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Andina Acquisition Corporation III *

Andina Acquisition Corporation III *

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Stryvve Food LLC

ENTERPRISE VALUE: $170 million
ANTICIPATED SYMBOL: SNAX

Andina Acquisition Corp. III proposes to combine with Stryve Foods LLC (“Stryve” or “the Company”), an emerging healthy snack platform disrupting traditional snacking categories.

Stryve is currently disrupting the meat snack category through its air-dried meat products including biltong, which originated in South Africa, and carne seca, which originated in Latin America. The process of air-drying meat vs. cooking, as is done with beef jerky, yields a product that has 40-50% more protein per serving than beef jerky. Unlike beef jerky, Stryve’s all natural meat snack products are made with 100% beef, are never cooked and contain no sugar, monosodium glutamate (MSG), gluten, nitrates, nitrites or preservatives and are Keto and Paelo diet friendly.  Based on protein density and sugar content, Stryve’s portfolio of snack products are one of the healthiest meat snacks available today.

Stryve sells several brands of air-dried meat including Stryve and Kalahari, which it acquired in mid-December of 2020. The Company is bringing new users to the meat snack category, including Healthy Snack Seekers, Women and Hispanic Consumers. According to an MRI-Simmons 2018 Consumer Segmentation, of the 183 million healthy snack seekers in the US, only 25% purchased a meat snack during the year.

Stryve Investment Highlights:

  • Emerging healthy snacking platform. Stryve is aligned with a consumer shift in snacking toward better-for-you products as it focuses on manufacturing and marketing highly differentiated healthy snacks that disrupt traditional snacking categories.
  • Unique manufacturing capabilities. According to Stryve Chairman and Co-Founder Ted Casey, Stryve’s manufacturing facility is the largest USDA approved air-dried meat manufacturing facility in America and USDA approval requirements create a high barrier to entry. The Company’s current infrastructure can support a $200+ million revenue business with limited additional capital expenditures.
  • Large and growing distribution footprint. Stryve currently utilizes 10+ unique sale channels and 70,000+ total points of distribution across a strong retail footprint. Stryve intends to increase penetration in existing channels while expanding SKUs on shelf.

TRANSACTION

The transaction will be funded by a combination of Andina’s cash held in its trust account (after redemptions by its public stockholders in connection with the closing), a full equity roll-over from existing Stryve ownership, and proceeds from a private placement of $42.5 million of common stock at $10.00 per share that will close concurrently with the business combination.

In connection with the business combination, Stryve raised $10.6 million through the sale of unsecured convertible bridge notes that will be funded immediately and will convert into equity of the combined company at the closing of the business combination.

The transaction implies a post-money enterprise valuation for the combined company of approximately $170 million at closing, or 3.7x/1.8x projected 2021/2022 estimated revenue. It is anticipated that the combined company will have $58 million of net cash proceeds.

In the business combination, Andina will re-domesticate from the Cayman Islands and become a Delaware corporation and change its name to “Stryve Foods, Inc.”, and acquire Stryve’s business in an “Up-C structure” based on a pre-money enterprise value of Stryve of $130 million.
andina iii transaction overview

PIPE

  • $42.5 million of common stock at $10.00 per share

BRIDGE NOTE

  • $10.6 million bridge note offering with accredited and institutional investors with funds being made available immediately for general working capital purposes.
  • The bridge note offering will convert into common stock immediately prior to the business combination closing.

FORFEITURE AGREEMENT

B. Luke Weil and certain other Andina shareholders (collectively with B. Luke Weil, the “Insiders”), who received any of the 2,700,000 Andina ordinary shares issued to B. Luke Weil as “insider shares” prior to Andina’s initial public offering (the “Insider Shares”) each entered into a letter agreement with Andina and the Seller (the “Insider Forfeiture Agreement”), pursuant to which such Insider agreed to cancel, effective as of the Closing:

  • (a) a number of Insider Shares equal to
    • (i) fifty percent (50%) of the Insider Shares held by such Insider as of the date of the Business Combination Agreement, minus
    • (ii) the number of Insider Shares, if any, approved by the Seller in writing for transfer and actually transferred by such Insider to other persons or entities in support of the Transactions, and
  • (b) a number of the warrants and rights purchased by such Insider in the private placement conducted by Andina in connection with its initial public offering equal (collectively, the “Private Warrants and Rights”) to:
    • (i) fifty percent (50%) of the Private Warrants and Rights held by such Insider as of the date of the Business Combination Agreement, minus
    • (ii) the number of Private Warrants and Rights, if any, approved by the Seller in writing for transfer and actually transferred by such Insider to other persons or entities in support of the Transactions.

