Velocity Acquisition Corp.
The below announced combination was terminated on 11/10/21. It will remain on the page for reference purposes only. Once a new combination is announced it will be added to the top of the page.
PROPOSED BUSINESS COMBINATION: BBQ Holding, LLC [TERMINATED on 8/20/21 – LINK]
ENTERPRISE VALUE: $839 million
ANTICIPATED SYMBOL: BBQG
Velocity Acquisition Corp. proposes to combine with BBQ Holding, LLC, a leading specialty e-commerce platform for higher-end BBQ grills, grilling accessories and outdoor living products for both homeowners and professional builders.
Founded in 1998, BBQGuys is one of the largest specialty e-commerce platforms for higher-end grills, grilling accessories and outdoor kitchen products, and is rapidly evolving into a complete outdoor living lifestyle brand. Unlike mass-market and brick-and-mortar specialty retailers, or manufacturers selling direct-to-consumer, BBQGuys offers a comprehensive consumer experience for the grilling and outdoor living enthusiast. Complemented by a strong focus on sales and customer support, this experience includes deep category expertise, tailored fulfillment capabilities, and a digital content engine for not only consumers looking for grilling techniques and recipes, but also professional customers seeking outdoor planning concepts. BBQGuys fosters and maintains long-tenured relationships with key brand partners, plus an attractive and growing portfolio of owned brands (including Blaze and Victory) that address gaps in the market and benefit from BBQGuys’ established infrastructure to commercialize its innovation pipeline.
BBQGuys was acquired by innovative private equity firm Brand Velocity Partners (“BVP”) along with additional strategic investors including the Manning family (Archie, Cooper, Peyton, and Eli), NFL Hall of Famers LaDainian Tomlinson and Steve Hutchinson, and lifestyle entrepreneur Landyn Hutchinson. Since the acquisition, BBQGuys and BVP have instituted significant advancements to the BBQGuys platform, including the development of additional distribution centers to improve national distribution, the acquisition of Pacific Coast Manufacturing to enhance vertical integration of BBQGuys’ owned brands, the addition of key management and executive team members, and the expanded focus on BBQGuys’ national sales center and PRO customers. Further, BBQGuys and BVP have formalized relationships with several key investors to also be the faces and personalities of the Company’s national marketing strategy, including its first national advertising campaign featuring the entire Manning family as brand ambassadors.
TRANSACTION
- The transaction implies a pro forma enterprise valuation for BBQGuys of $839 million, or 17.0x projected 2022 pro forma Adjusted EBITDA of $49 million. Estimated cash proceeds to the Company from the transaction are expected to consist of Velocity’s $230 million of cash in trust (assuming no redemptions).
- The Company expects to use the proceeds from the transaction to invest in BBQGuys’ key growth initiatives, including acquisitions, and provide additional working capital in addition to covering transaction-related costs.
- Upon the closing of the transaction, and assuming none of Velocity’s public stockholders elect to redeem their shares, existing BBQGuys shareholders, including BVP, are expected to own 71% of the combined company, the Velocity sponsors are expected to own 5% of the combined company, and public stockholders are expected to own 24% of the combined company. As part of BVP’s “Share the Gains” program, BVP’s principals are allocating 10% of their carried interest to the non-senior management employees of BBQGuys (subject to vesting).
PIPE
- There is no PIPE for this transaction.
EARNOUT
- In addition, upon the closing of the business combination, the Company will deposit a number of shares of Class A Common Stock, Class B Common Stock and LLC Units into escrow for the benefit of the pre-closing BBQ equity holders which shall be released as follows:
- (i) 2,500,000 of the Earn Out Securities shall be released if, at any time following the Closing but prior to the expiration of the 5 year period following the Closing, the reported closing sale price of the Class A Common Stock equals or exceeds $12.50 per share for 20 out of any 30 consecutive trading days
- (ii) 2,500,000 of the Earn Out Securities shall be released if, during the Earn Out Period, the reported closing sale price of the Class A Common Stock equals or exceeds $15.50 per share for 20 out of any 30 consecutive trading days
- (iii) 2,500,000 of the Earn Out Securities shall be released if, during the Earn Out Period, the reported closing sale price of the Class A Common Stock equals or exceeds $17.50 per share for 20 out of any 30 consecutive trading days
- In the event there is a Company Sale during the Earn Out Period that will result in the holders of Class A Common Stock receiving a Company Sale Price equal to or in excess of the applicable price per share attributable to any Triggering Event, then any Earn Out Securities held by such equity holders will be released and the holders of such Earn Out Securities will be eligible to participate in such Company Sale.
- For so long as the Earn Out Securities are held in the escrow, the Earn Out Securities shall be entitled to vote.
