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Far Point Acquisition Corporation *

Far Point Acquisition Corporation *

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Global Blue

ESTIMATED CURRENT FUNDS in TRUST: $651.5 million*
CURRENT PER SHARE REDEMPTION PRICE: $10.30*
ENTERPRISE VALUE: $2.6 billion

*SPACInsider estimate a/o 8-23-20

Far Point Acquisition Corp. proposes to merge with Global Blue, a strategic technology and payments partner empowering global merchants to capture the growth of international shoppers. Global Blue has been a leader of the Tax Free Shopping industry for the last 40 years, with a global footprint spanning 51 countries and 300,000 merchants.

Veteran public company executive and current Global Blue CEO Jacques Stern will continue to lead the company’s existing management team, and Mr. Farley will become Chairman of Global Blue. Current investors, including Silver Lake, the global leader in technology investing, will remain significant shareholders in the combined company. New investors, anchored by Ant Financial Services Group, a member of the Alibaba digital economy and operator of the world’s leading payment and lifestyle platform Alipay, and Third Point, have committed to invest a total of $350 million in the combined company at a €2.3 billion (approximately $2.6 billion) enterprise valuation in the form of a private placement. The new public company will be incorporated in Switzerland and will trade as Global Blue under ticker symbolNYSE: “GB” upon closing.

Global Blue Highlights

Global Blue is a strategic technology and payments partner empowering global merchants to capture the growth of international shoppers, with two business lines:

  • Tax Free Shopping Technology Solutions: pioneer and global leader with a strong and comprehensive network, serving more than 300,000 merchant stores, enabling 13 million international shoppers to claim VAT refunds in 43 countries
  • Added-Value Payment Solutions: worldwide provider partnering with more than 50 merchant acquirers, enabling 16 million international travelers to benefit from a great payment experience at more than 150,000 points of interaction in 34 countries

During Global Blue’s fiscal year ended in March 2019, the company processed 64 million transactions for 29 million international shoppers. Strong macro trends have driven the company’s development over multiple years, including the growth of the emerging markets middle class, positive VAT dynamics and digitalization. Today, Global Blue has over 2,000 employees in 51 countries.

Global Blue possesses an attractive financial profile including a structural long-term growth trajectory, well-diversified business model, healthy profitability and strong cash flow generation. With more than €22.6 billion Sales in Store, Global Blue recorded revenues of more than €400 million and an adjusted EBITDA margin of more than 40% in the fiscal year ended in March 2019.

SUBSEQUENT EVENTS

Far Point and Global Blue announced the entry into supplemental letter agreements on 8/17/20.  Summary of changes below:

  • TP Funds have agreed to fund into escrow $61 million to satisfy a portion of the TP Funds’ obligations under the Forward Purchase Agreement, dated as of May 18, 2018, between FPAC and the TP Funds (the “Forward Purchase Agreement”), and Third Point reiterated its commitment to voting its FPAC shares, constituting approximately 25% of the total outstanding, in favor of the business combination
  • Globetrotter, on behalf of the Global Blue seller parties, and FPAC have agreed not to enforce any rights or claims under the Forward Purchase Agreement, the share purchase and contribution agreements, the shareholders agreement and the relationship agreement if the TP Funds purchase at least $61 million of shares under the Forward Purchase Agreement
  • The New Global Blue shares to be received by the TP Funds for their FPAC Class B shares, all contingent shares contemplated by the merger agreement (if applicable) and all FPAC warrants will be transferred to Globetrotter, other than 4,316,321 New Global Blue shares that will be transferred to FPAC management, subject to certain terms and conditions
  • New Global Blue may award options or restricted stock units over up to an additional 500,000 New Global Blue shares to certain members of New Global Blue management, with any distribution, vesting or performance conditions to be determined by the New Global Blue board as the board sees fit
  • FPAC has agreed not to assert that certain conditions to closing have failed to be satisfied, if applicable, including (but not limited to) an occurrence in most cases of a material adverse effect, the failure of New Global Blue to obtain New York Stock Exchange listing approval or the failure of Global Blue to obtain certain regulatory approvals
  • If New Global Blue fails to obtain New York Stock Exchange listing approval by the closing of the business combination, New Global Blue has agreed to certain commitments for up to 12 months with regard to obtaining a listing after the closing of the business combination
  • FPAC (subject to complying with its obligations under its charter), Third Point and the TP Funds have agreed not to exercise any termination rights they may have with respect to the business combination until September 11, 2020
  • FPAC has agreed to take actions reasonably requested by Globetrotter to enable the closing conditions to be satisfied
  • FPAC has agreed not to object to the termination of the existing financing arrangements as long as a replacement or alternative financing facility is available on terms consistent with the merger agreement
  • Third Point, the TP Funds, FPAC, Globetrotter and the other seller parties have entered into customary and mutual releases of claims

