SAN FRANCISO and AUSTIN, Texas,
Jan. 6, 2020 /PRNewswire/
-- Open Lending, LLC ("Open Lending"), a leading provider of
lending enablement and risk analytics solutions to financial
institutions, and Nebula Acquisition Corporation
(NASDAQ: NEBU) ("Nebula"), a special purpose acquisition
company sponsored by True Wind Capital, L.P. ("True Wind"), today
announced that they have entered into a definitive business
combination agreement. Under the terms of the agreement, Nebula
will acquire Open Lending through a new Delaware holding company (the "Company"),
which will become a publicly-listed entity with an implied
estimated enterprise value at closing of approximately $1.3
billion.
The consideration payable to the stockholders of Open Lending
will consist of a combination of cash and shares of common stock of
the Company. In addition to the $275
million of cash held in Nebula's trust account (assuming no
redemptions), additional investors have committed to participate in
the transaction through a $200
million private placement of common stock at $10.00 per share anchored by True Wind and
several noteworthy and leading fundamental investors.
Open Lending is a lending enablement platform for the automotive
finance market powered by proprietary data, advanced decisioning
analytics, an innovative insurance structure and scaled
distribution. The platform enables near-prime consumers,
approximately 50% of borrowers today, to finance their vehicles at
more attractive rates when compared to traditional lending
alternatives, while presenting a similar risk profile to the lender
as that of a prime borrower. Furthermore, Open Lending's technology
platform unlocks value for a diverse partner ecosystem, benefitting
dealers, lenders, insurers and OEM's. Through the platform, Open
Lending facilitated over $1.7
billion of automotive loans in 2019 for over 275 financial
institutions, taking no balance sheet risk. Open Lending management
expects EBITDA margins to exceed 50% and organic revenue growth to
top 80% in 2020, representing over 140,000 loans facilitated.
Upon the close of the transaction, the Company intends to change
its name to Open Lending Corporation and is expected to trade on
The Nasdaq Stock Market under a new ticker symbol. Open Lending's
management team, led by John Flynn,
Co-Founder, President and Chief Executive Officer and Ross Jessup, Co-Founder, CFO, and COO, will
continue to lead the Company. Open Lending's management team is
expected to roll 70% of their existing equity interests in the
business. Open Lending's existing minority investor, Bregal
Sagemount ("Bregal"), a prominent growth equity firm, will continue
as a public stockholder. To facilitate the transaction and maximize
future public market performance, Nebula's sponsor and management
team have agreed to forfeit all of their founder warrants and
Nebula intends to launch a solicitation to retire all outstanding
public warrants.
John Flynn, Co-Founder,
President, and CEO of Open Lending, commented, "We are immensely
proud of Open Lending's accomplishments since our founding over 15
years ago, and we are excited to lead the next stage of development
alongside the True Wind team. We believe there is significant
runway for new growth opportunities within our existing base of
credit unions and banks as well as through untapped opportunities
such as OEM captive partnerships."
Adam Clammer, Co-CEO of Nebula
and Founding Partner of True Wind, said, "Open Lending's ability to
demonstrate consistent organic growth and high levels of
profitability represents an exciting investment opportunity within
the risk-based analytics ecosystem. John and his team have
developed a highly-scalable technology platform that helps hard
working consumers get into a new or used car at the best rate
possible. We look forward to partnering with Open Lending's
management team and Bregal at this exciting inflection point in the
company's growth."
Transaction Summary
The transaction reflects an implied estimated enterprise value
at closing of $1.3 billion, representing a 12.2x multiple to
2020 expected EBITDA of $109 million.
The cash component of the purchase price to be paid to the equity
holders of Open Lending is expected to be funded by Nebula's cash
in trust, up to $225 million of
privately rated institutional debt financing, and a $200 million private placement raised at
$10.00 per share. The balance of the
consideration payable to the existing Open Lending equity holders
will consist of shares of common stock of the Company. Existing
Open Lending equity holders have the potential to receive an
earnout of additional shares of common stock of the Company, if
certain stock price targets are met as set forth in the definitive
business combination agreement. Open Lending management, Bregal,
and other existing equity holders will remain majority owners of
the Company. Current shareholders of Nebula will also become
shareholders of the Company and will exchange their shares of
Nebula common stock for common stock of the Company on a share for
share basis.
The transaction has been unanimously approved by the boards of
both Open Lending and Nebula. Completion of the transaction is
subject to approval by the stockholders of Nebula and Open Lending
and certain other closing conditions. The transaction is expected
to close in the second quarter of 2020.