LOCK-UP

The Lock-Up Agreement, which will be effective at the Closing, provides that the Seller will not during the period commencing from the Closing and ending on the earlier of:

  • (i) with respect to fifty percent (50%) of each type of Restricted Securities
    • (x) the one (1) year anniversary of the date of the Closing,
    • (y) the date on which the closing price of Andina Common Stock equals or exceeds $12.50 per share for any twenty (20) trading days within any thirty (30) trading day period commencing twenty (20) trading days prior to the six (6) month anniversary of the Closing, and
    • (z) the date after the Closing on which Andina consummates a liquidation, merger, share exchange or other similar transaction with an unaffiliated third party that results in all of Andina’s stockholders having the right to exchange their equity holdings in Andina for cash, securities or other property (a “Subsequent Transaction”), and
  • (ii) respect to the remaining fifty percent (50%) of each type of Restricted Securities
    • (x) the one (1) year anniversary of the date of the Closing and
    • (y) the date after the Closing on which Purchaser consummates a Subsequent Transaction: (a) lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any restricted securities, (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the restricted securities, or (c) publicly disclose the intention to do any of the foregoing, whether any such transaction described in clauses (a), (b) or (c) above is to be settled by delivery of restricted securities or other securities, in cash or otherwise.

NOTABLE CONDITIONS TO CLOSING

  • Upon the Closing, Andina shall have cash and cash equivalents, including funds remaining in the Trust Account (after giving effect to the completion and payment of the Redemption) and the proceeds of any PIPE Investment, after giving effect to the payment of the Purchaser’s unpaid expenses and liabilities (but prior to giving effect to the Andina Contribution), of an amount equal to at least:
    • (i) Nineteen Million U.S. Dollars ($19,000,000), less
    • (ii) the gross proceeds received by the Company from the Bridge Notes (including as a result of the satisfaction or offset of obligations owed by the Company under Pre-Bridge Notes that were exchanged for Bridge Notes)

NOTABLE CONDITIONS TO TERMINATION

  • By either Andina or the Company if any of the conditions to Closing have not been satisfied or waived by July 31, 2021 (the “Outside Date”)

ADVISORS

  • Cowen is serving as financial advisor to Andina.
  • Cowen and Craig-Hallum Capital Group are acting as co-capital markets advisors to Andina.
  • Craig-Hallum is serving as sole placement agent in connection with the private placement and bridge offerings.
  • Ellenoff Grossman & Schole LLP is serving as legal advisor to Andina.
  • Foley & Lardner LLP is serving as legal advisor to Stryve.

MANAGEMENT & BOARD

Executive Officers

Julio A. Torres, 51
Chief Executive Officer & Director

Since 2013, Mr. Torres has been a managing partner at Multiple Equilibria Capital, a financial advisory firm covering Latin and Central America. From October 2015 to March 2018, Mr. Torres served as CEO of Andina Acquisition Corp. II on the deal that resulted in the merger with Lazydays. Between 2012 and 2013, Mr. Torres served as the co-CEO and board member of Andina Acquisition Corp. I. Since the merger with Tecnoglass he has continued as a board member of the merged entity. Prior to that he was managing director of Nexus Capital Partners, a private equity firm focused in the infrastructure sector in the Andean region. From 2006 to 2008, Mr. Torres served with the Colombian Ministry of Finance as director general of public credit and the treasury. He has also worked in other well recognized institutions in the financial sector such as JP Morgan Chase and is currently a board member of several companies in the region including Tuscany Oilfield Holdings, Fiduprevisora, and Serfinansa.

Mauricio Orellana, 53
Chief Operating Officer & Director

Since 2013, Mr. Orellana has served as a financial consultant to companies in Latin America in the media, infrastructure and services sectors. From August 2015 to March 2018, Mr. Orellana served as Chief Financial Officer and a member of the board of directors of Andina II. From 2005 to 2013, Mr. Orellana was a Managing Director at Stephens Inc., a private investment banking firm. From 2000 to 2005, Mr. Orellana was a Vice President and Managing Director at Cori Capital Partners, L.P., a financial services firm. Prior to this, he served as Investment Officer for Emerging Markets Partnership and Inter-American Investment Corporation, each private investment firms. Mr. Orellana received a degree in electrical engineering from the Universidad Central de Venezuela and an M.B.A. from the Instituto de Education Superior de Administracion.

Marjorie Hernandez, 38
Treasurer

Ms. Hernandez served as Secretary of Andina II from August 2015 and as Treasurer from October 2015, in each case until March 2018. She was also an initial investor and advisor to Andina I. From 2008 to 2015, Ms. Hernandez served as senior currency strategist for Latin America at HSBC Securities (USA). From 2005 to 2008, she was the lead macro-economic and political analyst for HSBC, covering the Andean region. Previously, she was a public policy associate at the Council of the Americas, a forum dedicated to the contemporary political, social, and economic issues in Latin America. Ms. Hernandez received a B.A. from Columbia University.