TRANSACTION SUMMARY

Far Point and new investors will invest a total of approximately $1.0 billion reflecting a total enterprise value of €2.3 billion (equivalent to approximately $2.6 billion) for Global Blue, which represents 12.1x the adjusted EBITDA expected for 2020/21 (i.e., fiscal year ending March 2021).

  • Assuming no redemptions by Far Point’s public shareholders, the cash in trust and the proceeds of this private placement will be used primarily to pay existing Global Blue shareholders an amount of approximately $967 million cash consideration. The Cash Consideration will be funded by:
    • (i) the $646MM in Company cash held in trust,
    • (ii) $100MM equity capital committed by certain affiliates of Third Point LLC, (the “Third Point PIPE”)
    • (iii) $125MM equity capital committed by Antfin (Hong Kong) Ltd. (Ant Financial Services Group, a member of the Alibaba digital economy) (“Ant Financial”), and
    • (iv) $125MM equity capital committed by several established strategic equity investors (the investors in (ii), (iii) and (iv) collectively the “PIPE Investors”).
  • The Cash Consideration amount is subject to adjustments as more fully described in the Merger Agreement (not filed yet), including a reduction in the event that payments are required to be made by the Company in connection with the exercise by one or more of the Company’s stockholders of their redemption rights with respect to the Company’s shares of Class A common stock (“Redemptions”).
  • The Stock Consideration to be issued to the Seller Parties will be in the form of common shares of New Global Blue; provided, that, in the event Redemptions exceed 5,000,000, a portion of the Stock Consideration will be in the form convertible preferred shares of New Global Blue.

Additionally:

  • Global Blue will refinance all existing debt with an anticipated pro-forma Net Debt of 3.3x LTM March 2020 adjusted EBITDA, with an anticipated rapid deleveraging potential thereafter.

The transaction is expected to close during the second quarter of 2020 and is subject to approval by Far Point stockholders and other customary closing conditions, including regulatory approvals.

Far Point page 1 transaction summary 2-25-20

Far Point page 2 transaction summary 2-25-20

PIPE

PIPE Investment  = the “Primary PIPE Investment” together with the “Secondary PIPE Investment“. The PIPE Investment will be consummated concurrently with the closing

  • Primary PIPE Investment: Certain PIPE investors (un-named) – Aggregate purchase price of $125MM ordinary shares of New Global Blue (at $10 per share).
  • Secondary PIPE Investment: an affiliate of Third Point and Ant Financial (the “Secondary PIPE Investors”) have committed to purchase for an aggregate purchase price of $100MM and $125MM, respectively, ordinary shares of Global Blue (for $10 per share) from Globetrotter (and Cayman Holdings)

FORWARD PURCHASE AGREEMENT

  • An affiliate of Third Point previously entered into an agreement at the time of the Company’s initial public offering to purchase shares of the Company’s common stock for $9.50 per share (the “Forward Purchase Shares”) to the extent Redemptions exceed 20,000,000 shares.
  • In the event such Third Point affiliate is obligated to purchase any Forward Purchase Shares as the result of such Redemptions, Third Point’s PIPE commitment will be reduced, as will the Cash Consideration (and there will be a corresponding increase in Stock Consideration).

EARNOUT

  • The Founder will contribute to New Global Blue 2,500,000 shares of Class B common stock of the Company (“Class B Shares”) held by the Founder as of immediately prior to the Closing, and that 2,500,000 shares of New Global Blue will be delivered to a nominee that will hold such shares for future delivery to the Founder upon the achievement of certain future New Global Blue share trading levels.

NOTABLE CONDITIONS TO CLOSING

  • The Company having received the proceeds of loans under the Financing Agreement in an amount which is sufficient to repay all amounts due under the €710,000,000 senior facilities agreement dated July, 26 2012 (as amended and restated on 16 October 2017) between, inter alia, Global Blue Finance S.à r.l., as parent, Global Blue Acquisition B.V., as a borrower, and RBC Europe Limited, as agent and as security agent.

