ACE Convergence Acquisition Corp. (NASDAQ:ACEV) has secured its combination with electronics manufacturer Tempo Automation with $200 million in convertible notes financing announced this morning.
This new money will replace $54 million originally destined for the post-combination company in the form of a senior debt facility and is made up of $175 million from Oaktree Capital Management and $25 million from an ACE Convergence affiliate.
This is still not cheap capital, however, as the notes are due in 2025 and hold a 13% interest rate per annum, to be paid semi-annually in a split of 8% cash and 5% in-kind. But, together with the $82 million PIPE, $25 million in convertible notes and a backstop of up to $95 million initially announced with the transaction, this brings the deal’s secured financing to $323 million.
This will cover the transaction’s $320 million minimum cash condition, removing any doubt of the deal’s completion as shareholders make their decisions at their extension redemption deadline set for today. ACE Convergence shareholders are then set to extend their completion deadline to July 13 at a shareholder vote January 21.
ACE Convergence initially announced its $936 million combination with Tempo on October 14. San Francisco-based Tempo provides outsourced digital manufacturing services for electronics and other circuitry applications.
While this work runs a wide gamut, components manufactured by Tempo are expected to head to the Moon in the first quarter of 2022 as a part of a the lander that will deliver five NASA payloads to the surface.
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