ECP Environmental Growth Opportunities Corp.
PROPOSED BUSINESS COMBINATION: Fast Radius, Inc.
ENTERPRISE VALUE: $995 million
ANTICIPATED SYMBOL: FSRD
ECP Environmental Growth Opportunities Corp. proposes to combine with Fast Radius, Inc., a cloud manufacturing and digital supply chain company.
Fast Radius is a dynamic software and industrial technology firm that continues to scale the first-of-its-kind cloud manufacturing and digital supply chain infrastructure. The Fast Radius solution combines proprietary software with a network of company-owned distributed micro-factories and third-party suppliers. This allows engineers to design, produce, and fulfill custom parts across a range of manufacturing technologies, including additive manufacturing, CNC machining, and injection molding.
The Fast Radius Cloud Manufacturing Platform™ has served over 2,000 customers, including Fortune 500 companies in the automotive, aerospace, medical, industrial, and consumer industries. The platform is purpose-built to provide industrial-certified parts at production volumes (e.g., thousands of units, not just prototypes) and has made over 11 million custom parts to-date.
The Cloud Manufacturing Platform™ is analogous to cloud computing and ushers in a new era of innovation in the physical world, just as cloud computing has done in the digital world. The platform consists of:
- Infrastructure: A network of distributed Fast Radius micro-factories and a curated set of third-party suppliers, in addition to a proprietary software layer to orchestrate the infrastructure.
- Operating System: A modern, software-driven user experience for customers and internal operations, including machine learning-driven insights.
- Apps & Services: An evolving ecosystem of apps and services, ultimately providing access for anyone with a browser to state-of-the-art manufacturing knowledge, tools, and elastic capacity. Services running on the platform today include Fast Radius On-Demand, Fast Radius Virtual Warehouse™, and Fast Radius Additive Launch.
Instead of storing parts physically, companies will have the ability to store parts digitally in the Fast Radius Virtual Warehouse™. Instead of moving parts by land, air, and sea, companies can move parts at the speed of light and produce them locally in a certified micro-factory where needed. The Cloud Manufacturing Platform™ is creating a more sustainable, more accessible, and more flexible global supply chain paradigm to meet the needs of this century.
SUBSEQUENT EVENT – 2/1/22 (8-K LINK)
- The parties agreed to reduce the Base Purchase Price from $1.0 billion to $750 million.
- ENNV will issue up to 75,000,000 newly issued shares of Class A Common Stock, par value $0.0001 per share, of ENNV (“ENNV Class A common stock”) in connection with the Merger, up to 65,000,000 shares of which will be issued or subject to ENNV awards at the closing of the Merger
- 10,000,000 shares of which will be issuable upon the attainment of certain previously disclosed performance thresholds.
- ENNV also announced that the Special Meeting has been adjourned to 9:00 a.m., Eastern Time, on February 2, 2022 (the “Adjournment”).
- New redemption deadline of February 3 at 5 pm ET.
TRANSACTION
- The combined company will have an estimated post-transaction enterprise value of $995 million with an estimated equity value of $1.4 billion from the contribution of $445 million in gross cash proceeds from the transaction.
- Proceeds will consist of up to $345 million of cash held in ENNV’s trust account (assuming no redemptions) and an additional $100 million fully committed private investment (the “PIPE”), including a $25 million forward purchase commitment from certain accounts managed by Goldman Sachs Asset Management, L.P. Other investors in the PIPE include UPS, Palantir, ECP and other institutional investors.
- The net proceeds raised from the transaction will be used to support Fast Radius’ continued growth across customer acquisition, software development, and micro-factory expansion.
- Fast Radius’ growth strategy is projected to generate revenue and EBITDA of $635 million and $135 million, respectively, in 2025.
- Current Fast Radius management, employees and existing shareholders will roll 100% of their existing equity holdings into equity of the combined company.
PIPE
- $75 million fully committed private investment (the “PIPE”) at $10.00 per share
- Investors in the PIPE include UPS, Palantir, ECP and other institutional investors.
FORWARD PURCHASE
- A $25 million forward purchase commitment of units from certain accounts managed by Goldman Sachs Asset Management, L.P. – LINK
- Each unit consisting of one share of ENNV Class A Common Stock and one-quarter of one redeemable warrant
- The Company and the Sponsor also waived GSAM’s potential obligation to forfeit shares of ENNV Class B Common Stock under the circumstances contemplated by the Forward Purchase Agreement in connection with the Closing.
