Aurora Acquisition Corp. *

PROPOSED BUSINESS COMBINATION: Better

ENTERPRISE VALUE: $6.732 billion

ANTICIPATED SYMBOL: BETR

Aurora Acquisition Corp. proposes to combine with Better HoldCo, Inc., a digital homeownership platform in the U.S.

Better, a fully digital homeownership platform, offers mortgage, real estate, title, and homeowners insurance products all through one intuitive online platform. Since its founding in 2016, Better has digitized the mortgage process, eliminated origination fees and commissions, empowering its clients throughout their homeownership journey. Customers can find a rate in as little as three seconds, get approved in as little as three minutes, lock in rates in as little as 15 minutes, and close their loans in as little as two weeks. From getting pre-approved for a mortgage and hiring a realtor, to securing title insurance, Better provides customers a cheap, quick, and intuitive online home financing experience. A meaningful portion of funds from this transaction will be used to fuel growth in current and adjacent businesses and to continue improving the customer experience. Additional proceeds will be used to cash-out shares from existing Better investors.

Better Investment Highlights

• Fast-growing homeownership platform, with over $24.2 billion funded loan volume and 490% year-over-year growth from 2019; $7.7B in title insurance placed, 855% growth from 2019, $1.4B in homeowners insurance placed 300% growth from 2019, and $691M in real estate transaction volume 471% growth from 2019;
• Better’s proprietary, data-driven technology platform, called Tinman, underpins Better’s efficient, low-cost model, allows Better to offer customers lower rates;
• Labor cost is 57% lower than MBA industry average, demonstrating our tech-driven efficiency;
• 2020 Adjusted 2020 EBITDA of $281.1M;
• An experienced management team led by founder and CEO Vishal Garg, with a proven record in consumer lending and fintech; CFO Kevin Ryan, with over 20 years of experience in financial services investment banking; CTU Diane Yu, with two decades experience in technical architecture and engineering; CCO Paula Tuffin, with over two decades experience in the law including at the Consumer Financial Protection Bureau; Head of Sales and Operations Sarah Pierce, overseeing thousands of Better team members across sales and operations;
• A highly efficient team, who close an average of 16.2 loans per month, compared to 7.1 for the MBA industry average;
• Currently licensed to operate in 47 states and the District of Columbia;
• Industry leading partnerships on private label and co-branded basis for some of the best brands in financial services, American Express, Ally Financial and Progressive Insurance;
• An award-winning product, most recently named among Nerdwallet’s Best Mortgage Refinance Companies of 2021, LinkedIn’s Top Startup of 2020 and a CNBC Disruptor 50: as well as being rated among the best mortgage refinance lenders by Forbes;

EXTENSION – 3/2/23 – LINK

• The SPAC will extend the date by which it must consummate a business combination from March 8, 2023 to September 30, 2023.
  • 25,751,449 shares were redeemed at a redemption price of $10.2178 per share.
  • No contribution to the trust account was made in connection with the extension.

SUBSEQUENT EVENT – 2/23/23 – LINK

• The meeting has been postponed from February 24, 2023 commencing at 9:00 a.m. Eastern Time, to February 24, 2023, commencing at 5:30 p.m., Eastern Time

