Founder SPAC (NASDAQ:FOUN) announced this morning that it has entered into a forward purchase agreement (FPA) of up to $150 million to help secure its combination with Rubicon Technologies.
The parties gained approval of the deal at Founder SPAC’s special meeting August 2, but this move could reflect putting in protections in the event redemptions are higher than expected in conjunction with the completion vote. And while Founder SPAC is required to deliver $111 million in cash in order for the deal to close, this is already fully covered by the transaction’s $111 million PIPE.
However, this might also have to do with meeting Nasdaq’s listing standards post-closing. In order to maintain a Nasdaq listing a de-SPAC needs at least 1,000,000 unrestricted publicly held shares that are not subject to contractual lock-up restrictions and that are held by at least 300 “round lot” holders with stock valued at at least $2,500.
This FPA represents a hybrid backstop by which Delaware-registered ACM ARRT F has agreed to purchase 1,000,000 shares from redeeming shareholders and may buy up to 15,000,000 of such shares as long as this would not represent more than 9.9% of the combined company’s equity. Another $150 million in the mix would give the company flexibility while it expects $736 million in revenue in 2022E.
The terms of this FPA are complex and outlined in full on Founder SPAC’s profile page. But, what it amounts to is keeping an undetermined amount of capital in with the de-SPAC on terms that are not cheap, but will be more fortuitous should the company trade well under the current market conditions.
The parties initially announced the $1.7 billion merger on December 16. Lexington, Kentucky-based Rubicon connects businesses and local governments to independent waste haulers through a cloud-based platform that gives them hard data on their recycling impacts.
In April, Rubicon announced a strategic partnership with PIPE investor Palantir (NYSE:PLTR) to develop a joint go-to-market strategy for commercializing new subscription products and supporting workflows analyzing waste and recycling data from its platform.
ADVISORS
- Moelis & Company LLC is serving as exclusive financial advisor to Founder SPAC.
- Cohen & Company Capital Markets a division of J.V.B. Financial Group, LLC is serving as financial advisor to Rubicon.
- Cohen & Company Capital Markets and Moelis & Company LLC are serving as placement agents to Founder SPAC.
- Jefferies LLC is serving as exclusive capital markets advisor to Founder SPAC.
- Winston & Strawn, LLP is serving as legal advisor to Founder SPAC.
- Gibson, Dunn & Crutcher LLP is serving as legal advisor to Rubicon.
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