Additional information about the transaction will be provided in
a Current Report on Form 8-K that will contain an investor
presentation to be filed with the Securities and Exchange
Commission ("SEC") and available at www.sec.gov. In addition,
the Company intends to file a registration statement on Form S-4
with the SEC, which will include a proxy statement/prospectus of
Nebula, and will file other documents regarding the proposed
transaction with the SEC.
Advisors
Financial Technology Partners and FTP Securities ("FT Partners")
served as strategic and financial advisor and Goodwin Procter
LLP as legal counsel to Open Lending in connection with the
transaction. Deutsche Bank Securities and Goldman Sachs & Co.
LLC are acting as capital markets advisors, financial advisors, and
private placement agents, and Greenberg Traurig, LLP is acting as
legal counsel to Nebula in connection with the transaction. On the
concurrent debt financing, UBS Investment Bank is acting as sole
arranger.
Conference Call Information
At 10:00am ET on January 6, 2020, Nebula will be holding an
investor conference call to discuss the transaction. For those who
wish to participate, the domestic toll-free access number is (888)
820-4544 and the international toll-free access number is (470)
279-3876. Once connected with the operator, please provide the
Conference ID number of 269278 and request access to the Nebula and
Open Lending Investor Call.
A replay of the call will also be available from 1:00pm ET on January 6,
2020, until 11:59pm ET on
March 31, 2020. To access the replay,
the domestic toll-free access number is (855) 213-8235 and the
international toll-free access number is (571) 982-7683 and
participants should provide the pin code of 269278# and request
access to the Nebula and Open Lending Investor Call.
About Nebula Acquisition Corporation
Nebula Acquisition Corporation, sponsored by True Wind Capital
and led by Adam H. Clammer and James H. Greene, Jr.,
is a blank check company formed for the purpose of entering into a
merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more
businesses in the technology industry.
About Open Lending
Open Lending, through its flagship product, Lenders Protection,
offers loan analytics, risk-based pricing, risk modeling and
default insurance, ensuring profitable auto loan portfolios for
financial institutions throughout the
United States. For more information, please
visit www.OpenLending.com.
About True Wind Capital
True Wind Capital is a San
Francisco-based private equity firm focused on investing in
leading technology companies with a broad mandate including
software, data analytics, tech-enabled services, internet,
financial technology, and hardware. True Wind Capital is a
value-added partner, providing support and expertise that is rooted
in its teams' 75+ years of collective investing experience. Mr.
Adam H. Clammer and Mr. James H. Greene, Jr., are the founding partners
of True Wind Capital.
About Bregal Sagemount
Bregal Sagemount is a growth-focused private capital firm with
$3 billion in committed capital. The
firm provides flexible capital and strategic assistance to
market-leading companies in high-growth sectors across a wide
variety of transaction situations. Bregal Sagemount invests
$15 million to $250 million per transaction into targeted
sectors including software, digital infrastructure, healthcare IT /
services, business and consumer services, and financial technology
/ specialty finance. For more information, please
visit www.sagemount.com.
Important Information and Where to Find It
A full description of the terms of the transaction will be
provided in a registration statement on Form S-4 to be filed with
the SEC by the Company that will include a proxy statement for the
stockholders of Nebula that also constitutes a prospectus of the
Company. Nebula urges investors, stockholders and other
interested persons to read, when available, the preliminary proxy
statement/prospectus as well as other documents filed with the SEC
because these documents will contain important information about
Nebula, Open Lending and the transaction. After the
registration statement is declared effective, the definitive proxy
statement/prospectus to be included in the registration statement
will be mailed to stockholders of Nebula as of a record date to be
established for voting on the proposed transaction. Stockholders
will also be able to obtain a copy of the proxy
statement/prospectus, without charge, by directing a request to:
Nebula Acquisition Corporation, Four Embarcadero Center, Suite
2350, San Francisco, CA 94111. The
preliminary and definitive proxy statement/prospectus to be
included in the registration statement, once available, can also be
obtained, without charge, at the SEC's website (www.sec.gov).
