Twin Ridge Capital Acquisition Corp.

Twin Ridge Capital Acquisition Corp.

Jan 22, 2021 by Kristi Marvin

PROPOSED BUSINESS COMBINATION: Carbon Revolution Limited

ENTERPRISE VALUE: $270 million
ANTICIPATED SYMBOL: tbd

Twin Ridge Capital Acquisition Corp. proposes to combine with Carbon Revolution Limited

Carbon Revolution is an Australian technology company, which has successfully innovated, commercialized and industrialized the advanced manufacture of carbon fiber wheels for the global automotive industry. Carbon Revolution has progressed from single prototypes to designing and manufacturing high-performing wheels for some of the fastest street cars and most prestigious brands in the world. Carbon Revolution is creating a significant and sustainable advanced technology business that supplies its lightweight wheel technology to automotive manufacturers around the globe.


SUBSEQUENT EVENT – 10/5/23 – LINK

  • BCA Amendment:
    • The merger ratios were agreed to be amended, subject to the order of the Federal Court of Australia, to reduce the total number of MergeCo Ordinary Shares to be issued in the Business Combination on a one share per ten share basis, affecting all recipients of MergeCo Ordinary Shares equally.

SUBSEQUENT EVENT – 9/22/23 – LINK

  • Carbon Revolution has entered into a structured equity facility for up to US$110 million with Orion Infrastructure Capital (OIC) which is expected to provide significant new funding for the Company to progress its growth strategy
  • The Company will issue Class A Preferred Shares in the Combined Company and a warrant to OIC in exchange for initial gross proceeds of US$35 million, with further proceeds to be available in tranches, comprising of up to US$35 million that will be deposited by OIC in an escrow account, which funds are subject to release upon satisfaction of further conditions and up to a further US$40 million in aggregate proceeds upon satisfaction of further conditions to be used for the development, construction, and/or retooling of future manufacturing facilities (Structured Equity Facility).
  • In connection with the entry into the Structured Equity Facility, Carbon Revolution has agreed to:
    • revise the merger ratio with TRCA from 0.0877 MergeCo Shares per Carbon Revolution Share to between 0.0640 and 0.0643 MergeCo Shares per Carbon Revolution Share (depending on the redemption rate of class A TRCA shares (Class A TRCA Shares)) and extend the TRCA deadline for Implementation, subject to obtaining a necessary order of the Federal Court of Australia.
    • The minimum available cash requirement is an amount not less than the product of the absolute value of the average monthly adjusted EBITDA for the three months most recently ended on such date multiplied by 6.00 for the fiscal months ending 30 June 2023 to 30 November 2023 (originally 30 June 2023 to 31 October 2023) and 9.00 for the fiscal month ending 31 December 2023 (originally 30 November 2023) and on the last day of each month thereafter.
    • The deadline to Implementation is amended from 31 August 2023 (with a 60-day cure period) to 30 September 2023 (with a 60-day cure period).
    • Carbon Revolution (before Implementation) or MergeCo (following Implementation) must raise at least an additional US$60 million in qualifying equity or subordinated debt financing on or prior to 31 December 2023.

TRANSACTION

  • The combined company will have an estimated post-transaction equity valuation of approximately $461 million, including about $214 million of cash held in TRCA’s trust account, assuming no redemptions from TRCA’s trust account.
  • Following the close of the transaction, assuming no redemptions from TRCA’s trust account, TRCA shareholders will hold 57% of the issued and outstanding shares of common stock of the combined company, with Carbon Revolution shareholders holding the rest, not taking into account the currently outstanding warrants of TRCA and management options of Carbon Revolution.
  • Shareholders of Carbon Revolution on the Australian Securities Exchange (ASX: CBR) will receive consideration for their shares consisting of an aggregate of approximately 20 million ordinary shares of the combined company, being 1 Poppetell Limited share for approximately every 10.5 Carbon Revolution shares.
  • Upon closing of the transaction, the ordinary shares and warrants of Poppetell Limited are expected to trade on a national exchange in the United States, and Carbon Revolution’s shares shall be delisted from the ASX.

twin ridge


SPAC FUNDING

  • Standby Equity Purchase Agreement
    • The SPAC entered into a Standby Equity Purchase Agreement with YA II PN, Ltd. (“Yorkville”) pursuant to which, subject to the consummation of the Transactions, MergeCo has the option, but not the obligation, to issue, and Yorkville shall subscribe for, an aggregate amount of up to $60 million of MergeCo Ordinary Shares at the time of MergeCo’s choosing during the term of the agreement.
    • Each advance under the CEF (an “Advance”) may be in an amount of MergeCo Ordinary Shares up to the greater of $10 million or the aggregate daily trading volume of MergeCo Ordinary Shares in the five trading days prior to MergeCo requesting an Advance.
    • The purchase price for an Advance is determined at the option of MergeCo and is either
      • (a) 95% of the average daily VWAP during the applicable one-day pricing period or
      • (b) 97% of the lowest daily VWAP during the applicable three consecutive trading day pricing period.
    • The CEF will continue for a term of three years commencing from the sixth trading day following the closing of the Business Combination unless prior terminated pursuant to its terms.

