Reinvent Technology Partners Y
PROPOSED BUSINESS COMBINATION: Aurora Innovation, Inc.
ENTERPRISE VALUE: $10.562 million
ANTICIPATED SYMBOL: AUR
Aurora, the self-driving technology company, has entered into a definitive business combination agreement with Reinvent Technology Partners Y, a special purpose acquisition company with the sponsor team that takes a “venture capital at scale” approach to investing.
Founded in 2017 by self-driving luminaries Sterling Anderson, Drew Bagnell, and Chris Urmson, Aurora is on a mission to deliver the benefits of self-driving technology safely, quickly, and broadly. Led by a management team with deep technical and industry experience, the approximately 1,600 Aurora employees are developing next-generation technology and building the business to bring it to market at scale.
TRANSACTION
- The proposed transaction has been unanimously approved by the transaction committee of Reinvent and the board of directors of Aurora. Reinvent formed the transaction committee, consisting of all of the members of its board of directors other than Karen Francis, to evaluate and make any decision on behalf of the full board of directors with respect to a proposed transaction with Aurora.
- Ms. Francis, who is also a director of TuSimple, is not a member of the transaction committee, was not permitted to attend any sessions of the transaction committee, and has recused herself from discussions of Reinvent’s board of directors about the proposed transaction and voting as a director on matters related to the proposed transaction.
- Reid Hoffman, LinkedIn Co-Founder, a non-voting observer on Reinvent’s board of directors and a member of Aurora’s board of directors, is not a member of the transaction committee, was not permitted to attend any sessions of the transaction committee, and has recused himself from discussions and decisions of Reinvent’s board about the proposed transaction.
- Mr. Hoffman also recused himself from discussions of Aurora’s board of directors and management about the proposed transaction and from voting on matters related to the proposed transaction.
- The pro forma implied market capitalization of the combined company is $13 billion, at the $10.00 per share PIPE subscription price and assuming no public shareholders of Reinvent exercise their redemption rights.
- The combined company is expected to have approximately $2.5 billion in cash at closing, including up to approximately $977.5 million of cash held in Reinvent’s trust account from its initial public offering which closed on March 18, 2021, assuming no public shareholders of Reinvent exercise their redemption rights.
- The proposed transaction is also supported by $1 billion PIPE at $10 per share.
- Investors include funds and accounts managed by Counterpoint Global (Morgan Stanley), PRIMECAP Management Company and XN, Baillie Gifford, funds and accounts advised by T. Rowe Price Associates, Inc., Fidelity Management & Research Company LLC, Canada Pension Plan Investment Board, Reinvent Capital, Index Ventures, Sequoia Capital, Uber, PACCAR, and Volvo Group.
PIPE
- Investors and Aurora partners have committed $1 billion in a PIPE and the proposed transaction represents an equity value of $11 billion for Aurora. Investors in the PIPE include:
- Baillie Gifford, funds and accounts managed by Counterpoint Global (Morgan Stanley), funds and accounts advised by T. Rowe Price Associates, Inc., PRIMECAP Management Company, Reinvent Capital, XN, Fidelity Management and Research LLC, Canada Pension Plan Investment Board, Index Ventures, and Sequoia Capital, as well as strategic investments from Uber, PACCAR, and Volvo Group.
- The Subscription Agreements will terminate with no further force and effect on January 10, 2022, if the Closing has not occurred by such date.
LOCK-UP
The Sponsor has agreed not to Transfer any Sponsor Shares until the end of the Lock-up Period with respect to:
- 25% of the Sponsor Shares, the period beginning on the Closing Date and ending on the one-year anniversary of the Closing Date
- 25% of the Sponsor Shares, the period beginning on the Closing Date and ending on the two-year anniversary of the Closing Date
- 25% of the Sponsor Shares, the period beginning on the Closing Date and ending on the three-year anniversary of the Closing Date
- 25% of the Sponsor Shares, the period beginning on the Closing Date and ending on the four-year anniversary of the Closing Date
EARNOUT
- If, at any time during the 10 years following the Closing (the “Measurement Period”), the VWAP of Domesticated Acquiror Class A Common Stock is greater than $15.00 for any 20 Trading Days within a period of 30 consecutive Trading Days, then 1/3 of the unvested Subject Shares owned by the Sponsor as of the Sponsor Share Conversion shall vest on the First Earnout Achievement Date.
