Cohn Robbins Holdings Corporation *
The below-announced combination was terminated on 9/26/22. It will remain on the page for reference purposes only. Once a new combination is announced it will be added to the top of the page.
PROPOSED BUSINESS COMBINATION: Allwyn Entertainment AG [TERMINATED 9/26/22 – LINK]
ENTERPRISE VALUE: $9.312 billion
ANTICIPATED SYMBOL: ALWN
Cohn Robbins Holdings Corporation proposes to combine with Allwyn Entertainment, a Leading Multinational Lottery Operator.
Since 2014, Allwyn’s business has provided major support for the renovation and modernization of Greece’s most important, largest and oldest children’s hospitals. The Company promotes active lifestyles as major sponsors of professional and mass sport, including Olympic teams, professional football and basketball teams, and after-school programs and activities for children. It is the biggest supporter of sports in Austria, with its subsidiary, Austrian Lotteries, making a guaranteed annual contribution of at least €80 million to sports, and having provided approximately €1.7 billion in sports funding since 1986. In the Czech Republic, 150,000 school children each year participate in a Company-sponsored Olympic-style multi-sport contest, and the Company supports more than 3,200 disadvantaged children in pursuing sports through the Czech Olympic Foundation. In Greece, Allwyn sponsors more than 175 sports academies serving more than 18,000 children, 28,000 parents and guardians, and 1,000 coaches.
Allwyn Entertainment is a lottery, entertainment, and digital gaming operator, with trusted brands delivering over €16bn in wagers. Allwyn is one of Europe’s largest and fastest growing lottery companies and its strong performance across its markets is helping to fund good causes in Austria, the Czech Republic, Greece, Cyprus and Italy.
SUBSEQUENT EVENT – 8/29/22 – LINK
- Allwyn Entertainment AG and Cohn Robbins Holdings Corp. today announced that PPF Group, which currently owns approximately 4 million shares of CRHC, has agreed to purchase up to an additional 26 million Allwyn shares at $10.00 per share (the “Backstop”) in connection with the previously announced business combination between Allwyn and CRHC.
- In exchange for its commitment to provide the Backstop to support the Business Combination, PPF Group will receive up to an additional 4 million class B shares in Allwyn.
- If PPF Group purchases the maximum number of shares under the Backstop, it would become an approximately 4.99% shareholder in the combined entity.
TRANSACTION
- Allwyn’s expected implied pro forma total enterprise value of approximately $9.3 billion represents approximately 11.5x 2022E Adjusted EBITDA.
- However, due to a bonus pool of up to approximately 6.6 million CRHC shares to be made available exclusively to non-redeeming CRHC shareholders, such shareholders have the opportunity to establish ownership stakes at a maximum expected effective valuation multiple of 10.8x 2022E Adjusted EBITDA, or approximately $8.7 billion in total enterprise value.
- Bonus shares forfeited by redeeming shareholders will be distributed to non-redeeming shareholders on a pro rata basis, which is variable based on a range of exchange ratios for shares held by non-redeeming shareholders of between 1.08x and 1.40x, to be determined based on redemptions.
- Assuming a price of $10.00 per share of CRHC common stock at the closing of the transaction, non-redeeming CRHC shareholders would receive, in exchange for each share of CRHC common stock held, shares of the post-combination company with value equating to between $10.80 (assuming no redemptions by CRHC shareholders) and $14.00 (assuming redemptions resulting in the maximum exchange ratio).
- Concurrent with the consummation of the proposed transaction, investors have committed to purchase more than $350 million of securities of the combined company.
- The PIPE investment includes participation from a group of international investors, including $50 million from CRHC’s Sponsor entity.
NON-REDEEMING SHAREHOLDERS
- Assuming a price of $10.00 per share of Cohn Robbins Class A Common Stock at the Merger Closing, each share of Cohn Robbins Class A Common Stock would receive shares of Swiss NewCo Class B Shares with a value ranging between $10.80 (assuming no redemptions by the stockholders of Cohn Robbins) and $14.00 (assuming redemptions resulting in the maximum Class B Exchange Ratio and waiver of the minimum cash condition to the Business Combination Agreement)
PIPE
- Investors have committed to purchase $353 million of securities of the combined company.