SUBSEQUENT EVENT – 8/29/22 – LINK

• On August 26, 2022, Aurora, Merger Sub, and Better entered into Amendment No. 4 to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date to March 8, 2023.
• In consideration of extending the Agreement End Date, Better will reimburse Aurora for certain reasonable and documented expenses in an aggregate sum not to exceed $15,000,000.
• The reimbursement payments will be structured in three tranches, in each case subject to receipt by Better of reasonable documentation related to the expenses:
  • (i) the first payment of up to $7,500,000 will be made within 5 business days after the date of Amendment No. 4;
  • (ii) the second payment of up to $3,750,000 will be made on January 2, 2023; and
  • (iii) the third payment of up to $3,750,000 will become due upon termination of the Merger Agreement by mutual consent of the parties thereto and shall be payable on March 8, 2023 (or any earlier termination date, as applicable).
• On August 26, 2022, Aurora, Better, and Novator entered into a letter agreement to extend the maturity date of the bridge notes held by Novator to March 8, 2023, subject to SB Northstar LP consenting to extending the maturity of its bridge notes accordingly.
• Furthermore, pursuant to the Letter Agreement, the parties agreed that Novator will have the option, to alternatively exchange its bridge notes as follows:
  • (x) $75 million of its $100 million aggregate principal amount of bridge notes would be exchanged for newly issued shares of Better’s Class B common stock at a price per share reflecting a 75% discount to a $6.9 billion pre-money equity valuation of Better and
  • (y) the remaining $25 million of Novator’s bridge notes would be exchanged for Better preferred stock at price per share reflecting a $6.9 billion pre-money equity valuation of Better.
• Lastly, under the Letter Agreement, Novator and Aurora agreed to provide Novator with the option, but not the obligation, to fund the Total Sponsor Note Commitment in respect of the Convertible Notes on the Closing Date of the Sponsor Subscription Agreement (the “Additional Commitment Option”).
• In connection with the amendment effectuating the Additional Commitment Option, the parties agreed that if Novator does not fund all or a portion of the Total Sponsor Note Commitment pursuant to the Additional Commitment Option, SB Northstar LP’s Total Note Commitment in respect of the Convertible Notes:
  • (i) shall be reduced on a dollar-for-dollar basis by the amount of the Total Sponsor Note Commitment that is not funded by Novator and
  • (ii) SB Northstar LP shall be under no obligation to fund any shortfall in the Sponsor Note Purchase Amount, such that if Novator elects not to fund in full the Total Sponsor Note Commitment, then SB Northstar LP’s Total Note Commitment Amount shall be reduced to $550,000,000.

SUBSEQUENT EVENT – (PR LINK) – 8-K LINK 

• On November 30, 2021, Digital Homeownership Platform Better Announced up to $1.5 Billion in Bridge Financing and Convertible Notes with Aurora Acquisition Corp., Novator Capital (Aurora Sponsor), and SoftBank; Company to Accelerate Transformation of the Homeownership Experience (instead of Digital Homeownership Platform Better Announces Up to $1.5 Billion in Bridge Financing and Convertible Notes with Aurora Acquisition Corp. and SoftBank; Company to Accelerate Transformation of the Homeownership Experience).

Revised Transaction Details:

• The new agreements replace the previous up to $1.78 billion of financing from Aurora and SB Northstar LP, a fund managed by SB Management, a subsidiary of SoftBank Group Corp., ($1.5 billion PIPE and $278 million backstop of Aurora’s trust account share redemptions) of which $950 million of such financing proceeds would have been used to purchase shares from existing Better stockholders, with a $1.5 billion transaction in which all proceeds go directly to Better’s balance sheet (i.e., no secondary purchase from existing Better shareholders) to accelerate growth as the mortgage industry undergoes radical transformation.
• The $1.5 billion transaction comprises a $750 million bridge note funded immediately that converts into common equity at closing of Better’s merger with Aurora, and an additional commitment by Aurora’s sponsor and SoftBank to fund up to a $750 million (less amounts remaining in Aurora’s trust account after redemptions) convertible note at Better’s option within 45 days after closing of Better’s merger with Aurora. The transaction adds onto SoftBank Vision Fund 2’s original $500 million investment in Better, in which it purchased shares from existing Better stockholders in April 2021.
• With the $750 million bridge financing, Better will have over $1 billion of cash and cash equivalents on its balance sheet.
• Both parties remain committed to their long-term partnership with Better and are supportive of increased capital to Better’s balance sheet.
• The amendments to the transaction do not change the implied equity value for Better of approximately $6.9 billion.
• Given the new capital to Better is now up to $1.5 billion, which is fully committed by SoftBank and Novator Capital in the same ratios as their previous PIPE commitments, the redemption backstop of Novator Capital for shareholder redemptions from Aurora’s trust account has been terminated.

Bridge Note Purchase Agreement

• On November 30, 2021, Aurora entered into a convertible bridge note purchase agreement (the “Bridge Note Purchase Agreement”) with Better and the persons and entities named therein (the “Purchasers”). Under the Bridge Note Purchase Agreement, Better will issue up to $750,000,000 of bridge notes that convert to shares of Class A common stock of Aurora in connection with the closing of the Business Combination, with SB Northstar LP and Novator Capital Sponsor Ltd., as Purchasers, purchasing $650 million and $100 million respectively, of such convertible bridge notes.

