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Northern Star Acquisition Corporation

Northern Star Acquisition Corporation

Oct 16, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Barkbox, Inc.

ENTERPRISE VALUE: $1.6 billion
ANTICIPATED SYMBOL: BARK

Barkbox, Inc. (“BARK” or the “Company”), a leading global omni-channel brand for dogs, and Northern Star Acquisition Corp. (“Northern Star”) (NYSE: STIC.U), announced that they have entered into a definitive merger agreement. As a result of the transaction, which values the Company at an enterprise value of approximately $1.6 billion, BARK will become a publicly listed company on the New York Stock Exchange under the new ticker symbol, “BARK”.

Founded in 2012 by Matt MeekerHenrik Werdelin and Carly Strife, BARK is the world’s most dog-centric company devoted to making dogs and their owners happy with the best products, services and content. The Company’s current offerings, available through www.barkbox.com, include BarkBox, its renowned, customized, internally designed and sourced, and cleverly themed monthly box of toys and treats, Super Chewer (highly durable rubber toys), BARK Home (everyday products), BARK Bright (dental, health and wellness), and BARK Eats (personalized food blend service).

BARK’s products are distributed directly to consumers via its BarkBox, Super Chewer and BARK Bright Dental subscriptions and are available through Amazon.com as well as 23,000 retail locations including Target, Petco, PetSmart and Costco, among many others. The Company’s omni-channel sales approach enable it to reach over 1 million active subscribers every month.

Following the close of the transaction, Mr. Meeker will continue to serve as Executive Chairman, Mr. Werdelin will continue to lead design, content and product development, and Ms. Strife will continue to lead strategic BARK initiatives, such as BARK Eats. BARK Chief Executive Officer Manish Joneja, a former senior leader at Amazon and eBay with two decades of experience scaling businesses through consumer-centric product and technology innovation, omnichannel commerce, global expansion and operational transformation, will serve as CEO of the combined company. Northern Star Chairwoman and Chief Executive Officer Joanna Coles, a creative media and technology executive, and President and Chief Operating Officer Jonathan Ledecky, a seasoned executive with over 35 years of investment and operational experience, will join the combined company’s Board of Directors.


TRANSACTION

The transaction values BARK at an enterprise value of approximately $1.6 billion.  For the fiscal year ending March 31, 2021, the Company projects revenue of approximately $365 million and gross profit of approximately $221 million.

The combined company expects to receive up to $454 million of gross cash proceeds at closing, assuming no redemptions of Northern Star’s existing public stockholders, including an upsized fully-committed $200 million private placement of common stock (the “PIPE Offering”) at $10.00 per share led by Fidelity Management & Research Company LLC, Senator Investment Group, the Federated Hermes Kaufmann Funds, and affiliates of the Santo Domingo Group (advised by Quadrant Capital Advisors, Inc.), among other top-tier institutional investors. All BARK shareholders and management are retaining 100% of their equity in the combined company. The proceeds are expected to be used to accelerate the growth of existing and new product lines, invest in staffing, marketing and engineering personnel and capabilities, and partially reduce debt obligations.

Northern Star’s units will be able to be separated voluntarily by holders commencing on or about December 18, 2020.

The Northern Star and BARK Boards of Directors have unanimously approved the proposed merger and the related transactions, which are expected to be completed early in the second quarter of 2021, subject to, among other things, the approval by Northern Star’s and BARK’s stockholders of the proposed merger and satisfaction or waiver of other customary closing conditions.



NOTABLE CONDITIONS TO CLOSING

  • Northern Star cannot consummate the proposed business combination if it has less than $5,000,001 of net tangible assets remaining either immediately prior to or upon consummation of the Merger after taking into account the holders of public shares that properly demanded that Northern Star redeem their public shares for their pro rata share of the trust account
  • Completion of the PIPE

NOTABLE CONDITIONS TO TERMINATION

  • Northern Star or BarkBox may terminate if the Merger is not consummated on or before June 30, 2021 (“Outside Date”), provided that the right to terminate the Merger Agreement will not be available to any party whose action or failure to act has been a principal cause of or primarily resulted in the failure of the Merger to occur on or before such date and such action or failure to act constitutes a breach of the Merger Agreement

SUPPORT AGREEMENTS

  • Both Northern Star and BarkBox shareholders have entered into stockholder support agreements pursuant to which they will agree to vote in favor of the Merger at a meeting called to approve the Merger by the BarkBox stockholders

PIPE

  • 20,000,000 shares at $10/share committed for $200 million from Fidelity Management & Research Company LLC, Senator Investment Group, the Federated Hermes Kaufmann Funds, and affiliates of the Santo Domingo Group (advised by Quadrant Capital Advisors, Inc.), among other top-tier institutional investors.