- Insider PIPE Investors are purchasing shares at $10 x 1.08
- Non-insiders are purchasing at the Class B exchange Ratio, (between 1.08 and 1.40) depending on the number of unredeemed shares and subject to a redemption cap of 80%.
Class B Exchange ratio is equal to the lower of:
- (A) 1.4; and
- (B) (1)
- (x) the Post-Redemption Acquiror Share Number, plus
- (y) 6,624,000 divided by
- (B) (2) the Post-Redemption Acquiror Share Number (the lower of (A) and (B), the “Class B Exchange Ratio”).
EARNOUT
- Existing Allwyn Shareholders
- 30 million shares (50% are released at each threshold)
- Vesting at $12 and $14
- 30 million shares (50% are released at each threshold)
- Founders Shares
- 26.5% of the Shares vesting at $12 and $14.
- 16% of the Founders shares are subject to forfeiture
- 26.5% of the Shares vesting at $12 and $14.
- The vesting period is 7 years
CONVERTIBLE NOTE
- Pursuant to the terms of the Apollo Side Letter, on the Acquisition Closing Date, in connection with the Business Combination, Swiss NewCo will repurchase of all of Sazka’s convertible preferred shares held by Primrose in exchange for €323,000,000 in cash
- The Convertible Note will mature on the date that is three years after the Acquisition Closing Date (the “Maturity Date”) and will bear an interest of 6.50% per annum, payable in cash semi-annually, accruing on the outstanding principal amount of the Convertible Note.
- On the first anniversary of the Acquisition Closing Date, Swiss NewCo will be required to redeem a portion of the Convertible Note with a stated face value of €96.75 million. Swiss NewCo may redeem the Convertible Note, at its option, in whole or in part, without premium or penalty, at any time and from time to time prior to the first anniversary of the Acquisition Closing Date upon a 30 days or more notice.
- In addition, Swiss NewCo may redeem the Convertible Note, at its option, in whole or in part, at any time and from time to time after the first anniversary of the Acquisition Closing Date and prior to Maturity Date, at customary “make-whole” price, in accordance with the terms and subject to the conditions set forth in the Apollo Side Letter. In addition, at any time after the Acquisition Closing Date, subject to certain anti-dilution protections as enumerated in the Apollo Side Letter, Swiss NewCo will have the option to convert the Convertible Note into shares of Swiss NewCo Class B Shares at $11.11111 (the “Conversion Price”) and the applicable foreign exchange spot rate at the time of conversion, provided that the closing price of Swiss NewCo Class B Shares exceeds $13.89 for at least 20 out of 30 consecutive trading days prior to the date of conversion.
NOTABLE CONDITIONS TO CLOSING
- Available Acquiror Cash is equal to $850 million
NOTABLE CONDITIONS TO TERMINATION
- If the Acquisition Closing has not occurred on or before September 20, 2022 (the “Original End Date”)
- The Business Combination Agreement provides for certain conditions under which the Original End Date can be extended by two months, to November 20, 2022.
ADVISORS
- PJT Partners is acting as financial advisor to Allwyn and KKCG, and is acting as joint placement agent on the PIPE.
- Kirkland & Ellis LLP and Clifford Chance are serving as legal advisors to Allwyn and KKCG.
- Citi is acting as financial advisor to CRHC and joint placement agent on the PIPE.
- Credit Suisse is acting as Equity Capital Markets advisor to CRHC.
- Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor to CRHC.
