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HPX Corporation *

HPX Corporation *

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Ambipar Emergency Response

ENTERPRISE VALUE: $581 million
ANTICIPATED SYMBOL: AMBI

HPX Corporation proposes to combine with Ambipar Emergency Response, a newly incorporated Cayman Islands exempted company that will hold the business of Emergência Participações S.A.

  • Ambipar Participações e Empreendimentos S.A. currently the sole shareholder of Emergência Participações S.A., will remain a majority shareholder of Ambipar Response with an approximate 50% equity stake in Ambipar Response following the closing of the Business Combination and assuming no redemptions from HPX’s existing public shareholders, and up to 72% in case of total redemptions of HPX existing public shareholders.
  • Founded in 1995 by Tercio Borlenghi Jr, Ambipar Response provides a wide range of emergency, environmental and industrial services to a diversified client base in logistics, chemical, oil and gas, mining and industrial sectors.
  • Ambipar Response expects to earn net revenues of approximately R$1.7 billion in 2022 and EBITDA of R$436 million, equivalent to US$325 million and US$81.8 million, respectively, if translated by the current USD – BRL exchange rate of $1.00 – R$5.33.
  • Headquartered in São Paulo, Brazil, Ambipar Response has a portfolio of over 10,000 customers with long-standing relationships in a variety of sectors and geographies, including North America (U.S., Canada), Europe (mainly UK), LatAm (Chile, Colombia, Peru, among others), and Brazil.
  • Over the last two years, Ambipar Response has achieved larger growth, including in the North American market, and has identified opportunities for continued expansion in all geographies, with a particular focus in the United States.

EXTENSION – 11/4/22 – LINK

  • On November 3, 2022, in connection with its Extraordinary General Meeting held on November 3, 2022, HPX Corp. extended the date before which the Company must complete a business combination from November 20, 2022, to March 31, 2023.
  • The holders of 3,650,973 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.064 per share, for an aggregate redemption amount of approximately $36.7 million, leaving approximately $21.9 million in the trust account.

EXTENSION – 7/14/22 – LINK

  • On July 14, 2022, HPX Corp. and Continental Stock Transfer & Trust Company entered into Amendment No. 1 to
    • (i) extend the date before which the Company must complete a business combination from July 20, 2022 to November 20, 2022 and
    • (ii) extend the date on which the Trustee must liquidate the trust account established in connection with the Company’s initial public offering if the Company has not completed its initial business combination from July 20, 2022 to November 20, 2022.
  • The holders of 19,472,483 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.018 per share, for an aggregate redemption amount of approximately $195.1 million, leaving approximately $58.4 million in the trust account.

TRANSACTION

  • The business combination values Ambipar Response at an implied US$581 million enterprise value and a pro forma equity value of approximately US$798 million, assuming no redemptions.
  • Ambipar Group will receive shares of HPX as consideration and the transaction is expected to provide Ambipar Response with at least US$168 million in gross proceeds through committed PIPE subscriptions and non-redemption agreements by high-profile institutional investors and high net-worth individuals, including Opportunity, Constellation, XP and Ambipar Group.
  • The proceeds will be used to accelerate Ambipar Response’s organic and inorganic growth.
  • In addition, Ambipar Group has agreed to a three-year lockup on its rollover shares and HPX’s sponsor has agreed to a three-year lockup on its founder shares.

hpx corp

PIPE

  • Ambipar Subscription Agreement
    • 5,050,000 New PubCo Class B Ordinary Shares (at $10.00 per share)
  • PIPE Subscription Agreements
    • 11,150,000 New PubCo Class A Ordinary Shares (at $10.00 per share)
    • New PubCo has agreed to issue to such PIPE Investors and Opportunity, on or promptly following Closing,
      • (i) an aggregate of 2,567,500 private placement warrants to purchase New PubCo Class A Ordinary Shares (“New PubCo Warrants”) and
      • (ii) an aggregate of 1,860,600 additional New PubCo Class A Ordinary Shares.
  • $162M in PIPE Agreements

