Pensare Acquisition Corporation *
PROPOSED BUSINESS COMBINATION: Computex Technology Solutions (name changed to American Virtual Cloud Technologies)
ESTIMATED CURRENT FUNDS in TRUST: $1.8 million*
CURRENT PER SHARE REDEMPTION PRICE: $10.64*
EQUITY VALUE: $46.4 million
* SPACInsider estimate as of 2/25/20
Pensare Acquisition Corp. propose to acquire Stratos Management Systems, Inc. and its operating companies, which do business as Computex Technology Solutions. Computex is an IT service provider offering a portfolio of managed IT services to a wide range of clients including Unified Communications-as-a-Service (UCaaS), directory and messaging services, enterprise networking, cybersecurity, collaboration, data center, integration, storage, backup, virtualization, and converged infrastructure.
Pensare has also entered in a non-binding Letter of Intent (the “LOI”) to acquire a leading developer of Unified Communications technology. The planned acquisitions are part of Pensare’s strategy to build a leading national Cloud-Managed Unified Communications and IT Solutions Provider.
Pensare also announced that it has joined AT&T Partner Exchange®. Pensare can now bundle and resell AT&T network, mobility, IoT and cybersecurity solutions with its own services to serve as a one-stop-shop for business customers.
In addition, Graham McGonigal has been appointed as Chief Operating Officer to help lead the execution of Pensare’s strategy. Mr. McGonigal was formerly Chief Network Officer at Vonage Holdings (NYSE:VG), Chief Operating Officer at MasTec Network Solutions, a division of MasTec Inc. (NYSE:MTZ), and an executive at AT&T.
TRANSACTION
- Pensare will acquire Computex for an aggregate of approximately $65 million in cash, stock, and assumed debt
- Pursuant to the terms of the LOI, it is proposed that Pensare would acquire the second target company for an aggregate of approximately $49.5 million in cash, stock, and assumed debt
- The price per share for any Pensare stock issued to Computex’s shareholder would be the lower of the market price per share or the lowest per share price paid by any purchaser in any private placement effected by Pensare in connection with the transaction.
The transaction is expected to close in the fourth quarter of 2019. As previously announced, Pensare is seeking shareholder approval of an extension of Pensare’s deadline to complete an initial business combination from August 1, 2019 to December 1, 2019.
SUBSEQUENT EVENTS
As of December 20, 2019 entered into Amendment No. 1 to the Business Combination Agreement to:
- (i) reduce the aggregate merger consideration payable from $65 million to $60 million,
- (ii) change the allocation of the Consideration Amount so that it is payable as follows:
- (a) an amount in cash equal to two-thirds of the cash raised by Pensare in the Private Placement less $5 million, subject to a cap of $20 million
- (b) $5 million of any securities, other than shares of Pensare’s common stock, sold in the Private Placement (the “PIPE Securities”)
- (c) the balance of the Consideration Amount in shares of the company’s common stock
- (iii) provide for the optional redemption of some or all of the PIPE Securities following the Closing, to the extent that Pensare raises additional funds in private placements following the Closing
- (iv) adjust a condition to the closing of the Merger to require that Pensare shall have at least an aggregate of $35 million of cash held either in or outside of the Trust Account at the Effective Time (reduced from $150 million)
- (v) adjust the Outside Date by which the Closing must occur from December 31, 2019 to April 1, 2020.
ADVISORS
- EarlyBirdCapital is serving as financial and capital markets advisor to Pensare.
- Greenberg Traurig, LLP is acting as legal counsel to Pensare.
PENSARE MANAGEMENT & BOARD
Executive Officers
Darrell J. Mays, 53
CEO
Mr. Mays was the Founder and Chief Executive Officer of nsoro, a turnkey wireless installation services provider, from 2003 to 2008, which was acquired by MasTec in August 2008. Mr. Mays has served as an executive of MasTec since 2008, during which period the revenues and EBITDA of MasTec’s communications division, of which nsoro is a component, increased to approximately $2.3 billion and $245.0 million in 2016, respectively. Mr. Mays holds a Bachelor of Arts degree in Business from Georgia State University.
Dr. Robert Willis, 48
President
Dr. Willis became the President of nsoro in 2007. In such capacity, he negotiated the acquisition of the business by MasTec and, following its acquisition, served in an advisory role from 2010 through July 2016. From December 2013 until December 2015, Dr. Willis served as Chairman of U.S. Shale Solutions, Inc., a shale services company which he founded in 2013. Prior to nsoro, Dr. Willis served as Chief Executive Officer of Foxcode Inc., a merchant-banking firm, from 2004 until November 2015, in which capacity he was principal on multiple debt and equity transactions. In July 2004, Dr. Willis founded Gaming VC, S.A., an online gaming enterprise which completed a GBP 81 million initial public offering in London in 2004, and served as a member of its board and as its Finance Director until 2007. Prior to that, Dr. Willis was the founder and Chief Executive Officer of Alpine Computer Systems, Inc., a systems integration engineering company established in the 1980s that grew rapidly and was acquired by Delphi Group plc. in 1996, at which time he became Senior Vice President and Chief Information Officer of the parent company. Dr. Willis was a member of a three-man North American roll-up M&A team which ultimately acquired approximately 25 businesses. After an ADR NASDAQ offering, the company was acquired by Adecco Group AG. Dr. Willis subsequently reacquired the company and then merged it into Aimnet Solutions Inc., backed by Mellon Ventures and William E. Simon & Sons. The business was ultimately acquired by Cognizant Inc., a large public IT services company. Dr. Willis was awarded a Doctorate in Humane Letters (Hon.) from Newbury College in Boston, MA, in May 2001.
