Global Consumer Acquisition Corp. *
PROPOSED BUSINESS COMBINATION: Ascense Brands Inc.
ENTERPRISE VALUE: $507.1 million
ANTICIPATED SYMBOL: SCNT
Global Consumer Acquisition Corp. proposes to combine with GP Global Limited and Luminex Home Decor & Fragrance Holding Corporation, industry leaders in branded, licensed, and private label solutions in the Air Care and Personal Care sectors.
GP Global Limited:
- GP Global’s primary assets are controlling stakes in MVP Group International, Inc. and Primacy Industries Ltd, two leading Air Care solution companies based out of the U.S. and India, respectively.
- Primacy Industries also has a strong, emerging personal care segment.
- GP Global has a strong portfolio of in-house brands coupled with existing partnerships with major retailers across Europe and the U.S. GP Global will bring key platform capabilities such as centres of excellence for digital & analytics, product development expertise, global sourcing & global manufacturing base to the combined entity.
Luminex Home Decor & Fragrance Holding Corporation:
- Luminex, headquartered in the U.S. – formed through the merger of Candle-lite, a portfolio company of Centre Lane Partners, and PartyLite, a portfolio company of Carlyle Investment Management – has quickly grown into the #1 market leader in branded and private label solutions in Air Care in North America with top retailers as customers, with a heritage of 180+ years in manufacturing candles, as well as substantial direct to consumer presence in Europe through a combination of online and agency models.
SUBSEQUENT EVENT – 9/29/22 – LINK
- On September 27, 2022, the Company, Luminex Seller and Luminex entered into the Third Amendment to Stock Purchase Agreement to, among other things:
- (i) remove the condition precedent requiring the Company to obtain financing of at least $180 Million in cash proceeds and
- (ii) provide that the Company is to use commercially reasonable efforts to secure additional financing.
- With the exception of such amended terms, the Luminex SPA remains in full force and effect.
SUBSEQUENT EVENT – 9/26/22 – LINK
- On September 22, 2022, the Company, GP Global Seller, and GP Global entered into the Second Amendment to Stock Purchase Agreement to:
- (i) extend the Outside Closing Date to December 11, 2022.
- (ii) expand the minimum net tangible asset requirement applicable to the Company.
EXTENSION – 9/7/22 – LINK
- The SPAC agreed to extend the time to complete a business combination from September 11, 2022 to December 11.
- The SPAC will deposit an aggregate of $1,826,300 into GACQ’s trust account.
SUBSEQUENT EVENT – 8/24/22 – LINK
- On August 21, 2022, the Company, Luminex Seller and Luminex entered into the Second Amendment to Stock Purchase Agreement to:
- (i) extend the Outside Closing Date to December 11, 2022,
- (ii) provide that any purchase price cash shortfall will be paid with a promissory note from the Company in favor of Luminex Seller bearing a 12% interest on the outstanding obligations under the note, having a term of one year, and providing for an upfront fee in an aggregate amount equal to 10% of the promissory note amount payable-by Luminex in kind on the date of issuance
- (iv) provide that as conditions precedent to the obligations of Luminex Seller and the Company, the Company shall have entered into definitive agreements for the debt, equity or structured financing of the Company that would generate for the Company at the closing of the Luminex Stock Acquisition at least $180 Million in cash proceeds, and
- (v) authorize Luminex Seller and Luminex to pursue under certain conditions a potential sale-leaseback transaction, but not enter into binding commitments with respect thereto.
SUBSEQUENT EVENT – 6/29/22 – LINK
- Luminex Seller and Luminex extended the Outside Closing Date (as defined in the Luminex SPA) to August 15, 2022. The Luminex SPA remains in full force and effect.
- GP Global Seller and GP Global extended the Outside Closing Date (as defined in the GP Global SPA) to September 11, 2022. The GP Global SPA remains in full force and effect.
EXTENSION – 6/7/22 – LINK
- The company extended its time to complete a business combination from June 11, 2022, to September 11, 2022.