EARNOUT
- 10 million shares to Sellers
- 50% earned at $15.00 for 20 out of 30 trading days prior to the 5th anniversary of closing
- 50% earned at $20.00 for 20 out of 30 trading days prior to the 5th anniversary of closing
SPONSOR SUPPORT AGREEMENT
- At the Closing, 90% of such Converted Shares (Class B common stock) will automatically vest. The remaining 10% of the Converted Shares will be subject to vesting, for the duration of the Earn Out Period, in two equal tranches, upon the satisfaction of certain price targets set forth in the Sponsor Support Agreement, which price targets will be based upon the
- (i) daily volume-weighted average sale price of shares of ENNV Class A Common Stock quoted on Nasdaq, or the exchange on which the shares of ENNV Class A Common Stock are then traded, for any 20 trading days within any 30 consecutive trading day period within the Earnout Period (50% at Triggering Event I, 50% at Triggering Event II) or
- (ii) the per share consideration received in connection with an Acquiror Sale.
- In the event of an Acquiror Sale in which the per share consideration received is less than a price target set forth in the Merger Agreement that has not previously occurred, the applicable provisions of the Sponsor Support Agreement will terminate and no Sponsor Earn Out Shares will be issuable thereunder with respect to such price target in connection with or following completion of such Acquiror Sale.
- Upon the expiration of the Earn Out Period, any unvested Sponsor Earn Out Shares will be forfeited to ENNV without consideration.
Triggering Event I” means the first date after the Closing Date, but within the Earn Out Period, on which the Stock Price Level is greater than fifteen Dollars ($15.00).
“Triggering Event II” means the first date after the Closing Date, but within the Earn Out Period, on which the Stock Price Level is greater than twenty Dollars ($20.00).
NOTABLE CONDITIONS TO CLOSING
- The amount of cash available in ENNV’s trust account immediately prior to the Effective Time and after:
- (a) deducting
- (x) the amount required to satisfy any redemptions by ENNV stockholders in connection with the Closing,
- (y) the payment of any deferred underwriting commissions being held in the trust account and
- (z) the payment of certain transaction expenses and adding
- (b) The aggregate gross proceeds received by ENNV from the PIPE Investment and the Forward Purchase Amount, in each case, as actually received by ENNV prior to or substantially concurrently with the Closing, equaling or exceeding $175.0 million;
- (a) deducting
NOTABLE CONDITIONS TO TERMINATION
- By either ENNV or Fast Radius if the Transactions are not consummated on or before February 18, 2022
ADVISORS
- Credit Suisse Securities (USA) LLC and Citigroup Global Markets Inc. are serving as co-financial and co-capital market advisors to Fast Radius, Inc.
- DLA Piper LLP (US) is serving as legal counsel to Fast Radius, Inc.
- Barclays Capital Inc. and Morgan Stanley & Co. LLC are serving as financial and capital markets advisors to ENNV
- Latham & Watkins LLP is serving as legal counsel to ENNV.
- Credit Suisse Securities (USA) LLC and Barclays Capital Inc. are serving as co-placement agents on the PIPE.
MANAGEMENT & BOARD
Executive Officers
Tyler Reeder, 47
President, Chief Executive Officer and Director
Mr. Reeder is a Managing Partner of ECP and serves on ECP’s Partnership Committee, Investment Committee, Strategy Committee, Operating Committee, ESG Committee and Valuation Committee. Mr. Reeder participates in overall investment management, strategic planning and operations of ECP and its funds. He is involved in all areas of the firm’s investment activities, with a particular emphasis on power generation, renewables and environmental infrastructure. Mr. Reeder led the recent take-private acquisition of Calpine and currently serves on the boards of Calpine, Gopher, EnergySolutions, Convergent and Heartland Generation. Prior to realization, he served on the boards of Wheelabrator, ADA Carbon Solutions, LLC, Dynegy Inc., EquiPower Resources Corp., Broad River Power Holdings, LLC, CE2 Carbon Capital, LLC and Empire Gen Holdings, Inc. Prior to joining ECP in 2006, Mr. Reeder was a Vice President of Power and Fuel Markets of Texas Genco, LLC. Mr. Reeder was an advisor on the acquisition of Texas Genco, LLC by a consortium of private equity firms and became a member of the management team until the sale of the company to NRG Energy in 2006. While at Texas Genco, LLC, Mr. Reeder was the head of the asset optimization desk and was responsible for managing the power and fuel positions for their large generation portfolio. From 1998 to 2002, Mr. Reeder was a Director for Energy Markets and a Finance Manager at Orion Power Holdings, Inc., where he was responsible for acquisitions, power marketing, transaction analysis and execution. From 1996 to 1998, Mr. Reeder worked at Goldman Sachs. Mr. Reeder received a Bachelor of Arts in Economics from Colgate University.
