PROPOSED BUSINESS COMBINATION: Li-Cycle
ENTERPRISE VALUE: $1.099 billion
ANTICIPATED SYMBOL: LICY
Peridot Acquisition Corporation proposes to combine with Li-Cycle Corp., a commercial leader in lithium-ion battery resource recovery.
Founded in Toronto in 2016, Li-Cycle is an industry-leading lithium-ion battery resource recovery company and the largest lithium-ion battery recycler in North America. Li-Cycle sits at the intersection of three core megatrends:
- The electric vehicle revolution
- The supply shortage of strategic battery materials
- The need for a truly sustainable, ESG-friendly lithium-ion battery recycling solution, a critical missing step in the battery supply chain
Li-Cycle’s two-stage battery recycling model enables customers to benefit from a safe and environmentally friendly solution for recycling all types of lithium-ion materials.
The transaction is expected to deliver up to $615 million of gross proceeds, including the contribution of up to $300 million of cash held in Peridot’s trust account from its initial public offering in September 2020 (assuming no redemptions from the trust account) and $315 million from committed equity PIPE funding from a group of institutional investors.
Upon completion of the transaction, Peridot expects to add up to $566 million in cash from the transaction, after transaction expenses and debt paydown, to fully fund its global expansion.
- $315 million PIPE at $10.00 / share
- Investors include Neuberger Berman Funds, Franklin Templeton and Mubadala Capital, as well as Peridot sponsor Carnelian Energy Capital, existing Li-Cycle investor Moore Strategic Ventures and global marketing and strategic off-take partner Traxys S.A (“Traxys”).
- The Sponsor acknowledges and agrees, in the event that the Aggregate Transaction Proceeds are less than $300,000,000 the Sponsor, with no further action required, after the Peridot Continuance and immediately prior to the Class B Conversion, shall automatically and irrevocably surrender and forfeit, to Peridot for no consideration, such number of Peridot Class B Shares as requested in writing by the Company not to exceed the lesser of (a) all Peridot Class B Shares held by Sponsor and (b) a number of Peridot Class B Shares equal to the Cash Consideration Deficit divided by $10.00 (such forfeited shares, the “Forfeited Shares”), and Peridot shall immediately cancel such Forfeited Shares
NOTABLE CONDITIONS TO CLOSING
- The aggregate cash proceeds from Peridot’s trust account, together with the proceeds from the PIPE Financing, equaling no less than $300,000,000.
- Minimum Cash Condition shall be an amount equal to (x) $300,000,000 minus (y) the product of the number of Class B Shares forfeited and $10.00.
NOTABLE CONDITIONS TO TERMINATION
- If the Business Combination is not consummated by August 16, 2021
- Citi is serving as sole financial advisor to Li-Cycle.
- Cowen is serving as capital markets advisor to Li-Cycle.
- UBS Investment Bank is serving as lead placement agent and Barclays and Citi are serving as placement agents for the PIPE.
- UBS Investment Bank and Barclays are also serving as financial and capital markets advisors to Peridot.
- McCarthy Tétrault and Freshfields Bruckhaus Deringer are serving as legal advisors to Li-Cycle.
- Kirkland & Ellis and Stikeman Elliott are serving as legal advisors to Peridot.
- INFOR Financial Inc. has provided a fairness opinion to the Board of Directors of Li-Cycle.
PERIDOT ACQUISITION CORPORATION MANAGEMENT & BOARD
Alan Levande, 64
Chief Executive Officer & Chairman of the Board
Mr. Levande is a career energy executive with broad experience across the power, utilities, renewables, midstream and upstream value chains. Most recently, Mr. Levande was Co-Chief Executive Officer of Covey Park Energy LLC, a natural gas company that was acquired for $2.2 billion in 2019 by a public company, from June 2013 to July 2019. Previously, Mr. Levande was a Co-Founder and Senior Managing Director at Tenaska Capital Management LLC, a $4 billion private equity manager focused on investments in the power and energy sectors, from 2003 to 2012. Mr. Levande began his career in energy investment banking, where he spent 20 years with Goldman Sachs and Salomon Brothers covering power, utilities, renewables and natural resources. In all of Mr. Levande’s prior roles, Mr. Levande was actively involved in sourcing and executing large-scale, complex mergers and acquisitions. Mr. Levande received his B.S. and M.B.A. from The Wharton School of The University of Pennsylvania.