LOCK-UP
- The Sponsor and the other Company insiders party to the agreement also agreed not to transfer, except in limited circumstances:
- (i) any Founder Shares until the earlier of
- (A) 180 days after the Closing
- (B) the date on which Velocity completes a liquidation, merger or similar transaction that results in all Velocity stockholders having the right to exchange Class A Common Stock for cash, securities or other property
- (ii) any Private Placement Warrants until 30 days after the Closing. In the event that the Company waives, releases, or terminates the lockup provisions of the Company’s amended and restated certificate of incorporation applicable to BBQ equity holders with respect to any shares or holders, then the holders of the Founder Shares subject to the Sponsor Letter Agreement will be granted a pro rata share in such waiver, release or termination.
- (i) any Founder Shares until the earlier of
SUPPORT AGREEMENT
- In connection with the execution of the Business Combination Agreement, the Sponsor and certain insiders of Velocity entered into an Agreement with Velocity, pursuant to which the Sponsor and such insiders agreed to vote all the Founder Shares beneficially owned by them in favor of the Business Combination and each other proposal related to the Business Combination included on the agenda for the special meeting of stockholders relating to the Business Combination and not to redeem any of their shares.
NOTABLE CONDTIONS TO CLOSING
- The consummation of the Business Combination is subject to customary conditions, including, among other things:
- (i) the approval of the Business Combination Agreement by the stockholders of Velocity
- (ii) Velocity having an aggregate cash amount of at least $150,000,000 available at Closing from Velocity’s trust account
- (iii) the expiration or termination of the waiting period
NOTABLE CONDITIONS TO TERMINATION
- The Business Combination Agreement may be terminated by BBQ or Velocity under certain circumstances, including, among others:
- (i) by mutual written consent of BBQ and Velocity
- (ii) by either BBQ or Velocity if the Closing has not occurred on or before January 20, 2022
ADVISORS
- Credit Suisse acted as exclusive financial advisor to BBQGuys.
- Jefferies acted as the M&A advisor to Velocity.
- Citigroup and Canaccord Genuity acted as financial and capital markets advisors to Velocity.
- Sidley Austin LLP acted as the legal advisor to BBQGuys
- Winston & Strawn LLP acted as the legal advisor to Velocity.
MANAGEMENT & BOARD
Executive Officers
Adrian Covey, 40
Chief Executive Officer and Director
Adrian Covey was most recently the Global Managing Director of Growth & Strategy for Accenture Interactive. There, Mr. Covey was responsible for global strategy and directing organic and inorganic investments, including capability and geographic expansions, ventures, and acquisitions. As part of this strategy, Accenture Interactive acquired and integrated over 35 companies globally. Prior to Accenture Interactive, Mr. Covey was the Global Ventures & Acquisitions Lead for Accenture Digital, responsible for strategy and execution across mobility, Internet of Things (“IoT”), marketing, data, and analytics. Prior to that, he held a number of client-facing, financial, and operational roles.
Judge Graham, 42
Chief Digital Officer
Judge Graham is an active investor and an acclaimed author. Mr. Graham has been featured in media outlets like AdWeek, Ad Age, Forbes, Bloomberg, CNBC, Money and many more. From 2015 through 2018, Mr. Graham served as the Chief Marketing & New Business Officer of Ansira, the second-largest independently owned customer relationship management (“CRM”) and digital marketing agency in the United States. As a member of their core deal team, Mr. Graham was instrumental in selling Ansira to Advent International in 2016. Prior to joining Ansira, Mr. Graham was the Co-Founder and President of Sq1, which he sold to Ansira in 2015. He was also the Co-Founder and President of Rassai Interactive.
Nicolas Brien, 58
Chief Strategy Officer
Nicolas Brien was most recently the CEO of Dentsu Aegis Network Americas. Prior to joining Dentsu in 2017, Mr. Brien was the President of Hearst Marketing Services and the global CEO of iCrossing. from 2014 through 2017, and previously served as the global CEO of McCann Worldgroup, a leading global advertising network, from 2010 to 2012. As CEO of McCann Worldgroup, Mr. Brien headed a multi-disciplinary organization spanning 120 countries and employing 24,000 people. The network is comprised of five high-profile global companies entrusted by many of the world’s largest marketers, including McCann Erickson (the world’s largest advertising agency network); MRM Worldwide (digital marketing/CRM); Momentum (activation/promotion); McCann Healthcare (professional pharma communications); and CRAFT (content production). Mr. Brien had worked previously at The Interpublic Group, as global CEO of IPG Mediabrands and global CEO of UM, one of the industry’s leading media agency networks. Mr. Brien is currently a board director and compensation committee member of Outfront Media, the leading US Out-of-Home company, and serves on the NY Chapter board of the Juvenile Diabetes Research Foundation.
