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Concord Acquisition Corp III *

Concord Acquisition Corp III *

Mar 26, 2021 by Kristi Marvin

PROPOSED BUSINESS COMBINATION: GCT Semiconductor, Inc.

ENTERPRISE VALUE: $461 million
ANTICIPATED SYMBOL: GCTS

Concord Acquisition Corp III proposes to combine with GCT Semiconductor, Inc.

GCT Semiconductor is a prominent designer and provider of semiconductor solutions for 5G and 4G LTE technologies. Their solutions have been widely adopted in various commercial devices, including CPEs, mobile hotspots, routers, and smartphones, serving top wireless carriers globally. GCT’s system-on-chip solutions combine radio frequency, baseband modem, and digital signal processing, delivering comprehensive 4G and 5G platforms known for their compact size, energy efficiency, high performance, reliability, and cost-effectiveness.

EXTENSION – 11/13/23 – LINK

  • The SPAC approved the extension from November 8, 2023 to August 8, 2024.
    • 98,573 shares were redeemed at the meeting for $10.70 per share.
    • No contribution will be made into the trust account.

TRANSACTION

  • Concord has agreed to combine with GCT based on a $661 million pro forma enterprise valuation, which includes 20.0 million performance-based earnout shares to GCT stockholders.
  • The transaction is expected to deliver up to $87 million of gross proceeds to the company, consisting of $43 million fully committed common stock PIPE and convertible note financing and up to approximately $43 million from Concord’s trust account that may become available to the company at closing (assuming no redemptions from Concord’s trust account).
  • The transaction is expected to close in the first quarter of 2024.

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SPAC FUNDING

PIPE Subscription Agreement

  • Concurrently with the execution of the Business Combination Agreement, certain investors (the “PIPE Investors”) entered into subscription agreements pursuant to which the PIPE Investors had committed to purchase in a private placement an aggregate of 4,529,967 shares of Company Common Stock at a purchase price of $6.67 per share and an aggregate purchase price of approximately $30.2 million.

Convertible Note Financing

  • In connection with the Business Combination Agreement, GCT issued convertible promissory notes to CVT Investors, allowing GCT to borrow up to $13.3 million, which will convert into shares of New CND common stock at a conversion price of $6.67 per share at the Closing.

SPONSOR AGREEMENT

  • The Sponsor and CA2 agreed that 1,399,107 shares of New CND common stock, Sponsor Unretained Earnout Shares, and up to 2,820,000 of the Company’s private placement warrants (the “Incentive Warrants”) held by them at Closing may be allocated to GCT’s existing stockholders and investors in the Financings without any vesting conditions.
    • The number of Incentive Warrants depends on the aggregate of proceeds raised before Closing in excess of $25,000,000 from certain sources, and if this sum is $25 million or more, up to 2,820,000 private placement warrants held by Sponsor and CA2 at Closing become Incentive Warrants.
  • The Sponsor and CA2 also agreed to forfeit up to 2,820,000 private placement warrants not allocated before Closing and to forgive all outstanding loans totaling $6.9 million made by them to the Company in connection with the initial public offering.

EARNOUT

  • Company
    • 20.0 million performance-based earnout shares to GCT stockholders.
      • 1/3 of the Shares will vest each at $12.50, $15.00, $17.50 over a 5 year period
  • Sponsor
    • 1,920,375  performance-based earnout shares to the Sponsor.
      • 1/3 of the Shares will vest each at $12.50, $15.00, $17.50 over a 5 year period
    • The number of Sponsor Earnout Shares depends on the aggregate of funds in the trust account at Closing, PIPE Financing proceeds not from certain sources, and net proceeds available to New CND from debt financing.
    • If this sum is $40 million or more, up to 1,920,375 shares held by the Sponsor and CA2 at Closing become Sponsor Earnout Shares, and the remaining shares may be allocated by GCT.

LOCK-UP

  • Company and Sponsor
    • One year after the Closing Date, or if the share price equals or exceeds $12.00 for 20/30 trading days at least 150 days after the Closing.

NOTABLE CONDITIONS TO CLOSING

  • The company having at least $5 million in net tangible assets upon the Closing.
  •  the PIPE Investors having invested at least $25,000,000 in the PIPE Financing.

