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Freedom Acquisition I Corp. *

Freedom Acquisition I Corp. *

Feb 10, 2021 by Kristi Marvin

POSED BUSINESS COMBINATION: Complete Solaria

ENTERPRISE VALUE: $553 million
ANTICIPATED SYMBOL: CSLR

Freedom Acquisition I Corp. proposes to combine with Complete Solaria.

Complete Solaria combines two residential solar companies in the U.S., Complete Solar and Solaria. The combination of businesses will create a compelling customer offering, which is expected to include financing, project fulfillment, and service allowing the combined company to sell more products across more markets and enable a package of financing options for customers wishing to make the switch to a more energy-efficient existence. Complete Solaria is backed by a world-class group of investors, including T.J. Rodgers and certain sponsor shareholders of Freedom.

SUBSEQUENT EVENT – 7/14/23 – LINK

  • Forward Purchase Agreements:
    • The SPAC entered into separate agreements with each of (i) Meteora Special Opportunity Fund I, LP (“MSOF”), Meteora Capital Partners, LP (“MCP”) and Meteora Select Trading Opportunities Master, LP (“MSTO”); (ii) Polar Multi-Strategy Master Fund (“Polar”), and (iii) another third-party investor (“Investor”, and each of Meteora, Polar, and Investor, individually, a “Seller”, and together, the “Sellers”) for OTC Equity Prepaid Forward Transactions.
    • The Sellers intend, but are not obligated, to purchase up to a number of shares of Class A ordinary shares of Freedom in the aggregate amount equal to up to 6,300,000, concurrently with the Closing.
  • Subscription Agreements:
    • The SPAC entered into separate subscription agreements with each of Meteora, and Investor (collectively, the “New Money PIPE Investors”).
    • The New Money PIPE Investors agreed to subscribe for and purchase, and Freedom agreed to issue and sell to the New Money PIPE Investors, on the Closing Date, an aggregate of 1,126,000 Freedom Ordinary Shares for a purchase price of $5.00 per share, for aggregate gross proceeds of $5,630,000.
  • PIPE Agreement:
    • The SPAC entered into subscription agreements with certain investors (the “PIPE Investors”).
    • The PIPE Investors agreed to subscribe for and purchase, and Freedom agreed to issue and sell to such investors, immediately prior to (but subject to), the Business Combination between Freedom and Complete Solaria, an aggregate of 563,000 shares of common stock of Freedom for a purchase price of $10.00 per share, for aggregate gross proceeds of $5,630,000 (the “PIPE Financing”).
    • In connection with the PIPE Financing, pursuant to the Subscription Agreements the Sponsor shall transfer to the PIPE Investors, on a pro rata basis, for no consideration an aggregate of 5,630,000 shares of Class B ordinary shares of Freedom concurrently with the issuance of the subscribed shares.

SUBSEQUENT EVENT – 6/15/23 – LINK

  • Complete Solaria, Inc., a prominent solar technology and services company, has announced that it has received an additional $10 million investment in its interim bridge financing.
    • This brings the total amount raised for its interim bridge financing to $40 million.
  • They also announced a decrease in its valuation from $450 million to $225 million, reflecting the reduced valuations of public solar companies since the initial announcement of a proposed business combination in October 2022.
    • The company’s anchor investors and management team believe this new valuation offers an attractive entry point for investors.

EXTENSION – 3/1/23 – LINK

  • The SPAC approved the extension from March 2, 2023 to June 2, 2023, and thereafter to up to three (3) times by an additional one month each time (or up to September 2, 2023)
    • 23,256,504 shares were redeemed at the meeting for $10.21/Share
    • The Sponsor will contribute $1.2M to 6/2/23 and $400K per month (x3) thereafter

