Trinity Merger Corp. (TMCX) Announces Merger with Broadmark

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Trinity Merger Corp. (TMCX) Announces Merger with Broadmark

Aug 12, 2019 INTEL by SPACInsider

Trinity Merger Corp. (TMCX), announced this morning that they have entered into a definitive merger agreement with the Broadmark real estate lending companies and management companies (“Broadmark”),  to create an internally-managed, mortgage real estate investment trust (“REIT”) with an expected equity value of $1.5 billion. It is expected that Broadmark will have no debt outstanding at closing.

Broadmark, which was founded in 2010 and headquartered in Seattle, is a specialty commercial real estate finance company providing construction, land and development financing for commercial and residential properties. Broadmark originates short term, first deed of trust mortgages with conservative loan-to-value collateral support. As of March 31, 2019, Broadmark had approximately $992.2 million in total committed loans in target geographic regions that exhibit favorable demographic trends. To date, Broadmark has delivered monthly unlevered distributions representing annual returns of 10-11% based on invested capital in its lending companies.

TRANSACTION

Under the terms of the merger agreement, Trinity will acquire Broadmark for $1.2 billion in total consideration, comprised of 92%, or $1.1 billion, in Broadmark Realty stock and 8%, or $98 million, in cash. The cash component of the purchase price will be paid to the equity owners of Broadmark’s real estate management companies as part of an internalization transaction and will be funded by Trinity’s cash held in trust. The remainder of the purchase price to be paid will be paid in newly issued shares of Broadmark Realty’s common stock.

PIPE

In addition, Broadmark Realty has entered into a subscription agreement for a $75.0 million private placement of Broadmark Realty’s common stock with affiliates of Farallon Capital Management, L.L.C. (“Farallon”), a global asset management firm. The proceeds from Farallon’s investment will be used to fund transaction-related expenses and the ongoing business operations of Broadmark Realty following the consummation of the business combination, including funding new loan origination opportunities in existing and new markets.

ADVISORS

  • B. Riley FBR, Inc. is acting as capital markets advisor and private placement agent to Trinity
  • Gibson, Dunn & Crutcher LLP is acting as Trinity’s legal advisor
  • Raymond James & Associates, Inc. is acting as Trinity’s financial advisor
  • CS Capital Advisors, LLC is acting as financial advisor to Broadmark
  • Bryan Cave Leighton Paisner LLP is acting as Broadmark’s legal advisor

 


CONFERENCE CALL

Trinity and Broadmark will host a joint investor conference call to discuss the proposed transaction on Tuesday, August 13 at 10:00 am EST.

Interested parties may listen to the call via telephone by dialing: 1-844-400-9700, or for international callers, 1-470-279-3859 (confirmation code: PIN: 21163#). A telephone replay will be available shortly after the call and can be accessed by dialing 1-855-454-6212, or for international callers, 1-941-999-2091 (confirmation code: PIN: 21163#).


Quick takes:  The presentation is still unavailable and the conference call is scheduled for 10:00AM. Check back for an update once we have some additional information.


 

 

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