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CBRE Acquisition Holdings, Inc.

CBRE Acquisition Holdings, Inc.

Nov 16, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Altus Power, Inc.

ENTERPRISE VALUE: $1.623 billion
ANTICIPATED SYMBOL: AMPS

CBRE Acquisition Holdings, Inc. proposes to combine with Altus Power, Inc., a clean electrification company which delivers savings and sustainability benefits to its rapidly growing pool of commercial, public sector, and community solar customers.

Altus Power serves its customers by offering locally-sited solar generation, energy storage, and EV-charging stations across the U.S. Since its founding in 2009, Altus Power has constructed or acquired more than 200 distributed generation solar facilities totaling more than 265 megawatts from Vermont to Hawaii. The Company expects to end 2021 with a solar asset portfolio of more than 400 megawatts. Altus Power has generated significant EBITDA since 2017.

SUBSEQUENT EVENT – 9/15/22 – LINK

Warrant Redemption

  • Warrant holders will have until October 17, 2022 (the “Redemption Date”), to redeem their warrants.
  • Between May 31, 2022, and August 17, 2022, Altus Power exchanged approximately 4,630,163 public warrants for an aggregate of 1,111,243 of shares of its Class A Common Stock.
  • Altus Power is entitled to redeem all of the outstanding Warrants at a redemption price of $0.10 per Warrant if the last reported sales price of the Class A Common Stock is at least $10.00 per share on any twenty trading days within the thirty trading day period ending on the third trading day prior to the date on which a notice of redemption is given
  • All Warrants may be exercised by the holders thereof until 5:00 p.m. New York City time on the Redemption Date. Payment upon exercise of the Warrants may be made either:
    • (i) in cash, at an exercise price of $11.00 per Warrant (the “Cash Exercise Price”) or
    • (ii) on a “cashless basis” in which the exercising holder will receive 0.2763 shares of Class A Common Stock for each Warrant.

TRANSACTION

  • The transaction is anticipated to generate gross proceeds of up to approximately $678 million of cash, assuming no redemptions by CBAH’s public stockholders, which will be used to fund the Company’s growth initiatives and strengthen the combined company’s balance sheet.
  • Proceeds include a $275 million fully-committed common stock PIPE (the “PIPE”), anchored by CBRE Group, Inc. and existing investors, including Altus Power management and Blackstone Credit, as well as new investors, including ValueAct Capital, Liberty Mutual Investments and other leading institutional investors.
  • The pro forma implied equity value of the combined company is $1.58 billion at the $10 per share price in the transaction, and assuming no redemptions by CBAH’s public stockholders.
  • CBRE receives no upfront sponsor shares but instead earns its incentive as Altus Power shares appreciate in value over time.

cbre trans overview

PIPE

  • Proceeds include a $275 million fully-committed common stock PIPE at $10.00 per share
    • Anchored by CBRE Group, Inc. and existing investors, including Altus Power management and Blackstone Credit
    • New investors: ValueAct Capital, Liberty Mutual Investments and other leading institutional investors.

SPONSOR FORWARD PURCHASE

  • The Sponsor has committed to purchase shares of CBAH Class A common stock in an aggregate amount of $70,000,000, with a commitment to purchase additional shares of CBAH Class A common stock in an aggregate amount of up to $150,000,000 to the extent of the amount of redemptions of shares of CBAH Class A common stock submitted for redemption by public stockholders in connection with the closing.

MANAGEMENT EQUITY INCENTIVE

  • The compensation committee of the Board will grant to senior members of the Company, including to Mr. Felton and Mr. Norell, time-based restricted stock units (“RSUs”) with respect to an aggregate five percent (5%) of PubCo’s Class A common stock on a fully diluted basis, excluding the then-outstanding shares of PubCo’s Class B common stock or any shares of PubCo’s Class A common stock into which such shares of PubCo’s Class B common stock are or may be convertible.
  • The RSUs will be allocated based on the recommendation of the compensation consultant(s) to the Compensation Committee (which shall include at least Mercer and one other compensation consultant proposed by Sponsor) and as determined by the Compensation Committee.
  • Subject to continued employment on each applicable vesting date, the RSUs will vest 33 1/3% on each of the third, fourth and fifth anniversaries of the date the transaction is consummated.

CLASS B FORFEITURE

  • At the closing of the transactions, each such holder will surrender to PubCo 30% of the shares of Class B common stock held by such holder and each such holder shall not transfer any shares of Class B common stock

COMMERCIAL COLLABORATION AGREEMENT

  • CBRE will invite Altus to join CBRE’s strategic supplier program and CBRE will promote Altus as its preferred clean energy renewable provider/partner
  • CBRE and Altus Power will create a business opportunity referral program
  • CBRE will reasonably collaborate with Altus to develop and bring to market new products and/or bundles for Altus’s customers
  • Altus will consider in good faith inviting CBRE to become a solar tax equity partner for Altus, on a non-exclusive basis, on market terms to be mutually agreed and CBRE will provide, at no cost to Altus, reasonable access to data-driven research and insights prepared by CBRE (subject to certain exceptions).
  • The Collaboration Agreement continues for a period of seven years, with automatic one year renewal periods, unless earlier terminated by either party

NOTABLE CONDITIONS TO CLOSING

  • Altus is not obligated to close unless CBAH has at least $425 million of cash available upon the closing (taking into account funds in CBAH’s trust account net of any stockholder redemptions and the proceeds from the PIPE financing), before redemption of the Altus preferred stock and payment of transaction expenses.