LOCK-UP

  • Certain of the BarkBox stockholders, representing approximately 80% of the BarkBox stockholders, and Northern Star will enter into lock-up agreements (“Lock-Up Agreements”) which provide that shares of Northern Star Common Stock to be issued to such BarkBox stockholders in the Merger will be subject to a 12-month lockup period, which period may be terminated earlier if the reported closing sale price of the Northern Star Common Stock equals or exceeds $15.00 per share (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations or other similar transactions) for a period of twenty (20) trading days during a thirty (30)-trading day period, subject to certain exceptions
  • Northern Star agreed to cause its initial stockholders to amend existing lockup agreements with respect to the Northern Star Common Stock, Class B common stock of Northern Star, and warrants of Northern Star held by them, and enter into the Lock-Up Agreement, so that the lockup with respect to such initial stockholders’ securities will be identical to the lockup of the BarkBox stockholders

ADVISORS

  • Citigroup is acting as sole financial and capital markets advisor to Northern Star. Citigroup acted as sole placement agent to Northern Star in connection with the PIPE Offering
  • Canaccord Genuity is acting as financial advisor to BARK
  • Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP and Skadden, Arps, Slate, Meagher & Flom LLP are acting as legal counsel to BARK
  • Graubard Miller is acting as legal counsel to Northern Star

NORTHERN STAR MANAGEMENT & BOARD


Executive Officers

Joanna Coles, 58
Chairperson of the Board and Chief Executive Officer

Ms. Coles is a creative media and technology entrepreneur who in her previous roles as editor of two leading magazines and Chief Content Officer of Hearst Magazines developed an extensive network of relationships at the intersection of technology, fashion and beauty. Ms. Coles is on the board of Snap Inc. (NYSE: SNAP), a leading digital media company that utilizes technology to combine mobile phone photos with Snapchat, a leading communications platform. Its chat services include creating and watching stories, chatting with groups, and making voice and video calls while also communicating through stickers and Bitmojis. She is also on the board of directors of Sonos, Inc. (NASDAQ: SONO), a designer, developer, manufacturer and seller of audio products and services. Ms. Coles has been the Executive Producer for ABC Freeform’s highly acclaimed The Bold Type since 2016 and in 2019 entered into a production development deal at ABC Studios creating TV shows across Disney’s streaming platforms. Since January 2019, she has also been a special advisor to Cornell Capital, a $3.5 billion private investment firm founded in 2013 by Henry Cornell, the former Vice Chairman of Goldman Sachs’ Merchant Banking Division. She was appointed Chief Content Officer of Hearst Magazines in September 2016, overseeing editorial for Hearst’s 300 titles globally, and served until August 2018. Prior to that, she was Editor-in-Chief of Cosmopolitan, a role she started in September 2012. She edited Marie Claire magazine from April 2006 to September 2012. Ms. Coles was New York columnist for The Times of London from September 1998 to September 2001 and served as New York Bureau Chief for The Guardian from 1997 to 1998. She is on the board of Women Entrepreneurs New York City, an initiative to encourage female entrepreneurship, with a focus on underserved communities. She is also a member of the board of directors of Density Software, a company that utilizes hardware systems and software solutions to manage safety and security in physical spaces including retail stores, hotels, restaurants, office buildings, public facilities such as airports and universities and home environments, Blue Mistral, a clean beauty company, and an advisor to several private companies. She holds a B.A. in English and American literature from the University of East Anglia.


