NEW YORK, Nov. 3, 2017 /PRNewswire/ -- M III Acquisition
Corp. (Nasdaq:MIII) (Nasdaq:MIIIU) (Nasdaq:MIIIW) ("MIII") today
announced that it has entered into a definitive agreement and plan
of merger with IEA Energy Services LLC, a leading engineering,
procurement and construction ("EPC") company in the renewable
energy sector. MIII will be renamed as "Infrastructure and
Energy Alternatives, Inc." ("IEA") upon consummation of the merger
and is expected to continue to be listed on the Nasdaq Capital
Market under the symbol "IEA".
Following the transaction, IEA will hold all of the existing
renewable energy EPC businesses (the "IEA Businesses") of
Infrastructure and Energy Alternatives, LLC (the "Company"),
including the Infrastructure and Energy Alternatives family of
companies, led by White Construction, Inc. and IEA Renewable
Energy, Inc. The Company's existing management team, led by
J.P. Roehm, will serve as the
continuing management team for IEA, and IEA's headquarters will
remain in Indianapolis,
Indiana. Funds managed by the Power Opportunities group of
Oaktree Capital Management, L.P. ("Oaktree") and the IEA management
team (collectively, the "Existing Owners") will hold a significant
ownership interest in IEA following the merger.
The Company was formed by Oaktree in 2011 in connection with its
acquisition of White Construction, a leading United States EPC firm
that had established itself with an early presence in the
utility-scale, wind farm construction industry. The Company
believes that the IEA Businesses hold an industry-leading market
share among EPC companies for wind farm construction in the United
States. Through construction of approximately 200 projects,
the IEA Businesses have erected more than 7,200 wind turbines which
generate more than 14 GW of electricity. The IEA Businesses
have a long track record of successfully completing its projects on
time and on budget, and the Company's safety-first approach,
customer responsiveness, and expertise have resulted in more than
80% of annual revenues coming from repeat customers.
IEA expects to build upon its leading market share of the IEA
Businesses in wind farm construction and to expand its market share
in the construction of utility-scale solar projects to drive
organic growth. As a public company, IEA believes that it
will be able to implement its acquisition strategy to drive
incremental growth and diversification. The overall goal is
to enhance IEA's position as the leading, publicly-traded,
renewables EPC company by expanding its core product offerings in
wind and solar construction and broadening the range of services
that it offers to its customers.
"MIII is excited to partner with IEA's management and Oaktree to
bring IEA to the public markets," said Mohsin Y. Meghji, Chairman and CEO of MIII. "IEA
is a market leader in the construction of renewable energy
facilities, and we are confident that it is well-positioned for
substantial growth over the years to come. We look forward to
working with Oaktree and management of IEA to build shareholder
value for our public investors."
Ian Schapiro, Managing Director
and Portfolio Manager of the Power Opportunities group of Oaktree,
noted that "IEA is an excellent company with a great management
team. We strongly believe in the IEA growth story and, by
partnering with MIII, look to benefit from continuing growth.
We look forward to working with MIII and the IEA management team
with the goal of creating a larger and more valuable company for
all shareholders."
J.P. Roehm, who will continue as
CEO of IEA, added that "Oaktree has been a terrific partner for IEA
over the past six years, and we are excited to now add MIII as a
partner going forward. As a current leader in the booming
renewables industry, we expect that the opportunities for IEA and
our customers will only increase as a public company. Our
entire team is excited about the opportunity to show public
investors the strength of IEA and enable a wider range of
shareholders to benefit from our success."
Transaction Details
Under the terms of the purchase agreement, the aggregate
purchase price payable at the closing of the proposed transaction
will be $255 million (subject to
certain adjustments). The purchase price (excluding
transaction expenses and subject to certain adjustments) will
consist of (a) $100 million in cash,
(b) convertible, redeemable, preferred stock with a liquidation
value of $35 million (with conversion
to be based upon the volume weighted average price of the MIII
common stock), (c) 10 million shares of MIII common stock, and (d)
assumption of approximately $20 million in capital leases. In
addition, the Existing Owners will be entitled to receive up to 9
million shares of MIII common stock as an "earn-out" based upon
IEA's EBITDA for 2018 and 2019. The cash component of the
purchase consideration is to be funded by cash in MIII's trust
account established in connection with its initial public
offering.
Upon consummation of the transaction, it is anticipated that the
Existing Owners will hold approximately 34% of the outstanding
common stock of IEA, with the ability to increase that interest to
approximately 49.7% of the outstanding common stock of IEA assuming
receipt of the full earn-out (excluding, in each case, unexercised
warrants and common stock to be received upon any conversion of the
convertible preferred stock).
As part of the transaction, the sponsor investors in MIII have
agreed to defer vesting of 1.875 million common shares (the
"Deferred Shares"), with 50% of such common shares to vest when the
common stock trades at $12 per share
for any 20 of 30 trading days, and the remainder to vest when such
common stock trades at $14 per share
for any 20 of 30 trading days. Warrants to purchase 7.73
million common shares of MIII at a strike price of $11.50 per share will remain outstanding.
The investor rights agreement to be entered into in connection
with the closing of the transaction contemplates that the initial
board of directors of the combined company will consist of seven
members, with two of the directors to be nominated by Oaktree, two
to be nominated by the sponsor investors in MIII, and the remainder
to be jointly selected. Messrs. Meghji, Schapiro, and Roehm
will be members of the initial board of directors. A majority
of the directors will be "independent directors" in accordance with
applicable regulations of the U.S. Securities and Exchange
Commission and Nasdaq rules.