SPONSOR FORFEITURE

  • Sponsor has also agreed that, immediately prior to the consummation of the Merger, and conditioned upon the consummation of the Merger, 327,203 of the 5,267,203 SPAC Class B Ordinary Shares beneficially owned by Sponsor shall be automatically forfeited and surrendered to the SPAC for no additional consideration.

LOCK-UP

  • Company and Sponsor
    • The lock-up is not clearly stated within the merger documents provided. We will update this section once a proxy statement has been filed.

NOTABLE CONDITIONS TO CLOSING

  • There being no temporary, preliminary or final order, injunction, decision or decree issued by any court of competent jurisdiction or government agency which restrains, prohibits, or prevents, implementation of the Scheme or the Merger
  • Approval by an Australian court of the Scheme
  • On 9/22/23, the minimum available cash requirement was amended to be an amount not less than the product of the absolute value of the average monthly adjusted EBITDA for the three months most recently ended on such date multiplied by 6.00 for the fiscal months ending 30 June 2023 to 30 November 2023 (originally 30 June 2023 to 31 October 2023) and 9.00 for the fiscal month ending 31 December 2023 (originally 30 November 2023) and on the last day of each month thereafter.

NOTABLE CONDITIONS TO TERMINATION

  • If by March 8, 2023, the SPAC has not obtained shareholder approval to extend the deadline for completing a business combination as necessary to at least May 31, 2023 or such other date as the parties reasonably agree.
  • On 9/22/23, the SPAC amended the Outside Date to September 30, 2023.

ADVISORS

  • E&P Corporate Advisory is acting as Advisor to the Carbon Revolution Board.
  • Herbert Smith Freehills and Goodwin Procter LLP are serving as Australian and U.S. legal counsel to Carbon Revolution.
  • Ashurst and Kirkland & Ellis LLP are serving as Australian and U.S. legal counsel to the SPAC.

MANAGEMENT & BOARD


Executive Officers

Sanjay K. Morey, 49
Co-Chief Executive Officer, President and Director 

Mr. Morey is a founding partner of TRCM and its predecessor, TriPointe Capital, which was formed in 2011. Mr. Morey has built a career in private equity and investment banking that has spanned over 25 years. At TRCM, Mr. Morey has been involved in the investments in Findus, Hale & Hearty, Harvest Food Distributors, I&K Distributors, Lipari Foods, Sherwood Food Distributors, and Young’s Seafood. Prior to joining TRCM, Mr. Morey was a senior executive at KKR & Co. (KKR) from 2006 to 2010. At KKR, Mr. Morey was involved in the investments in Toys “R” Us and U.S. Foods and served on the boards of both companies. Previously, he was involved in investments in American Achievement, Harry Winston, Wilmar, Century Maintenance Supply, Hudson RCI and The Pantry. Currently, Mr. Morey serves as Chairman of the Board of Harvest Sherwood Food Distributors. Mr. Morey also worked for Fenway Partners from 2001 to 2006 and prior to completing his M.B.A., was at Freeman Spogli from 1997 to 1999 and worked in the investment banking division of Salomon Brothers Inc. from 1994 to 1997. He holds a B.A., magna cum laude, Phi Beta Kappa, from the University of California, Los Angeles and an M.B.A. from Harvard Business School.


William P. Russell, Jr., 48
Co-Chief Executive Officer, Chief Financial Officer and Director

Mr. Russell is a partner at TRCM which he joined in 2019. Mr. Russell has over 20 years of experience in the private equity and investment banking industries. Prior to joining TRCM, Mr. Russell was a partner at Sterling Investment Partners from 2006 to 2019, where he served on the Investment Committee and on the boards of directors of All My Sons Moving and Storage, Aurora Parts & Accessories, Lipari Foods, Opinionology, Miller Heiman, Service Logic and Cambridge International. Before Sterling, Mr. Russell was in the investment banking division of Lehman Brothers from 2000 to 2006. Mr. Russell holds a B.A. from Hamilton College, an M.B.A. from Harvard Business School and was a Fulbright Scholar at the National University of Singapore.


