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Soaring Eagle Acquisition Corp.

Soaring Eagle Acquisition Corp.

Dec 23, 2020 by Kristi Marvin

PROPOSED BUSINESS COMBINATION: Ginkgo Bioworks, Inc. 

ENTERPRISE VALUE: $15.164 billion
ANTICIPATED SYMBOL: DNA

Arclight Clean Transition Corp. proposes to combine with Ginkgo Bioworks, Inc., a horizontal platform for synthetic biology, making it possible to program cells as easily as we can program computers and enabling innovation across industries, including therapeutics, industrials, food and agriculture. Ginkgo programs living cells for customers in any industry, so they can realize the potential of biology to grow more sustainable and innovative products.

Ginkgo’s founders have been working together for nearly twenty years since they first met at MIT. They launched Ginkgo in 2008 with the consistent goal of developing a platform that makes cell programming easier for their customers and partners. Ginkgo’s platform leverages advanced robotic automation, proprietary software, and data analytics to continuously improve the technology (“Foundry”) as well as the knowledge and re-usable biological assets (“Codebase”) required to engineer biology. Ginkgo has built a scalable engineering and data platform by integrating a spectrum of innovative life sciences tools into their Foundry, and has amassed a large, flexible, and diverse biological Codebase to facilitate innovation across a wide breadth of applications.

 

TRANSACTION

  • The transaction implies a pre-money equity valuation for Ginkgo of $15.0 billion, and is expected to provide up to $2.5 billion of gross cash proceeds.
  • Gross proceeds include Soaring Eagle’s $1.725 billion of cash in trust (subject to any redemptions by Soaring Eagle’s public shareholders) and $775 million in proceeds from a PIPE transaction priced at $10.00 per share of Class A common stock of Soaring Eagle to be funded immediately prior to the closing of the transaction.
  • Eagle Equity Partners is co-sponsoring the transaction with Bellco Capital, led by Dr. Arie Belldegrun. Dr. Belldegrun is a leader in the field of cell and gene therapy and founder of Kite Pharma and Allogene Therapeutics.
  • Both co-sponsors are also investing in the PIPE.
    • The PIPE is being led by Baillie Gifford, Putnam Investments, and funds and accounts managed by Counterpoint Global (Morgan Stanley Investment Management) and with additional participation from new and existing investors including accounts advised by ARK Investment Management LLC, ArrowMark Partners, Bain Capital Public Equity, Berkshire Partners, Cascade Investment, Casdin Capital, Franklin Advisers, funds and accounts advised by T. Rowe Price Associates, Inc., and Viking Global Investors.

SRNG trans overview

PIPE

  • An aggregate of 77,500,000 Class A common shares for $10.00 per share (the “PIPE Investment”) to the Investors (including 7,500,000 Class A common shares to an affiliate of the Sponsor)
  • The PIPE is being led by Baillie Gifford, Putnam Investments, and funds and accounts managed by Counterpoint Global (Morgan Stanley Investment Management) and with additional participation from new and existing investors including accounts advised by ARK Investment Management LLC, ArrowMark Partners, Bain Capital Public Equity, Berkshire Partners, Cascade Investment, Casdin Capital, Franklin Advisers, funds and accounts advised by T. Rowe Price Associates, Inc., and Viking Global Investors.

EARNOUT

SELLER EARNOUT SHARES

Holders of Ginkgo common stock, Ginkgo options, Ginkgo Restricted Stock Awards, Ginkgo Restricted Stock Unit Awards, and Ginkgo preferred warrants will collectively be entitled to receive up to approximately 180,000,000 earn-out shares of New Ginkgo common stock (the “Seller Earn-out Shares”) vesting during the five-year period following the closing date of the Business Combination.