Participants in the Solicitation
Nebula, Open Lending and the Company and their respective
directors and executive officers may be considered participants in
the solicitation of proxies with respect to the potential
transaction described in this press release under the rules of the
SEC. Information about the directors and executive officers of
Nebula is set forth in Nebula's Annual Report on Form 10-K for the
fiscal year ended December 31, 2018,
which was filed with the SEC on February 15,
2019. Information regarding the persons who may, under the
rules of the SEC, be deemed participants in the solicitation of the
stockholders in connection with the potential transaction will be
set forth in the proxy statement/prospectus when it is filed with
the SEC. These documents can be obtained free of charge from the
sources indicated above.
Non-Solicitation
This press release is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the potential transaction and shall not constitute an
offer to sell or a solicitation of an offer to buy the securities
of Nebula, Open Lending or the Company, nor shall there be any sale
of any such securities in any state or jurisdiction in which such
offer, solicitation, or sale would be unlawful prior to
registration or qualification under the securities laws of such
state or jurisdiction. No offer of securities shall be made except
by means of a prospectus meeting the requirements of the Securities
Act of 1933, as amended.
Forward-Looking Statements
This press release includes certain statements that are not
historical facts but are forward-looking statements for purposes of
the safe harbor provisions under the United States Private
Securities Litigation Reform Act of 1995. Forward-looking
statements generally are accompanied by words such as "believe,"
"may," "will," "estimate," "continue," "anticipate," "intend,"
"expect," "should," "would," "plan," "predict," "potential,"
"seem," "seek," "future," "outlook," and similar expressions that
predict or indicate future events or trends or that are not
statements of historical matters. These forward-looking statements
include, but are not limited to, statements regarding 2020 EBITDA
and EBITDA margin, projections, estimates and forecasts of revenue
and other financial and performance metrics and projections of
market opportunity and expectations, Nebula's ability to enter into
definitive agreements or consummate a transaction with Open Lending
and Nebula's ability to obtain the financing necessary to
consummate the potential transaction. These statements are based on
various assumptions and on the current expectations of Nebula's and
Open Lending's management and are not predictions of actual
performance. These forward-looking statements are provided for
illustrative purposes only and are not intended to serve as, and
must not be relied on by any investor as, a guarantee, an
assurance, a prediction or a definitive statement of fact or
probability. Actual events and circumstances are difficult or
impossible to predict and will differ from assumptions. Many actual
events and circumstances are beyond the control of Nebula and Open
Lending. These forward looking statements are subject to a number
of risks and uncertainties, including general economic, political
and business conditions, applicable taxes, inflation, interest
rates and the regulatory environment, the outcome of judicial
proceedings to which Open Lending [is or] may become a party, the
inability of the parties to enter into definitive agreements or
consummate the proposed transaction; the risk that the approval of
the stockholders of Nebula or Open Lending for the potential
transaction is not obtained; failure to realize the anticipated
benefits of the potential transaction, including as a result of a
delay in consummating the potential transaction or difficulty in
integrating the businesses of Nebula and Open Lending; the amount
of redemption requests made by Nebula's stockholders; those factors
discussed in Nebula's Annual Report on Form 10-K for the fiscal
year ended December 31, 2018 under
the heading "Risk Factors," and other documents of Nebula filed, or
to be filed, with the SEC. If the risks materialize or assumptions
prove incorrect, actual results could differ materially from the
results implied by these forward-looking statements. There may be
additional risks that Nebula, Open Lending and the Company
presently do not know or that they currently believe are immaterial
that could also cause actual results to differ from those contained
in the forward-looking statements. In addition, forward-looking
statements reflect Nebula's and Open Lending's expectations, plans
or forecasts of future events and views as of the date of this
press release. Nebula and Open Lending anticipate that subsequent
events and developments will cause their assessments to change.
However, while Nebula and Open Lending may elect to update these
forward-looking statements at some point in the future, Nebula and
Open Lending specifically disclaim any obligation to do so. These
forward-looking statements should not be relied upon as
representing Nebula's or Open Lending's assessments as of any date
subsequent to the date of this press release. Accordingly, undue
reliance should not be placed upon the forward-looking
statements.
Non-GAAP Financial Measure and Related Information
This press release references EBITDA and EBITDA margin, which
are financial measures that are not prepared in accordance with
U.S. generally accepted accounting principles ("GAAP"). These
non-GAAP financial measures do not have a standardized meaning, and
the definition of EBITDA used by Open Lending may be different from
other, similarly named non-GAAP measures used by others. In
addition, such financial information is unaudited and does not
conform to SEC Regulation S-X and as a result such information may
be presented differently in future filings by the Company with the
SEC.
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SOURCE True Wind Capital