FirstMark Horizon (NASDAQ:AMAO) announced this morning that it is working to close its combination with internet service provider Starry, but has made significant changes to the deal.
Shareholders voted to approve the transaction two weeks ago on March 16, but most likely redemptions and a decision that the post-transaction company would hold certain levels of debt prompted a re-negotiation with PIPE investors. The deal’s $130 million PIPE is now priced at $7.50 per share and Tiger Global agreed to invest an additional $10 million at this price, bringing the total PIPE to $140 million made up of 18,666,667 shares.
The parties also waived the deal’s $300 million minimum cash condition and it is expected to now produce $176 million in gross proceeds at an enterprise value of $1.76 billion, up from $1.65 billion at announcement. This implies all but about $36 million, or 91%, of FirstMark Horizon’s $414 million trust was redeemed, although the parties have not released official numbers.
In theory, this could trigger the SPAC’s crescent term as the PIPE proceeds at $7.50 now represent more than 60% of the issued equity in the deal. But, the combined company would have to hit a VWAP for the 20 days beginning the day preceding close below $9.20 in order for this to be triggered. The parties now aim to close the deal today with the combined company and begin trading on the NYSE under the symbol “STRY” March 29, so time will tell. Over the past 20 trading days, FirstMark Horizon has generally traded above $9.50 but hit a brief low of $7.91 on March 11.
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