NOTABLE CONDITIONS TO TERMINATION

  • September 30, 2024 (Outside Date)

ADVISORS

  • Company
    • B. Riley Securities, Inc. is acting as the exclusive financial advisor
    • Morgan, Lewis & Bockius LLP is serving as legal advisor
  • SPAC
    • TD Cowen is acting as exclusive financial advisor and lead capital markets advisor.
    • Cohen & Company Capital Markets, a division of JVB Financial, LLC, is acting as a capital markets advisor
    • Greenberg Traurig, LLP is acting as legal advisor
  • DLA Piper LLP (US) is acting as legal advisor to TD Cowen and B. Riley Securities, Inc.

LETTER OF INTENT – 10/25/23 – LINK

  • On October 25, 2023, Concord Acquisition Corp III announced it entered into a non-binding letter of intent for a business combination with a reputable semiconductor supplier.
    • The Target has also received non-binding letters of intent from investors to provide enough financing for the proposed Business Combination.

NON-REDEMPTION AGREEMENT – 8/23/23 – LINK

  • The SPAC entered into a non-redemption agreement with several unaffiliated third parties in exchange for them agreeing not to redeem an unknown number of shares. The Sponsor will transfer a number of Class B shares to each non-redeeming shareholder.

EXTENSION – 5/8/23 – LINK

  • The SPAC approved the extension from May 8, 2023 to November 8, 2023.
    • 30,460,066 shares were redeemed at the meeting for $10.42 per share.
    • No contribution will be made into the trust account.

NON-REDEMPTION AGREEMENT – 4/7/23 LINK

  • The SPAC entered into a non-redemption agreement with several unaffiliated third parties in exchange for them agreeing not to redeem an unknown number of shares. The Sponsor will transfer 100,000 Class B shares to each non-redeeming shareholder.

MANAGEMENT & BOARD

Executive Officers

Jeff Tuder, 48
Chief Executive Officer and Director

Mr. Tuder is currently an Operating Partner of Atlas, having joined in September 2020. Since August 2020, Mr. Tuder has been the Chief Executive Officer of Concord I and since February 2021, Mr. Tuder has also been the Chief Executive Officer of Concord II. Previously, Mr. Tuder founded Tremson Capital Management, LLC to invest in undervalued public equities and to make private equity and credit investments in partnership with a number of family offices. Prior to founding Tremson, Mr. Tuder held various investment positions at JHL Capital Group, a $3 billion multi-strategy hedge fund, KSA Capital Management, a deep value long/short equity fund, and CapitalSource Finance, where he was a Managing Director and Head of its Special Opportunity credit investment business. Mr. Tuder began his career as a private equity professional at Fortress Investment Group, where he underwrote and managed private equity investments for Fortress’ various investment vehicles; Nassau Capital, LLC, which managed the private assets of Princeton University’s Endowment; and ABS Capital Partners, a private equity firm affiliated with Alex. Brown & Sons. Mr. Tuder is currently a member of the Board of Directors of Inseego Corporation (NASDAQ: INSG) and Unico American (NASDAQ: UNAM). Mr. Tuder received a B.A. in English Literature from Yale College.

Michele Cito, 32
Chief Financial Officer

Ms. Cito is Chief Financial Officer of Atlas Merchant Capital LLC, having joined in June 2014. Ms. Cito joined Atlas as Controller and later served as Vice President of Finance and Operations prior to becoming Chief Financial Officer. Since August 2020, Ms. Cito has been the Chief Financial Officer of Concord I and since February 2021, Ms. Cito has also been the Chief Financial Officer of Concord III. Previously, Ms. Cito worked as an Auditor at Deloitte & Touche LLP in financial services. Ms. Cito is a Certified Public Accountant and received a B.A. in Public Accounting, and an MBA from Pace University.