Garrett Schreiber, 30
Chief Financial Officer
Garrett Schreiber is currently the Chief Financial Officer of FST, a hospitality-focused special purpose acquisition company that went public as of August, 2020, and a Partner at &vest since 2019. In 2012, Mr. Schreiber joined RBC Capital Markets as an investment banking analyst. Upon leaving RBC in 2014, Mr. Schreiber joined as an associate with Enhanced Capital, a portfolio company of Stone Point Capital, where he raised two tax-credit capitalized investment funds and a SBIC fund. While there, Mr. Schreiber worked on fundraising, underwriting, and reporting efforts both to the limited partners and to government regulators.
Board of Directors
Sanjay Chadda, 44
Chairman and Director
Mr. Chadda is currently the co-head of U.S. Investment Banking and co-head of U.S. Technology, Media, Marketing and Information Services investment banking group at Canaccord Genuity. Mr. Chadda has led more than 150 transactions during his career and has successfully completed over 50 transactions since the beginning of 2017. He joined Canaccord Genuity through its acquisition in 2019 of Petsky Prunier, a firm he helped build over two decades. He focuses on origination, due diligence, marketing, management, negotiation of M&A, public and private placement transactions, and IPOs. Mr. Chadda also serves as a director on the board of FST.
Carla Hendra, 64
Director
Ms. Hendra is the founder and Chief Executive Officer of Ogilvy Consulting Worldwide, the global strategy consulting and innovation arm of The Ogilvy Group. Prior to founding Ogilvy Consulting, Ms. Hendra served as Co-Chief Executive Officer, Ogilvy North America from 2005 to 2010. She was also the founder of the CRM and data consulting group at Ogilvy and led the development of digital media services at Neo@Ogilvy. Additionally, Ms. Hendra was responsible for two acquisitions for Ogilvy: The Lacek Group, a loyalty marketing specialist, and Leopard, a digital sales enablement group. Currently Ms. Hendra is also Ogilvy’s worldwide Chief Digital Officer, overseeing the firm’s global capability in Digital Marketing, MarTech, AdTech and E-Commerce, and is a member of Ogilvy’s Executive Leadership Team. Ms. Hendra serves as a Board Director of Caleres, a multi-brand global footwear company. She is also a member of the board of directors of the Edgewell Personal Care Group, a global consumer goods marketer, and is also a former director of Unica and the non-profit Dress for Success.
Michael Lastoria, 40
Director
Mr. Lastoria currently serves the Chief Executive Officer of &pizza, a company he co-founded in 2010, and JWALK, a digitally-oriented brand and creative agency he also co-founded that same year. In 2002, at the age of 22, Mr. Lastoria founded his first company, Innovation Ads, an advertising, technology and marketing services firm, as his first job out of college in New York City. In four years, as founding Chief Executive Officer, he oversaw the rapid growth of the company and its sale to Seaport Capital, a New York-based private equity firm, in 2006. Lastoria remained the company’s Chief Executive Officer from 2006 to 2009. In 2016, Mr. Lastoria was named one of the Washington Business Journal’s “40 Under 40.” In 2017, he was awarded the Mort Harris Small Business Person of the Year award by the Small Business Council of America. Mr. Lastoria also serves on FST’s board of directors.
Steve Kassin, 35
Director
Mr. Kassin is the Founder and Managing Partner of Infinity Real Estate, a privately owned developer, owner, and manager of high-quality real estate headquartered in New York City. Under Mr. Kassin’s leadership, Infinity has acquired or developed commercial property representing over $1.5 billion in direct investment transactions across more than 75 projects. In October 2015, Mr. Kassin was named “Fifty Under 40” in Globe Street’s Real Estate Forum publication. He is also an active participant on various industry panels and a guest lecturer at NYU Stern School of Business and at other educational institutions. Mr. Kassin currently serves as a NYU Stern Real Estate Advisory Board Member, NYU Alumni Council Chair, NAIOP Advisory Board Member, ICSC Next Gen. Committee Member and Executive Board Member, and PREF Co-Founder. Mr. Kassin is also a board member of FST, a hospitality-focused SPAC launched in 2020.
Ramin Arani, 50
Director
Mr. Arani has been the chief financial officer of Vice Media since November 2019 and has decades of experience in fund management and financial operations. Previously, Mr. Arani worked at Fidelity Management & Research Company, where he was an Analyst & Sector Fund Manager from July 1992 to May 2000 and a Portfolio Manager from May 2000 to September 2018. Most recently, he managed the Fidelity Puritan Fund, achieving top 5% performance relative to industry peers. His financial experience spans a variety of sectors, including media, technology, health care, real estate, retail, aerospace and defense. Mr. Arani has served on several company boards, including Legendary Pictures, Rent the Runway, Goop, Rumble Boxing, Sakara Life and FST. Mr. Arani holds a bachelor’s degree from Tufts University.