- The Company’s sponsor will deposit an aggregate of $1,826,300 into GACQ’s trust account
TRANSACTION
The combined entity has a forecasted 2022 revenue of approximately $553 million. At the closing of the acquisitions, Ascense Brands’ brand portfolio, accounting for approximately 55% of its total revenues including well-established heritage brands, will make it one of the top three brand portfolios in Air Care in the multi-outlet channels in the United States. The combined entity is expected to have a global distribution network covering 40+ major retailers and 50,000+ retail outlets, including 14 major U.S. retailers like Walmart, T.J. Maxx, Kroger, Dollar General and Rite Aid across 21,000+ retail outlets.
- Under the terms of the business combination agreements, GACQ will acquire all of the issued and outstanding equity securities of each of GP Global and Luminex.
- The transaction implies a pro forma company enterprise value of $507.1 million and implies a 6.95x FY23 EBITDA multiple and 0.79x FY23 Revenue multiple.
- The transaction is expected to provide Ascense Brands with approximately $117.5 million in cash proceeds to its balance sheet, assuming no redemptions.
PIPE
- There is no PIPE at this time.
LOCK-UP
- In connection with the Closing of the GP Global Stock Acquisition, GP Global Seller will agree, subject to certain customary exceptions, not to:
- (i) sell, offer to sell, contract or agree to sell, pledge or otherwise dispose of, directly or indirectly, any of the Acquisition Consideration Shares held by them (such shares, together with any securities convertible into or exchangeable for or representing the rights to receive shares of Purchaser Common Stock, if any, acquired during the lock-up period, the “Lock-up Shares”)
- (ii) enter into a transaction that would have the same effect
- (iii) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Shares or otherwise or engage in any short sales or other arrangement with respect to the Lock-Up Shares
- (iv) publicly announce any intention to effect any transaction specified in clause (i) or (ii) until the the end of the lock-up period.
COVENANTS
- The Luminex SPA includes customary covenants of the parties with respect to operation of their respective businesses prior to consummation of the Luminex Stock Acquisition, and efforts to satisfy conditions to consummation of the Luminex Stock Acquisition.
- The Luminex SPA also contains additional covenants of the parties, including, among others, access to information, tax matters, notices of certain events, cooperation in the preparation of the Proxy Statement and other filings required to be filed in connection with the Luminex Stock Acquisition, cooperation with antitrust law approvals, efforts to obtain Company Consents, Global Consumer’s right to obtain quality of earnings reports as of December 31, 2021 and January 31, 2022, Luminex providing additional financial information, approval by Luminex stockholders with respect to Waived 280G Benefits, cooperation and payment in Global Consumer securing a RWI Policy not to exceed $20 million, non-competition and non-solicitation, and Global Consumer using commercially reasonable efforts to secure at least $100 million in a PIPE Financing.
NOTABLE CONDITIONS TO CLOSING
- Global Consumer having at least $5,000,001 of net tangible assets either immediately prior to or upon consummation of the GP Global Stock Acquisition
NOTABLE CONDITIONS TO TERMINATION
- Subsequent Event – On September 22, 2022, the Company, GP Global Seller, and GP Global entered into the Second Amendment to Stock Purchase Agreement to extend the Outside Closing Date to December 11, 2022.
- By either Global Consumer or GP Global if the GP Global Stock Acquisition and related transactions are not consummated on or before June 13, 2022 (the “Outside Closing Date”); provided that, if the SEC has cleared the Proxy Statement on or prior to June 13, 2022, then Outside Closing Date shall be automatically extended for 60 days after such clearance
- Amended Outside Dates – LINK
- Luminex Seller and Luminex extended the Outside Closing Date (as defined in the Luminex SPA) to August 15, 2022. The Luminex SPA remains in full force and effect.
- GP Global Seller and GP Global extended the Outside Closing Date (as defined in the GP Global SPA) to September 11, 2022. The GP Global SPA remains in full force and effect.
ADVISORS
- Jones Day is serving as legal counsel for Luminex.
- KPPB Law is serving as legal counsel for GP Global.
- Loeb & Loeb LLP is serving as legal counsel to Global Consumer Acquisition Corp.
- ARC Group Limited is serving as the financial advisor to Global Consumer Acquisition Corp.
- Duff & Phelps Securities, LLC is serving as the financial advisor to Luminex.
