Grove has also agreed to waive its minimum cash condition in exchange for the new agreements and Virgin Group II’s promote shares are no longer to be subject to earn-out terms.
The new money is to come in two tranches with Corvina Holdings investing $27.5 million into a PIPE effectively at $10 per share at at close. It has further agreed to purchase $22.5 million in shares but may redeem these proportionate to the amount that the deal’s closing cash exceeds that amount.
Corvina also stands to receive additional shares proportionate to the amount of shares it ultimately holds at close and the amount that the VWAP of the combined company in the 10 days following closes drags below $10. It will receive new warrants at close in an amount relative to a number of outstanding shares in the combined company at close at terms that are detailed in full on Virgin Group II’s profile page.
Virgin Group II traded up about 0.5% on the news of the changes, but like many SPACs that listed in the spring of 2021, the last time it traded at or above $10 was the day of its IPO and these new backstops should provide additional security as it works towards completing the transaction.
The parties initially announced their $1.5 billion combination on December 8. San Francisco-based Grove makes sustainable home and beauty products sold primarily though its native ecommerce platform.