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Prospector Capital Corp. *

Prospector Capital Corp. *

Dec 18, 2020 by Kristi Marvin

PROPOSED BUSINESS COMBINATION: LeddarTech

ENTERPRISE VALUE: $330 million
ANTICIPATED SYMBOL: LDTC

Prospector Capital Corp proposes to combine with LeddarTech.

A global software company founded in 2007 and headquartered in Quebec City with additional R&D centers in Montreal, Toronto and Tel Aviv, Israel, LeddarTech develops and provides comprehensive perception software solutions that enable the deployment of ADAS and autonomous driving (AD) applications. LeddarTech’s automotive-grade software applies advanced AI and computer vision algorithms to generate accurate 3D models of the environment, allowing for better decision making and safer navigation. This high-performance, scalable, cost-effective technology is available to OEMs and Tier 1-2 suppliers to efficiently implement automotive and off-road vehicle ADAS solutions.

LeddarTech is responsible for several remote-sensing innovations, with over 150 patents granted or applied for that enhance ADAS and AD capabilities. Better awareness around the vehicle is critical in making global mobility safer, more efficient, sustainable and affordable: this is what drives LeddarTech to seek to become the most widely adopted sensor fusion and perception software solution.

TRANSACTION

  • The transaction is expected to provide the company with up to $66 million in gross proceeds, including up to $23 million in proceeds from the Prospector trust account (assuming no redemptions) and $43 million in convertible PIPE proceeds from investors including Prospector’s sponsor, FS Investors (an affiliate of Prospector’s sponsor), Investissement Québec as a representative of the Government of Québec, Desjardins Capital and BDC Capital participating in the transaction via a convertible private placement investment into LeddarTech.
  • The transaction values LeddarTech at a pro-forma equity value of $348 million, assuming no redemptions and the full conversion of the convertible PIPE (without taking into account earn-out to LeddarTech existing shareholders or earn-out to Prospector’s sponsor).
  • Upon closing of the transaction, which is expected by the fourth quarter of 2023, LeddarTech is expected to be listed on Nasdaq under the ticker symbol “LDTC.”

prsr overview

SPAC FUNDING

  • Convertible PIPE Proceeds
    • $43 million in convertible PIPE proceeds
      • 5-year term and are convertible at $10.00/Share
      • For every $100.00 invested in Tranche A, the warrant certificate offers 2.75 Class D-1 Preferred Shares.

EARNOUT

  • Company
    • 5 million shares will vest for 7 years after the Closing of the business combination.
      • 20% if the share price equals or exceeds $12.00 for 20/30 trading days.
      • 20% if the share price equals or exceeds $14.00 for 20/30 trading days.
      • 20% if the share price equals or exceeds $16.00 for 20/30 trading days.
      • 20% on the milestone of signing the first customer contract with an OEM for 150K or more units/year
      • 20% when sending invoice for product delivery to a customer needs 150K or more units/year
  • Sponsor
    • 25% of the shares and 25% of the private placement warrants can be earned if the share price equals or exceeds $12.00, $14.00 or $16.00 for 20/30 trading days

LOCK-UP

  • Company
    • 4 years post-close and 6 months post-close for those existing investors that participate in the PIPE.
  • Sponsor
    • 6 months after the Closing Date

NOTABLE CONDITIONS TO CLOSING

  • Immediately after the Closing, the aggregate cash proceeds actually received (or deemed received) by LeddarTech, Amalco or the Surviving Company in respect of the Financing (as defined below), together with any funds in the Trust Account, shall be equal to or greater than $43,000,000.

NOTABLE CONDITIONS TO TERMINATION

  • By either Prospector or LeddarTech if the Business Combination is not consummated by December 31, 2023

ADVISORS

  • Company
    • Stikeman Elliot LLP and Vedder Price PC are representing LeddarTech as legal counsel.
  • SPAC
    • TD Cowen is serving as financial advisor to Prospector
    • Current Capital is serving as a financial advisor that provided a fairness opinion to Prospector’s board of directors.
    • Osler, Hoskin and Harcourt LLP and White & Case LLP are representing Prospector as legal counsel.

