Draper Oakwood Technology Acquisition, Inc. (“DOTA”), announced late last night that they have entered into a definitive business combination agreement with Reebonz Limited (“Reebonz”), a leading online luxury marketplace and platform for buying and selling new and pre-owned products.  Reebonz currently has over 5.5 million members and achieved S$349 million in gross merchandise value (approximately $253 million USD).

Reebonz equity holders will roll 100% of their equity resulting in an anticipated 70% pro forma ownership. Implied enterprise value post-transaction is anticipated to be $284 million based on a per-share price of $10.26.

CONSIDERATION

The total consideration to be provided at the Closing is US$252 million, less:

• The aggregate amount of any outstanding indebtedness, net of cash and cash equivalents, of Reebonz and its subsidiaries as of the end of the last fiscal quarter as of the Closing.

  • However, ten percent (10%) of the Exchange Shares will be held back and not issued until twelve (12) months after the Closing to the extent that the Holdback Shares are not used to satisfy the Sellers’ indemnification obligations under the Business Combination Agreement.

EARNOUT

Reebonz may also receive up to an additional 2.5 million additional shares comprised of 1.5 million shares subject to the Management Performance Plan and 1.0 million Earnout Shares after the Closing:

• 2019:  500,000 Earnout Shares if the consolidated revenue is at least SGD$199,000,000 (Singapore Dollars), and the closing sale price equals or exceeds US$11.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30 trading day period

• 2020:  500,000 Earnout Shares if the consolidated revenue is at least SGD$290,000,000 (Singapore Dollars), and the closing sale price equals or exceeds US$13.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30 trading day period

• Both the revenue target and the stock price target must be met for the applicable Earnout Year; except that if the revenue target, but not the stock price target, is met for an Earnout Year, then if the stock price target for such Earnout Year is met in the subsequent year, the earnout payment for such Earnout Year will still be made promptly after it is determined in the subsequent year that such stock price target was met.

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Advisors

• Cowen and Company, LLC and EarlyBirdCapital, Inc. are acting as financial advisors to DOTA
• Ellenoff Grossman & Schole LLP and Maples and Calder are acting as legal advisors to DOTA
• Dentons Rodyk and Davidson LLP, Dentons US LLP and Dentons Cayman Islands are acting as legal advisors to Reebonz