NOTABLE CONDITIONS TO TERMINATION

  • Either party if the closing of the transactions contemplated by the Business Combination Agreement has not occurred by March 31, 2022

ADVISORS

  • Citi acted as exclusive financial advisor to Altus Power.
  • Fifth Third Securities acted as capital markets advisor to Altus Power.
  • Morgan Stanley and J.P. Morgan acted as financial advisors to CBAH.
  • Morgan Stanley acted as CBAH’s lead placement agent on the PIPE.
  • Citi and J.P. Morgan acted as CBAH’s placement agents on the PIPE.
  • Simpson Thacher & Bartlett LLP served as legal counsel to CBAH.
  • Ropes & Gray LLP served as legal counsel to Altus Power.
  • Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel to the placement agents.
  • Potter Anderson & Corroon LLP served as legal counsel to the special committee of the CBAH board.

MANAGEMENT & BOARD

Executive Officers

William F. Concannon, 65
Chief Executive Officer, Director

Mr. Concannon is CBRE’s Global Group President, Clients and Business Partners, where he drives the firm’s engagement strategy for CBRE’s largest occupier and investor clients, as well as with key strategic partners. He has been with CBRE since its acquisition of the Trammell Crow Company in 2006. Before assuming his current role, he served as Global CEO of CBRE’s GWS business segment, a global, integrated, full-service real estate outsourcing business serving the world’s largest real estate occupiers. He serves on the board of Charles Rivers Associates (NASDAQ: CRAI). Mr. Concannon received a B.S. from Providence College.

Cash J. Smith, 44
President, Chief Financial Officer and Secretary

Mr. Smith joined CBRE in 2012 and was Global Head of Mergers & Acquisitions with responsibility for CBRE’s mergers and acquisitions activity globally. He was also responsible for CBRE’s property technology and venture-capital investments, including serving on multiple boards related to CBRE’s direct investments. Mr. Smith received an M.B.A. from Duke University and a B.S. from Georgia Institute of Technology.

Board of Directors

Robert E. Sulentic, 64
Director 

Mr. Sulentic began his real estate career with Trammell Crow Company in 1984 as an Industrial Leasing Agent in Houston, Texas. Over the next 23 years he served in various leadership positions at Trammell Crow Company and rose to President and CEO in 2000 and Chair of the Board in 2002. He served in those roles when Trammell Crow Company merged with CBRE in late 2006. Mr. Sulentic is a member of the CBRE Group, Inc. Board of Directors and also served as the independent Chair of the Board of Staples, Inc. until its acquisition by Sycamore Partners, a private equity firm, in 2017. Mr. Sulentic received an M.B.A. from Harvard Business School and a B.A. from Iowa State University.

Emma E. Giamartino, 37
Director

Ms. Giamartino is CBRE’s Executive Vice President of Corporate Development and Global Head of Mergers & Acquisitions. She began her career at CBRE in February 2018, as Head of Mergers & Acquisitions in the Americas. Prior to joining CBRE, Ms. Giamartino served as Director of Corporate Development at Verizon Communications, from 2015 to 2018, where she completed transactions across telematics, IoT, media, software and the core network. Previously, she worked in Nomura’s technology, media and telecommunications investment banking group, covering a wide range of sectors, including data and information services, software, media and digital content platforms, from 2010 to 2015. Ms. Giamartino received an M.B.A. from Columbia Business School and a B.S.E. from Duke University.

David S. Binswanger, 43
Director 

At LPC, Mr. Binswanger is responsible for the firm’s operations and principal acquisition and development projects throughout the U.S. west region. He also directs the delivery of all services to LPC’s clients in the west, including commercial real estate owners, investors, lenders and occupiers. Mr. Binswanger joined LPC in 1998 and has held various senior level positions within operations and finance, including Vice President of Finance and Executive Vice President overseeing the firm’s Southern California business unit. He received a B.B.A. from Southern Methodist University.

Sarah E. Coyne, 29
Director 

At ValueAct Capital, Ms. Coyne is responsible for evaluating investment opportunities and managing a diverse portfolio of investments and has been with the firm since September 2017. Prior to ValueAct, she served as Associate in the Technology, Media & Telecommunications private equity group at KKR, from July 2015 to July 2017, and before that, a member of the Technology, Media & Telecommunications investment banking group at Goldman Sachs, from July 2013 to March 2015. Ms. Coyne received a B.S. from the University of Pennsylvania’s Wharton School of Business.

Jamie J. Hodari, 39
Director 

Since 2013 at Industrious, he has led the growth to over 90 locations across more than 45 cities. Prior to this role, he served as CEO of Kepler from 2011 to 2013, a hedge fund analyst at Birch Run Capital from 2010 to 2011, a corporate lawyer at Sullivan & Cromwell from 2009 to 2010, and a reporter for the Times of India from 2004 to 2005. He holds a J.D. from Yale Law School, an M.P.P. from Harvard University and a B.A. from Columbia University.

Michael J. Ellis, 64
Director 

At Johnson Controls, which he joined in 2019, Mr. Ellis oversees digital strategy, innovation and execution, working closely with customers to drive new growth and value opportunities across the globe. Prior to this role, he served as Global Managing Director of Accenture, from 2018 to 2019, and, before that, was President, Chairman and CEO of ForgeRock, a global digital security software company, from 2012 to 2018. Mr. Ellis received B.S. and B.A. from the University of Minnesota.

ByRoman Developer