Board of Directors

Bob Diamond, 70
Chairman of the Board

Mr. Diamond is Founding Partner and Chief Executive Officer of Atlas Merchant Capital LLC. Since August 2020, Mr. Diamond has been the Chairman of Concord I and since February 2021, Mr. Diamond has also been the Chairman of Concord III. Until 2012, Mr. Diamond was Chief Executive of Barclays, having previously held the position of President of Barclays, responsible for Barclays Capital and Barclays Global Investors (“BGI”). He became an executive director of Barclays in 2005 and had been a member of the Barclays Executive Committee since 1997. Prior to Barclays, Mr. Diamond held senior executive positions at Credit Suisse First Boston and Morgan Stanley in the United States, Europe and Asia. Mr. Diamond worked at Credit Suisse First Boston from 1992 to 1996, where his roles included Vice Chairman and Head of Global Fixed Income and Foreign Exchange in New York, as well as Chairman, President and CEO of Credit Suisse First Boston Pacific. Mr. Diamond worked at Morgan Stanley from 1979 to 1992, including as the Head of European and Asian Fixed Income Trading. Mr. Diamond is currently a member of the Board of Directors of South Street Securities Holdings, Inc., Crux Informatics and Atlas Mara Limited. He is also a Trustee of The American Foundation of the Imperial War Museum Inc., a Life Member of The Council on Foreign Relations and is involved in several non-profit initiatives, including being a Director of the Diamond Foundation. He is also Life Trustee and former Chair of the Colby College Board of Trustees. Mr. Diamond received a B.A. in Economics from Colby College and an M.B.A. from the University of Connecticut.

Peter Ort, 50
Director Nominee

Mr. Ort is Co-Founder of CurAlea Associates LLC, which provides customized software and advisory solutions to wealth and asset managers. Mr. Ort is also a General Partner at Cambium Capital Partners, an early stage venture capital firm focused on advanced computing in areas such as machine learning specific chips, quantum computing, and application specific devices. Previously, Mr. Ort spent the bulk of his career at Goldman Sachs, where he was a Managing Director and co-head of the Hedge Fund Strategies Group, overseeing manager selection for a $25 billion portfolio, and also worked in the firm’s Private Equity Group and Financial Institutions Group in New York and Tokyo. Mr. Ort was also a Managing Director at Karsch Capital, a $3 billion equity long/short hedge fund. Mr. Ort is a member of the board or advisory board of a number of privately held technology companies. Mr. Ort graduated from Duke University, obtained J.D. and M.B.A. degrees from New York University, and is a member of the New York and New Jersey State Bars. He was a Fulbright Scholar in Japan, and is the Treasurer and a member of the board of the Fulbright Association’s New Jersey Chapter.

Thomas King, 60
Director Nominee

Mr. King is an Operating Partner of Atlas. He has more than 30 years of experience in the investment banking and financial services industry. Most recently, Mr. King served as Chief Executive Officer of Investment Banking at Barclays and Chairman of the Investment Banking Executive Committee. Mr. King was also a member of the Barclays Group Executive Committee, which oversees all of the Barclays plc businesses. Mr. King began his career at Salomon Brothers, which was later acquired by Citigroup. During his tenure at Citi, he served as Global Head of Mergers and Acquisitions, Head of Investment Banking for the EMEA (Europe, Middle East and Africa) Region and Head of Corporate and Investment Banking for the EMEA region. In 2009, Mr. King moved to Barclays Investment Bank and held several senior roles before becoming CEO, including Head of European Investment Banking, Co-Head of Global Corporate Finance, Global Head of Investment Banking. Mr. King received his MBA with distinction from the Wharton School, University of Pennsylvania and his Bachelor of Arts degree from Bowdoin College. He currently serves on the Board of Directors of Radius Global Infrastructure, Inc. (LSE: RADI) (formerly known as Digital Landscape Group, Inc.) and Clear Channel Outdoor Holdings, Inc. (NYSE: CCO) and various private boards and Chairs the Board of Trustees at the King School in Stamford, Connecticut.

Larry Leibowitz, 60
Director Nominee

Mr. Leibowitz is a finance and technology entrepreneur who specializes in business transformation and capital markets. Mr. Leibowitz is an Operating Partner of Atlas, and is a Strategic Advisor and Board Director of Crux Informatics. Mr. Leibowitz currently serves on the Board of Directors of Cowen, Inc (NASDAQ: COWN), an independent investment bank, as well as Vice Chairman of XCHG Xpansiv, an intelligent commodities exchange focusing on renewable energy products, and is on the board of various other private companies in the cryptocurrency, asset management technology, and digital law businesses. Most recently, Mr. Leibowitz served as Chief Operating Officer, Head of Global Equities Markets and as a Member of the Board of Directors of NYSE Euronext, holding such positions from 2007 to 2013. Prior to that, Mr. Leibowitz served as Chief Operating Officer of Americas Equities at UBS, Co-head of Schwab Soundview Capital Markets, and CEO of Redibook. Mr. Leibowitz was formerly a founding partner at Bunker Capital, and Managing Director and Head of Quantitative Trading and Equities Technology at CS First Boston. Mr. Leibowitz received a B.A. in Economics from Princeton University.

ByKristi Marvin