Duddell Street Acquisition Corp. (NASDAQ:DSAC) has secured up to $250 million in senior debt financing as well as a bonus pool for non-redeeming shareholders for its combination with legal and regulatory data provider FiscalNote.
The recent addition in capital comes from Runway Growth Capital, ORIX Growth Capital, and Atalaya Capital Management, and will be provided as a 5-year senior secured term loan. This will include an aggregate principal amount of $150 million financing committed at closing with an additional accordion facility for $100 million.
The proceeds are expected to be used to drive FiscalNote’s growth through an acceleration of investment in go-to-market and other capabilities, fund M&A strategy, and refinance certain existing indebtedness of the company. This new credit facility will replace the previously announced PIPE with a flexible source of funding that can expand as the company grows.
FiscalNote and DSAC are also allocating, on a pro rata basis, the 10 million shares previously reserved for the PIPE into a bonus pool for non-redeeming DSAC shareholders and backstop providers, with existing FiscalNote equity holders retaining approximately 75% pro forma equity ownership in the post-business combination company. DSAC will issue a bonus of 0.57 shares to each backstop purchaser for each backstop purchase share immediately prior to the effective time of the merger.
Duddell Street originally brought $175 million into the deal from its current trust alongside a $100 million PIPE at deal announcement, which was anchored by Duddell Street affiliate Maso Capital. Maso Capital also agreed to fully backstop any and all redemptions by public SPAC shareholders. Duddell Street must maintain at least $190 million in cash in order for the deal to close, excepting up to $30 million in transaction expenses.
Furthermore, the parties have also expanded the scope of the existing earnout structure, providing existing FiscalNote equity holders the opportunity to receive additional shares of common stock of the combined company if certain stock price growth targets are achieved.
The parties initially announced the $1.18 billion combination on November 8. Washington, DC-based FiscalNote uses AI tools to crunch legislative, regulatory and geopolitical data to provide insights and analysis
The company currently remains on pace to achieve its growth targets and is reiterating its revenue guidance for FY2022.