PROPOSED BUSINESS COMBINATION: Luminar Technologies, Inc.
ESTIMATED CURRENT FUNDS in TRUST: $406.3 million*
CURRENT PER SHARE REDEMPTION PRICE: $10.16*
ENTERPRISE VALUE: $2.9 billion
Gores Metropoulos, Inc. proposes to combine with Luminar Technologies, Inc., an autonomous vehicle sensor and software company.
Founded in 2012 by CEO Austin Russell, Luminar is the leading autonomous vehicle and lidar technology company for consumer cars and trucking. Luminar is partnered with 7 of the top 10 global automakers and is set to power the introduction of highway self-driving and next-generation safety systems. Luminar has built a new type of lidar from the chip-level up with breakthroughs across all core components. As a result, Luminar has created the only lidar sensor that meets the stringent performance, safety and cost requirements for Level 3–Level 5 autonomous vehicles. Integrating this advanced hardware with Luminar’s custom developed software stack enables a turn-key autonomous solution to accelerate widespread adoption with automakers.
Starting in 2022, Luminar’s hardware and software will be integrated into Volvo’s global vehicle platform, the foundation for their next generation of consumer vehicles. In parallel, Luminar’s technology will also enable a new benchmark for vehicle safety surpassing today’s advanced driving assistance systems (ADAS) with proactive safety features.
- Implied pro forma enterprise value of approximately $2.9 billion and an equity value of approximately $3.4 billion at closing.
- $170 million PIPE:
- The $170 million investment made directly into Luminar is led by institutional investors including Alec Gores, Van Tuyl Companies, Peter Thiel, Volvo Cars Tech Fund, Crescent Cove, Moore Strategic Ventures, Nick & Jill Woodman and VectoIQ, with the majority of the major existing investors participating.
- Luminar’s stockholders will receive approximately 271.8 million shares of Gores Metropoulos common stock at closing.
- Net transaction proceeds will remain in the company and support continued growth across key verticals as Luminar executes on significant production and development opportunities.
- All current Luminar stockholders will roll the entirety of their existing equity holdings into the combined company.
- The transaction is expected to close in the fourth quarter of 2020.
MANAGEMENT & BOARD
Following completion of the transaction, Luminar will retain its experienced management team.
- Founder Austin Russell will continue to serve as CEO
- Tom Fennimore will continue to serve as CFO.
- Alec Gores will join the Luminar board of directors upon closing of the transaction.
- $170 million Series X preferred stock
- Such shares shall be converted into the right to receive no less than 17,000,000 shares of Parent Class A Stock
Stockholders of Luminar will be entitled to receive an additional number of earn-out shares from the Company, issuable in either Company Class A common stock or Company Class B common stock as provided in the Merger Agreement, of up to 7.5% of the total outstanding capital stock of the Company as of the closing of the Business Combination (including shares subject to outstanding Luminar stock options, restricted stock and warrants that will be assumed by the Company in connection with the Business Combination).
The Earn Out Period is defined as the time period between the Lockup Expiration Date and the fifth (5th) year anniversary of the Lockup Expiration Date.
- Triggering Event I means the date on which the Common Share Price is greater than $13.00 after the Closing Date, but within the Earn Out Period.
- Triggering Event II means the date on which the Common Share Price is greater than $16.00 after the Closing Date, but within the Earn Out Period.
- Triggering Event III means the date on which the Common Share Price is greater than $19.00 after the Closing Date, but within the Earn Out Period.
- Triggering Event IV means the date on which the Common Share Price is greater than $22.00 after the Closing Date, but within the Earn Out Period.
- Triggering Event V means the date on which the Common Share Price is greater than $25.00 after the Closing Date, but within the Earn Out Period.
- Triggering Event VI means the date on which the Common Share Price is greater than $28.00 after the Closing Date, but within the Earn Out Period.
- Lockup agreement – Exhibit C to Agreement and Plan of Merger – has not been filed yet.
The Company, First Merger Sub and Second Merger Sub entered into a support agreement (the “Support Agreement”) with Austin Russell, who holds Luminar founders preferred stock and Luminar common stock representing approximately 38% of the voting power of Luminar capital stock (assuming that $170,000,000 of the Series X Financing Amount (as defined in the Merger Agreement) is funded).
