CF Finance Acquisition Corporation III

CF Finance Acquisition Corporation III

Oct 16, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: AEye, Inc.

ENTERPRISE VALUE: $2.003 billion
ANTICIPATED SYMBOL: LIDR

CF Finance Acquisition Corporation III proposes to combine with AEye, Inc.

AEye’s proprietary active sensing, intelligent LiDAR delivers industry-leading performance that addresses the most difficult challenges facing autonomous driving. While traditional sensing systems passively collect data, AEye’s active LiDAR leverages principles from automated targeting systems and biomimicry to scan everything while intelligently focusing on what matters in order to enable safer, smarter, and faster decisions in complex scenarios. As a result, AEye’s active LiDAR uniquely enables higher levels of autonomous functionality (SAE L2-L5) at the optimal performance, power, and price. The proposed transaction will expand AEye’s technology leadership and accelerate the adoption of its active, high-performance LiDAR across key markets.

AEye was founded in 2013 by Luis Dussan to create low-cost and high-performance artificial intelligence (AI)-driven sensing systems that exceed the capabilities of the human eye and visual cortex. Dussan’s mission was to design deterministic artificial intelligence sensing systems that adhere to automotive functional safety standards. Prior to founding AEye, Dussan was at Northrop Grumman and Lockheed Martin, where he was responsible for designing mission-critical targeting systems for fighter jets and ground troops that uniquely search, acquire, and track threats. At AEye, Dussan applied the same principles to create the highest performing active sensing and perception systems used to address the most challenging situations, ensuring the highest levels of safety for autonomous driving.

AEye’s intelligent Detection and Ranging platform (iDAR™) leverages an agile MEMS-based scanner, 1550nm laser, and bistatic advanced receiver with embedded deterministic artificial intelligence to deliver high-performance at a low cost. iDAR’s modular, software configurable platform leverages intelligence at the edge to achieve exceptional range, resolution, and frame rate, and through its proprietary active scanning, the ability to capture intraframe radial and lateral velocity. Complementing other sensors like RADAR and cameras, iDAR assists AEye and its partners in delivering a complete sensor suite to address any use case in automotive, industrial and mobility markets. iDAR technology is based on a large and diverse patent portfolio of over 80 patents with more than 3000 claims.


SUBSEQUENT EVENTS – Press Release, Filed 8-K

On May 3, 2021, CFAC announced they amended their previously announced merger agreement.

  • Under the terms of the amended merger agreement, AEye will be valued on a pre-merger basis at $1.52 billion at the closing of the transaction, compared to $1.9 billion at the time of the merger announcement in February 2021.
  • Assuming no redemptions by CF III stockholders, gross proceeds from the transaction are expected to be up to $455 million, including the contribution of up to $230 million of cash held in CF III’s trust account.
  • The transaction is further supported by a $225 million fully committed PIPE anchored by strategic and institutional investors including Continental, GM Ventures, Subaru-SBI, Intel Capital, Hella Ventures, and Taiwania Capital.
  • Upon the closing of the transaction, all cash remaining in CF III, net of transaction expenses and CF III liabilities, is expected to be used by AEye to retire debt and to strengthen its balance sheet to support future growth.
  • CFAC also extended the deadline for CF III to consummate a business combination from May 17, 2021 to September 17, 2021 by depositing an additional $0.10 per share into CF III’s trust account so that the trust now has $10.10 per share.
    • Cantor Fitzgerald has also agreed to extend such deadline, if necessary, from September 17, 2021 to January 17, 2022.

TRANSACTION

Assuming no redemptions by CF III stockholders, the transaction is expected to deliver up to $455 million of gross proceeds, including the contribution of up to $230 million of cash held in CF III’s trust account.

The transaction is further supported by a $225 million fully-committed PIPE anchored by strategic and institutional investors including GM Ventures, Subaru-SBI, Intel Capital, Hella Ventures, Taiwania Capital, and other undisclosed investors to be announced.

All cash remaining in CF III at the closing of the transaction after paying off transaction expenses and CF III liabilities is expected to be used to retire debt and to add cash to AEye’s balance sheet for working capital, growth capex and other general corporate purposes.

