Act II Global Announces Bittersweet Merger Amendment

ACT II Whole+Earth+Brands+2

Act II Global Announces Bittersweet Merger Amendment

Jun 16, 2020 INTEL by Matt Cianci

Act II Global Acquisition Corp. (ACTT) filed an 8-K on Tuesday morning announcing a number of amendments to their merger agreement with Whole Earth Brands.  The transaction is now expected to total $439.0M vs. $516.0M, though it looks like all three sides of the transaction (SPAC, Target and PIPE investors) are still rooting for the deal to go through, and Irwin Simon of Act II is still very excited to begin working with the company, according to their press release. Details below.

  • Cash consideration reduced from $415.0M to $387.5M).
    • This comes after the base cash consideration from reduced from $450.0M to $415.0M back on May 8th.
  • Reducing minimum cash condition to $153.0M
    • Down from $210.0M as stated in the initial combination proposal.
  • Eliminating Purchaser Ordinary Shares Consideration
    • Was reduced from $60.0M to $25.0M back in May’s amendment.
  • Increase the number of Class A ordinary shares of Act II (“Act II Class A Shares”), to be deposited into escrow by the sponsor at the Closing from 2.0M to 3.0M shares
    • They are increasing the earn-out with original $20 per share hurdle
  • Confirms there is no change to the $75.0M PIPE
  • Transaction expected to close by end of June

Additionally, The extraordinary general meeting of the shareholders and the special meeting of the public warrant holders will be reconvened on Wednesday, June 24, 2020, at 3:30 p.m. ET and 3:00 p.m. ET, respectively. The record date remains May 1, 2020. Act II has also extended the deadline by which holders of its Class A ordinary shares may submit such shares for redemption until Monday, June 22, 2020, at 5:00 p.m. ET


Valuation:

  • Amended transaction terms reflect an improved valuation of 6.75x pro forma adjusted 2020 EBITDA compared to 7.9x under the transaction terms announced in May 2020
  • Anticipated net leverage will decrease to 0.8x from 1.4x under the transaction terms announced in May 2020 providing incremental capacity to support accelerated growth and future acquisitions

Click here for the updated investor presentation.

Act II transaction summary 6-16-20

 

 

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