 

Board of Directors

B. Luke Weil, 39
Chairman of the Board of Directors

In October 2014, Mr. Weil founded the Long Island Marine Purification Initiative, a non-profit foundation established to improve the water quality on Long Island, New York, and has served as its Chairman since such time. In November 2012, he also co-founded Rios Nete, a medical clinic in the upper amazon region of Peru. Mr. Weil served as Chief Executive Officer of Andina II from its inception in July 2015 until August 2015, served as a member of its Board of Directors from its inception until its business combination with Lazy Days’ R.V. Center, Inc. (including as Non-Executive Chairman of the Board from February 2016 until the business combination) and has served as a director of the newly formed public company, Lazydays Holdings, Inc., since the business combination. From 2008 to 2013, Mr. Weil was Vice President, International Business Development — Latin America for Scientific Games Corporation, a supplier of technology-based products, systems and services to gaming markets worldwide. From January 2013 until its merger in December 2013, Mr. Weil served as Chief Executive Officer of Andina 1 and previously served as a member of its board from September 2011 until March 2012. From January 2004 to January 2006, Mr. Weil served as an associate of Business Strategies & Insight, a public affairs and business consulting firm. From June 2002 to December 2004, Mr. Weil served as an analyst at Bear Stearns. Mr. Weil received a B.A. from Brown University and an M.B.A. from Columbia Business School.

Matthew S. N. Kibble, 40
Director

In November 2013, Mr. Kibble founded Australy International LLC, a boutique investment bank, and has served as a Partner since. He also is the founder and Managing Partner of Kibble Holdings, a private investment vehicle. Since July 2013, he has also served as Principal and an advisor to Cap-Meridian Ventures, a venture capital firm. From October 2010 to July 2013, Mr. Kibble was the Founder and Chief Operating Officer of Everlight Capital, LLC, a boutique investment bank. From June 2009 to June 2010, Mr. Kibble served as Executive Director of The Westrock Group, Inc., a broker-dealer and asset management firm. From November 2005 to May 2009, Mr. Kibble was with JPMorgan Securities Inc. where he worked in the institutional equities and derivatives section. Prior to this, Mr. Kibble was an analyst at JPMorgan Chase and GMCG, LLC. Mr. Kibble is currently a director of Kibble Pet, Sargon Capital and Selong Selo Developments, all private companies. Mr. Kibble served as a member of the Board of Directors of Andina II from August 2015 until its business combination with Lazy Days’ R.V. Center, Inc. Mr. Kibble received a Bachelor of Science and a Bachelor of Commerce from the University of Queensland in Australia.

David Schulhof, 47
Director

Mr. Schulhof has served as President of Music at AGC Studios since January 2018 and is the co-founder and President of IM Global Music which he founded in December 2014. From March 2012 to November 2014, he was a Managing Director at G2 Investment Group, an offshoot of New York private equity firm Guggenheim Partners, focusing on the firm’s media investments. Prior to G2, he was the Co-Founder and Chief Executive Officer of Evergreen Copyrights from January 2005 through December 2010, which pursued a global acquisition strategy. Mr. Schulhof and his partners built Evergreen into one of the leading independent music publishing companies worldwide and in 2010 sold Evergreen to KKR/BMG Rights Management. Before launching Evergreen, from 1997 to 2004, he was Vice President of Motion Picture Music at Miramax and Dimension Films. Prior to joining Miramax, he was a lawyer at the law offices of Pryor Cashman Sherman and Flynn, representing film, music and TV clients. He began his career at Interscope Records. Mr. Schulhof served as Director of MI Acquisitions Inc., a blank check company that successfully completed a business combination with Priority Holdings LLC. Mr. Schulhof received a B.A. from Georgetown University and a J.D. from the NYU School of Law.

Walter Schenker, 72
Independent Director

Mr. Schenker has been a Principal at MAZ Capital Advisors LLC, the general partner of MAZ Partners LP, a hedge fund, since June 2010. From 1999 to 2010, Mr. Schenker was a Principal at Titan Capital Management, LLC, a registered investment adviser and hedge fund. Prior to this, he was affiliated with several hedge funds and brokerage firms, including Steinhardt Partners, Bear Stearns, Gabelli & Company, Inc., Lehman Brothers and Drexel Burnham Lambert. Mr. Schenker is currently on the board of directors and a member of the audit committee of TechPrecision Corp., a manufacturer of precision, large-scale fabricated and machined metal components and systems. He previously served on the board of directors and as chairman of the compensation committee and member of the audit committee of Sevcon, Inc., a NASDAQ-listed global supplier of control and power solutions for zero-emission, electric and hybrid vehicles, from 2013 until that company’s acquisition in September 2017. Mr. Schenker holds a B.S. from Cornell University and an M.B.A. in Finance from Columbia University.

ByRoman Developer