Amendment to PIPE Subscription Agreement

• On November 30, 2021, Aurora entered into an amendment of the PIPE Subscription Agreement (the “PIPE Subscription Agreement Amendment”) with Subscriber and Better whereby
  • (i) Subscriber’s equity subscription commitment was reduced from $1,500,000,000 to $750,000,000 (less the amounts subscribed by other investors, the Sponsor’s subscription commitment amount, and the amount of any bridge notes funded by Subscriber)
  • (ii) Subscriber will have a new note commitment to fund $750,000,000 in convertible notes (less the amount of convertible notes funded by Sponsor and less any cash received by Aurora at the closing of the Business Combination from its trust account)
  • (iii) if state regulators or government-sponsored enterprises reject the transactions directly as a result of the new convertible note commitment, or if state regulators or government-sponsored enterprises do not approve the incurrence of debt represented by the convertible notes, then there will be no convertible note commitment and Subscriber’s aggregate common stock subscription commitment will be amended to $1,250,000,000.

Amendment to Novator Subscription Agreement

• On November 30, 2021, Aurora entered into an Amendment No. 1 to the Novator Subscription Agreement (the “Novator Subscription Agreement Amendment”) by and among Aurora, Sponsor, Sponsor Guarantor and Better pursuant to which, among other things, Sponsor agrees to purchase $100,000,000 of convertible promissory notes, convertible into shares of Class A common stock and any other terms mutually agreed by the Aurora, Better and Sponsor, minus
  • (i) such amount of cash received by Aurora at the closing of the Business Combination from its trust account that is attributable to investments in Aurora made by investors in Sponsor or in funds affiliated with or related to Sponsor or such investors
  • (ii) 13.33% of cash received by Aurora at the closing of the Business Combination from its trust account.
• In addition, if state regulators or government-sponsored enterprises reject the transactions directly as a result of the new convertible note commitment, or if state regulators or government-sponsored enterprises do not approve the incurrence of debt represented by the convertible notes, then there will be no convertible note commitment and Sponsor’s aggregate equity subscription commitment will be amended to $166,666,666.67, less the amounts noted in clauses (i) and (ii) above.

Termination of Redemption Subscription Agreement

• The Redemption Subscription Agreement provides that immediately after the deadline for Aurora’s public shareholders to elect to redeem or convert their Class A common stock from funds in the trust account in connection with the closing of the Mergers, Aurora will notify Backstop Subscriber of the number of shares that Aurora’s public shareholders have elected to redeem (the “Shortfall”), and Backstop Subscriber subscribes for and agrees to purchase (the “Backstop Purchase”) from Aurora the number of shares of Class A common stock assigned equal to the Shortfall, at a purchase price equal to $10.00 per share, and Aurora agrees to sell such shares to Backstop Subscriber at such price, subject to Aurora’s right to determine not to consummate such sale if the closing of the Mergers does not occur other than as a result of certain specified circumstances.
• On November 30, 2021, Aurora entered into a termination agreement (the “Termination Agreement”) of the Redemption Subscription Agreement, by and among Aurora, Sponsor and Sponsor Guarantor, which eliminates Sponsor’s requirement to backstop any redemptions.

TRANSACTION

• The transaction reflects an implied post-money equity value for Better of approximately $7.7 billion.
• Of the total consideration to existing stockholders of Better, $950 million will be paid in cash and the remainder in stock of the new Better.
• Existing Better shareholders can elect to receive cash or stock, subject to proration depending on whether cash elections are above or below $950 million.
• Certain existing holders have committed to elect cash for at least a portion of their shares, while others holders, including Vishal Garg, have committed to only elect stock consideration.
• After payment of the $950 million cash consideration, the remaining transaction proceeds, after paying expenses related to the transactions, of approximately $778 million will be used for general corporate purposes.
• Aurora’s Sponsor and Better have agreed that Aurora’s Sponsor will voluntarily forfeit 50% of its private placement warrants and modify the remaining 50% to be redeemable at $18.00 per share.
• Aurora’s sponsor also has agreed that 20% of its founder shares will be subject to price-based vesting.
• Major stockholders, members of Better’s Board of Directors, and key executives of Better have agreed to enter into lock-up agreements as well.
• Existing Better shareholders to receive super-voting shares at 3:1

PIPE

• $1.5 billion PIPE.
• Aurora’s sponsor, Novator Capital (“NC” or “Aurora’s Sponsor”) will invest $200 million through the PIPE, by taking up a portion of SoftBank’s commitment, and also has committed to backstop any redemptions by Aurora shareholders of funds in its trust account.
• Also participating in the PIPE is current Better investor, Activant Capital.

