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Foley Trasimene Acquisition Corporation II

Foley Trasimene Acquisition Corporation II

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Paysafe Group Holdings Limited

ENTERPRISE VALUE: $9.0 billion
ANTICIPATED SYMBOL: PSFE

Foley Trasimene Acquisition Corp. II and Paysafe Group Holdings Limited (“Paysafe”), a leading integrated payments platform, announced that they have entered into a definitive agreement and plan of merger. Upon closing of the transaction, the newly combined company will operate as Paysafe and plans to list on the New York Stock Exchange (NYSE) under the symbol PSFE. The transaction reflects an implied pro-forma enterprise value for Paysafe of approximately $9 billion.

Paysafe is a leading integrated payments platform, with a two-sided consumer and merchant network, whose core purpose is to enable businesses and consumers around the world to connect and transact seamlessly through payment processing, digital wallet, and online cash solutions.


TRANSACTION SUMMARY

The transaction values the combined company at an anticipated initial enterprise value of approximately $9.0 billion, or 16.0x Paysafe’s projected 2021 organic adjusted EBITDA of $561 million, with an anticipated initial equity market capitalization of over $7.2 billion.

The cash component of the consideration will be funded by Foley Trasimene’s cash in trust, $150.0 million in proceeds from the forward purchase agreement with Cannae Holdings, Inc., as well as a $2.0 billion private placement from various institutional and private investors.

 

 


PIPE & FPA

  • $150M from forward purchase agreement by Cannae Holdings for 15,000,000 units at $10.00

$2 billion PIPE includes the following, each at $10.00 per share:

  • $500 million investment from Fidelity National Title Insurance Co., Chicago Title Insurance Co., Commonwealth Land Title Insurance Co. and Fidelity & Guaranty Life Insurance Co.
  • $350 million investment from Cannae Holdings, Inc. Other institutional investors include Third Point LLC, Suvretta Capital Management, Hedosophia and the Federated Hermes Kaufmann Funds
  • Remaining $850M to come from unnamed investors

FOUNDER HOLDERS FORFEITURE AGREEMENT

  • As provided in the Merger Agreement, FTAC II Sponsor and certain of the Insiders have agreed to forfeit 7,987,877 shares of Class B Common Stock at the consummation of the Business Combination. All such shares of Class B Common Stock shall be canceled. (~22% of founder shares)

LOCK-UP

Covered Shares, for the period beginning on the Closing until the earlier of:

(i) 270 days thereafter

(ii) if the VWAP of the Company Common Shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any twenty (20) Trading Days within a period of thirty (30) consecutive Trading Days, 150 days thereafter

Sponsor Shares, for the period beginning on the Closing Date until the earlier of :

(i) 180 days thereafter

(ii) if the VWAP of the Common Shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any twenty (20) Trading Days within a period of thirty (30) consecutive Trading Days, 60 days thereafter


NOTABLE CONDITIONS TO CLOSING

  • The obligations of PGHL and the Company to consummate the Transactions are also conditioned upon, among others, the amount of Available Closing Cash being least $3,400,000,000 as of the closing of the Transactions
    • defined as an amount equal to the sum of (i) the Available Cash Amount, minus (ii) the Debt Repayment Amount, minus (iii) the Transaction Expenses.

NOTABLE CONDITIONS TO TERMINATION

  • The Merger Agreement may be terminated at any time, but not later than the closing of the Transactions, as follows:
    • (i) by mutual written consent of FTAC II and PGHL;
    • (ii) by either FTAC II or PGHL if the transactions are not consummated on or before December 7, 2021 (the “Termination Date”), but, in the case of FTAC II’s right to terminate, the Termination Date will be automatically extended if any action for specific performance or other equitable relief by PGHL or the Company with respect to the Merger Agreement, the other transaction agreements specified in the Merger Agreement or otherwise regarding the Transactions is commenced or pending on or prior to the Termination Date, provided that the terminating party’s failure to fulfill any of its obligations under the Merger Agreement is not the primary cause of the failure of the closing to occur by such date;
    • (iii) by either FTAC II or PGHL if a governmental entity shall have issued an order, decree or ruling or taken any other action, in any case having the effect of permanently enjoining or prohibiting the merger, which order, decree, judgment, ruling or other action is final and nonappealable;
    • (iv) by either FTAC II or PGHL if the other party has breached any of its covenants, agreements, representations or warranties which would result in the failure of certain conditions to be satisfied at the closing and has not cured its breach within thirty days of the notice of an intent to terminate, provided that the terminating party’s failure to fulfill any of its obligations under the Merger Agreement is not the primary cause of the failure of the closing to occur; or
    • (v) by either FTAC II or PGHL if, at the Special Meeting, the Transactions and the other FTAC II Stockholder Matters shall fail to be approved by holders of FTAC II’s stockholders, provided that FTAC II’s right to terminate for failure to obtain such approval shall not be available if, at the time of such termination, FTAC II is in breach of certain of its obligations under the Merger Agreement, including with respect to the preparation, filing and mailing of the registration statement and prospectus/proxy statement and convening the Special Meeting

ADVISORS

  • Credit Suisse is acting as lead financial advisor and capital markets advisor to Paysafe and also acted as lead placement agent on the private offering.
  • Morgan Stanley also acted as financial advisor to Paysafe.
  • Simpson Thacher & Bartlett LLP is acting as legal counsel to Paysafe.
  • RBC Capital Markets LLC., BofA Securities and J.P. Morgan are acting as financial advisors to Foley Trasimene.
  • Weil, Gotshal & Manges LLP is acting as legal counsel to Foley Trasimene.
  • BofA Securities and J.P. Morgan Securities LLC also acted as placement agents on the private offering.