NON-REDEMPTION AGREEMENT

  • Certain shareholders of the SPAC, owning, in the aggregate, 600,000 of the outstanding Class A Ordinary Shares of SPAC, have entered into non-redemption agreements with SPAC and New PubCo, under which, among other things, such Non-Redeeming Shareholders have agreed, in consideration of
    • (i) an aggregate of 26,400 additional New PubCo Class A Ordinary Shares and
    • (ii) 150,000 New PubCo Warrants, in each case to be issued by New PubCo to such Non-Redeeming Shareholders on or promptly following the Closing, to vote in favor of transactions contemplated in the Business Combination Agreement for which the approval of such SPAC shareholders is required and agreed not to redeem or exercise any right to redeem any Class A Ordinary Shares of SPAC that such SPAC shareholders hold of record or beneficially.
  • Trend HPX SPAC FIA IE, represented by its investment manager XP Allocation Asset Management Ltda., owning 1,297,400 of the outstanding Class A Ordinary Shares of SPAC, has entered into a certain non-redemption agreement with SPAC and New PubCo, pursuant to which, among other things, XP will be entitled to
    • (i) an aggregate of 57,086 additional New PubCo Class A Ordinary Shares and
    • (ii) 324,350 New PubCo Warrants, in each case to be issued by New PubCo to XP on or promptly following the Closing, in the event XP does not redeem the SPAC Shares of which it is the record and beneficial owner in connection with any Extension sought on or prior to July 15, 2022.
    • Sponsor Letter
      • The Sponsor and SPAC have agreed that the Sponsor will effectuate the SPAC Sponsor Recapitalization, as a result of which it will
        • (i) exchange 6,245,000 SPAC Class B Ordinary Shares for 1,860,000 SPAC Class A Ordinary Shares minus any XP Additional Shares, and
        • (ii) and exchange 7,060,000 of its private placement warrants for 812,500 private placement warrants minus any XP Additional Warrants.
          • The Sponsor and the Insiders also waived certain anti-dilution protections to which they would otherwise be entitled in connection with the Business Combination.

DOWNSIDE PROTECTION AGREEMENT

  • The PIPE Investors, the Non-Redeeming Shareholders, New PubCo, Ambipar, and the Sponsor entered into a downside protection agreement pursuant to which the PIPE Investors and the Non-Redeeming Shareholders are provided with certain downside protection rights. Subject to the terms and conditions of the Downside Protection Agreement, such PIPE Investors and Non-Redeeming Shareholders may receive, on a pro-rata basis, an aggregate of up to 1,050,000 New PubCo Class A Ordinary Shares from the Sponsor or may sell a certain number of their respective New PubCo Class A Ordinary Shares to Ambipar, the Sponsor or to a third party in a block trade, in each case to occur no earlier than 30 months following the Closing.

LOCK-UP

Company & Sponsor

  • Three-year lock-up on Ambipar Group rollover shares and HPX’s sponsor founder shares.

EARNOUT

  • Ambipar will be issued up to an additional 11,000,000 newly issued New PubCo Class B Ordinary Shares, as follows:
    • (i) if at any time during the three-year period following the Closing Date, the closing share price of the New PubCo Class A Ordinary Shares is greater than or equal to $17.00 over any 20 Trading Days (as defined in the Business Combination Agreement) within any consecutive 30 Trading Day period, 50% of the Earn-Out Shares shall be issued; and
    • (ii) if at any time during the three-year period following the Closing Date, the closing share price of the New PubCo Class A Ordinary Shares is greater than or equal to $20.00 over any 20 Trading Days within any consecutive 30 Trading Day period, the remaining 50% of the Earn-Out Shares shall be issued.

NOTABLE CONDITIONS TO CLOSING

  • The Company’s obligations to consummate the Closing are subject to the condition that SPAC shall have at least $168,000,000 in cash and cash equivalents in the Trust Account

NOTABLE CONDITIONS TO TERMINATION

  • The Closing has not occurred by July 20, 2022, provided that such date will be automatically extended for an additional period ending on the last date for SPAC to consummate its initial business combination pursuant to any Extension sought and obtained by SPAC pursuant to the terms of the Business Combination Agreement provided that the outside date shall not be later than January 31, 2023 without the prior written consent of the Company
  • A governmental entity shall have issued an order or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions, and such order or other action has become final and non-appealable

ADVISORS

  • Bank of America Merrill Lynch Banco Múltiplo S.A. is serving as financial advisor to Ambipar Response and Ambipar Group
  • BofA Securities, Inc. is serving as the placement agent in connection with the PIPE offering.
  • Simpson Thacher & Bartlett LLP is serving as U.S. legal advisor to Ambipar Response and Ambipar Group
  • Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados is serving as Brazilian legal advisor to Ambipar Response and Ambipar Group.
  • Skadden, Arps, Slate, Meagher & Flom LLP is serving as U.S. legal advisor to HPX
  • Greenberg Traurig, LLP is serving as legal advisor on certain international diligence matters for HPX and BRZ Advogados as legal advisor on Brazilian matters.
  • Shearman & Sterling LLP is acting as legal advisor to BofA Securities, Inc. in its capacity as the placement agent.