The Support Agreement provides, among other things, that:
- On (or effective as of) the third business day following the date that the consent solicitation statement/prospectus included in the Registration Statement is disseminated, Mr. Russell will execute and deliver a written consent with respect to the outstanding shares of Luminar founders preferred stock and Luminar common stock held by Mr. Russell adopting the Merger Agreement and approving the Mergers;
- provided, that in the event Luminar’s board of directors makes a Company Change in Recommendation, Mr. Russell would only be required to vote a number of his Luminar shares in favor of the Mergers that would equal 35% of the total number of shares of Luminar capital stock on an as-converted basis, and would be entitled, in his sole discretion, to vote his remaining shares in any manner.
- In addition, the Support Agreement prohibits Mr. Russell from engaging in activities that have the effect of soliciting a competing Acquisition Proposal.
NOTABLE CONDITIONS TO CLOSING
- Subject to customary closing conditions (no minimum cash closing condition)
NOTABLE CONDITIONS TO TERMINATION
- By mutual written consent of the Company and Luminar, if the transactions have not been consummated by February 5, 2021
- Deutsche Bank Securities is serving as exclusive financial advisor, lead capital markets advisor and sole private placement agent to Gores Metropoulos.
- Credit Suisse LLC is serving as additional capital markets advisor to Gores Metropoulos
- Moelis & Company LLC is acting as additional financial advisor to Gores Metropoulos.
- Weil, Gotshal & Manges, LLP is acting as legal advisor to Gores Metropoulos.
- GCA Advisors, LLC and Jefferies Group LLC are serving as financial advisors to Luminar.
- GCA Advisors, LLC is serving as sole private placement agent on the direct investment into Luminar
- Orrick, Herrington & Sutcliffe LLP is acting as legal advisor to Luminar.
GORES METROPOULOS MANAGEMENT & BOARD
Alec Gores, 65
Chief Executive Officer & Director
Mr. Gores is the Founder, Chairman and Chief Executive Officer of The Gores Group, a global investment firm focused on acquiring businesses that can benefit from the firm’s operating expertise. Mr. Gores implemented an operational approach to private equity investing when he founded The Gores Group in 1987 by operating businesses alongside management, or in some cases in lieu of management, to build value in those entities. Since then, the firm has acquired more than 100 businesses including a current portfolio of more than 20 active companies worldwide. Mr. Gores began his career as a self-made entrepreneur and operating executive. In 1978, he self-funded and founded Executive Business Systems (EBS), a developer and distributor of vertical business software systems. Within seven years, EBS had become a leading value-added reseller in Michigan and employed over 200 people. In 1986, CONTEL purchased EBS, and Mr. Gores subsequently began acquiring and operating non-core businesses from major corporations and building value in those entities, a decision that ultimately led to the founding of what has evolved into The Gores Group today. Under his leadership, The Gores Group has continued to acquire businesses in need of operational and financial resources, while creating value and working with management teams to establish an entrepreneurial environment as a foundation for sustainable growth. This philosophy has served the firm well. Mr. Gores served as the Chairman of the Board of Directors of Gores Holdings I from its inception in June 2015 until completion of the Hostess acquisition in November 2016. Additionally, Mr. Gores has served as the Chairman of the Board of Directors of Gores Holdings II (Nasdaq: GSHT) and Gores Holdings III (Nasdaq: GRSH) since their inception in August 2016 and October 2017, respectively. Mr. Gores holds a degree in Computer Science from Western Michigan University.
Andrew McBride, 38
Chief Financial Officer & Secretary
Mr. McBride has served as Director, Finance and Tax at The Gores Group since February 2010, where he is responsible for tax due diligence and structuring of acquisitions, compliance, planning, financial management and portfolio company reporting. Mr. McBride served as the Chief Financial Officer and Secretary of Gores Holdings I from January 2016 until completion of the Hostess acquisition in November 2016. Additionally, Mr. McBride served as the Chief Financial Officer and Secretary of Gores Holdings II (Nasdaq: GSHT) from its inception in August 2016 until October 2018 and he has served as the Chief Financial Officer and Secretary of Gores Holdings III (Nasdaq: GRSH ) since its inception in October 2017. Previously, from January 2008 to January 2010, Mr. McBride worked in the High Net Worth group at Ehrhardt, Keefe, Steiner, and Hottman, P.C.. From January 2004 to January 2008, Mr. McBride was with KPMG, LLP, assisting international corporations with tax planning, structuring and compliance issues. Mr. McBride holds a B.S. in Accounting and Finance from the University of Notre Dame and is licensed as a Certified Public Accountant in the State of Colorado.