Board of Directors

Dale Morrison, 71
Chairman of the Board of Directors

Mr. Morrison is a founding partner at TRCM and its predecessor, TriPointe Capital, which was formed in 2011. At TRCM, Mr. Morrison has been involved in the investments in Findus, Hale & Hearty, Harvest Food Distributors, I&K Distributors, Lipari Foods, Sherwood Food Distributors, and Young’s Seafood. Mr. Morrison has extensive experience as a consumer and distribution executive where he has been involved in implementing long-term strategies, developing management talent, driving profitable growth, executing successful turnarounds and managing multiple acquisitions. Mr. Morrison was formerly Chief Executive Officer of McCain Foods from 2004 to 2011, an international leader in the frozen food industry, employing 21,000 people and operating 52 production facilities in 14 countries on six continents. Prior to McCain Foods, Mr. Morrison served as the President and Chief Executive Officer of Campbell Soup Company from 1997 to 2000 and as the Chief Executive Officer of Pepperidge Farm (a division of Campbell Soup Company) from 1995 to 1997. Mr. Morrison began his career at General Foods and PepsiCo. Mr. Morrison was also an operating partner at Fenway Partners from 2002 to 2004. Mr. Morrison is currently the lead Director of International Flavors & Fragrances Inc. and of InterContinental Hotels Group, and is Chairman of the board of the University of North Dakota Center for Innovation. Mr. Morrison holds a B.S. degree in Business Administration from the University of North Dakota.


Alison Burns, 57
Director

Ms. Burns is a marketing, branding and communications professional whose career has spanned more than 30 years, and has been split between the UK and the US, focused increasingly on multinational brands. Before her current independent consulting stint, Ms. Burns spent ten years at WPP’s J. Walter Thompson from 2006 to 2016, as CEO of the firm’s flagship London office and then in New York, where she led several of the firm’s most prestigious and globally significant client accounts, including Rolex, Kelloggs, and Unilever haircare. Ms. Burns’ prior experience includes 5 years as President of Fallon from 1998 to 2003, where she led the Agency through a period of rapid growth and creative distinction, adding assignments from Starbucks, Pepsico, Georgia-Pacific and Viacom. From 1994 to 1998 Alison served as a senior global marketer for Pepsico based in Dallas and New York, helming International marketing for Pizza Hut and then domestic marketing for the Fountain Beverage Division. Other experience includes a decade in senior roles in UK Advertising firms, running accounts as diverse as political campaigns, confectionery, fashion and financial services. Ms. Burns has guest-lectured at Columbia and NYU, served on the Boards of both Hale and Hearty Soups and the International Advertising Association, and currently serves as a senior advisor to Powell Communications, a boutique public relations firm based in New York. Alison holds a BA in English and Politics from the University of York.


Paul Henrys, 50
Director

Mr. Henrys has over 25 years in finance, strategy and supply chain. Mr. Henrys is currently Chief Financial Officer of Feeding America, the nation’s largest hunger relief organization, where he leads finance and strategic planning. Mr. Henrys also serves as Treasurer of the Feeding America Board of Directors. Prior to joining Feeding America in 2013, Mr. Henrys spent 8 years from 2004 to 2013 in finance and strategy at US Foods – a leading foodservice distributor. Mr. Henrys most recent role at US Foods was Senior Vice President of Financial Planning and Analysis. Mr. Henrys also has five years of experience in the supply chain technology industry, where he successfully managed several consulting projects from 1999 to 2004. Mr. Henrys began his career in strategy consulting, with a firm now known as Oliver Wyman from 1994 to 1999, where he managed project teams to identify and successfully implement supply chain and strategic business opportunities. Mr. Henrys serves on the board of directors of the Global Food Banking Network and is the finance committee chair. Mr. Henrys has a B.A. from Harvard University.


Gary Pilnick, 56
Director

Mr. Pilnick is a corporate development and legal executive with over 30 years of experience, with over 20 years in the food and consumer products industries. Mr. Pilnick joined Kellogg Company in 2000. Kellogg Company is one of the world’s largest food manufacturing companies with over 31,000 employees and $13 billion in revenue. My Pilnick has served as the Vice Chairman, Corporate Development and Chief Legal Officer of the Kellogg Company since 2016 and is a member of the executive committee. Prior to his current role, Mr. Pilnick served as the Senior Vice President, General Counsel and Secretary or Kellogg Company, a role he assumed in 2003 after joining in 2000. Mr. Pilnick’s other experience includes leadership roles at Sara Lee Corporation from 1997 to 2000, where he ultimately served as Vice President and Chief Counsel, Sara Lee Branded Apparel, and Specialty Foods Corporation where he served as Vice President and Chief Corporate Counsel from 1995 to 1997. Prior to this, Mr. Pilnick practiced law at the Jenner and Block in their Chicago and Tokyo offices from 1989 to 1995. Mr Pilnick holds a B.A in Government and Business from Lafayette College, and a J.D from Duke University School of Law.