MANAGEMENT & BOARD

Executive Officers

Carlos Piani, 47
Chief Executive Officer, Chief Financial Officer & Director

Mr. Piani has over 20 years of investment and operational experience and a depth of investment and mergers and acquisitions experience in a wide range of industries. Mr. Piani is currently the Chairman of Equatorial Energia S.A. (SAO: EQTL3), a Brazilian utilities company, Chairman of Brasil Brokers Participacoes S.A. (SAO: BBRK3), a Brazilian real estate company, and serves on the board of directors of Petrobras Distribuidora S.A. (SAO: BRDT3), Brazil’s largest fuel distribution company. Mr. Piani served as Head of Strategic Initiatives and Mergers & Acquisitions in 2019 at Kraft Heinz and Zone President of Kraft Heinz Canada from 2015 to 2018. Prior to joining Kraft Heinz, Mr. Piani served as Chief Executive Officer of PDG Realty S.A. Empreendimentos e Participacoes (SAO: PDGR3), a real estate company, from August 2012 to August 2015. Previously, he served as Co-Head of Private Equity of Vinci Partners, an independent asset management firm, from April 2010 to August 2012, as Chief Executive Officer of CEMAR, an electricity distribution company in Brazil, from March 2006 to April 2010, and as Chief Executive Officer of Equatorial Energia S.A., CEMAR’s controlling shareholder, from March 2007 to April 2010. From 1998 to 2004, Mr. Piani served at Banco Pactual S.A. (now known as BTG Pactual S.A.), initially as an investment banking analyst and later as an Associate Partner of the Principal Investment Group, where he managed a multi-million dollar venture capital fund focused on Brazilian technology companies. Mr. Piani has a degree in computer science from PUC/RJ and a bachelor’s degree in business from IBMEC/RJ. He has also completed the Owner and President Management Program at Harvard Business School and is a Chartered Financial Analyst by CFA Institute.

 

Board of Directors

Bernardo Hees, 50
Co-Chairman of the board of directors

Mr. Hees served as a partner of 3G, a private equity firm, from 2010 to 2019 and was responsible for leading some of 3G’s most iconic investments. Until stepping down in June 2019, Mr. Hees served as the Chief Executive Officer of Kraft Heinz (NYSE: KHC), one of the largest manufacturers and marketers of consumer branded food products in the world. Mr. Hees became Chief Executive Officer of Kraft Heinz upon the closing of the merger of Kraft with Heinz in 2015, where he served as Chief Executive Officer since June 2013. Prior to this, Mr. Hees served as Chief Executive Officer of Burger King, a global fast food restaurant chain, from November 2010 to June 2013, upon 3G’s approximately $4.0 billion acquisition of Burger King Holdings (formerly NYSE: BKC). Mr. Hees also served as the Chief Executive Officer of America Latina Logistics (SAO: RAIL3), a Brazilian logistics company, from January 2005 to September 2010 (now known as Rumo S.A.). Mr. Hees is currently the Chairman of the Board and Chair of the Board’s Executive Committee of Avis Budget Group, Inc. (Nasdaq: CAR), a leading global provider of mobility and car rental solutions through its Avis and Budget brands. Mr. Hees has served on the board of directors of Bunge Ltd. (NYSE: BG), an agribusiness and food company, since December 2019. Mr. Hees received his bachelor’s degree from Pontifícia Universidade Católica do Rio de Janeiro and his MBA from the University of Warwick and he completed the Owner and President Management Program at Harvard Business School.

Rodrigo Xavier, 51
Co-Chairman of the board of directors

From 2014 to 2017, Mr. Xavier served as Chief Executive Officer and Chairman of the board of directors of Bank of America Merrill Lynch Brazil. Prior to this, from 2009 to 2013, he was a Founding Partner and member of the Executive Committee of Vinci Partners. Mr. Xavier joined Banco Pactual in 1993, where he became a senior partner and executive committee member. He later served as Chief Executive Officer of UBS Pactual from 2008 to 2009. In 2018, Mr. Xavier became a fellow at Stanford’s Distinguished Career Institute (“DCI”) and has since become an investor board member and adviser at DCI in the topics of digital transformation, innovation, technology and social entrepreneurship. Mr. Xavier received his bachelor’s degree in Economics from Universidade de Brasilia and completed his post-graduate studies in International Economics from Tohoku and Fukushima Universities in Japan. He also has a master’s degree in International Management from the American Graduate School of International Management (Thunderbird), USA.

