if certain stock price and liquidity conditions are satisfied.

LOCK-UP

  • Certain Ackrell stockholders, NAI and Dahle will enter into a Lock-up Agreement with Ackrell (each, a “Lock-Up Agreement”).
  • Pursuant to the Lock-Up Agreements, each party will agree to a 180-day lock-up of its Newco Common Stock following Closing.

NOTABLE CONDITIONS TO CLOSING

  • The obligations of the parties to complete the Closing are subject to the aggregate amount of proceeds raised in the PIPE Investment plus the amount of funds in the Trust Account (after giving effect to any redemption of Ackrell Common Stock by Ackrell’s stockholders) will be at least $150,000,000.

NOTABLE CONDITIONS TO TERMINATION

  • The Business Combination Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including:
    • by either Ackrell or the Company if the Closing has not occurred by the date that is six months after the execution of the Business Combination Agreement, provided, that in the event of an extension of the time for Ackrell to complete a Merger in accordance with the terms of Ackrell’s certificate of incorporation, such six month period will automatically be extended by a like period

ADVISORS

  • Nomura Securities International, Inc. (“Nomura”) is acting as the sole financial advisor to Ackrell.
  • Nomura and Barclays Capital Inc. (“Barclays”) are acting as Capital Markets Advisors to Ackrell and as placement agents for the PIPE financing.
  • Ackrell Capital, LLC is acting as financial advisor to Blackstone.
  • O’Melveny & Myers LLP is acting as legal advisor to the Company.
  • Ellenoff Grossman & Schole LLP is acting as legal advisor to Ackrell.
  • Sidley Austin LLP is acting as legal advisor to the placement agents.

MANAGEMENT & BOARD

Executive Officers

Jason M. Roth, 45
Chief Executive Officer nominee

Since April 2020, Mr. Roth has served as Chief Strategy Officer and a member of the board of directors of Next Frontier Brands. From 2018 to 2019, Mr. Roth was the Chief Executive Officer and Chairman of the board of directors of Mile High Labs International, which we believe was one of the world’s largest processors of hemp-derived CBD concentrates in 2019. From 2014 to 2018, Mr. Roth was the Chief Executive Officer of Incense Specialties Inc., a vaporizer device company. From 2010 to 2015, Mr. Roth was a founder and Senior Vice President, Commercial Director, Compliance Director and member of the board of directors of Brooklands Inc., a medical device manufacturer. From 1998 to 2014, Mr. Roth was a founder, Chief Executive Officer and Chairman of the board of directors of Safeguard Medical Technologies LLC, a medical device manufacturer.

Stephen N. Cannon, 52
Chief Executive Officer (current), Chief Operating Officer nominee and President

Since August 2020, Mr. Cannon has been the Chief Operating Officer and President of Global SPAC Partners Co, a proposed blank check company which filed a registration statement with the SEC on October 13, 2020 for a $200 million IPO and intends to focus on potential business combinations in geographic regions from the Middle East North Africa through SouthEast Asia. Since 2014, Mr. Cannon has been President of Everest Partners Limited, a privately-owned investment firm focused on Asian private investments. From 2017 until 2019, Mr. Cannon was the Chief Financial Officer of Twelve Seas Investment Company, a blank check company with $207 million held in trust that consummated its initial business combination with BPGIC Ltd, a petroleum and gas company located in the United Arab Emirates, in December, 2019. From 2017 until 2019, Mr. Cannon was the President, Chief Financial Officer and a director of CM Seven Star, a Nasdaq-listed SPAC, sponsored by a leading Chinese private investment firm, which consummated its business combination with Kaixin Auto Holdings in April 2019. From 2014 until 2016, Mr. Cannon was Chief Executive Officer and a director of DT Asia Acquisition Corp, a Nasdaq-listed SPAC, which consummated its business combination with China Direct Lending Corp. in July 2016. From 2010 until 2014, Mr. Cannon was a Partner and Head of China for RedBridge Group Ltd., a boutique merchant banking firm focused on Chinese and Arabian Gulf cross-border investments. From 2009 until 2014, Mr. Cannon was a registered representative of, and senior advisor to, Ackrell Capital. From 2007 until 2010, Mr. Cannon served in various capacities with Hambrecht Asia Acquisition Corp., a Nasdaq-listed SPAC, as a co-founder, initial Chief Financial Officer and a director, and then Vice President of Acquisitions. Hambrecht Asia Acquisition Corp. merged with SGOCO Ltd, a Chinese company, in April 2010. From 2005 until 2008, Mr. Cannon served as a Managing Director of Asian investment banking for WR Hambrecht+Co. Prior to WR Hambrecht + Co., Mr. Cannon worked at ABN AMRO, Donaldson, Lufkin & Jenrette, Smith Barney Shearson and Salomon Brothers. Mr. Cannon currently serves on the board of the Cambodian Hotel Association. Mr. Cannon graduated from the University of Notre Dame with a Bachelor of Arts degree in Economics and a Bachelor of Science degree, majoring in Mechanical Engineering.

