Hennessy Capital Locks up Business Combination

Hennessy Capital Acquisition Corp. III, announced this morning that they have secured capital commitments to the tune of $85 million, thereby securing the necessary financing to complete their business combination with NRC Group.

Hennessy’s current redemption price is $10.19 and that’s exactly where the share traded to this morning, which is a good place to start before the team hits the road and starts marketing.

The transaction is anticipated to close some time in October of this year.

Details:

The $85 million is mix of common and convertible preferred:

• $62.0 million of shares of the Company’s 7.00% Series A Convertible Preferred Stock at a cash purchase price of $100.00 per share (initial conversion price of $12.50 per share, or eight common shares for every preferred)
• $23.0 million of shares of the Company’s common stock at a cash purchase price of $10.25 per share.

However, it should be noted that for the financing, there is a $750,000 closing fee to be paid to the subscriber, Cyrus Capital Partners, L.P., which subscribed for both 530,000 shares of the Company’s 7.00% Series A Convertible Cumulative Preferred Stock and 1,463,415 shares of the Company’s common stock (at a price of $10.25 per share of Common Stock).

Cyrus represents $68 million of the total $85 million and the remainder would appear to be Nomura’s backstop investment ($9 million convertible preferred + $8 million common stock)

Credit Suisse, Stifel and Nomura Securities acted as joint private placement agents in connection with the subscription agreements.