SPONSOR AGREEMENT

• Aurora’s Sponsor and Better have agreed that Aurora’s Sponsor will voluntarily forfeit 50% of its private placement warrants and modify the remaining 50% to be redeemable at $18.00 per share.
• Aurora’s sponsor also has agreed that 20% of its founder shares will be subject to price-based vesting. (Docs not filed yet)

NOTABLE CONDITIONS TO CLOSING

• Aurora holding cash in an amount at least equal to the sum of (x) the amount currently in Aurora’s trust account on May 10, 2021 plus (y) $1,500,000,000.

NOTABLE CONDITIONS TO TERMINATION

• Subsequent Event – On August 26, 2022, Aurora, Merger Sub, and Better entered into Amendment No. 4 to the Merger Agreement, pursuant to which the parties agreed to extend the Agreement End Date to March 8, 2023.
• The Merger Agreement may be terminated at any time prior to the Closing by either Aurora or Better in the event of certain uncured breaches by the other party or if the Closing has not occurred on or before February 12, 2022 (subject to extension of such date in accordance with the terms of the Merger Agreement).

ADVISORS

• BofA Securities is acting as financial advisor to Better.
• Barclays is acting as financial advisor to Aurora.
• Sullivan & Cromwell LLP is acting as legal counsel to Better.
• Baker McKenzie LLP and Ropes & Gray LLP are acting as legal counsel to Aurora.

MANAGEMENT & BOARD

Executive Officers

Arnaud Massenet, 55
Chief Executive Officer

Mr. Massenet holds a Bachelor of Arts from the Lincoln International School of Business in Paris, France and a Masters of Business Administration from the University of North Carolina. Mr. Massenet started his career in banking in 1994 at Morgan Stanley. He became the Head of Morgan Stanley’s derivatives group in London, United Kingdom, in 1998. In 2003, Mr. Massenet started Lehman Brothers corporate derivatives Group (Capital Market) before exiting in 2007 to start South West Capital, a hedge fund focused on real asset investments. Mr. Massenet co-founded Net-a-Porter in 1999, largely financed by himself and the Richemont Group. He was an active board member for more than 10 years, involved in all important strategic decisions including creation of Outnet.com, Mr. Porter, Porter Magazine, finally culminating in a 2-step sale in 2010 and 2015 to the Richemont Group. Mr. Massenet is currently chairman of Grip, a subsidiary of Intros.at, an artificial intelligence company specialized in organizing virtual conferences for corporate and virtual meetings. He founded Grip in 2015 with Reed Elsevier and Founders Forum. Mr. Massenet also backed many successful tech companies, including Deliveroo, Care Wish, Houzz, Urban Massage, Highsnobiety, Invincible and NGM, Ozon, and serves on the board of directors of Ahalife, a large interior design platform based in New York, New York.

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Prabhu Narasimhan, 40
Chief Investment Officer and Head of Legal

Mr. Narasimhan has almost two decades of experience as a lawyer at three leading international law firms (Mayer Brown, White & Case and Baker & McKenzie), acting as a senior strategic advisor to multi-billion dollar family offices and private equity funds on multi-billion dollar mergers and acquisitions and equity and debt capital markets transactions worldwide. His re-structuring of ATP Media’s tennis broadcasting rights and his crafting of fiscal stimulus laws in Europe have been widely recognized and commended, particularly by the FT Innovative Lawyers awards. In 2020, Mr. Narasimhan was appointed to the board of directors as a director of the media company, Prime Focus World N.V.