Long Long, 35
Chief Financial Officer

Mr. Long has been the Chief Financial Officer of Global SPAC Partners Co. From 2017 to 2019, Mr. Long was Vice President of Twelve Seas Sponsors I LLC, sponsor of Twelve Seas Investment Company. From 2006 to 2016, Mr. Long worked for IBM in a variety of Corporate Finance, Audit, and Managerial roles, both within the US and internationally. From 2015 to 2016, Mr. Long served as Finance Controller for IBM China’s Consulting Business Unit and Sales Channels. From 2013 to 2014, Mr. Long served as the Strategy and Planning Manager for IBM China and, from January 2012 to December 2012, as a Senior Finance Analyst for IBM China. From 2010 to 2011, Mr. Long served as Internal Auditor for IBM’s Asia Pacific region and, from 2006 to 2009, as a financial analyst for IBM’s worldwide operations. Mr. Long graduated from Washington University in St. Louis with a Bachelor of Science and Business Administration degree, majoring in Finance and a Bachelor of Science degree, majoring in Electrical Engineering.

Board of Directors

Michael K. Ackrell, 53
Chairman of the Board

Since 2003, Mr. Ackrell has been the Chief Executive Officer and Chairman of the board of directors of Ackrell Capital, a U.S. registered broker-dealer focused on providing M&A and capital raising services to the consumer, technology, digital and hemp industries. Prior to this, Mr. Ackrell was the Senior Managing Director in charge of the U.S. Technology Investment Banking Group of ABN AMRO, from 2000 to 2001, and Head of Investment Banking at WR Hambrecht+Co., a San Francisco, CA-based investment bank specializing in the technology sector, from 1999 to 2000. Previously, Mr. Ackrell worked for Donaldson, Lufkin & Jenrette in New York, Menlo Park and San Francisco, CA as a Senior Vice President in the Technology Investment Banking Group from 1988 to 1999. Mr. Ackrell graduated from the Wharton School of the University of Pennsylvania with a Bachelor of Science degree in Economics (summa cum laude), with majors in Finance and Accounting. In the last five years, Mr. Ackrell has been a director of a number of private companies, including Stable Technologies, Inc., a manufacturer of water-soluble CBD products, CMLM Holdings, Inc., doing business as QIND, a branded retailer of CBD products, American Giant, Inc., a U.S.-based manufacturer of apparel and active wear, Vator, Inc., a professional network for entrepreneurs, and Scrubbed.net, LLC, an online accounting and bookkeeping services company. CMLM Holdings, Inc. was acquired by Next Frontier Holdings, Inc. in August 2020.