Markus Specks, 36
Chief Financial Officer
Mr. Specks is an energy investor with significant experience sourcing, structuring and executing complex transactions. He was most recently a Managing Director with Värde Partners, a global alternative investment advisor managing approximately $14 billion in assets, where he was employed from July 2008 to June 2020. Mr. Specks opened and was Head of Värde’s Houston office, where he focused on investments across the energy landscape, including upstream, power, renewables and energy infrastructure. He began his career in investment banking at Lazard. Mr. Specks received his B.A. from Lawrence University.
Board of Directors
Tomas Ackerman, 40
Mr. Ackerman is a Co-Founder and a Partner of Carnelian, where he oversees Carnelian’s efforts in sourcing investments, transaction negotiation and execution, monitoring of portfolio companies and firm management and strategy. Prior to co-founding Carnelian, Mr. Ackerman was an energy investor at Natural Gas Partners from 2002 to 2015, most recently serving as a Managing Director and the head of the Houston office. Mr. Ackerman received a B.B.A. from the Business Honors Program at The University of Texas at Austin and an M.B.A. from Harvard Business School.
Preston Powell, 34
Mr. Powell is a Managing Director of Carnelian, where he is responsible for leading investment sourcing, transaction due diligence and execution and monitoring portfolio companies. Prior to joining Carnelian in November 2015, Mr. Powell was an energy investor at Denham Capital Management and KKR & Co. from 2011 to 2015. He began his career in investment banking at Greenhill & Co. and received a B.B.A. from the Business Honors Program from The University of Texas at Austin.
Scott Prochazka, 54
Mr. Prochazka most recently served as the President and Chief Executive Officer and a director of CenterPoint Energy, an NYSE-listed, Fortune 500 energy delivery company with electric transmission and distribution, power generation and natural gas distribution operations (“CenterPoint”) from January 1, 2014 to February 20, 2020. Prior to that role, Mr. Prochazka held several positions at CenterPoint since 2011, including Executive Vice President, Chief Operating Officer and Senior Vice President and Division President, Electric Operations. Mr. Prochazka received his B.S. in Chemical Engineering from the University of Texas in Austin.
Varun Sivaram, 31 [Resigned 1-21-21]
Dr. Sivaram is a senior research scholar at the Columbia University Center for Global Energy Policy and has served in this capacity since May 2020. Previously, Dr. Sivaram served as Chief Technology Officer of ReNew Power Limited, India’s largest renewable energy firm, from September 2018 to March 2020, as a fellow and director of the energy program at the Council on Foreign Relations from March 2015 to September 2018, and as a consultant at McKinsey & Co. from 2013 to 2015. Dr. Sivaram currently serves on the advisory boards of Glint Solar, a clean energy and software company, the Stanford University Precourt Institute for Energy and the Stanford Woods Institute for the Environment. Dr. Sivaram also serves as a senior fellow at the Aspen Institute and the Information Technology and Innovation Foundation and as a senior advisor to Camus Energy and Radia, Inc. Dr. Sivaram received a Ph.D. in condensed matter physics from Oxford University and a B.S. in Engineering Physics and a B.A. in International Relations from Stanford University.
June Yearwood, 54
Ms. Yearwood is a Managing Director and the Head of Private Specialty Strategies for CPF, a multi-billion dollar private pension fund, and has served in this capacity since 2006. In her role at CPF, Ms. Yearwood focuses on private equity, real estate and real assets, including natural resources and infrastructure. Previously, Ms. Yearwood served as Vice President, Secretary and Investment Director at the Alfred P. Sloan Foundation, a non-profit foundation, from 2001 to 2006 and spent over a decade with J.P. Morgan, where she served in debt capital markets, public finance and community development roles of increasing seniority. Ms. Yearwood received a B.A. from Yale University and an M.B.A. from the Stanford Graduate School of Business, and currently serves as Board Chairperson for Brooklyn Workforce Innovations, a New York City-based non-profit focused on creating living-wage employment opportunities.