SUBSEQUENT EVENT – 12/28/22 – LINK

  • On December 26, 2022, Freedom Acquisition I Corp., Complete Solaria, Inc., Jupiter Merger Sub I Corp., and Jupiter Merger Sub II LLC, entered into a letter agreement amending the Business Combination Agreement, dated as of October 3, 2022.
  • The Amendment deletes the following provisions in the Business Combination Agreement:
    • The condition to the obligation of Complete Solaria to consummate the Business Combination that there be, as of the closing of the Business Combination, at least $100,000,000 in Available Acquiror Cash (as such term is defined in the Business Combination Agreement)
    • The obligation of each of Freedom and Complete Solaria to use reasonable best efforts to cause the Available Acquiror Cash to equal or exceed $100,000,000 as of immediately prior to the Closing
    • The right of Complete Solaria to terminate the Business Combination Agreement if:
      • Complete Solaria has not consummated the issuances of convertible note investments in Complete Solaria for an aggregate purchase price of at least $10,000,000 on or before January 16, 2023; or
      • at a meeting of shareholders of Freedom to extend the deadline by which Freedom is required to consummate the Business Combination under its organizational documents, a number of shareholders of Freedom elect to redeem their Freedom ordinary shares such that the amount remaining in Freedom’s trust account after processing such redemptions, when taken together with the amounts included in prongs (ii), (iii), (iv) and (v) of the definition of Available Acquiror Cash is less than $100 million.
    • The obligation of Freedom and Complete Solaria to make termination payments in certain circumstances.

TRANSACTION

  • The business combination values Complete Solaria at an implied $553 million pro forma enterprise value, at a price of $10.00 per share, prior to any potential redemptions by Freedom’s public stockholders.
  • The business combination values Complete Solaria at an approximate $888 million equity value, prior to any potential redemptions by Freedom’s public stockholders, providing Complete Solaria with capital to pursue additional profitable growth streams.
  • The pro forma enterprise value implies 1.9x the Company’s projected 2023 revenue.
  • T.J. Rodgers and sponsor shareholders of Freedom Tidjane Thiam, Edward Zeng, and Adam Gishen have entered into a binding agreement to purchase $7 million of convertible promissory notes, demonstrating their commitment to the transaction and belief in the combined company’s ability to create long-term value.
    • In addition, the potential exists for investments of up to $23 million from additional investors prior to the consummation of the proposed business combination of Complete Solaria with Freedom.
  • All Complete Solaria shareholders will roll 100% of their equity holdings into the new combined company.

fact overview

CONVERTIBLE NOTES

  • T.J. Rodgers and sponsor shareholders of Freedom Tidjane Thiam, Edward Zeng, and Adam Gishen have entered into a binding agreement to purchase $7 million of convertible promissory notes, demonstrating their commitment to the transaction and belief in the combined company’s ability to create long-term value.
    • RMRLT has agreed to purchase convertible notes from Complete Solar following the closing of the Required Transaction in an amount equal to approximately $6.7 million in consideration for RMRLT’s existing investment in Solaria, which will be assumed and canceled by Complete Solar.
    • The Company promises to pay compounding interest on the outstanding principal amount hereof from the date hereof until payment in full, which interest shall be payable at the rate of 5.0% per annum or the maximum rate permissible by law, whichever is less.
    • On the two-year anniversary of the date of this Note (“Maturity Date”)
  • In addition, the potential exists for investments of up to $23 million from additional investors prior to the consummation of the proposed business combination of Complete Solaria with Freedom.
  • Based on the transaction overview, the aggregate Convertible Note will be $30M at the Closing of the business combination

LOCK-UP

  • Company and Sponsor
    • 12 months from the Closing Date or when the share price equals or exceeds $12.00 for any 20/30 trading days at least 180 days after closing

NOTABLE CONDITIONS TO CLOSING

  • The sum of the following amounts equaling or exceeding $100 million as of the Closing
  • The amount by which unpaid Freedom transaction expenses as of immediately prior to the Closing exceeds $20 million.

NOTABLE CONDITIONS TO TERMINATION

  • Complete Solar has not consummated the issuances of convertible notes pursuant to the Post-Signing Complete Solar Subscription Agreements for an aggregate purchase price of at least $10 million on or before January 16, 2023
  • The Closing has not occurred on or before March 1, 2023, or, if the deadline by which Freedom is required to consummate the Business Combination under its organizational documents has been extended, September 1, 2023

Termination Payments

  • Complete Solar is required to pay Freedom a termination payment of $3 million if:
    • (a) Freedom terminates the Business Combination Agreement as a result of a material uncured breach by Complete Solar of specified representations, warranties, covenants or other agreements of Complete Solar or due to the failure of Complete Solar’s shareholders to approve the Business Combination
    • (b) prior to the date of such termination. an acquisition proposal is made for Complete Solar that is not withdrawn
    • (c) within 12 months of the termination. Complete Solar executes or consummates an alternative transaction.
  • Each of Freedom and Complete Solar is entitled to a $1.5 million termination payment if the Business Combination Agreement is terminated as a result of material uncured breach by the other party of specified representations, warranties, covenants or other agreements or due to the failure of the other party’s shareholders to approve the Business Combination.