MANAGEMENT & BOARD
Executive Officers
Rohan Ajila, 53
Chief Executive Officer, Chief Financial Officer and Co-Chairman of the Board of Directors
Mr. Ajila is a business leader with over 20 years of experience in investment management, mergers and acquisitions, as an entrepreneur, operator and private equity investor for both privately held and public companies. Since January 2016, Mr. Ajila has been serving as the Managing Partner of FIDES Business Partner, a private equity firm based in Zurich aimed at acquiring majority stakes in European companies and proactively assisting them in areas such as strategy, cost management and operational implementation. From January 2007 to May 2018, Mr. Ajila served as the Managing Partner at Capvent AG, a private equity manager which he helped build to over US$ 1.2 Billion AUM and has offices in Switzerland, India, China and the US. The firm invested in 120+ PE funds across strategies and geographic regions and met with more than 1000 GPs. At Capvent, Mr. Ajila also served as the Managing Partner of a direct PE fund set-up to invest in consumer companies in Asia, particularly China and India, with Unilever Corporate Ventures as a strategic investor in the fund. Mr. Ajila is also the Founding Director of an Indo-German joint venture with the Heinz Group set up primarily to bring in the global capabilities to manufacture high-end cosmetic glass in India for global cosmetic companies/brands since December 2015. In 1993, Mr. Ajila received his MBA degree from the University of Houston, TX. In 1991, Mr. Ajila received his BBA degree from the University of Houston, TX.
Board of Directors
Gautham Pai, 46
Co-Chairman of the Board of Directors
Mr. Pai is a business leader with over 20 years of operational experience overseeing multiple businesses with global operations and global leadership teams. Mr. Pai has been serving as the Managing Director and Executive Chairman of The Manipal Group since May 2006. Throughout his career, Mr. Pai guided the rapid scale of his portfolio companies and built a conglomerate with business interests in consumer industrials, consumer products, Banking, Financial Services, and Insurance (BFSI) that includes payment & identification solutions, financial and digital inclusion, with operations spanning across North America, Asia and Africa. Mr. Pai has been at the forefront and led the inorganic growth initiatives of the group in the consumer industrials market by acquiring companies in adjacencies, strengthening the leadership team, scaled the revenue by 2x, thereby enhancing shareholder value by 2.3x. In the last 15 years, Mr. Pai has played a significant role in the Manipal Group’s revenue growth of over 20x. He has brought in stringent financial governance, built a strong management team with industry expertise, a professional management board, and a strategic direction. Mr. Pai also has a vast amount of knowledge in raising growth capital through cross-border deals, advocated business translocations, and strategic JVs with partners from the US, Italy, Colombia and Thailand. This has helped rapid scale up of businesses to gain leadership position in their respective sectors. Mr. Pai has incubated ventures in the technology and financial technology sector. He has been an active angel investor in the dynamic Indian start-up landscape with over twenty investments and mentors early-stage entrepreneurs. In 1996, Mr. Pai received his bachelor’s degree in Printing Technology from the Manipal Institute of Technology (MIT).
Art Drogue, 75
Independent Director
Since January 2011, Mr. Drogue’s extensive experience in the Consumer industry from an operational, strategic and investment management perspective working closely with several private equity groups in the consumer sector in the US coupled with his deep management experience in senior leadership roles across SPAR, Best Foods, Unilever, Nabisco and General Mills, make him a valuable addition to our board of directors. Since 2011, Mr. Drogue has served as director of Ruiz foods, a leading U.S. Mexican Frozen Food Brand. Since 2011, Mr. Drogue has also been serving as founding partner for the Resource Team, a consumer packaged goods consulting practice. During his stint with Unilever, Mr. Drogue led the $18 billion Americas sales organization in theU.S., Canada, Latin America. Mr. Drogue is also board chairman and director at several early-stage consumer businesses. Mr. Drogue was awarded the William H. Albers award for his many years of leadership in the consumer industry. Mr. Drogue completed the food executive program from Cornell University in 1981 and received his bachelor’s degree in Economics from Stetson University in 1970.