John Foley, 68
CFO
Mr. Foley was the former Chief Financial Officer of nsoro MasTec from 2007 until his retirement in December 2015. During his tenure, Mr. Foley oversaw the financial integration of seven acquisitions. He also held executive positions which were responsible for the financial and operations at Burger King, Diageo PLC and Chiquita Brands International, Inc. Mr. Foley holds a Bachelor of Science degree in Finance from Boston College, where he graduated with honors.
Board of Directors
Lawrence E. Mock, Jr., 71
Chairman of the Board and Director
Mr. Mock is currently Managing Partner of Navigation Capital Partners, Inc., an Atlanta-based private equity firm which he founded in partnership with Goldman Sachs in 2006. From 1995 to 2006, Mr. Mock served as President and Chief Executive Officer of Mellon Ventures, Inc., which he founded in partnership with Mellon Financial Corporation, to make private equity and venture capital investments in operating companies. From 1983 to 1995, he was founder and Chief Executive Officer of River Capital, Inc. Mr. Mock holds a Master of Science degree from Florida State University and a Bachelor of Arts degree from Harvard College.
Jose Mas, 45
Director
Mr. Mas has served as a director and Chief Executive Officer of MasTec since 2007. MasTec is a leading infrastructure construction company operating mainly throughout North America across a range of industries. MasTec’s primary activities include the engineering, building, installation, maintenance and upgrade of communications, energy and utility infrastructure, such as: wireless, wireline/fiber, satellite communications and customer fulfillment activities; petroleum and natural gas pipeline infrastructure; electrical utility transmission and distribution; conventional and renewable power generation; and industrial infrastructure. As of March 31, 2017, MasTec had over 18,500 employees and 500 locations, and generated over $5.1 billion in revenue in 2016, more than five times greater than its 2006 revenues. Mr. Mas was also appointed to the Board of Directors of Helmerich & Payne, Inc. on March 1, 2017. Mr. Mas holds a Master of Business Administration and Bachelor of Business Administration degree from the University of Miami.
U. Bertram Ellis, Jr., 63
Director
Mr. Ellis has served as the Chairman and Chief Executive Officer of Ellis Capital, a diversified investment firm, since 1984. In addition, Mr. Ellis was the Founder and Chief Executive Officer of ACT III Broadcasting from 1986 to 1991, which sold for $530 million and Ellis Communication from 1993 to 1996, which sold for $840 million. Mr. Ellis holds a Master of Business Administration from the University of Virginia Darden Business School and a Bachelor of Arts from the University of Virginia.
Suzanne Shank
Director
Mrs. Shank has served as Chairman, Chief Executive Officer and majority owner of Siebert Cisneros Shank & Co., a full-service investment bank that has managed or co-managed over $2 trillion in transactions, since 1996. Mrs. Shank holds a Master of Business Administration from the Wharton School at the University of Pennsylvania and a Bachelor of Science from the Georgia Institute of Technology.
Karl Krapek, 68
Director
Mr. Krapek has served as the Lead Director at Prudential Financial, Inc. since 2014, and a Director since 2008, and Director of Northrop Grumman Corporation since 2008. From 2002 to 2009, he was the President and Chief Operations Officer of United Technologies Corporation, or UTC, which has a market capitalization of approximately $90 billion. Mr. Krapek has served as an Executive Vice President of UTC since 1997 and as a Director of UTC from 1997 to 2007. Mr. Krapek holds a Master of Science from Purdue University and Bachelor of Science from Kettering University.
Dennis Lockhart, 70
Director
Mr. Lockhart recently retired from his position as president and Chief Executive Officer of the Federal Reserve Bank of Atlanta, a position he held from 2007 to 2017. Earlier, he was a professor at Georgetown University, School of Foreign Service, from 2003 to 2007. Prior to this, he held senior positions at Heller Financial Inc. and Citicorp (now Citigroup). Mr. Lockhart holds a Master of Arts from Johns Hopkins University and a Bachelor of Arts from Stanford University.
Dr. Klaas Baks, 44
Director
Dr. Baks is the Co-Founder and Executive Director of the Emory Center for Alternative Investments, which was formed in 2008. He also serves as the Atlanta Chair of TIGER 21, which is a peer-to-peer network of high net worth wealth creators, since 2014. In addition, he has been an Associate Professor in the Practice of Finance at Emory University’s Goizueta Business School since 2002. Dr. Baks has a Doctoral degree from the Wharton School at the University of Pennsylvania and a Masters of Arts degree from Brown University.