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Caroline Harding, 40
Chief Financial Officer

Ms. Harding qualified as a chartered accountant with Ernst & Young LLP in 2007. Prior to relocating to the Cayman Islands in 2020, Ms. Harding was the chief financial officer for Weybourne, Sir James Dyson’s family office, where she was a member of a team that oversaw a multi-billion pound portfolio which included the James Dyson Group. During this time, Ms. Harding served as a director of eleven Weybourne Group related entities, which included the overall holding company responsible for strategy and investments. Ms. Harding was the senior accounting officer for Weybourne Group and the compliance and anti-money laundering officer for the Financial Conduct Authority regulated subsidiary. For the nine years prior to Weybourne, Ms. Harding was the chief financial officer and director of Exploration Capital Ltd. for five of her nine years with the company. Exploration Capital, manages a diversified global investment portfolio with a particular focus on agricultural and development land in Latin America. Ms. Harding was simultaneously chief financial officer of one of the portfolio companies, a high performance engineering business, Gilo, and successfully re-structured the accounting and reporting systems of the company.

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Board of Directors

Thor Björgólfsson, 53
Chairman of the Board and Director

Mr. Björgólfsson graduated from New York University’s Stern School of Business with a Bachelor’s degree in Finance. He is Iceland’s first billionaire. In 1991, Mr. Björgólfsson went to Russia and founded the brewing company, Bravo Brewery in St Petersburg, Russia. He ultimately sold the company to Heineken in 2002. Over the next years, Mr. Björgólfsson invested in telecommunications, mostly in Eastern Europe, built up generic drugs company Actavis (now Allergan) and became a significant investor in one of Iceland’s largest banks, Landsbanki. Mr. Björgólfsson continues to be an active investor in the emerging economies of Central and Eastern Europe and Latin America through his London-based private equity fund, Novator Partners. He is chairman of Novator and maintains a shareholding in companies including PLAY in Poland and WOM S.A. in Chile, as well as computer games company CCP, data center Verne Global and pharmaceutical company Xantis Pharma.

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Michael Edelstein, 52
Director

Mr. Edelstein is a creative business leader, investor and producer who has developed hit television series and built an award-winning international content studio for NBCUniversal International. Mr. Edelstein received his undergraduate degree from the University of California at Los Angeles with a Bachelor of Arts degree in History and Art History. From 1998 to 2002, he was the director of current programs at CBS Corporation. From 2004 to 2006, Mr. Edelstein was the executive producer of the Desperate Housewives. From 2010 to 2017, he was the president of NBCUniversal International where he built the division into one of the most respected content players in the international marketplace. He is experienced in both the domestic and international television markets. Mr. Edelstein has demonstrated a breadth of skill in developing clear business strategies and financial management as well as being equally adept at communicating with writers, directors and producers in order to create global quality content.

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Shravin Mittal, 30
Director

Mr. Mittal received his undergraduate degree from the University of Bath in 2009 with a Bachelor of Science degree in accounting and finance and Masters of Business Administration from Harvard University in 2014. Mr. Mittal has held a series of positions with increasing seniority and responsibility, including as an investment banking professional with J. P. Morgan Chase & Co. from 2009 to 2010, Manager and managing director at Airtel in Africa and India from 2010 to 2012, assistant director at Better Capital from 2014 to 2016, and Founder of Unbound Ltd. since 2017, or Unbound, and a director of Bharti Global from 2017, the Bharti family office. Unbound is a globally focused long-term technology investment arm that aims to invest in and build technology companies. Select investments include Databricks, mPharma, and FreightHub.

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Sangeeta Desai, 44
Director

Ms. Desai is an experienced investor and C-level executive, and currently serves on number of listed and private boards globally. She brings a unique combination of strategic, operating and financial experience, having spent her early career in investment banking and private equity before taking on leadership roles in global media businesses. She is currently the Chairman of Mopar Media Group AB, or Mopar Media (2020 to present) and is a non-executive director on the Boards of Orbit Showtime Network (“OSN”) (2020 to present) and Ocean Outdoor Ltd. (“Ocean Outdoor”) (2018 to present). During 2021, Ms. Desai was appointed to the board of directors of Boat Rocker Media. Her most recent executive experience was as Group Chief Operating Officer and Chief Executive Officer of Emerging Markets at FremantleMedia (2013 to 2018), and prior to that as Chief Operating Officer of Hit Entertainment (2009 to 2012). Prior to joining HIT, Sangeeta was a Principal at Apax Partners (2005 to 2009), where she invested in the media industry globally, and she started her career as an investment banker at The Goldman Sachs Group, Inc. (2004 to 2005) and JP Morgan (1998 to 2001). She holds a Bachelor of Science in Business Administration from the Haas School of Business, University of California at Berkeley and a Master of Business Administration from the Wharton School, University of Pennsylvania.

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