Marcos Peigo, 40 
Director

Mr. Peigo has served as an Operating Partner of Digital Colony, a global investment firm, and Chief Executive Officer and Board Member of Scala, the Latin American hyperscale data center platform of Digital Colony, since April 2020. Prior to this, Mr. Peigo was Vice President of Value Creation at IBM Latin America from 2018 to April 2020, and before that was the Chief Operating Officer at UOL Diveo Tecnologia Ltda. from 2012 to 2017. From 2004 to 2013, Mr. Peigo served as the Chief Executive Officer of Solvo Serviços de Informática S.A and from 2002 to 2007, he served as a Board Member of Automatos International Ltd. In 2014, Mr. Peigo founded Lemniscata Ventures, a privately held advisory and investment firm. Mr. Peigo studied Electrical Engineering and Economics at Pontificia Universidade Catolica de Sao Paulo.

Fábio Mourão, 50 [Resigned 12/9/20]
Director

Mr. Mourão has been a partner at Principia Capital Partners Investimentos Ltda., a private equity firm operating in Brazil, since 2019. From 2004 to 2018, he worked at Credit Suisse Brazil where he held positions as Head of Execution, Head of Mergers and Acquisitions and Head of Investment Banking. Mr. Mourão served at Indosuez, an investment banking boutique in Brazil and in Switzerland, from 1996 to 2000. He began his career at J.P. Morgan in 2000 and at Goldman Sachs in 2001 in New York, as a summer associate at both firms. Mr. Mourão was also a Consultant at McKinsey from 2002 to 2004 advising clients in Germany, Italy and Portugal, and an Engineer in the mining and steel sectors for Magnesita in Brazil and Japan from 1993 to 1996. Mr. Mourão holds a BS in Metallurgical Engineering from the Federal University of Minas Gerais and an MBA from Stanford University Graduate School of Business. He was a Fellow at Stanford University’s Distinguished Careers Institute in 2019.

Marco Kheirallah, 47 [Resigned 7/16/21]
Director

Mr. Kheirallah has been the Principal Founder and Managing Partner at SIP Capital Fund since 2010. During that time, Mr. Kheirallah also served as the Chief Financial Officer at PDG Realty from 2012 to 2015. Prior to this, Mr. Kheirallah was a Partner, at Banco Pactual from 2001 to 2009 and at Banco Matrix from 1996 to 2001. Prior to this, he served as a Trader, at Banco Opportunity from 1994 to 1996 and at Banco BCN from 1992 to 1994. Mr. Kheirallah received his bachelor’s degree in Business Administration at Fundação Getúlio Vargas, EAESP and serves a board member to a nonprofit dedicated to mental health issues, Instituto Ame Sua Mente.

Salete Pinheiro, 65
Director

Ms. Pinheiro has more than 38 years of experience in the Brazilian corporate market, most recently as an Auditing Partner at PricewaterhouseCoopers from 1979 to 2018. From 1995 to 2008, Ms. Pinheiro became an executive member, responsible for human resources in PricewaterhouseCoopers’ Rio de Janeiro office and then for operations in Northeast Brazil from 2003 to 2008. Ms. Pinheiro serves on the fiscal council at Petrobras Distribuidora S.A. (SAO: BRDT3) and on the audit committee at HDI Seguros. Ms. Pinheiro holds a bachelor’s degree in Accounting and obtained her MBA from IBMEC.

Wolney Edirley Gonçalves Betiol, — [Appointed 7/16/21]
Director

Mr. Betiol is an entrepreneur, an investor, and a business leader with more than 30 years in technology industry. In 1990, he co-founded Bematech, which became one of the largest Brazilian companies focused on retail automation solutions, took the company public in 2007 and led the process of merging the company with Totvs, one of the largest IT companies in Latin America in 2015. Also in 2015, Mr. Betiol founded Synapse Venture Capital, a global investment firm focused on investing in innovative companies and venture capital funds, strengthening the ties between Silicon Valley and Brazil.

Rafael Salvador Grisolia, — [Appointed 7/16/21]
Director

Mr. Grisolia is a senior executive with over 20 years of experience in high leadership positions or as an executive officer in large Brazilian companies. He was most recently the Chief Executive Officer of BR Distribuidora S.A., from 2019 to January 2021, and prior to that served as CFO and IRO of Petroleo Brasileiro S.A. since 2018. He was CFO and IRO of Petrobras Distribuidora S.A.from 2017 to 2018 and CFO and IRO of InBrands S.A. from 2013 to 2017. Prior to this, he was an executive officer of many large Brazilian companies, including Cosan, Cremer Group, Trigo Group and Esso (ExxonMobil). Mr. Grisolia has extensive experience in successfully coordinating privatization processes, turnarounds, M&A’s and IPO’s for large and well-known Brazilian companies. He is certified by IBGC (Brazilian Institute of Corporate Governance), having participated in the Board of Directors of PDG Realty, a Brazilian real estate developer and IBP, the Brazilian Institute of Oil & Gas.

ByRoman Developer