- If, at any time during the Measurement Period, the VWAP of Domesticated Acquiror Class A Common Stock is greater than $17.50 for any 20 Trading Days within a period of 30 consecutive Trading Days, then 1/3 of the unvested Subject Shares owned by the Sponsor as of the Sponsor Share Conversion shall vest on the Second Earnout Achievement Date.
- If, at any time during the Measurement Period, the VWAP of Domesticated Acquiror Class A Common Stock is greater than $20.00 for any 20 Trading Days within a period of 30 consecutive Trading Days, then 1/3 of the unvested Subject Shares owned by the Sponsor as of the Sponsor Share Conversion shall vest on the Third Earnout Achievement Date
SUPPORT AGREEMENT
- In the event that more than 22.5% of the outstanding RTPY Class A ordinary shares are redeemed, and the Sponsor, any affiliate of the Sponsor or any other person arranged by the Sponsor has not provided backstop or alternative financing to replace such redemptions above the 22.5% threshold, the Sponsor will forfeit a number of RTPY Class B ordinary shares then owned by the Sponsor immediately before the Domestication, with such number of forfeited RTPY Class B ordinary shares calculated on a sliding scale tied to the unreplaced redemptions,
- Subject to the forfeiture (if any) described in the immediately preceding clause, shares of Aurora Innovation Class A common stock held by the Sponsor as of the Domestication will be subject to certain vesting and lock-up terms,
- The Sponsor will exercise all of its Aurora Innovation Class Warrants acquired by the Sponsor in the private placement for cash or on a “cashless basis” on or prior to the date upon which Aurora Innovation elects to redeem the public Aurora Innovation Class Warrants in accordance with the Warrant Agreement, dated as of March 15, 2021, between RTPY and Continental Stock Transfer & Trust Company, if the last reported sales price of the Aurora Innovation Class A common stock for any 20 trading days within the 30 trading-day period ending on the third trading day prior to the date on which notice of the redemption is given exceeds $18.00 per share (subject to certain adjustments), and
- The Sponsor will have the right to designate a Class III director to Aurora Innovation’s Board of Directors for the first and second terms of the Class III directors.
NOTABLE CONDITIONS TO CLOSING
- The PIPE Investment is equal to or greater than $1,500,000,000
- The amount of the Redemption Obligations will not exceed $500,000,000
NOTABLE CONDITIONS TO TERMINATION
The Merger Agreement may be terminated at any time prior to the Closing:
- (i) by mutual written consent of RTPY and Aurora.
- (ii) by Aurora, if there is a Modification in Recommendation.
- (iii) by RTPY, if certain approvals of the equityholders of Aurora, to the extent required under the Merger Agreement, are not obtained five business days after the S-4 has been declared effective by the Securities Exchange Commission.
- (iv) by either RTPY or Aurora in certain other circumstances set forth in the Merger Agreement, including:
- (a) if certain approvals of the shareholders of RTPY, to the extent required under the Merger Agreement, are not obtained as set forth therein.
- (b) if any Governmental Authority shall have issued or otherwise entered a final, nonappealable order making consummation of the Merger illegal or otherwise preventing or prohibiting consummation of the Merger.
- (c) in the event of certain uncured breaches by the other party.
ADVISORS
- Allen & Company LLC is serving as financial advisor to Aurora.
- Wilson Sonsini Goodrich & Rosati, P.C. is acting as its legal counsel to Aurora.
- Goldman Sachs & Co. LLC is acting as exclusive financial advisor to Reinvent and as the sole placement agent on the PIPE transaction.
- Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel to Reinvent.
- Sullivan & Cromwell LLP served as legal counsel tothe placement agent.
- Houlihan Lokey Capital, Inc. is serving as financial advisor to the Reinvent transaction committee.
MANAGEMENT & BOARD
Executive Officers
Michael Thompson, 44
Chief Executive Officer and Chief Financial Officer and Director nominee
Michael Thompson is a co-founding member of Reinvent Capital. Mr. Thompson currently serves as Chief Executive Officer and Chief Financial Officer and a director of RTP and RTPZ. Mr. Thompson was previously co-founder, managing member, and portfolio manager for BHR Capital, which managed as much as $1.9 billion of special situations funds from 2009-2016. Mr. Thompson played an active role in several of BHR Capital’s portfolio companies, developing operating and financing strategies alongside management. While managing BHR Capital, Mr. Thompson was responsible for all portfolio construction, security selection, and risk management activities and oversaw the firm’s investment team. He also led several investments in which BHR Capital took active protagonist roles. Additionally, since the early 2010s, he has made dozens of private investments. He has experience as a board member and regularly advises companies on business and financial matters. Mr. Thompson graduated magna cum laude with a BBA in International Finance from the Honors Program at the University of Georgia, where he received Alumni, Governor’s, and Hope Scholarships.