The transaction has been unanimously approved by the boards of
directors of both the Company and MIII and remains subject to the
satisfaction of customary closing conditions, including regulatory
approval and the approval of MIII's stockholders. It is
expected to close promptly following MIII's special stockholders'
meeting to approve the transaction, and the sponsor investors in
MIII have agreed to vote all of their shares in MIII in favor of
the transaction.
MIII was advised on the transaction by Stifel, Nicolaus &
Company Incorporated, as M&A advisor, Jefferies LLC and Cantor
Fitzgerald & Co., as Equity Capital Markets advisors.
Kirkland & Ellis LLP and Ellenoff Grossman & Schole LLP
served as legal counsel to MIII. The Company was advised by
FMI Capital Advisors Inc., as financial advisor, and Paul, Weiss,
Rifkind, Wharton & Garrison LLP, as legal counsel.
The description of the transaction contained herein is only a
summary and is qualified in its entirety by reference to the
definitive agreements relating to the transaction, copies of which
will be filed by MIII with the SEC as an exhibit to a Current
Report on Form 8-K.
Pre-Recorded Conference Call
A pre-recorded conference call offering commentary from
management of MIII and IEA on the transaction details will be made
available to all investors on November
3, 2017. The pre-recorded remarks will be available
for a limited period of time beginning November 3, 2017. The call can be accessed by
dialing (404) 504-7197 or toll-free by dialing (866) 608-2485. Once
connected, please enter the Conference ID number of 12773.
About M III Acquisition Corp.
M III Acquisition Corp. is a special purpose acquisition company
(SPAC) founded by Mohsin Y. Meghji
and formed for the purpose of effecting business combination(s)
with one or more businesses. M III Acquisition Corp.'s
long-term strategy is to leverage the experience and expertise of
its management team and advisors to identify and acquire a company
with long term growth potential and then to work with management of
that company to realize this potential.
About IEA Energy Services LLC
IEA Energy Services LLC ("Services") holds the operating assets
of Infrastructure and Energy Alternatives, LLC, a holding company
established to acquire and manage industry leading companies
delivering infrastructure solutions for the renewable energy,
traditional power, and civil infrastructure industries. The IEA
family of companies provides complete engineering, procurement and
construction (EPC) services throughout North America. For
more information, visit www.iea.net.
About Oaktree
Oaktree is a leader among global investment managers
specializing in alternative investments, with $100 billion in assets under management as of
September 30, 2017. The firm
emphasizes an opportunistic, value-oriented and risk-controlled
approach to investments in distressed debt, corporate debt
(including high yield debt and senior loans), control investing,
convertible securities, real estate and listed equities.
Headquartered in Los Angeles, the
firm has over 900 employees and offices in 18 cities worldwide. For
additional information, please visit Oaktree's website at
www.oaktreecapital.com.
Additional Information About The Transaction And Where To
Find It
The proposed transaction will be submitted to stockholders of
MIII for their approval. In connection with that approval, MIII
will file with the SEC a proxy statement containing information
about the proposed transaction and the respective businesses of
MIII and IEA. Stockholders are urged to read the proxy statement
when it becomes available because it will contain important
information. Stockholders will be able to obtain a free copy of the
proxy statement, as well as other filings containing information
about MIII, without charge, at the SEC's website (www.sec.gov) or
by calling 1-800-SEC-0330. Copies of the proxy statement and other
filings with the SEC can also be obtained, without charge, by
directing a request to M III Acquisition Corp., 3 Columbus Circle,
15th Floor, New York,
NY 10019, (212) 716-1491.
Participants in the Solicitation
MIII, Services and their respective directors and executive
officers may be deemed to be participants in the solicitations of
proxies from MIII's stockholders in respect of the proposed
transaction. Information regarding MIII's directors and executive
officers is available in its Form 10-K filed with the Securities
and Exchange Commission on March 30,
2017. Additional information regarding the participants in
the proxy solicitation and a description of their direct and
indirect interests will be contained in the proxy statement when it
becomes available.
Forward-Looking Statements
This news release may include forward-looking statements within
the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. All statements, other
than statements of historical facts, included in this news release
that address activities, events or developments that MIII, Services
and/or Oaktree expects or anticipates will or may occur in the
future are forward-looking statements and are identified with, but
not limited to, words such as "believe" and "expect". These
statements are based on certain assumptions and analyses made by
MIII, Services and/or Oaktree in light of its experience and its
perception of historical trends, current conditions and expected
future developments as well as other factors it believes are
appropriate in the circumstances. Actual results may differ
materially from those expressed herein due to many factors such as,
but not limited to, the ability to satisfy closing conditions for
the transaction, including stockholder and other approvals, the
financial performance of IEA, competition within the EPC industry
and from competing technologies, IEA's ability to identify and
complete future acquisitions, the ability of the combined company
to meet the Nasdaq Capital Market's listing standards, including
having the requisite number of stockholders, and the risks
identified in MIII's prior and future filings with the SEC
(available at www.sec.gov), including the proxy statement to
be filed in connection with the proposed transaction and the final
prospectus dated July 7, 2016. These
statements speak only as of the date they are made and none of
MIII, Services or Oaktree undertakes any obligation to update any
forward-looking statements contained herein to reflect events or
circumstances which arise after the date of this news release.
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SOURCE M III Acquisition Corp.