- Winston & Strawn LLP is serving as legal advisor to the placement agents
MANAGEMENT & BOARD
Executive Officers
Clifton S. Robbins, 62
Co-Chairman and Director
Mr. Robbins founded Blue Harbour Group, L.P. (“Blue Harbour”) in 2004 and has been its Chief Executive Officer since inception. Mr. Robbins has more than 40 years of experience in the investment management business. Prior to forming Blue Harbour, Mr. Robbins had been a Managing Member of General Atlantic Partners, LLC (“General Atlantic Partners”), a global private equity firm from 2000 through August 2004. Prior to that, Mr. Robbins had been a General Partner of Kohlberg Kravis Roberts & Co. (“KKR”) where he worked from 1987 until 2000. At KKR, he played a significant role in many of the firm’s leveraged buyout transactions and financings and was also intimately involved with the firm’s capital markets activities. Mr. Robbins began his career in the Mergers and Acquisitions department of Morgan Stanley & Co. He graduated with an A.B. from Harvard College and received his M.B.A. from the Stanford University Graduate School of Business. Mr. Robbins has served on the Board of Directors of more than fifteen public and private companies. He is a member of the Boards of Overseers and Managers of the Memorial Sloan-Kettering Cancer Center and also serves as Vice Chairman of the Stanford Graduate School of Business Advisory Council.
Charles S. Kwon, 39
Chief Financial Officer
Mr. Kwon is currently the Chief Financial Officer at Blue Harbour and will continue to serve in that capacity until the firm closes its operations later this year. Mr. Kwon has more than fifteen years of experience working in finance and tax at companies including PricewaterhouseCoopers LLP and JPMorgan Chase & Co. Mr. Kwon graduated magna cum laude and Phi Beta Kappa from Brooklyn College with a Bachelor’s degree in accounting and philosophy of law. He is a licensed Certified Public Accountant in the State of Virginia.
Board of Directors
Gary D. Cohn, 59
Co-Chairman and Director
Mr. Cohn served as Assistant to the President for Economic Policy and Director of the National Economic Council from January 2017 until April 2018. Before serving in the White House, Mr. Cohn was President, Chief Operating Officer and a director of The Goldman Sachs Group, Inc. (“Goldman Sachs”) from 2006-2016. He joined Goldman Sachs in 1990 and held a number of other leadership positions, including the Global Co-Head of the Equities and Fixed Income, Currency and Commodities Division. He also served as Chairman of the Firmwide Client and Business Standards Committee. Mr. Cohn also serves on the boards of nanoPay Holding Inc., Hoyos Integrity Corporation, Infinite Arthroscopy Inc., Limited, Springcoin Inc., and Starling Trust Sciences, LLC and is the Chairman of the Board of Pallas Advisors LLC. Mr. Cohn also serves on the Systemic Resolution Advisory Committee (SRAC) of the Federal Deposit Insurance Corporation (FDIC). He is also member of the Board of Trustees of NYU Langone Health and serves on the Board of Overseers of the NYU Tandon School of Engineering. In 2019 Mr. Cohn was a Visiting Fellow at the Harvard Kennedy School’s Institute of Politics. Mr. Cohn earned a B.S. in business administration from American University in 1982.
Kathryn A. Hall, 62
Director
Ms. Hall is Founder and Co-Chair of Hall Capital Partners LLC, and she is a member of the firm’s Executive Committee and Investment Review Committee. Before founding Hall Capital in 1994, Ms. Hall was a General Partner of Laurel Arbitrage Partners, a risk arbitrage investment partnership that she founded in 1989. Prior to that, she was a General Partner of HFS Management Partners (predecessor to Farallon Capital Partners), HFS Partners I, and Hellman & Friedman. Ms. Hall began her career at Morgan Stanley where she worked in both the risk arbitrage and mergers and acquisitions departments. Ms. Hall currently serves as Chair of the Board of Trustees of The Andrew W. Mellon Foundation. Additionally, she serves on the Board of Trustees and the Investment Committee of the San Francisco Museum of Modern Art (SFMOMA), and is Chair of the Investment Committee of the Smithsonian Institution. Ms. Hall also serves on the Board of Directors of the McEvoy Group, the San Jose Earthquakes, and Ariat International. Ms. Hall served as the Chair of the Board of Trustees of Princeton University from 2011 to 2019, and as a trustee from 2001 – 2005 and 2006 – 2019. She also served as the Chair of the Board of Directors of the Princeton University Investment Company from 2008 to 2011 and as a director from 1998 to 2011. Additionally, Ms. Hall previously served as a member of the Federal Reserve Bank’s 12th District Economic Advisory Council. Ms. Hall earned a A.B. in economics from Princeton University and received her M.B.A. from the Stanford University Graduate School of Business.