Shannon Soqui, 53
Non-Executive Vice Chairman of the Board

Since April 2020, Mr. Soqui has served as Chief Executive Officer and Chairman of the board of directors of Next Frontier Holdings, Inc., doing business as Next Frontier Brands. Next Frontier Brands is an international provider of fast-moving consumer goods, including alcoholic and non-alcoholic beverages and wellness products. From 2018 to 2020, Mr. Soqui was the Chief Executive Officer of CMLM Holdings, Inc., prior to its acquisition by Next Frontier Brands. From 2017 to 2018, Mr. Soqui was the head of U.S. cannabis investment banking at Canaccord Genuity, a leading global cannabis investment bank. From 2015 to 2017, Mr. Soqui was the Head of Cannabis Investment Banking at Ackrell Capital. Prior to Ackrell Capital, Mr. Soqui spent more than fifteen years in investment banking with: Clark Dodge & Co (2013 to 2014); Advanced Equities, Inc. (2010 to 2012); Pacific Crest Securities (November 2003 to April 2010); UBS Warburg (2001 to 2002); and Donaldson, Lufkin & Jenrette and Credit Suisse (1997 to 2000). Prior to his career in investment banking, Mr. Soqui was a securities lawyer with Brobeck, Phleger & Harrison and Gunderson Dettmer, and was a Certified Public Accountant with KPMG. Mr. Soqui received his Bachelor of Arts in Economics with an emphasis in Accounting from the University of California, Santa Barbara, and a J.D. (magna cum laude) from the Santa Clara University School of Law.

William A. Lamkin, 61
Director

From 2004 to 2019, Mr. Lamkin was a Managing Director and registered representative of Ackrell Capital. Prior to that, Mr. Lamkin served in various capacities as a technology investment banker with ABN AMRO; Donaldson, Lufkin & Jenrette; KidderPeabody; and PaineWebber. Prior to his investment banking career, Mr. Lamkin practiced law with the firm of Broad, Schulz, Larson and Wineberg. Mr. Lamkin currently serves as an independent Trustee and Chair of the Audit Committee for two real estate investment trusts, Office Properties Income Trust (NASDAQ:OPI) (since 2019) and Service Properties Trust (NASDAQ:SVC) (since 2007). He also currently serves as an independent Trustee for Tremont Mortgage Trust (NASDAQ:TRMT) (since May 2020), a commercial real estate finance company. He previously served as an independent Trustee and Chair of the Audit Committee for Select Income REIT (NASDAQ:SIR) (2012 to 2019) and Commonwealth REIT (NYSE:CWH) (now Equity Commonwealth; 2006 to 2014). Mr. Lamkin has also served as an independent Director and Chair of the Audit Committee of a private insurance company, Affiliates Insurance Company. Mr. Lamkin holds a Bachelor of Arts from Westmont College where he majored in both business administration and psychology, a Master of Business Administration from the University of California, Berkeley Haas School of Business and a Juris Doctor from the University of California, Hastings College of the Law.

Daniel L. Sheehan, 65
Director

Since 1995, Mr. Sheehan has been an attorney licensed in the State of California. From 2004 to the present, Mr. Sheehan has been the founder and managing partner of Silicon Valley Wealth Law, a law firm specializing in estate planning, tax planning, business planning, and special needs planning. Mr. Sheehan has designed and drafted over 1,000 estate plans for clients throughout Silicon Valley. Mr. Sheehan has expertise in handling federal and state income tax matters and disputes, in the formation and operation of business entities, and has provided strategic planning and technology enhancement guidance to new business ventures and established companies. Mr. Sheehan has senior management experience with companies in a range of industries, including computer-aided manufacturing, real estate development, health care, mining, and law. Mr. Sheehan has frequently consulted with venture capitalists to review and advise them about investment opportunities. From 2011 to 2013, Mr. Sheehan was Chief Executive Officer of North Star Resources, a provider of technology for the extraction and refining of precious and strategic metals. From 1996 to 2004, Mr. Sheehan was a partner in the law firm of Davidson, Sheehan & Jewel. In 2010, Mr. Sheehan filed for personal bankruptcy under Chapter 13, which was completed in May 2014 with no debts being discharged. Mr. Sheehan graduated from St. Mary’s College of California with a Bachelor of Arts degree in Business Management with honors. Mr. Sheehan received his Juris Doctor from the University of San Francisco School of Law.

 

ByKristi Marvin