NOTABLE CONDITIONS TO TERMINATION

  • If the transactions have not been consummated by August 31, 2020

SPONSOR SHARES & PRIVATE PLACEMENT PURCHASE

  • 15,812,500 Founder Shares at IPO:  2,500,000 to be forfeited and contributed to an earnout for Global Blue (details to be provided upon filing of the merger agreement)
  • 9,766,666 Private Placement warrants purchased at $1.50 at IPO:  none to be cancelled

BOARD

  • Expected Board: 9 members (including Great Blue CEO), of which majority are independents; 3 to be appointed by existing shareholders and 2 by FPAC
  • Tom Farley to be Chairman

ADVISORS

  • PJT Partners is acting as the lead financial advisor to Global Blue and its shareholders.
  • Simpson Thacher & Bartlett LLP, Niederer Kraft Frey, and Kirkland & Ellis are acting as legal advisors to Global Blue and its shareholders.
  • Credit Suisse is acting as equity private placement agent, financial advisor and capital markets advisor to Far Point.
  • BofA Securities is acting as financial advisor and capital markets advisor to Far Point.
  • Morgan, Lewis & Bockius LLP is acting as legal advisor to Far Point, with BakerHostetler as legal advisor to Third Point.
  • BNP Paribas and Morgan Stanley are coordinators and active bookrunners on the senior debt financing for the combined company, with mandated lead arranger and bookrunner roles also for each of Royal Bank of Canada, Barclays, BofA Securities, Credit Suisse, and J.P. Morgan.
  • Of the aforementioned financing banks, those not serving as financial advisors to Far Point are also serving as financial advisors to Global Blue and its shareholders.

FAR POINT MANAGEMENT & BOARD

Executive Officers

Thomas W. Farley, 42
CEO, President and Chairman of the Board

Mr. Farley served as President of the NYSE Group of Intercontinental Exchange Inc. (“ICE”) from May 2014 until May 2018. Mr. Farley’s responsibilities included leading all operations for the New York Stock Exchange (the “NYSE”) and managing a diverse range of equity and equity options exchanges, comprising the largest equities listing and securities trading venue in the world. Mr. Farley joined the NYSE in November 2013 when ICE acquired NYSE Euronext. Prior to becoming President of ICE in May 2014, he served as the Chief Operating Officer. Mr. Farley has agreed with ICE that, following his service as President of the NYSE, he will provide limited advisory and other services upon request to ICE until February 2019. Prior to joining the NYSE, Mr. Farley served as Senior Vice President of Financial Markets at ICE, where he oversaw the development of several businesses and initiatives across ICE’s markets. Mr. Farley joined ICE in 2007 as the President and Chief Operating Officer of ICE Futures U.S., formerly the New York Board of Trade. He also represented ICE on the Options Clearing Corporation Board of Directors. Prior to joining ICE, Mr. Farley was President of SunGard Kiodex, a risk management technology provider to the derivatives markets and prior thereto served as the business unit’s Chief Financial Officer and Chief Operating Officer. Mr. Farley has also held various positions in investment banking at Montgomery Securities and in private equity at Gryphon Investors. Mr. Farley holds a Bachelor of Arts degree in Political Science from Georgetown University and is a Chartered Financial Analyst.

David W. Bonanno, 36
CFO & Director

Mr. Bonanno is a Managing Director at Third Point LLC where he is responsible for analyzing private investment opportunities across a broad range of industries including Fintech, financial services, telecommunications, energy and real estate. Mr. Bonanno is also responsible for analyzing investment opportunities in public credit and equity markets. Over his nearly ten-year career at Third Point, Mr. Bonanno has been responsible for over $850 million in private equity investments. Mr. Bonanno is the primary investment professional responsible for the Third Point Hellenic Recovery Fund L.P., a $750 million private equity style vehicle exclusively dedicated to illiquid growth investments in Greece and Cyprus. Mr. Bonanno currently serves as a director of Social Finance, Inc. (SoFi), Energean Oil & Gas PLC (LSE: ENOG) and Hellenic Bank PCL. Mr. Bonanno previously served on the boards of Neptune Financial, Inc. and Tollerton Investments Limited which held a 51% stake in Play Communications S.A. prior to its public listing on the Warsaw Stock Exchange in July 2017. Mr. Bonanno serves or has served as a director for companies which have collectively issued over $20 billion in debt and more than $2 billion in equity in both public and private markets. Prior to joining Third Point, Mr. Bonanno was a Private Equity Associate at Cerberus Capital Management, L.P from 2006 to 2008 and an analyst in Restructuring and Reorganization Advisory Group at Rothschild Inc. from 2004 to 2006. Mr. Bonanno graduated cum laude from Harvard University in 2004 with an A.B. in Psychology.