  • If the trading price per share of New Ginkgo Class A common stock at any point during the trading hours of a trading day is greater than or equal to $12.50 for any 20 trading days within any period of 30 consecutive trading days during the Earn-out Period, 25% of the Seller Earn-out Shares will immediately vest;
  • If the trading price per share of New Ginkgo Class A common stock at any point during the trading hours of a trading day is greater than or equal to $15.00 for any 20 trading days within any period of 30 consecutive trading days during the Earn-out Period, an additional 25% of the Seller Earn-out Shares will immediately vest;
  • If the trading price per share of New Ginkgo Class A common stock at any point during the trading hours of a trading day is greater than or equal to $17.50 for any 20 trading days within any period of 30 consecutive trading days, an additional 25% of the Seller Earn-out Shares will immediately vest; and
  • If the trading price per share of New Ginkgo Class A common stock at any point during the trading hours of a trading day is greater than or equal to $20.00 for any 20 trading days within any period of 30 consecutive trading days, the remaining 25% of the Seller Earn-out Shares will immediately vest.

The shares of Class B common stock of New Ginkgo will have the same economic terms as the shares of Class A common stock of New Ginkgo, but the shares of Class A common stock of New Ginkgo will have 1 vote per share and the Class B common stock of New Ginkgo will have 10 votes per share

SPONSOR EARNOUT SHARES

  • The Sponsor will, subject to certain vesting conditions, be entitled receive a number of earn-out shares (the “Sponsor Earn-out Shares”) up to the difference between 30% of the number of Class B ordinary shares held by the Sponsor prior the Closing (or 12,892,500 shares), minus the excess (if any) of the Restructured Amount over the Upfront Shares, plus 25% of the Restructured Amount.
  • The Sponsor Earn-out Shares are divided into four equal tranches that will vest in accordance with the same milestones applicable to the Seller Earn-out Shares described above under the section “Merger Agreement.”

“Restructured Amount,” which is equal to 42,975,000 Class B ordinary shares held by the Sponsor immediately prior to the Closing multiplied by a percentage, the numerator of which is the dollar amount of the Shareholder Redemption, as offset by the amount of any incremental proceeds raised by SRNG outside of the PIPE Investment, and the denominator of which is the sum of SRNG’s trust account balance (before giving effect to the Shareholder Redemption) and the PIPE Investment amount of $775 million.

SPONSOR AGREEMENT

  • At the Closing, Sponsor will forfeit 10% of the private place warrants

NOTABLE CONDITIONS TO CLOSING

  • SRNG to have at least $1.25 billion of cash at the closing of the Business Combination, consisting of:
    • (A) cash held in its trust account after giving effect to redemptions of public shares, if any, but before giving effect to the payment of Ginkgo’s and SRNG’s outstanding transaction expenses,
    • (B) the aggregate gross purchase price received by the Company pursuant to the Subscription Agreements and
    • (C) subject to certain limitations, the amount of any equity investments in Ginkgo or SRNG between the date of the Merger Agreement and the closing of the Business Combination (other than the PIPE investments committed pursuant to the Subscription Agreements).

NOTABLE CONDITIONS TO TERMINATION

  • If the closing of the Business Combination has not occurred on or before November 11, 2021 (subject to extension under the circumstances specified in the Merger Agreement)

ADVISORS

  • Allen & Company LLC and Morgan Stanley & Co. LLC are acting as financial advisors to Ginkgo.
  • Latham & Watkins LLP is acting as legal advisor to Ginkgo.
  • Wachtell, Lipton, Rosen & Katz is acting as legal advisor to Ginkgo with respect to certain corporate governance matters.
  • Goldman Sachs & Co. LLC is acting as financial advisor to Soaring Eagle.
  • White & Case LLP is acting as legal advisor to Soaring Eagle.
  • Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, and Allen & Company LLC served as placement agents for Soaring Eagle on the PIPE transaction.