Board of Directors
Dean Metropoulos, 72
Chairman & Director
Mr. Metropoulos has served as Executive Chairman of the Board of Directors of Hostess since November 2016. Since 2013, Mr. Metropoulos has served as the Executive Chairman of certain subsidiaries of Hostess and a member of the Board of Directors of Hostess. Mr. Metropoulos also served on the Board of Directors of Pabst Brewing Company until 2014. Mr. Metropoulos has over 30 years of experience in acquiring and restructuring businesses in the U.S., Mexico and Europe, focusing on the food and consumer sectors. Mr. Metropoulos has been involved in approximately 80 transactions, including investments in Pabst Brewing Company, Utz Quality Foods LLC, Pinnacle Foods Group, Inc. (Swanson/Hungry-Man, Vlasic Pickles, Open Pit Barbeque Sauce, Duncan Hines, Log Cabin Syrup, Mrs. Butterworth’s Syrup, Aunt Jemima Frozen Breakfast, Mrs. Paul’s Seafood, Van De Kamp’s Seafood, Celeste Pizza and Lender’s Bagels), Aurora Foods, Stella Foods, The Morningstar Group, International Home Foods (Chef Boyardee, Pam Cooking Spray, Gulden’s Mustard and Bumble Bee Tuna), Ghirardelli Chocolate, Mumm and Perrier Jouet Champagnes and Hillsdown Holdings, PLC (Premier International Foods, Burtons Biscuits and Christie Tyler Furniture), among others. Mr. Metropoulos holds a B.S. and an M.B.A. from Babson College.
Randall Bort, 53
Mr. Bort is a Co-Founder of SandTree Holdings, LLC, a private commercial real estate investment firm since November 2012. Previously, Mr. Bort was an investment banker at Drexel Burnham Lambert, BT Securities, Donaldson, Lufkin & Jenrette, Credit Suisse First Boston, The Mercanti Group and Imperial Capital. Mr. Bort has significant financial, transactional and capital markets experience across multiple industries and has worked both domestically and in Asia. Mr. Bort earned a B.A. in Economics and Mathematics from Claremont McKenna College and an M.B.A. in Finance and Entrepreneurial Management from The Wharton School of the University of Pennsylvania. Mr. Bort served as a member of the Board of Directors of Gores Holdings I from August 2015 until completion of the Hostess acquisition in November 2016. Additionally, Mr. Bort has served as a member of the Board of Directors of Verra Mobility Corp. (Nasdaq: VRRM) (formerly Gores Holdings II (Nasdaq: GSHT)) and Gores Holdings III (Nasdaq: GRSH ) since their inception in August 2016 and October 2017, respectively. Mr. Bort also is a member of the Board of Trustees of Children’s Bureau, a non-profit organization based in Los Angeles focused on foster care and the prevention of child abuse.
Michael Cramer, 66
Mr. Cramer has been the Chief Administrative Officer & Executive VP at Hostess Brands, Inc. since 2013 and the Founding Director-Texas Program in Sports and Media at The University of Texas at Austin since 2010. Mr. Cramer was employed as a Director, SVP-Business Planning & Development by The Pabst Brewing Co. from 2010 to 2014, and was previously employed as an Associate Professor by New York University, a Chief Administrative Officer & Executive VP by Pinnacle Foods Corp., a President & Chief Operating Officer by Hicks Sports Group LLC and President of the Texas Rangers Baseball Club and Dallas Stars Hockey team, an Executive Vice President & General Counsel by Morningstar Group, Inc., an Executive VP-Administration & General Counsel by Stella Foods, Inc., a Vice President by CDM Hostess Class C LLC, a Vice President by Fairmont Aviation LLC, a Principal by Ghirardelli Chocolate Co., and a Director & Executive Vice President by International Home Foods, Inc. He also practiced law for approximately 10 years in Wisconsin. He received his undergraduate degree from State University of New York at Albany and a J.D. from Marquette University Law School.
Joseph Gatto, 62
Mr. Gatto has been a partner at Perella Weinberg Partners, L.P., a leading independent global financial services firm providing corporate advisory and asset management services (“PWP”) since 2012. Prior to his employment at PWP, Mr. Gatto was an investment banker holding senior roles in mergers and acquisitions and corporate finance at Goldman, Sachs & Co., Lehman Brothers Inc. and Barclays plc. Mr. Gatto has significant financial, transactional and capital markets experience, particularly in the consumer products and retail industries, and has worked with clients in the Americas, Europe and Asia. Mr. Gatto has also served as an Adjunct Professor of Law at the University of Pennsylvania Law School and a Fellow at Harvard University’s Advanced Leadership Initiative. Mr. Gatto holds an A.B. in economics and international affairs from the Woodrow Wilson School at Princeton University. He also holds an M.B.A. from the Wharton School of the University of Pennsylvania and a J.D. from the University of Pennsylvania Law School.