Jonathan J. Ledecky, 62
President and Chief Operating Officer

Mr. Ledecky has been a co-owner of the National Hockey League’s New York Islanders franchise since October 2014. He also serves as an Alternate Governor on the Board of Governors of the NHL and as President of NY Hockey Holdings LLC. Mr. Ledecky has served as chairman of Ironbound Partners Fund LLC, a private investment management fund, since March 1999. He has also been the Chief Executive Officer and chairman of the board of directors of Pivotal II, a blank check company like our company that raised $230,000,000 in its initial public offering in July 2019. In September 2020, Pivotal II entered into a definitive agreement for an initial business combination with XL Hybrids, Inc. (“XL”). XL is a leading provider of fleet electrification solutions for Class 2-6 commercial vehicles in North America. Mr. Ledecky was also Chief Executive Officer and chairman of the board of directors of Pivotal I, a blank check company like our company that raised $230,000,000 in its initial public offering in February 2019. In December 2019, Pivotal I consummated its initial business combination with KLDiscovery, a provider of software and services that help protect corporations from a range of information governance, compliance and data issues. Mr. Ledecky has also served as President and a director of Newtown Lane Holdings, Incorporated, a blank check company, since October 2015. Mr. Ledecky also served as a member of the board of directors of Propel Media, Inc., a digital media holding company, from January 2015 to January 2019. From July 2005 to December 2007, Mr. Ledecky served as president, secretary and a director of Endeavor Acquisition Corp., a blank check company that completed its initial business combination with American Apparel, Inc. From January 2007 to May 2009, he served as president, secretary and a director of Victory Acquisition Corp., a blank check company that was unable to consummate an initial business combination. He also served as president, secretary and a director of Triplecrown Acquisition Corp., a blank check company, from June 2007 until it completed its initial business combination with Cullen Agricultural Technologies, Inc. in October 2009. During 2007, he also served as president, secretary and director of Grand Slam Acquisition Corp., Performance Acquisition Corp. and Endeavour International Acquisition Corp., three similarly structured blank check companies that never completed their initial public offerings due to market conditions at the time. Mr. Ledecky founded U.S. Office Products in October 1994 and served as its chief executive officer until November 1997 and as its chairman until its sale in June 1998. U.S. Office Products was one of the fastest start-up entrants in the history of the Fortune 500 with sales in excess of $3 billion within its first three years of operation. From 1999 to 2001, Mr. Ledecky was vice chairman of Lincoln Holdings, owners of the Washington sports franchises in the NBA, NHL and WNBA. In addition to the foregoing, Mr. Ledecky served as chairman of the board and chief executive officer of Consolidation Capital Corporation from its formation in February 1997 until March 2000 when it merged with Group Maintenance America Corporation. Mr. Ledecky also has served as a trustee of George Washington University, a director of the U.S. Chamber of Commerce and a commissioner on the National Commission on Entrepreneurship and currently serves as a trustee of the U.S. Olympic and Paralympic Foundation. In 2004, Mr. Ledecky was elected the Chief Marshal of the 2004 Harvard University Commencement, an honor bestowed by his alumni peers for a 25th reunion graduate deemed to have made exceptional contributions to Harvard and the greater society while achieving outstanding professional success. Mr. Ledecky received a B.A. (cum laude) from Harvard University in 1979 and a M.B.A. from the Harvard Business School in 1983.


James H.R. Brady, 56
Chief Financial Officer

Mr. Brady has served as Chief Financial Officer of Pivotal II since its inception and served as Chief Financial Officer of Pivotal I from September 2018 until its merger with KLDiscovery. Since 2014, He has provided financial and strategic services to growth companies. Since 2017, he has served as Chief Financial Officer of Airside Mobile, a technology company. From 2014 to 2017, he was Vice President for VSL Pharmaceuticals, a probiotic company. From 2013 to 2014, Mr. Brady was the Chief Financial Officer and General Counsel of Sweetgreen, a high-growth healthy, fast casual restaurant chain. From 2011 to 2013, Mr. Brady was Executive Vice President – Finance and Legal for Audax Health Solutions, a digital health/social media company. From 2009 to 2011, he was Executive Counsel of ODIN Technologies, a RFID software company. Mr. Brady previously served as a corporate and securities attorney with the firms of Hogan & Hartson and Hunton & Williams. Mr. Brady received a BA from the College of William and Mary, a JD from the George Washington National Law Center and a MBA from Darden Graduate School of Business at the University of Virginia.


 

Board of Directors

Jonathan Mildenhall, 53
Director

Mr. Mildenhall is co-founder and Executive Chairman of TwentyFirstCenturyBrand, a management consultancy firm founded in 2018 focused on enabling founders and CEOs to realize full growth potential via excellence in corporate and consumer brand strategy and marketing. He will also be serving as Chief Marketing Officer of Dave.com, a 21st century fintech platform, commencing October 1, 2020. From 2014 to 2018, Mr. Mildenhall served as global Chief Marketing Officer at Airbnb. From 2006 to 2014, Mr. Mildenhall served with The Coca-Cola Company, first as Vice President in charge of global advertising and later Senior Vice President in charge of marketing and design for the North American business unit. Prior to this, Mr. Mildenhall represented a variety of advertising clients in London. Mr. Mildenhall was recognized as one of the world’s most influential Chief Marketing Officers by Forbes in 2017, a brand genius by Adweek in 2016 and one of the most creative people in business by Fast Company in 2015. In 2008, he was awarded an Honorary Doctorate In Business Administration by Manchester Metropolitan University in recognition for his contribution to the British advertising industry. He is currently a director for Everlane, an American clothing retailer, and a national board director on the non-profit College Track organization, an organization founded by Laurene Powell Jobs that helps students from underserved communities get into and graduate from college. He previously chaired the Institute of Practitioners in Advertising diversity and recruitment initiative. He also served as a Trustee of HRH Prince of Wales’ Arts and Business organization. He received a degree in advertising from Thomas Danby College.