MANAGEMENT & BOARD

Executive Officers

Harry E. Sloan, 70
Chief Executive Officer and Chairman

Most recently Mr. Sloan has served as Chief Executive Officer and Chairman of Flying Eagle Acquisition Corp. (NYSE: FEAC), or Flying Eagle, which raised $600,000,000 in its initial public offering in March 2020 and in September 2020 announced its initial business combination with Skillz Inc., a technology company that enables game developers to monetize their content through fun and fair multi-player competition. Prior to that, Mr. Sloan was a founding investor of Diamond Eagle Acquisition Corp. (Nasdaq: DEAC), which raised $400 million in its initial public offering in May 2019 and in January 2020 announced its initial business combination with DraftKings, Inc., a digital sports entertainment and gaming company known for its industry-leading daily fantasy sports and mobile sports betting platforms, and SBTech (Global) Limited, an international turnkey provider of cutting-edge sports betting and gaming technologies. Mr. Sloan previously served as chairman and chief executive officer of Silver Eagle Acquisition Corp. from April 2013 until the consummation of its initial business combination in March 2015 with Videocon d2h Limited (“Videocon”) (Nasdaq: VDTH). From May 2016 to April 2018 Mr. Sloan served on the board of directors of Videocon, where he was a member of its Nomination, Remuneration and Compensation Committee. Mr. Sloan also served as chairman and chief executive officer of Global Eagle Acquisition Corp. from February 2011 until the consummation of its business combination in January 2013, and he remains a director of the combined company, Global Eagle Entertainment Inc. From October 2005 to August 2009, Mr. Sloan served as chairman and chief executive officer of Metro-Goldwyn-Mayer, Inc., or MGM, a motion picture, television, home entertainment, and theatrical production and distribution company, and thereafter continued as non-executive chairman until December 2010. MGM filed for bankruptcy protection in 2010. From 1990 to 2002, Mr. Sloan was chairman and chief executive officer of SBS Broadcasting, S.A. (“SBS”) (Nasdaq: SBTV), a European broadcasting group, operating commercial television, premium pay channels, radio stations and related print businesses in Western and Central and Eastern Europe, which he founded in 1990 and continued as executive chairman until 2005. In 1999, SBS became the largest shareholder of Lions Gate Entertainment Corp., or Lions Gate, an independent motion picture and television production company. Mr. Sloan served as chairman of the board of Lions Gate from April 2004 to March 2005. From 1983 to 1989, Mr. Sloan was co-chairman of New World Entertainment Ltd., an independent motion picture and television production company. In January 2011, Mr. Sloan joined the board of Promotora de Informaciones, S.A. (“PRISA”) (NYSE: PRIS), Spain’s largest media conglomerate which owns El Pais, the leading newspaper in the Spanish-speaking world, as well as pay television, radio and digital properties. He has served on the board of ZeniMax Media Inc., an independent producer of interactive gaming and web content, since 1999. He currently serves on the UCLA Anderson School of Management Board of Visitors and the Executive Board of UCLA Theatre, Film and Television. Mr. Sloan received his B.A. degree from UCLA and J.D. Degree from Loyola Law School.

Eli Baker, 45
President, Chief Financial Officer and Secretary

Most recently Mr. Baker has served as President and Chief Financial Officer of Flying Eagle through the business combination with Skillz, Inc. Mr. Baker also served as president, chief financial officer and secretary of Diamond Eagle from March 2019 until the consummation of its business combination with DraftKings, Inc., in April 2020. Mr. Baker served as the president, chief financial officer and secretary of Platinum Eagle from July 2017 until the consummation of its business combination with Target Hospitality in March 2019, and has served as a member of Target Hospitality’s board of directors since March 2019. Mr. Baker served as Double Eagle’s vice president, general counsel and secretary from June 2015 through its business combination in November 2017. Mr. Baker was also a director of Silver Eagle from July 2014 through Silver’ Eagle’s business combination in March 2015. Mr. Baker is a co-founder and partner of Manifest Investment Partners, LLC, a growth equity/venture fund that focuses in early stage technology-enabled business where he has served since June 2016. Mr. Baker continues to be co-managing director and a partner in Hemisphere Capital Management LLC, a private finance company that specializes in special opportunity equity and credit investments in the media and entertainment industry. Mr. Baker is a former lawyer and earned a Bachelor of Arts degree from the University of California, Berkeley and a Juris Doctor from the University of California at Hastings Law School.