Board of Directors

Stanley A. McChrystal, 63
Director Nominee

General McChrystal is a retired United States Army general. From June 2009 to June 2010, General McChrystal served as Commander, International Security Assistance Force (ISAF) and Commander, U.S. Forces Afghanistan (USFOR-A). From August 2008 to June 2009, General McChrystal served as Director, Joint Staff and from 2003 until 2008 as Commander of the Army’s Joint Special Operations Command (JSOC). General McChrystal is the founder of the McChrystal Group LLC, a privately held global services and leadership development firm based in Alexandria, VA, and has served as its Managing Member since 2010. He also currently serves as a director of FiscalNote, a privately held legislative and regulatory analytics firm headquartered in Washington DC as well as JetBlue Airlines, and Deutsche Bank US Corporation, both headquartered in New York City. He is also an advisor to General Atomics. Within the last five years, General McChrystal served on the boards of Knowledge International, Navistar International Corp. and Siemens Government Technologies. He also served as chairperson of The Yellow Ribbon Fund, a non-profit organization committed to helping wounded veterans and their families. General McChrystal is a senior fellow at Yale University’s Jackson Institute for Global Affairs, where he teaches a course on Leadership in Operation. He is also the chair of Service Year Alliance, a project of Be The Change and the Aspen Institute, which envisions a future in which a service year is a cultural expectation and common opportunity for every young American.

Nicole Seligman, 61
Director Nominee

Since August 2016, Ms. Seligman has been a member of the board of Viacom, Inc., where she chairs the Nominating and Governance Committee. Since January 2014, Ms. Seligman has been a member of the Board of WPP plc, where she has served as Senior Independent Director since April 2016. Ms. Seligman has additionally served as Chairman of the Board of The Doe Fund, a NYC non-profit organization, since 2017. Until March 2016, Ms. Seligman served as the President of Sony Entertainment, Inc. (beginning in 2014) and of Sony Corporation of America (beginning in 2012), and as Senior Legal Counsel of Sony Group (beginning in 2014). Ms. Seligman had previously served as Executive Vice President and General Counsel of Sony Corporation from 2005 to 2014. She joined Sony in 2001 and served in a variety of other capacities during her tenure. Prior to joining Sony, Ms. Seligman was a partner in the litigation practice at Williams & Connolly LLP in Washington, D.C., where she worked on a broad range of complex civil and criminal matters and represented a wide range of clients, including President William Jefferson Clinton. Ms. Seligman joined Williams & Connolly in 1985. She served as law clerk to Justice Thurgood Marshall on the Supreme Court of the United States from 1984 to 1985 and as law clerk to Judge Harry T. Edwards at the U.S. Court of Appeals for the District of Columbia Circuit from 1983 to 1984. She graduated magna cum laude from Harvard Law School, where she was a winner of the Sears Prize.

Laurence A. Tosi, 50
Director Nominee

Mr. Tosi is the Founder and Managing Partner of Weston Capital Group, LLC, a diversified capital platform with a focus on technology enabled businesses and industries. From 2015 until 2018, Mr. Tosi served as the Chief Financial Officer of Airbnb Inc., a privately held company which operates the world’s largest digital marketplace and hospitality service for alternative accommodations. Mr. Tosi served as the Chief Financial Officer, Senior Managing Director and a member of the Management Committee of The Blackstone Group, L.P. from 2008 to 2015. From 2006 to 2007, Mr. Tosi was a Managing Partner of Merrill Lynch & Co. (now Bank of America Merrill Lynch) where he held several senior operating roles over his 9-year tenure from 1999 to 2008. At Bank of America Merrill Lynch, Mr. Tosi served as the Chief Operating Officer of Global Markets & Investment Banking from 2006 to 2008. His operating responsibilities included investment banking, equities, fixed income, private markets, technology and corporate development/strategy. Prior to that role, Mr. Tosi. served as the Finance Director, Principal Accounting Officer and Chief Financial Officer of the operating businesses of Bank of America Merrill Lynch and of various Merrill Lynch Investment funds. Mr. Tosi holds a J.D. (finance/taxation), a M.B.A. (global finance/economics), and a B.A. (government/theology) from Georgetown University where he currently sits on the Board of Directors and is a frequent lecturer on entrepreneurship and capital investing.

ByRoman Developer