Drew Brown, 34
Executive Vice President and Chief Financial Officer
Mr. Brown is a Principal at ECP and serves on ECP’s ESG Committee. He is involved in all areas of the firm’s investment activities, with particular emphasis on power generation, renewables, and environmental infrastructure. Mr. Brown serves on the board of EnergySolutions, Gopher and Cormetech Inc. and, prior to realization, was involved with ECP’s investments in Wheelabrator and EquiPower Resources Corp. Prior to joining ECP in 2012, Mr. Brown was an analyst in the Natural Resources Investment Banking Group at Deutsche Bank Securities. Mr. Brown received a Bachelor of Arts in Economics from the College of William & Mary.
Chris Leininger, 51
Executive Vice President, General Counsel and Secretary
Mr. Leininger is a Partner and the General Counsel at ECP. He is a member of the Partnership Committee, Compliance Committee, ESG Committee and an observer of the Valuation Committee. Mr. Leininger serves on the boards of Gopher, EnergySolutions, Convergent, Heartland Generation, Triton Power and Symmetry. Previously, he served on the board of Summit Midstream Partners, L.P., PLH Group, Inc., Wheelabrator, NESCO Holdings, ProPetro Holdings Corp. and Sunnova. Prior to joining ECP in 2006, Mr. Leininger was an Associate at the law firm of Latham & Watkins LLP and a member of its Finance department. Mr. Leininger represented both lenders and borrowers in numerous financing, acquisition and development transactions. Mr. Leininger received a Bachelor of Arts in History and Political Science from the University of San Diego and a J.D. from the University of Virginia School of Law.
Tyler Kopp, 30
Executive Vice President, Corporate Development
Mr. Kopp is a Vice President at ECP. He is involved in all areas of the firm’s investment activities, with particular emphasis on power generation, renewables and environmental infrastructure, and currently serves on ECP’s ESG Committee. Mr. Kopp currently serves on the board of Symmetry, is actively involved in Calpine, EnergySolutions and Terra-Gen, and, prior to realization, was involved in Dynegy, Empire Generating and CE2 Carbon Capital. Prior to joining ECP in 2014, Mr. Kopp was an Analyst in the Power & Utilities Investment Banking Group at Bank of America Merrill Lynch. Mr. Kopp received a Bachelor of Science in Engineering Science from Vanderbilt University.
Board of Directors
Douglas Kimmelman, 60
Director
Mr. Kimmelman established ECP in April 2005 and serves as its Senior Partner. He is a member of the firm’s Partnership Committee, Investment Committee and Operating Committee. Mr. Kimmelman currently serves on the boards of Calpine, US Development, USD Partners, LP, Sunnova, and NESCO Holdings. Prior to realization, he served on the board of CE2 Carbon Capital, LLC. Prior to founding ECP, Mr. Kimmelman spent 22 years with Goldman Sachs, starting in 1983 in the firm’s Pipeline and Utilities Department within the Investment Banking Division. He was named a General Partner of the firm in 1996 and remained exclusively focused on the energy and utility sectors in the Investment Banking Division until 2002 when he transferred to the firm’s J. Aron commodity group to help form a new business for the firm in becoming an intermediary in electricity trading markets. Mr. Kimmelman was instrumental in developing the Constellation Power Source concept as the initial entry point for Goldman Sachs as a principal into electricity markets. Mr. Kimmelman also played a leadership role at Goldman Sachs in building a principal investing business in power generation and related energy assets. Mr. Kimmelman received a Bachelor of Arts in Economics from Stanford University and an M.B.A. from the Wharton School at the University of Pennsylvania.