Board of Directors

Scott M. Delman, 61
Director

Mr. Delman has served on Flying Eagle’s board of directors since March 2020. Mr. Delman also served on Diamond Eagle’s board of directors from December 2019 until the consummation of its business combination with DraftKings, Inc., in April 2020. Mr. Delman is the founder of Blue Spruce Productions, a producer of top Broadway and West End theatrical events, and is also the Managing Partner of DGZ Capital, a private equity firm that acquires ownership stakes in alternative investment firms (“DGZ”). Prior to forming DGZ, Mr. Delman was co-founder and President of Capital Z Investments, where he initiated and managed a multi-billion-dollar investment program to sponsor the creation of new alternative asset management companies. Capital Z Investments has invested over $2.0 billion in more than 25 investment firms throughout North America, Europe and Asia. Mr. Delman has served on the boards and advisory councils of various academic, corporate, cultural and public policy organizations such as Third Way, the New America Foundation, The Truman Project, Manhattan Theatre Club, Yale Drama School and the Williamstown Theatre Festival. Mr. Delman graduated with honors from Yale College in 1982 and received an MBA from Harvard Business School in 1986. Mr. Delman also served as a Visiting Senior Fellow at Harvard University’s JFK School for Government in 2006 and 2007, where he focused on the intersection between international capital markets and national security.

Joshua Kazam, 43
Director 

Mr. Kazam has served on Flying Eagle’s board of directors since March 2020. Mr Kazam also served on Diamond Eagle’s board of directors from May 2019 until the consummation of its business combination with DraftKings, Inc., in April 2020. Mr. Kazam served as a director of Platinum Eagle from its initial public offering through the completion of its initial business combination in March 2019. Mr. Kazam is a co-founder and has been a Partner of Two River Consulting, LLC (“Two River”) since fall of 2004. Mr. Kazam is a co-founder, officer and director of Allogene Therapeutics, Inc. (Nasdaq: ALLO), of Kronos Bio Inc. (Nasdaq: KRON), and TS Innovation Acquisitions (TSIA) and a co-founder of Vida Ventures. Mr. Kazam co-founded and served on the Board of Directors of Kite Pharma, Inc. from its inception in 2009 until it was acquired by Gilead Sciences Inc. (Nasdaq: GILD) in October 2017. Mr. Kazam also serves as a director of several privately held companies, including Iconovir Bio, Hubble Contacts, Byheart, Inc. and Breakthrough Properties, LLC. Mr. Kazam is a Member of the Wharton School’s Undergraduate Executive Board and serves on the Board of Directors of the Desert Flower Foundation. Mr. Kazam received his B.S. in Economics from the Wharton School of the University of Pennsylvania.

Dennis A. Miller, 65
Director 

Mr. Miller served on the board of directors of Global Eagle Acquisition Corp. from May 2011 until the consummation of its business combination in January 2013. Mr. Miller currently serves on the board of Nexstar Broadcasting. Mr. Miller also served on the boards of Radio One, Inc. from September 2011 until 2015 and Storage Upreit Partners, LP from February 2012 until February 2014. In 2005, Mr. Miller became a General Partner of Spark Capital LLC, a venture fund focusing on the tech industry, and is currently a venture partner. In 2000, Mr. Miller became a managing director of Constellation Ventures, the venture partner business anchored by Bear Stearns. From 1998 to 2000, Mr. Miller was executive vice president of Lions Gate. Prior to joining Lions Gate, from 1995 to 1998, he was executive vice president of SPE. While there, he was responsible for all television operations of SPE and actively involved with strategic planning and new media. From 1990 to 1996, Mr. Miller was executive vice president of Turner Network Television, or TNT, a cable television channel, and in 1993 he took on the additional responsibility for the Turner Entertainment Company, a subsidiary of Turner Broadcasting System, Inc. Mr. Miller received his Juris Doctor from Boalt Law School in 1982 and his Bachelor of Arts degree in political science from the University of California, San Diego in 1978.