EXTENSION – 1/11/23 – LINK

  • The SPAC approved the extension from January 12, 2023, to December 31, 2023.
    • 30,305,944 shares were redeemed
    • No contributions to trust were made.

MANAGEMENT & BOARD

Executive Officers

Derek Aberle, 50
Chief Executive Officer and Director

Mr. Aberle also served as President and Chief Operating Officer of XCOM from July 2018 to November 2020. Prior to XCOM, Mr. Aberle spent 17 years at Qualcomm, including as President of Qualcomm from March 2014 to January 2018. He was an officer and member of Qualcomm’s Executive Committee from 2008 until January 2018. Prior to Qualcomm, Mr. Aberle was an attorney with the international law firms Pillsbury Winthrop and Heller Ehrman. Mr. Aberle holds a B.A. in Business Economics from the University of California, Santa Barbara and a J.D. from the University of San Diego School of Law.

Nick Stone, 42
Chief Financial Officer and Director

Prior to joining FS Investors in June 2011, Mr. Stone served as Vice President at TPG Capital, one of the world’s largest private equity funds from August 2007 to March 2011. Prior to joining TPG, Mr. Stone was an investment professional at Kohlberg Kravis Roberts & Co. focusing on investments in the healthcare space from 2003 to 2005. Prior to that, he was an analyst at Morgan Stanley, focusing on the technology sector. Mr. Stone graduated cum laude from Harvard University and was an Arjay Miller Scholar at the Stanford Graduate School of Business.

Board of Directors

Steve Altman, 59
Chairman Director

Steve Altman currently serves as the Managing Member of AJL, an investment vehicle he founded in 2014. Prior to that, Mr. Altman spent 24 years at Qualcomm in numerous leadership roles, including as President and Vice Chairman. Mr. Altman was also a member of Qualcomm’s Executive Committee from November 2011 to January 2014. Mr. Altman has served as a board member of Dexcom, Inc. since 2013 and also serves as a board member for a variety of private company boards including Brain, Amionx, CourseKey, Yembo and ViaCyte. Mr. Altman holds a B.S. degree in Police Science and Administration from Northern Arizona University and a J.D. degree from the University of San Diego School of Law.

Jonathan A. Levy, 59
Director

Jonathan A. Levy is currently Co-Founder and Managing Partner of Redstone Investments, a full service commercial real estate firm, which he co-started as JLB Investments in 1988. Mr. Levy has more than 30 years of experience in the commercial real estate business. He served on the board of Sky Financial Group, Inc. from 1999 until Huntington’s acquisition of Sky in 2007, where he served as lead director from 2003 to 2007. Prior to this, Mr. Levy served on the boards of Western Reserve Bank and Citizens Bankshares, Inc. Mr. Levy previously served on the board of directors of Gulfshore Bank from 2013 to 2017, Real Nexus, Inc. from 2014 to 2019, Huntington Bancshares Inc. from 2007 to 2018 (where he was on the Executive and Risk Oversight committees), and on the boards of numerous community non-profit organizations. Mr. Levy holds a B.A. degree in Finance from Syracuse University.

Ron Lumbra, 59
Director

Ron Lumbra is currently managing partner of Heidrick & Struggles’ Centers of Excellence and a partner in the CEO & Board Practice. Mr. Lumbra has more than 20 years of executive search consulting experience and an extensive track record of recruiting board directors and chief executive officers to a broad variety of clients. Prior to joining Heidrick & Struggles, Mr. Lumbra spent 17 years with a global search firm where he was managing director and co-leader of the Americas CEO and board services practice. Mr. Lumbra is chair of the board of trustees for the University of Vermont and is the former board chair and current director of a national nonprofit. Mr. Lumbra earned his B.S. from University of Vermont and his MBA from Harvard Business School.

 

ByKristi Marvin