ADVISORS

  • Cooley is serving as legal advisor to Complete Solaria.
  • Paul Hastings LLP is serving as legal advisor to Freedom.
  • Duff and Phelps will provide a fairness opinion to the Board of Directors of Freedom in connection with the proposed business combination with Complete Solaria.

SUBSEQUENT EVENT – 6/8/22 – LINK

  • On June 6, 2022, LVS III SPE XLIII LP (“LVS”), a Delaware limited partnership and previously a member of our sponsor, Freedom Acquisition I LLC, sold its entire interest in our sponsor to NextG Tech Limited.
    • Pursuant to the Amendment, LVS assigned all of its rights, interests, and obligations under the Letter Agreement to NextG.
    • The Letter Agreement was amended to permit us to pay China Bridge Capital (“CBC”), which is an affiliate of NextG, for certain advisory services pursuant to the CBC Agreement.
    • In May 2021, they entered into an agreement with CBC to provide advisory and investment banking services to us in connection with a potential business combination.
    • Under the CBC Agreement, they will pay CBC a customary advisory fee, which amount shall be negotiated at the time of the business combination, upon closing the business combination.
  • The sponsor also issued a promissory note for $500,000 which they can use from time to time for working capital purposes

MANAGEMENT & BOARD

Executive Officers

Adam Gishen, 45
Chief Executive Officer and Board Observer

From 2015 to 2020, Mr. Gishen served in several senior roles at Credit Suisse Group AG, including Global Head of Investor Relations, Corporate Communications and Marketing and Branding. Prior to 2015, Mr. Gishen was a partner at Ondra Partners, a financial advisory firm and previous to this worked as a Managing Director at Nomura and at Lehman Brothers in the area of Equity Capital Markets. Mr. Gishen graduated from the University of Leeds.

Board of Directors

Tidjane Thiam, 58
Executive Chairman

Since 2020, Mr. Thiam has been a Director and Chair of the Audit Committee of Kering S.A., the French luxury group. From 2015 to 2020, Mr. Thiam was Chief Executive Officer of Credit Suisse Group AG. From 2014 to 2019, Mr. Thiam was a Director of 21st Century Fox and served on its Nominating and Corporate Governance Committee. Mr. Thiam previously served at Prudential plc, a global insurance company based on London, as the Group Chief Executive from 2009 to 2015, a Director from 2008 to 2015 and Group Chief Financial Officer from 2008 to 2009. Mr. Thiam holds an MBA from INSEAD and graduated from École Nationale Supérieure des Mines de Paris in 1986 and from École Polytechnique in Paris in 1984.

Jamie Weinstein, 44 [Resigned 6/8/22]
Director

Mr. Weinstein is a managing director, portfolio manager and head of corporate special situations at PIMCO, focusing on PIMCO’s opportunistic and alternative strategies within corporate credit. Prior to joining PIMCO in 2019, Mr. Weinstein worked for KKR as a portfolio manager for the firm’s special situations funds and portfolios, which he managed from their inception in 2009. Mr. Weinstein was also a member of KKR’s special situations, real estate, and India NBFC investment committees and the KKR credit portfolio management committee. Previously, Mr. Weinstein was a portfolio manager with responsibility across KKR’s credit strategies. Prior to joining KKR, Mr. Weinstein was with Tishman Speyer Properties as director of acquisitions for Northern California and at Boston Consulting Group as a consultant. Mr. Weinstein serves on the boards of directors of CRIS I, CRIS II, Capstar Special Purpose Acquisition Corp and Sandbridge Acquisition Corporation. Mr. Weinstein has 18 years of investment experience and received an M.B.A. from the Stanford Graduate School of Business and a B.S. in Civil Engineering and Operations Research from Princeton University.

Edward Zeng, — [Appointed 6/8/22]
Director

Mr. Zeng is the founder and Managing Partner of CBC and beneficially owns approximately 85% of CBC. As described in further detail above, we will pay CBC certain fees upon the closing of a business combination pursuant to the CBC Agreement. Other than the CBC Agreement, Mr. Zeng has no direct or indirect material interest in any transaction or proposed transaction required to be reported under Item 404(a) of Regulation S-K or Item 5.02(d) of Form 8-K.

ByKristi Marvin