PROPOSED BUSINESS COMBINATION: Sky Harbour LLC
ENTERPRISE VALUE: $777 million
ANTICIPATED SYMBOL: SKYH
Yellowstone Acquisition Company proposes to combine with Sky Harbour LLC (SHG), a developer of private aviation infrastructure focused on building, leasing and managing business aviation hangars. Tal Keinan, Chairman and Chief Executive Officer of SHG, will continue to lead the business post-transaction. The combined company will have an implied pro forma equity market value of approximately $777 million at closing.
Sky Harbour LLC is an aviation infrastructure company building the first nationwide network of Home-Basing solutions for business aircraft. The Company develops, leases and manages business aviation hangars across the United States based on its proprietary targeting and acquisition model, targeting airfields with significant hangar supply and demand imbalances in the largest US markets. Sky Harbour hangar campuses feature exclusive private hangars and a full suite of dedicated services specifically designed for home-based aircraft. Benefits of the Sky Harbour Home-Basing model include security, efficiency of flight and maintenance operations, enhanced safety and complete privacy, all delivered in a beautiful, thoughtfully designed environment.
- Sky Harbour Group (“SHG”) develops and leases private aviation hangar infrastructure campuses at airports in the United States to deliver a superior home-basing solution to business and private jet owners.
- SHG operates its first campus at Sugar Land Airport, Texas (near Houston) with two additional locations currently under construction in Opa-Locka, Florida (Miami) and Nashville International Airport in Tennessee, and has entered into lease arrangements for two other locations at Centennial Airport in Denver, Colorado and Deer Valley Airport, in Phoenix, Arizona.
- SHG to become publicly listed through a business combination with Yellowstone Acquisition Company (NASDAQ: YSAC, YSACU and YSACW).
- Combined company to have an estimated post-transaction equity market value of $777 million following expected transaction close in the fourth quarter of 2021.
- Transaction to provide up to $238 million in gross proceeds, comprised of Yellowstone Acquisition Company $138 million of cash held in trust (assuming no redemptions) and a $55 million investment in SHG to be made by a wholly owned subsidiary of Boston Omaha Corporation (NASDAQ:BOMN). In addition, Boston Omaha Corporation has agreed to provide a backstop valued at $45 million to help assure net investment in cash and securities at closing of at least $150 million to SHG.
- Additional funds to support the transaction may be raised through a private placement investment (“PIPE”).
- Separately, SHG anticipates raising additional funds through a private activity bond financing in September.
SUBSEQUENT EVENT – (LINK)
- On January 17, 2022, SkyHarbour Group LLC and Yellowstone Acquisition Company Announced up to $70 Million Forward-Purchase Agreement in Connection with Proposed Business Combination
- On January 17, 2022, Yellowstone and ACM ARRT VII E LLC, entered into an agreement (the “FPA”) for an Equity Prepaid Forward Transaction (the “FP Transaction”).
- Pursuant to the terms of the FPA:
- (a) Seller intends, but is not obligated, to purchase shares of Class A common stock of Sky after the date of the FPA from holders of Shares (other than the Company, Boston Omaha Corporation or their affiliates) who have redeemed Shares or indicated an interest in redeeming Shares pursuant to the redemption rights set forth in the Company’s charter in connection with the Business Combination and
- (b) Seller has agreed to waive all redemption rights with respect to any Subject Shares in connection with the Business Combination so long as the FPA and the Equity Purchase Agreement are not terminated prior to the closing of the Business Combination and the closing of the Business Combination occurs prior to the Outside Closing Date.
- The number of Subject Shares shall be no more than the lesser of
- (i) 7,000,000 and
- (ii) the maximum number of Shares such that Seller does not beneficially own greater than 9.9% of the Shares on a post-combination pro forma basis.
- If the Seller acquires less than 2,500,000 Subject Shares, it has agreed to acquire additional Shares (“Additional Shares”) from the Company in a private placement which will be subject to the FPA such that the sum of the number of Additional Shares and the number of Subject Shares will be equal to 2,500,000.