MANAGEMENT & BOARD


Executive Officers

Richard N. Massey, 63
Chief Executive Officer

Richard N. Massey has served as Chief Executive Officer of the Company since July 2020. In addition, he serves as a Senior Managing Director of Trasimene Capital and Chief Executive Officer of Cannae Holdings. Mr. Massey served as the Chairman and principal shareholder of Bear State Financial, Inc., a publicly traded financial institution from 2011 until April 2018. Mr. Massey also serves as Chief Executive Officer of Foley Trasimene I since March 2020 and as a director of Foley Trasimene I since May 2020. Mr. Massey has served on Cannae Holdings’ board of directors since June 2018 and previously served on Black Knight’s board of directors from December 2014 until July 2020. In addition, Mr. Massey has served as a director of FNF since February 2006. Mr. Massey has been a partner in Westrock Capital, LLC, a private investment partnership, since January 2009. Prior to that, Mr. Massey was Chief Strategy Officer and General Counsel of Alltel Corporation and served as a Managing Director of Stephens Inc., a private investment bank, during which time his financial advisory practice focused on software and information technology companies, and he formerly served as a director of FIS. Mr. Massey also serves as a director of FGL Holdings. Mr. Massey is also a director of the Oxford American Literary Project and the Chairman of the board of directors of the Arkansas Razorback Foundation. Mr. Massey formerly served as a director of FIS and Chairman of Bear State Financial, Inc. Mr. Massey’s significant financial expertise and experience on the boards of a number of public companies make him well qualified to serve as a member of our board of directors.


Bryan D. Coy, 50
Chief Financial Officer

Bryan D. Coy has served as Chief Financial Officer of the Company since July 2020. In addition, he has served as Chief Financial Officer of Foley Trasimene I since July 2020 and as Chief Financial Officer of Cannae Holdings since July 2020. He also serves as Managing Director of Trasimene Capital. He also serves as Chief Financial Officer of Black Knight Sports & Entertainment, LLC, which is the private company that owns the Vegas Golden Knights, a National Hockey League team, a position he has held since October 2017. He served as Chief Financial Officer of Foley Family Wines from 2017 until 2019. Prior to that, Mr. Coy served as Chief Accounting Officer of Interblock Gaming, an international supplier of electronic gaming tables, from September 2015 to October 2017. He served as Chief Financial Officer – Americas and Global Chief Accounting Officer of Aruze Gaming America from July 2010 through September 2015.


David W. Ducommun, 43
Senior Vice President of Corporate Finance

David W. Ducommun has served as a Senior Vice President of Corporate Finance of the Company since July 2020. In addition, he has served as a Senior Vice President of Corporate Finance of Foley Trasimene I since March 2020, as a Managing Director of Trasimene Capital since November 2019 and as a Senior Vice President of Corporate Finance of Cannae Holdings since November 2017. Mr. Ducommun has over 10 years of experience in the financial industry. Mr. Ducommun has served as a Senior Vice President of Mergers and Acquisitions of FNF from 2011 to November 2019. He also served as Secretary of FGL Holdings from April 2016 until December 2017.


Michael L. Gravelle, 58
General Counsel & Corporate Secretary

Michael L. Gravelle has served as General Counsel and Corporate Secretary of the Company since July 2020. In addition, he has served as General Counsel and Corporate Secretary of Foley Trasimene I since March 2020 and as an Executive Vice President, General Counsel and Corporate Secretary of Cannae Holdings since April 2017. Mr. Gravelle has served as the Chief Compliance Officer for Trasimene Capital since January 2020. Mr. Gravelle has over 25 years of business and legal experience in the financial industry. Mr. Gravelle has served as an Executive Vice President, General Counsel and Corporate Secretary of FNF since January 2010, and also served in the capacity of an Executive Vice President, Legal since May 2006 and Corporate Secretary since April 2008. Mr. Gravelle joined FNF in 2003, serving as a Senior Vice President. Mr. Gravelle joined a subsidiary of FNF in 1993, where he served as a Vice President, General Counsel and Secretary beginning in 1996 and as a Senior Vice President, General Counsel and Corporate Secretary beginning in 2000. Mr. Gravelle has also served as an Executive Vice President and General Counsel of Black Knight and its predecessors since January 2014 and as Corporate Secretary of Black Knight from January 2014 until May 2018.