Tracy McKibben, 51
Director
Ms. McKibben is the founder and Chief Executive Officer of MAC Energy Advisors, LLC, an investment and consulting company that provides integrated, innovative and cost-efficient energy solutions to help clients effectively use capital to strategically expand and leverage opportunities around the globe. Before founding MAC Energy Advisors in 2010, McKibben served as managing director and head of environmental banking strategy for Citigroup Global Markets. She also served on the National Security Council at the White House as director of European economic affairs and European union relations, as well as in various senior advisory roles within the U.S. Department of Commerce. Prior to her work in the public sector, she practiced law at Akin, Gump, Strauss, Hauer & Feld LLP, representing and advising clients on commercial and complex litigation matters, as well as corporate and multinational energy clients on global strategic investments. She currently serves as a trustee at the New York Power Authority and as a director of Ecolab Inc. and USAA. She is also a member of the Council on Foreign Relations, a nonpartisan organization specializing in U.S. foreign policy and international affairs. Ms. McKibben received a Bachelor of Arts degree from West Virginia State University and a Juris Doctor from Harvard Law School.
Kathryn E. Coffey, 59
Director
Ms. Coffey has operating, investment and finance experience in the renewable resources and energy spaces, with more than 30 years of engagement in corporate governance, asset management, corporate and project finance, mergers and acquisitions, and private equity and impact investing. Since 2011, Ms. Coffey has served as the President and Chief Operating Officer of ARB, a private family investment company focused on the renewable energy and resources spaces. The ARB portfolio consists of companies in the water, sustainability, solar, wind project development, waste-to-energy, and real estate sectors, along with selected fund investments. Prior to joining ARB, Ms. Coffey held senior roles in investment banking and private equity, including as a Managing Director and head of the private placement group at Deutsche Bank Alex. Brown, where she also served on the invesment committee of two internally managed venture funds, and as a Managing Director of FTV Capital, a private equity firm focused on software and business services companies. Ms. Coffey serves on the boards of 3Degrees Group, Inc., Natural Systems Utilities, LLC, American Refining Group and Kanin Energy Inc. and previously served on the board of SunLink Corporation. Ms. Coffey received a Bachelor of Arts in Economics from Wellesley College and an MBA from The Darden School at the University of Virginia.
Richard Burke, 56
Director
Mr. Burke served as the Chief Executive Officer and as a member of the Board of Directors of Advanced Disposal from July 2014 until Advanced Disposal’s sale to Waste Management Inc. in October 2020. Prior to becoming Chief Executive Officer, Mr. Burke served as President of Advanced Disposal since November 2012. Prior to joining Advanced Disposal, Mr. Burke served as President and Chief Executive Officer of Veolia Environmental Services North America Corp., a waste management company, from 2009 to 2012 and as President and Chief Executive Officer of Veolia ES Solid Waste, Inc., a solid waste management company, from 2007 to 2009. Mr. Burke began his employment with Veolia, Inc. in 1999 as Area Manager for the Southeast Wisconsin area and served as Regional Vice President for the Eastern and Southern markets until he was appointed Chief Executive Officer. Prior to joining Veolia, Inc., he spent 12 years with Waste Management, Inc., a waste management company, in a variety of leadership positions. From December 2017 to December 2018, Mr. Burke served as a director of Estre Ambiental, a Brazilian waste management company. Mr. Burke holds a Bachelor’s degree from Randolph Macon College.
David Lockwood, 61
Director
Mr. Lockwood was Chief Executive Officer of EnergySolutions, the leading international nuclear services company, from 2012 to 2018. He continues to serve as a board member. Since 2019, Mr. Lockwood has been an advisor to the U.S. Secretary of Energy. Prior to joining EnergySolutions, Mr. Lockwood was Chairman and Chief Executive Officer of Liberate Technologies, a provider of applications and services to the telecommunications, satellite and cable industries. Before joining Liberate Technologies, Mr. Lockwood was CEO and President of Intertrust Technologies, a supplier of digital rights management and computing Systems. In addition to his experience leading public companies, Mr. Lockwood worked for over a decade in the financial services industry, including as a Managing Director of Goldman Sachs. Mr. Lockwood also has been a partner of a venture capital fund and a hedge fund, and served on the boards of over fifteen public and private companies, including Steinway Musical Instruments and Forbes. Mr. Lockwood was a Lecturer on the faculty of the Stanford Graduate School of Business and a board member of USTAR, the Utah Science and Technology Research Initiative. Mr. Lockwood holds a Bachelor of Arts from Miami University of Ohio and an MBA from the Graduate School of Business at the University of Chicago.