SUBSEQUENT EVENT – (LINK)
- On December 22, 2021, Yellowstone Acquisition Company announced that Boston Omaha Corporation, through its subsidiary BOC YAC, LLC, has agreed to provide $45 million of PIPE financing in connection with the closing of the potential business combination with Sky Harbour LLC, in addition to the $55 million Series B investment that will convert to Class A common stock upon completion of the business combination.
- Boston Omaha is committing $100 million in total to Sky for the acceleration of Sky’s business plan.
- The PIPE Financing will be provided through the purchase of Yellowstone Class A common stock at a price of $10.00 per share immediately prior to the closing of the business combination.
- BOC YAC, LLC has executed a PIPE Subscription Agreement to provide the additional $45 million in equity financing.
- In consideration of the investment, Sky has agreed to waive the $150 million minimum financing condition which required that the Company deliver cash proceeds of at least $150 million (after payment of certain expenses) to Sky as a condition precedent to consummating the business combination.
- Yellowstone, which currently holds approximately $138 million in cash in trust, will combine with SHG at an estimated $777 million pro forma equity market value.
- Assuming no redemptions by Yellowstone’s existing public stockholders, SHG’s existing shareholders will hold approximately 58% percent of the issued and outstanding shares of common stock immediately following the closing of the business combination.
- The combined company expects to receive up to $238 million in gross proceeds, assuming no redemptions of Yellowstone’s existing public stockholders.
- This figure excludes additional funds which may be raised in the PIPE.
- All SHG equityholders are retaining 100% of their equity in the combined company.
- The cash proceeds are expected to be used to fund the completion of four initial airport hangar campuses in addition to expansion at SHG’s location currently in operations.
- The parties will seek to raise additional funding to support the business combination through a private placement investment (“PIPE”) to be consummated at the closing of the transaction of $100 million.
- Boston Omaha, through one of its subsidiaries, has agreed to provide $55 million of financing in support of the transaction, which will be funded prior to the closing of the business combination, assuming SHG successfully raises at least $80 million in a private activity bond offering.
- This additional equity investment will initially be directly into SHG, and upon the successful consummation of the business combination will convert into 5,500,000 shares of the post-combination public company’s Class A common stock, at a price of $10 per share.
- In the event the business combination is not consummated, Boston Omaha’s investment will remain as Series B Preferred units of SHG.
- In addition to the $138 million raised in Yellowstone’s initial public offering and held in trust and the $55 million financing, Boston Omaha has agreed to provide to SHG a backstop valued at up to an additional $45 million through the purchase of additional shares of Yellowstone Class A common stock at a price of $10 per share if needed to meet the minimum investment condition of $150 million in cash and securities to SHG at the closing
- In addition to the $138 million raised in Yellowstone’s initial public offering and held in trust and the $55 million financing, Boston Omaha has agreed to provide to SHG a backstop valued at up to an additional $45 million through the purchase of additional shares of Yellowstone Class A common stock at a price of $10 per share if needed to meet the minimum investment condition of $150 million in cash and securities to SHG at the closing.
NOTABLE CONDITIONS TO CLOSING
- On December 23, 2021, Sky agreed to waive the $150 million minimum financing condition.
- Minimum investment condition of $150 million in cash and securities to SHG at the closing
- Yellowstone having no indebtedness in excess of $2,500,000
NOTABLE CONDITIONS TO TERMINATION
- The Equity Purchase Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including, among others, the following:
- by written notice from Sky or Yellowstone to the other party if the Closing has not occurred by March 31, 2022, such extended deadline (the “Outside Closing Date”)
- by Yellowstone, if Sky does not raise at least $80,000,000 in gross proceeds from a contemplated private activity bond financing (the “Bond Financing”)
- SHG is being advised by Morrison & Foerster LLP
- Yellowstone is being advised by Gennari Aronson, LLP.