Tom Clausen, 59
Independent Director
Mr. Clausen has over 30 years of global investment experience. Since February 2016, Mr. Clausen has been serving as the Managing Partner and Shareholder of FIDES Business Partner, a private equity firm based in Zurich where he helped execute the direct investment strategy with a focus on Swiss SME companies and consumer companies. Mr. Clausen helped build and cultivate the cross-border bridge between Switzerland and India/China, leveraging his network. Mr. Clausen co-founded Capvent AG and has been serving as the Managing Partner since July 2000, private equity manager which he helped build to over US$ 1.2 Billion AUM and has offices in Switzerland, India, China and the US; the firm invested in 120+ PE funds across strategies and geographic regions and met with more than 1000 GPs. Since January 2016, Mr. Clausen has also been serving as the Head of Business Development and shareholder of FlowGen Development & Management AG, a Swiss renewable energy company that offers turnkey decentralized power generation systems combining its proprietary small wind turbines with solar and storage. Mr. Clausen served as the Executive Director of Societe Generale in Zurich and London from 1998 to 2000 and served as the Member of Senior Management of Credit Swiss First Boston in San Francisco, USA from 1991 to 1998, focusing on rapidly growing technology companies. In 1996, Mr. Clausen received his Executive MBA degree from the University of San Francisco with Beta Gamma Sigma Honors. In 1988, Mr. Clausen received his bachelor’s degree in Law from the University of Zurich.
Denis Tse, 45
Independent Director
Mr. Tse has more than 20 years of investing experience in private equity and venture capital, and his extensive experience in the areas of finance, strategy and investing, particularly in the technology sector, makes him a valuable addition to our board of directors. Mr. Tse has been serving as the CEO of ACE Equity Partners International Pte. Ltd. since March 2020, an Asian cross-border technology private equity firm with over US$1 billion of assets under management. Since May 2020, Mr. Tse has been serving as the co-founder and director of ACE Convergence Acquisition Corp. (NASDAQ:ACEV), Asia’s first private equity-sponsored technology-focused SPAC listed in the US. Mr. Tse has more than 20 years of investing experience in private equity and venture capital, including six years (2009-2015) as the Head of Asia for Private Investments with Lockheed Martin Investment Management Company, where he was named “40 under 40” by the company’s Chief Investment Officer. Mr. Tse was also the first Kauffman Fellow from an Asian venture capital firm. Mr. Tse currently chairs the Investment Committee of the board of directors at the Hong Kong Science & Technology Parks Corporation. He also serves on the China Leadership Board of the School of Global Policy & Strategy at University of California, San Diego, as well as on the Advisory Board of the School of Education & Social Policy at Northwestern University. Mr. Tse earned his MBA degree from INSEAD in 2003, and his BSc. with Honor from Northwestern University in 1998.
Sergio Pedreiro, 56 [Appointed 5/6/22]
Independent Director
Before joining Revlon Inc. in January 2020, Mr. Pedreiro served as the CEO of Estre Ambiental Inc. from May of 2015 to December of 2019, a leading waste management company in Latin America. Mr. Pedreiro has more than 20 years of experience in international finance and business administration. From April 2014 to December 2018, Mr. Pedreiro was an associate partner of the private equity group of BTG Pactual. Before joining BTG Pactual, Mr. Pedreiro was the CFO of Coty Inc., a global beauty company with US$5 billion in annual revenues. Mr. Pedreiro served as Coty’s Chief Financial Officer from February 2009 to March 2014, during which period he led the company’s initial public offering of approximately US$ 1 billion on the New York Stock Exchange (“NYSE”) in mid-2013. From January 2002 to December 2008, Mr. Pedreiro served as the chief financial officer of America Latina Logística SA, a Brazilian stock exchange (B3) listed entity with one of the largest publicly traded cargo railroads in Brazil. From 2016 to 2017, Mr. Pedreiro served on the board of directors of Advanced Disposal Inc., a U.S.-based waste management company with approximately US$1.4 billion in annual revenues. During Mr. Pedreiro’s time on Advanced Disposal Inc.’s Board, the company conducted its initial public offering of approximately US$350 million on NYSE in 2016. Mr. Pedreiro began his career as a business consultant at McKinsey & Company in Brazil and was also previously an intern at Goldman Sachs in New York. Mr. Pedreiro received his B.Sc. in Aeronautical Engineering from ITA—Instituto Tecnológico de Aeronautica in Brazil in 1988. He received his M.B.A. degree from Stanford University in 1996.