C. Robert Kidder, 75
Director
Mr. Kidder has served on numerous boards of directors including as: director of Merck and Co., Inc. from 2005 to 2017, non-executive Chairman of the Board of Chrysler Group LLC from 2009 to 2011, Chairman of Borden Inc. from 1995 to 2004, Chairman of Duracell International Inc. and director of Morgan Stanley from 1997 to 2017, including as Lead Director for eight years Mr. Kidder currently serves as Chairman the board of directors of Advanced Drainage Systems, Inc. and Microvi Biotech Inc., serves on the board of Wildcat Discovery Technologies, Inc. and previously served on the board of directors of Schering-Plough Corporation from 2005 to 2009. He co-founded and served as Chief Executive Officer of 3Stone Advisors LLC, a private investment firm, from 2006 to 2011. Mr. Kidder was a Principal and Partner at Stonehenge Partners, Inc., a private investment firm, from 2004 to 2006. Prior to Stonehenge, Mr. Kidder served as President of Borden Capital, Inc., a company that provided financial and strategic advice to the Borden, Inc.’s family of companies, from 2001 to 2003. He served as Chief Executive Officer from 1995 to 2002 of Borden Chemical, Inc. (formerly Borden, Inc.), a forest products and industrial chemicals company. Mr. Kidder was also Chief Executive Officer and President of Duracell International Inc. Prior to joining Duracell, Mr. Kidder was Vice President, Planning and Development at Dart Industries Inc., worked as a general management consultant with McKinsey & Co. and served as an officer in the U.S. Navy Civil Engineer Corps. Mr. Kidder earned a B.S. in industrial engineering from the University of Michigan and a graduate degree in industrial economics from Iowa State University.
Alexander T. Robertson, 41
Director
Mr. Robertson is President and Chief Operating Officer of Tiger Management LLC (Tiger Management), a firm committed to sourcing and developing future leaders in the investment management industry. Prior to joining Tiger Management in 2008, he served as legislative assistant to U.S. Senator Elizabeth Dole. Mr. Robertson serves as a trustee and board member of the Robertson Foundation, Tiger Foundation, Boys’ Club of New York, Memorial Sloan Kettering Board of Overseers, Stanford Graduate School of Business Advisory Council, East Lake Foundation, and Purpose Built Communities. Mr. Robertson is a graduate of University of North Carolina at Chapel Hill and received his M.B.A. from the Stanford University Graduate School of Business.
Anne Sheehan, 63
Director
Ms. Sheehan has been the Chair of the SEC’s Investor Advisory Committee since 2018 and currently serves on the Board of Directors of L Brands Corporation. From 2008 until 2018, Ms. Sheehan served as the Director of Corporate Governance at The California State Teachers’ Retirement System (CalSTRS), the largest educator-only pension fund in the world and the second largest pension fund in the United States. She previously served as the Chief Deputy Director for Policy at the California Department of Finance from 2004 to 2008 and as Executive Director at the California Building Industry Foundation from 2000 to 2004. Ms. Sheehan is a founder of the Investor Stewardship Group, serves on the Advisory Board of the Weinberg Center for Corporate Governance at the University of Delaware, is a member of the Advisory Board of Rock Center for Corporate Governance of Stanford Law School and is a Senior Advisor at PJT Camberview. Ms. Sheehan earned a B.A. in political science and history from the University of Colorado.