 

Board of Directors

William P. Foley, II, 75
Founder & Chairman

William P. Foley, II is a founder and the Chairman of the Company since July 2020. In addition, he has served as the Chairman of Cannae Holdings since July 2017. Mr. Foley is a founder of FNF, and has served as the Chairman of the board of directors of FNF since 1984. Mr. Foley serves as a Senior Managing Director of Trasimene Capital. He served as Chief Executive Officer of FNF until May 2007 and as President of FNF until December 1994. Mr. Foley also serves as Chairman of Foley Trasimene I since May 2020, and he was previously Executive Chairman of Foley Trasimene I from March 2020 until May 2020. Mr. Foley also serves as Chairman of Black Knight since December 2019, and served as the Executive Chairman of Black Knight from January 2014 to December 2019 and as the co-Executive Chairman of FGL Holdings since April 2016. Mr. Foley also previously served as a director of Ceridian from September 2013 to August 2019. Mr. Foley also serves as the Chairman of Dun & Bradstreet, which is a Cannae Holdings portfolio company. Mr. Foley also serves as the Chairman, Chief Executive Officer and President of Foley Family Wines Holdings, Inc., a private holding company for numerous vineyards and wineries, and the Executive Chairman and Chief Executive Officer of Black Knight Sports and Entertainment LLC, which is the private company that owns the Vegas Golden Knights, a National Hockey League team. Within the past five-years, Mr. Foley served as the Vice Chairman of FIS and as the Chairman of Remy. After receiving his B.S. degree in engineering from the United States Military Academy at West Point, Mr. Foley served in the U.S. Air Force, where he attained the rank of captain. Mr. Foley’s qualifications to serve on our board include more than 30 years as a director and executive officer of FNF, his long and deep knowledge of our business and industry, his strategic vision, his experience as a board member and executive officer of public and private companies in a wide variety of industries, and his strong track record of building and maintaining stockholder value and successfully negotiating and implementing mergers and acquisitions.


C. Malcolm Holland, 60
Director 

C. Malcolm Holland has agreed to serve as a member of our board of directors. In addition, he has served as a director of Cannae Holdings since November 2017. Mr. Holland founded Veritex Holdings, Inc. (“Veritex”), where he has served as Chairman of the Board and Chief Executive Officer since 2009, and as Chairman of the Board, Chief Executive Officer and President of Veritex Bank since its inception in 2010. Mr. Holland began his career in 1982 as a credit analyst and commercial lender at First City Bank. In 1984, Mr. Holland joined Capital Bank as a vice president of commercial lending. From 1985 to 1998, Mr. Holland was an organizer and executive vice president of EastPark National Bank, a de novo bank that opened in 1986. EastPark National Bank was acquired by Fidelity Bank of Dallas in 1995, and Mr. Holland served as executive vice president and head of commercial lending for Fidelity Bank of Dallas from 1995 to 1998, when the bank was acquired by Compass Bank. From 1998 to 2000, Mr. Holland served as senior vice president and head of business banking for Compass Bank. Mr. Holland served as President of First Mercantile Bank from 2000 to 2002, when the bank was acquired by Colonial Bank. From 2003 to 2009, Mr. Holland served as Chief Executive Officer for the Texas Region of Colonial Bank. Mr. Holland is a past president of the Texas Golf Association and served on the Executive Committee of the United States Golf Association from 2013 through 2016. Mr. Holland is a member of the business advisory committee of Watermark Community Church. He has served as chairman of the College Golf Fellowship from 2002 to 2013. Mr. Holland received his Bachelor of Business Administration from Southern Methodist University in 1982.


Mark D. Linehan, 58
Director 

Mark D. Linehan has agreed to serve as a member of our board of directors. In addition, he has served as a director of Trebia Acquisition Corp. since June 2020, as a director of Cannae Holdings since September 2019 and as a director of Hudson Pacific Properties (“Hudson Pacific”) since 2010. Mr. Linehan has served as President and Chief Executive Officer of Wynmark Company (“Wynmark”), a private real estate investment and development company, since he founded the company in 1993. Prior to founding Wynmark, he served as a Senior Vice President with Trammell Crow Company (“Trammell”) in Los Angeles, California. Prior to working for Trammell, Mr. Linehan worked for Kenneth Leventhal & Co., a Los Angeles-based public accounting firm specializing in the real estate industry which is now part of Ernst & Young LLP. Mr. Linehan previously served on the board of directors of Condor Hospitality from March 2016 to December 2017. In addition, Mr. Linehan serves as a Director of Direct Relief. Mr. Linehan has a Bachelor of Arts degree in Business Economics from UCSB and is a Certified Public Accountant.


Erika Meinhardt, 61
Director 

Erika Meinhardt has agreed to serve as a member of our board of directors. In addition, she has served as a director of Cannae Holdings since July 2018. Since January 2018, Ms. Meinhardt has served as Executive Vice President of FNF. She previously served as President of National Agency Operations for FNF’s Fidelity National Title Group from February 2005 until January 2018. Prior to assuming that role, she served as Division Manager and National Agency Operations Manager for FNF from 2001 to 2005.