AEye shareholders will retain 100% of their equity holdings in the combined company.

cf iii transaction summary


PIPE

  • $225 million fully-committed PIPE anchored by strategic and institutional investors including GM Ventures, Subaru-SBI, Intel Capital, Hella Ventures, Taiwania Capital, and other undisclosed investors to be announced.
    • An aggregate of 22.5 million shares of Class A Common Stock (the “PIPE Shares”), for a purchase price of $10.00 per share and an aggregate purchase price of $225 million (the “PIPE Investments”), with the Sponsor’s Subscription Agreement accounting for $9.5 million of such aggregate PIPE Investments.

LOCKUP

  • The securities held by such stockholders will be locked-up until the earlier of:
    • (i) the one (1) year anniversary of the date of the Closing,
    • (ii) the date on which the last reported sale price of Class A Common Stock exceeds $12.00 per share (adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing, and
    • (iii) the date on which CF III consummates a liquidation, merger, capital stock exchange, reorganization, or other similar transaction after the Closing which results in all of CF III’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.

NOTABLE CONDITIONS TO CLOSING

  • Available Acquiror Cash being at least $225 million

NOTABLE CONDITIONS TO TERMINATION

  • If the Closing has not occurred on or before the earlier of the six month anniversary that the Registration Statement is initially filed with the SEC and the 270 day anniversary of the date of the Merger Agreement
  • By either CF III or AEye if the board of directors of the other party publicly changes its recommendation with respect to the Merger Agreement and Transactions and related stockholder approvals under certain circumstances detailed in the Merger Agreement
  • None of the parties to the Merger Agreement are required to pay a termination fee or reimburse any other party for its expenses as a result of a termination of the Merger Agreement (except that AEye may be responsible for $250,000 in consultant expenses of CF Finance Holdings III, LLC (the “Sponsor”)

ADVISORS

  • Guggenheim Securities is serving as financial advisor and capital markets advisor to AEye.
  • DLA Piper LLP (US) is serving as legal advisor to AEye.
  • Financial Profiles is serving as investor relations advisor for AEye.
  • Cantor Fitzgerald & Co. is serving as financial and capital markets advisor to CF III.
  • Hughes Hubbard & Reed LLP and Ellenoff Grossman & Schole LLP are serving as legal advisors to CF III.
  • Cantor Fitzgerald & Co. is serving as placement agent to CF III for the PIPE offering.

MANAGEMENT & BOARD


Executive Officers

Howard W. Lutnick, 59
Chairman and Chief Executive Officer

Mr. Lutnick is also the Chairman, President and Chief Executive Officer of Cantor. Mr. Lutnick joined Cantor in 1983 and has served as President and Chief Executive Officer of Cantor since 1992 and as Chairman since 1996. Mr. Lutnick’s company, CF Group Management, Inc. (“CFGM”), is the managing general partner of Cantor. Mr. Lutnick is also the Chairman of the Board of Directors of BGC Partners, Inc. and its Chief Executive Officer, positions in which he has served from June 1999 to the present. In addition, Mr. Lutnick has served as Chairman of Newmark Group, Inc. since 2016. Mr. Lutnick also serves as the Chairman and Chief Executive Officer of Cantor SPAC I, since October 2015, and Cantor SPAC II, since September 2019. Mr. Lutnick is a member of the Board of Directors of the Fisher Center for Alzheimer’s Research Foundation at Rockefeller University, the Board of Directors of the Horace Mann School, the Board of Directors of the National September 11th Memorial & Museum, the Board of Directors of the Partnership for New York City, and the Board of Overseers of The Hoover Institution. In addition, Mr. Lutnick has served as Chairman and Chief Executive Officer of each of Cantor Fitzgerald Income Trust, Inc. (formerly known as Rodin Global Property Trust, Inc.) and Rodin Income Trust, Inc. since February 2017 and as President of Rodin Income Trust, Inc. since January 2018.


Anshu Jain, 57
President and Director Nominee

Mr. Jain is also the President of Cantor, a position he has held since January 2017. Mr. Jain directs strategy, vision and operational foundation across Cantor’s businesses. Mr. Jain also serves as the President of Cantor SPAC I, since January 2018, and a director of Cantor SPAC I since December 2018, and also serves as the President of Cantor SPAC II, since September 2019, and a director of Cantor SPAC II since August 2020. Mr. Jain was Co-CEO of Deutsche Bank from June 2012 to June 2015. Between February 2016 and March 2017, Mr. Jain was an advisor to Social Finance Inc. and consultant to Deutsche Bank from July 2015 to January 2016. He was also a member of Deutsche Bank’s Management Board from 2009 to 2015 and Deutsche Bank’s Group Executive Committee from 2002 to 2015 and previously led Deutsche Bank’s team advising the UK Treasury on financial stability. Mr. Jain joined Deutsche Bank from Merrill Lynch in 1995. Mr. Jain sat on the Board of Directors of the Institute of International Finance from 2012 to 2015 and previously was a member of the Financial Services Forum and served on the International Advisory Panel of the Monetary Authority of Singapore. Mr. Jain is a trustee of Chance to Shine, a leading UK based sports charity whose mission is to spread the power of cricket throughout schools and communities. Mr. Jain also serves on the MIT Sloan Finance Group Advisory Board. Mr. Jain received his Bachelor’s degree in Economics, with honors, from the University of Delhi and his MBA in Finance, Beta Gamma Sigma, from the University of Massachusetts Amherst.