David Cohen, 42
Secretary
David Cohen is the Chief Operating Officer and General Counsel of Reinvent Capital. His areas of expertise include mergers and acquisitions, public and private corporate and securities transactions, special situation investing, asset management, and reinventions. Mr. Cohen joined Reinvent Capital in 2018 as part of the founding team. Mr. Cohen currently serves as Secretary of RTP and RTPZ. Since 2017, he has also worked as general counsel of certain of Mr. Pincus’s business entities. From 2015 to 2017, Mr. Cohen served as Associate General Counsel of Zynga and led the legal team responsible for mergers and acquisitions, corporate governance, and securities and finance matters. Prior to this, he spent nine years in private legal practice, most recently as Senior Counsel in Proskauer’s corporate and private equity groups. Mr. Cohen received an A.B. from Middlebury College and a J.D. from the University of Virginia School of Law.
Board of Directors
Mark Pincus, 55
Director
Mark Pincus is also a co-founding member of Reinvent Capital. Mr. Pincus is an accomplished entrepreneur and investor. He founded several internet companies including Zynga, which pioneered social games to help establish gaming as a mass-market activity. Mr. Pincus currently serves as Co-Lead Director of RTP and RTPZ. He is the Chairman of Zynga’s Board (since May 2018) and previously served as Zynga’s Executive Chairman (from March 2016 to May 2018) and twice as its Chief Executive Officer (April 2007 to July 2013 and April 2015 to March 2016), including when he returned in 2015 to lead its turnaround and reinvention as a mobile-first games company. Before Zynga, Mr. Pincus founded tribe.net, one of the earliest online social networks whose technology was acquired by Cisco Systems. He also founded Support.com, a provider of help desk service and support automation software, one of the first enterprise software companies to go to market with a subscription-based model. Support.com went public in 2001. Mr. Pincus also founded FreeLoader, Inc., a web-based, push technology news company, which was acquired by Individual, Inc. Mr. Pincus has made numerous investments in many internet, media, and software companies, including Facebook, Twitter, Airbnb, Snap, Epic Games, Xiaomi, JD.com, and Niantic. He is also an active angel investor in technology startups. Mr. Pincus has prioritized social impact in his personal and professional life. Zynga was one of the first companies to use in-game virtual goods to allow players to contribute directly to disaster relief and other nonprofit efforts. Mr. Pincus was appointed by President Barack Obama to the Board of the Presidio Trust, a federal agency that operates the Presidio as part of the Golden Gate Recreation Area. He also regularly lectures to aspiring entrepreneurs at colleges and universities, including Stanford Graduate School of Business, Harvard Business School, and The Wharton School of the University of Pennsylvania. Mr. Pincus graduated summa cum laude from University of Pennsylvania’s Wharton School of Business and earned an MBA from Harvard Business School. Mr. Pincus has built an intellectual practice around product management. He was an early pioneer in reimagining product management for consumer internet products, notably the use of rapid testing and experimentation to inform design decisions in all stages of product development. He also developed a product roadmapping process that tracks engineering resources to expected outcomes. Mr. Pincus was among the first to bring these lessons to games, spawning an always-on, product-as-a-service operating model that empowers product teams to react in real time to user behavior by deploying product updates. Mr. Pincus co-created the Stanford Graduate School of Business course on Product Management with Professor Amir Goldberg.
Katharina Borchert, 48
Director
Katharina Borchert is a journalist and executive with more than a decade of experience in technology, media and journalism. From 2016 to 2020, Ms. Borchert served as Chief Innovation Officer of Mozilla, where she previously served as non-executive director from 2014 to 2015. Prior to joining Mozilla, she served as Chief Executive Officer at Spiegel Online, the online division of DER SPIEGEL magazine. Prior to that, Ms. Borchert was Editor-in-Chief at WAZ Media Group and Chief Executive Officer at WAZ NewMedia, where she launched the “Der Westen” digital news portal based upon user participation, integrated social media, and a focus on location-based data in journalism. She was named one of Fast Company’s “Most Creative People in Business” in 2020, a “Power Women to Watch” by Forbes Magazine in 2011, a Young Global Leader of the World Economic Forum in 2011, and a Member of the European Commission’s “40 under 40 – Young European Leader’s Programme” in 2011/2012.