Laurence E. Paul, 56
Director 

Mr. Paul has been the co-founder and managing principal of Laurel Crown Partners since 2001. Mr. Paul has also served on Flying Eagle’s board of directors since May 2020. Mr. Paul has extensive experience in private equity investing, the identification, negotiation and purchase of new portfolio companies, sale of existing entities and general strategic and financial involvement and oversight of portfolio companies. From 1994 to 2001, Mr. Paul worked at Credit Suisse (NYSE: CS) in various investment banking including as a managing director in the Investment Banking Division. Mr. Paul is currently a member of the board of directors for several non-profit organizations and portfolio companies including: Harvard Medical School’s Board of Fellows, Harvard Alumni Association, Children’s Hospital of Los Angeles, Pittsburgh Steelers Football Club, Pro Football Hall of Fame, Crew Knitwear, Kova International, and Vereco. From 2006 to 2017, Mr. Paul was a member of the Board of Governors during which time he served in many roles including Vice Chairman of the board and chairman of the audit committee. Mr. Paul holds a B.A. from Harvard College, a M.D. from Harvard Medical School and an M.B.A. from Stanford University.

Timothy Leiweke, 63
Director 

Mr. Leiweke founded Oak View Group (OVG) in 2015 and serves as the company’s CEO. With over 30 years of global sports and entertainment experience, Mr. Leiweke is a widely respected industry leader and has been deeply involved in the evolution of NHL, NBA and MLS. Mr. Leiweke partnered with music industry titan Irving Azoff to launch OVG, a developmental and investment company comprised of an Arena & Stadium Alliance, a sponsorship subsidiary, a security advisory group, and a venture fund division which most recently acquired Pollstar publication and conferences. Prior to OVG, Mr. Leiweke served as President and CEO of Maple Leaf Sports & Entertainment (MLSE). In his first year with MLSE, Mr. Leiweke led a transformation of the Toronto Raptors, which resulted in a record for wins and back-to-back Division Championships. with Toronto FC, Leiweke orchestrated a dramatic overhaul, which ignited the club’s first ever playoff berth in 2015. It was during this time that Mr. Leiweke ranked fifth on the Sports Business Journal’s 50 Most Influential and eighth on Billboard’s 100 Most Powerful in Music – the only President & CEO to rank on both lists. During his 18 years at the helm of Anschutz Entertainment Group (AEG), Mr. Leiweke led the company’s evolution into a global live entertainment organization capable of developing, producing, marketing and managing sports and entertainment programming in its venues worldwide. It was through Mr. Leiweke’s vision that the $2.5 billion L.A. LIVE complex was built in Downtown Los Angeles, adjacent to the STAPLES Center and the Los Angeles Convention Center. In addition, Mr. Leiweke was the architect of AEG’s global expansion, including development of O2 Arenas and the stadiums in London, China and Germany. Mr. Leiweke then built AEG Live into the second largest promoter in the world with artists including Paul McCartney, Taylor Swift, Rolling Stones, Black Eyed Peas, Kenny Chesney, Celine Dion, The Eagles and Katy Perry. AEG Live also became one of the world’s largest festival organizers through partnerships with the Coachella and Stagecoach Festivals. Deeply committed to the community, Mr. Leiweke and his family dedicate their time to a range of charitable initiatives. Through their work, the Leiwekes have been recognized by numerous organizations, including the Anti-Defamation League’s 2007 Humanitarian Award, Father of the Year by the American Diabetes Association and the Muscular Dystrophy Association’s Man of the Year.

 

ByKristi Marvin