MANAGEMENT & BOARD
Adam K. Peterson, 39
Co-Chairman, Co-Chief Executive Officer and Co-President
Mr. Peterson has been Co-Chairperson of BOC’s board of directors since February 2015, and has been Co-President and Co-Chief Executive Officer of BOC since December 2017, having previously served as the Executive Vice President of BOC from February 2015 until December 2017. Since June 2014, Mr. Peterson has served as the Manager of The Magnolia Group, LLC, an SEC registered investment advisor and the general partner of Magnolia Capital Fund, LP, Magnolia BOC I, LP, and Magnolia BOC II, LP. Since June 2017, Mr. Peterson has served as a Director for Nicholas Financial, Inc., a publicly-traded company on the NASDAQ Global Select Market. Since May 2016, Mr. Peterson has served as a Director for Brampton Brick Ltd., a publicly-traded Canadian company traded on the Toronto Stock Exchange. From November 2005 through August 2014, Mr. Peterson served as the Chief Investment Officer of Magnolia Capital Partners, LP and related entities. From May 2004 through June 2006, Mr. Peterson was a financial analyst for Kiewit Corporation. Mr. Peterson graduated with a B.S. in Finance from Creighton University.
Alex B. Rozek, 41
Co-Chairman, Co-Chief Executive Officer and Co-President
Mr. Rozek has been Co-Chairperson of BOC’s board of directors, Co-Chief Executive Officer, President from February 2015 through December 2017 and Co-President since December 2017. He also serves as the Managing Member of Boulderado Partners, LLC, a private investment partnership founded in July 2007. From 2004 to 2007, Mr. Rozek served as an analyst for Water Street Capital and Friedman Billings Ramsey Group. Prior to 2004, he worked for Hunton & Williams and FedEx. Mr. Rozek graduated with a B.S. in Biology and a Minor in Chemistry from the University of North Carolina at Chapel Hill.
Joshua P. Weisenburger, 37
Chief Financial Officer, Treasurer and Secretary
Mr. Weisenburger has served as BOC’s Chief Financial Officer, Secretary and Treasurer since June 2017. He has also served as BOC’s Chief Accounting Officer and Controller since August 2016. From July 2011 through June 2016, Mr. Weisenburger was employed by Ecolab, Inc., a global leader in water, hygiene and energy technologies and services. At Ecolab, Mr. Weisenburger served first as a finance manager and then as a finance controller throughout various divisions within the company. Prior to his time at Ecolab, Mr. Weisenburger was employed from June 2005 through August 2009 by Kiewit Corporation, a construction, engineering and mining services company, and held several different treasury roles. Mr. Weisenburger graduated with a B.S. in Finance from Creighton University and an MBA from the University of Minnesota — Carlson School of Management.
Board of Directors
Sydney C. Atkins, 38
Ms. Atkins joined Ellevest, Inc., a New York based investment firm, in 2018 as the Head of Private Wealth Management. She previously worked at Goldman Sachs & Co. from 2011-2018. Prior to joining the Investment Management Division of Goldman, she was the Founder and CEO of Synergy Inc., a company focused on the empowerment of girls through sports. Synergy, Inc. was acquired in 2013. She is a graduate of Middlebury College in Vermont, with a BA in Neuroscience and Studio Art. Ms. Atkins received an MBA from the MIT Sloan School of Management where she studied Entrepreneurship.
David J. Bronczek, 66
Mr. Bronczek served as President and Chief Operating Officer at FedEx Corp. from 2017 to 2019. Mr. Bronczek worked at FedEx for more than 40 years. His roles included leading FedEx Express in Canada, Europe, the Middle East and Africa and later serving for 17 years as President and CEO of FedEx Express. Mr. Bronczek was recently elected a director of Tyson Foods and is a graduate of Kent State University, where he received a degree in business administration.
Shanna Noelle Khan, 33
Ms. Khan is President of United Marketing, a marketing agency she co-founded in 2013. United Marketing provides agency quality marketing services in brand identity, promotional products, web and social media, printed sales tools and other services. She previously served as an immigration and international affairs specialist to the U.S. House of Representatives from 2010-2013. Ms. Khan received her B.S. in Accountancy from the Gies Business School at the University of Illinois Urbana-Champaign.