Paul Pion, 53
Chief Financial Officer and Director Nomine

Mr. Pion has served as U.S. Chief Administrative Officer and Senior Managing Director of CF&Co since August 2011. In this position, Mr. Pion oversees a range of functions for Cantor and its affiliates, most notably client management, cost control, procurement, and vendor management. Other responsibilities include business continuity planning, facilities and insurance. In addition, Mr. Pion is the Treasurer of the Cantor Fitzgerald Relief Fund. Additionally, since January 2012, Mr. Pion has served as Chief Executive Officer of Tower Bridge International Services LP, a subsidiary of Cantor that is responsible for the back-office functions under a shared-services model for all Cantor UK-based businesses. Mr. Pion also serves as the Chief Financial Officer of Cantor SPAC I since January 2020 and a director of Cantor SPAC I since June 2020, and also serves as the Chief Financial Officer of Cantor SPAC II since September 2019 and a director of Cantor SPAC II since August 2020. In addition, Mr. Pion has served as Chief Financial Officer, Treasurer and a director of each of Cantor Fitzgerald Income Trust, Inc. (formerly known as Rodin Global Property Trust, Inc.) and Rodin Income Trust, Inc. since January 2020. Mr. Pion previously served in numerous positions for Cantor, including Global Director of Internal Audit and was involved in various special projects from 2002 to 2010. Prior to joining Cantor, Mr. Pion served for approximately 14 years with the accounting firm Deloitte & Touche, most recently as an Audit and Assurance partner focusing on financial services clients. At Deloitte & Touche, Mr. Pion also led the New York office’s China Practice. Mr. Pion holds Series 7 and 27 licenses and is a Certified Public Accountant in the State of New York. He received a B.S. in Accounting from the State University of New York at Albany.


 

Board of Directors

Robert Sharp, 55
Director

Mr. Sharp has over 25 years of experience in corporate acquisitions and strategically building equity value, combining financial and operational expertise. Since January 2014, Mr. Sharp has been Co-CEO of Ramy Brook, a leading contemporary fashion brand. Mr. Sharp was a founding partner and member of the Executive Committee of MidOcean Partners, a leading private equity firm, from February 2003 to December 2013. From September 1999 to February 2003, Mr. Sharp was a Managing Director at DB Capital Partners, the private equity division of Deutsche Bank, which was acquired out of Deutsche Bank to form MidOcean Partners. Mr. Sharp joined DB Capital Partners from Investcorp International, a global private equity firm. Mr. Sharp has served on numerous corporate boards throughout his career, and is currently Chairman of Thomas Scientific, one of the largest suppliers of laboratory products and services. Mr. Sharp has also served as a director of CF Finance Acquisition Corp. since March 2019. Mr. Sharp is a member of the Advisory Board of Mount Sinai Hospital, and a member of the Steering Committee of Duke University’s Financial Economics Center. Mr. Sharp received his B.A. in Economics, Phi Beta Kappa, Summa Cum Laude, from Union College, and his M.B.A in Finance from Columbia University, where he was a Samuel Bronfman Fellow.


Robert Hochberg, 58
Director

Mr. Hochberg is currently President and Chief Executive Officer of Numeric Computer Systems, Inc. Mr. Hochberg has served as President since June 1984 and as Chief Executive Officer since November 1994. Numeric Computer Systems is a global software company with offices in New York, San Juan, Auckland, Jakarta and Sydney. Additionally, Mr. Hochberg currently serves on the Board of Directors of Rodin Income Trust, Inc. Mr. Hochberg has also served as a director of Cantor SPAC I since January 2020 and a director of Cantor SPAC II since August 2020. Mr. Hochberg is a graduate of Vassar College, where he received a Bachelor of Arts in Economics.