Colleen McCreary, 47
Director
Karen Francis has served as the Chair of the Board of Vontier Corporation, a spin-off from Fortive Corporation focused on mobility and transportation businesses, since its spin-off in 2020. Ms. Francis also serves as Chair of the Compensation & Management Development Committee for Vontier. From December 2016 to November 2019, Ms. Francis served on the Board of Directors of Telenav, Inc., where she served as lead independent director, chair of the Compensation Committee and a member of the Nominating and Governance Committee of Telenav, Inc. Prior to that, she served as a director of The Hanover Insurance Group, Inc. from May 2014 to May 2017 and AutoNation, Inc. from February 2016 to April 2018. In addition, Ms. Francis serves as Senior Advisor to TPG Capital and is an independent director for private equity and venture capital funded companies in Silicon Valley, including Metawave, Nauto and Wind River. Ms. Francis served as Chief Executive Officer of AcademixDirect, Inc., a technology innovator in education, from 2009 to 2014 and as its Executive Chairman from 2009 to 2017. From 2004 to 2007, Ms. Francis was Chairman and Chief Executive Officer of Publicis & Hal Riney, based in San Francisco and part of the Publicis global advertising and marketing network. From 2001 to 2002, she served as Vice President of Ford Motor Company, where she was responsible for the corporate venture capital group, as well as global e-business strategies, customer relationship management and worldwide export operations. From 1996 to 2000, Ms. Francis held several positions with General Motors, including serving as General Manager of the Oldsmobile Division.
Anne-Marie Slaughter, 62
Director
Ms. McCreary has served as the Chief People Officer at Credit Karma, a financial technology company that allows consumers to monitor and evaluate their credit and financial status, since 2018. She has over 20 years of experience in managing and developing talent primarily in the technology and entertainment industries. Ms. McCreary previously served as Chief People Officer for Vevo, a multinational music video platform from 2016 to 2018. She previously served as Chief People Officer for The Climate Corporation and as Chief People Officer for Zynga. Earlier in her career, Ms. McCreary worked for Electronic Arts and Microsoft. She has been featured at Fortune’s Most Powerful Women’s Conferences, Fortune Brainstorm Tech, LeanIn blog, and other publications. Currently, Ms. McCreary serves on the non-profit Boards of Second Harvest Food Bank and the Molina Foundation and advises several startups. She holds a B.S. from Boston University and M.A. from Columbia University Teachers College.
Karen Francis, 58
Director
Ms. Francis has served as the Chair of the Board of Vontier Corporation, a spin-off from Fortive Corporation focused on mobility and transportation businesses, since its spin-off in 2020. Ms. Francis also serves as Chair of the Compensation & Management Development Committee for Vontier. From December 2016 to November 2019, Ms. Francis served on the Board of Directors of Telenav, Inc., where she served as lead independent director, chair of the Compensation Committee and a member of the Nominating and Governance Committee of Telenav, Inc. Prior to that, she served as a director of The Hanover Insurance Group, Inc. from May 2014 to May 2017 and AutoNation, Inc. from February 2016 to April 2018. In addition, Ms. Francis serves as Senior Advisor to TPG Capital and is an independent director for private equity and venture capital funded companies in Silicon Valley, including Metawave, Nauto and Wind River. Ms. Francis served as Chief Executive Officer of AcademixDirect, Inc., a technology innovator in education, from 2009 to 2014 and as its Executive Chairman from 2009 to 2017. From 2004 to 2007, Ms. Francis was Chairman and Chief Executive Officer of Publicis & Hal Riney, based in San Francisco and part of the Publicis global advertising and marketing network. From 2001 to 2002, she served as Vice President of Ford Motor Company, where she was responsible for the corporate venture capital group, as well as global e-business strategies, customer relationship management and worldwide export operations. From 1996 to 2000, Ms. Francis held several positions with General Motors, including serving as General Manager of the Oldsmobile Division. Ms. Francis was selected to serve on our board of directors due to her experience as a Chief Executive Officer, director, strategic advisor and investor with a deep knowledge of corporate governance and a strong track record of successfully building companies and businesses across multiple industries and sizes.