Debora Spar, 57
Director

Ms. Spar has served as the Senior Associate Dean of Harvard Business School Online since January 2020. She is also the MBA Class of 1952 Professor of Business Administration at Harvard Business School. From 2017 to 2018, Ms. Spar served as President and Chief Executive Officer of Lincoln Center for the Performing Arts. From 2008 to 2017, she served as the President of Barnard College. During her tenure at Barnard, Ms. Spar led initiatives to highlight women’s leadership and advancement, including the creation of the Athena Center for Leadership Studies and the development of Barnard’s Global Symposium series. Before joining Barnard, Ms. Spar spent 17 years on the Harvard Business School faculty as the Spangler Family Professor as well as the Senior Associate Dean for Faculty Research and Development. A prolific writer, Ms. Spar’s books include Ruling the Waves: Cycles of Discovery, Chaos, and Wealth from the Compass to the Internet (2001), The Baby Business (2006), Wonder Women: Sex, Power, and the Quest for Perfection (2013) and Work Mate Marry Love: How Machines Shape Our Human Destiny (2020). Ms. Spar is a member of the Academy of Arts and Sciences and serves as a director of Thermo Fisher Scientific, a provider of scientific instrumentation, reagents and consumables, and software and services to healthcare, life science and other laboratories in academia, government and industry, and Value Retail LLC, a company specializing in the development and operation of luxury outlet shopping villages, as well as a trustee of the Howard Hughes Medical Institute. She formerly served as a board member of Goldman Sachs from June 2011 to April 2017. Ms. Spar received a Ph.D. in Government from Harvard University and a B.S. from Georgetown University’s School of Foreign Service.


Valerie Jarrett, 63
Director

Ms. Jarrett has served as a Senior Advisor to the Obama Foundation since April 2017 and a Distinguished Senior Fellow at the University of Chicago Law School since January 2018. From January 2008 to January 2016, Ms. Jarrett served as Senior Advisor to President Barack Obama, where she oversaw the Office of Public Engagement and Intergovernmental Affairs and chaired the White House Council on Women and Girls. Prior to joining the administration of the President of the United States, Ms. Jarrett served in various senior positions, including Chief Executive Officer of the Habitat Company, a Chicago real estate development and management firm. She previously was Deputy Chief of Staff for the Mayor of Chicago, served as Commissioner of the Chicago Department of Planning and Development and chaired the Chicago Transit Board. Ms. Jarrett currently serves as Chairperson of the board of directors of When We All Vote, a non-profit organization, and Co-Chair of The United State of Women, and serves on the boards of directors of Lyft, Inc. (Nasdaq: LYFT), 2U, Inc., an education technology company, Sweetgreen, an American fast casual restaurant chain that serves salads, and Ariel Investments, LLC, a private investment company. Her New York Times bestselling memoir, Finding My Voice, the Adventure Begins, was published in 2019 and updated in paperback in 2020. She has received numerous awards and honorary degrees, including TIME’s “100 Most Influential People”. Ms. Jarrett received a B.A. from Stanford University and a J.D. from the University of Michigan Law School.


Justine Cheng, 44
Director

Ms. Cheng has served as a Founding Partner of Cornell Capital, a $3.5 billion private investment firm founded in 2013 by Henry Cornell, the former Vice Chairman of Goldman Sachs’ Merchant Banking Division, since 2016. Prior to joining Cornell Capital, Ms. Cheng worked with the Private Equity Group at Fortress Investment Group from 2004 to 2016, where she was most recently a Managing Director. While at Fortress, she also served as the Chief Financial Officer and Chief Operating Officer for New Senior Investment Group (NYSE:SNR) from 2014 to 2016 and Newcastle Investment Corp. (NYSE: NCT) from 2014 to 2016. Ms. Cheng previously held various private equity and investment banking positions at UBS, Credit Suisse and Donaldson Lufkin & Jenrette. Ms. Cheng was recognized as one of the Wall Street Journal’s Women to Watch in Private Equity in 2018, and profiled in The Deal’s article Private Equity’s Better Half in 2019. She is Chairperson of the Board of Knowlton Development Corporation, the largest global custom formulator and manufacturer serving the prestige beauty, personal care and household sectors. She is also on the board of directors of Corelle Brands, a leading global manufacturer and marketer of dinnerware, cookware, storage and food prepware under iconic brands including Instant Pot, Pyrex, Corelle, Snapware and CorningWare, and of Blue Mistral, a holding company with investments in Frédéric Fekkai Brands and Bastide, two beauty and personal care companies. She received a Bachelors Degree in Economics and a Masters in International and Public Affairs from Columbia University.