SilverBox Engaged Merger Corp I (NASDAQ: SBEA) today issued the
following open letter to its investors and partners:
Dear Investors and Partners,
We are very pleased to announce that SilverBox Engaged Merger
Corp I (“SBEA,” “SilverBox-Engaged” or “we”) has agreed to enter
into a business combination with Black Rifle Coffee Company (“BRCC”
or the “Company”). By combining with BRCC, we believe we are
providing a unique opportunity to become shareholders of a dynamic,
high-growth and mission-oriented consumer business that has
valuable recurring revenue and a long runway for expansion in a $45
billion addressable market. Based on four months of exhaustive
analysis and diligence, we firmly believe BRCC can be a source of
exceptional long-term returns as well as a catalyst for positive
impact within the often-underserved veteran and first responder
communities.
The SilverBox-Engaged team has a proven track record of helping
companies achieve superior value in the public markets. We want to
underscore that our principals took a deliberate, thoughtful
approach to reaching this merger with BRCC. Rather than attempting
to hastily execute a transaction, as some SPACs have done, or
languishing, as others have done, we focused on balancing urgency
and selectivity throughout our investment screening process. We
identified and evaluated roughly 200 quality merger candidates
before selecting BRCC as the ideal target and opportunity. We
subsequently devoted considerable effort, time and resources to
robust due diligence before negotiating and entering into a
definitive agreement with BRCC, allowing us to announce this
high-quality transaction about eight months after SBEA’s initial
public offering.
This transaction, which represents a significant milestone for
all of our team members and stakeholders, also reflects our focus
on fulfilling the important commitments made to you during our
roadshow. These include:
- We would treat our investors as partners – not
counterparties;
- We would look to buy fundamentally sound companies with strong
growth trajectories – not businesses that were so early stage that
they had no real track records; and
- As an experienced SPAC sponsor, we would draw on our team’s
deep expertise and leverage our partners’ additive capabilities and
relationships.
Maintaining investor confidence and trust will always be our top
priority. In this spirit, we are taking the opportunity to
elaborate on how we have executed on our commitments in recent
months:
- PARTNERS, NOT COUNTERPARTIES. Our belief in BRCC and its
talented team of aligned leaders is so high that we are investing
more than $100 million into this transaction via a forward purchase
agreement with Engaged Capital and through the infusion of
additional capital from SilverBox-Engaged’s principals. Moreover,
we are further aligning our interests with shareholders by
subjecting 7.5% of our founder shares to forfeiture if the combined
company’s share price does not appreciate at least 50% and another
7.5% to forfeiture if the price does not appreciate at least 100%.
Additionally, BRCC’s founders and management team share our belief
in partnership and are subjecting 20 million shares to forfeiture
if the same return thresholds are not achieved. Lastly,
SilverBox-Engaged’s principals will donate more than 430,000
shares, or $4.3 million at $10 per share to the BRCC Fund,
reflecting our support for BRCC’s mission to hire and support
veterans and first responders.
- A FUNDAMENTALLY STRONG COMPANY WITH RECURRING REVENUE AND
SIGNIFICANT GROWTH POTENTIAL. BRCC is a digitally native,
omni-channel business that is serving a loyal customer base in a
massive addressable market. With projected revenues of more than
$230 million in 2021 and $311 million in 2022, we believe BRCC
already has the right foundation for sustainable growth. The
Company benefits from a proven management team, high consumer
loyalty, a relentless focus on execution and a mission-driven
philosophy that resonates with a growing number of coffee drinkers.
Further, with a capital efficient financial model, attractive gross
margins, and significant white space in targeted geographic
markets, we expect that BRCC will be able to sustain meaningful
revenue growth while continuing to pragmatically expand operations
across high-potential regions.
- INNOVATIVE INSTITUTIONAL EXECUTION. With our partners at
Engaged Capital, we have created an innovative backstop structure
that eliminates the risk of a successful closing to both BRCC and
our existing investors. With up to $300 million of capital
committed through a PIPE and backstop, the minimum cash condition
that we agreed to with the Company is already met. Engaged Capital
has committed $100 million to this structure to provide significant
institutional leadership. Therefore, BRCC will have sufficient
capital to support the growth plans laid out in the Company’s
roadshow.
After completing months of due diligence, we have significant
conviction in the quality of this opportunity. We look forward to
having you join us in this investment, which presents a compelling
opportunity to realize attractive financial returns while
supporting our military, veterans and first responders.
On behalf of the entire SilverBox-Engaged team, we thank you for
your partnership and support.
Sincerely,
Joe Reece Executive Chairman
Steve Kadenacy Chief Executive Officer
***
About SilverBox Engaged Merger Corp I and SilverBox
Capital
SilverBox Engaged Merger Corp I (“SBEA” or “SilverBox-Engaged”)
is a special purpose acquisition company (“SPAC”) formed as a part
of a long-term vision shared by SilverBox Capital LLC and Engaged
Capital LLC to create an institutional platform intended to sponsor
a series of SPACs. SBEA completed its $345 million initial public
offering in March 2021 and its stock currently trades on NASDAQ
under the ticker “SBEA.” The SilverBox-Engaged team, together with
a robust advisory group of well-known seasoned operating executives
from varied industries, provides collective multi-faceted
expertise, investing and operating experience, and a broad network
of relationships to source, evaluate, and execute potential
transactions. Learn more at www.sbcap.com.
About Engaged Capital
Engaged Capital, LLC (“Engaged Capital”) is an investment
advisor with a private equity-like investing style in the U.S.
public equity markets. Engaged Capital seeks to help build
sustainable businesses that create long-term shareholder value by
engaging with and bringing an owner’s perspective to the
managements and boards of undervalued public companies and working
with them to unlock the embedded value within their businesses.
Engaged Capital manages approximately $1.5 billion of institutional
capital with a focus on delivering superior, long-term,
risk-adjusted returns for our limited partners. Engaged Capital was
established in 2012 and is based in Newport Beach, California.
Learn more at www.engagedcapital.com.
Forward-Looking Statements
Certain statements in this communication are forward-looking
statements. Forward-looking statements generally relate to future
events including future financial or operating performance of
Authentic Brands, LLC (the “Company”) or SBEA. Forward-looking
statements generally relate to future events or SBEA’s or the
Company’s future financial or operating performance. For example,
projections of future revenue and other metrics are forward-looking
statements. In some cases, you can identify forward-looking
statements by terminology such as “may”, “should”, “expect”,
“intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”,
“potential” or “continue”, or the negatives of these terms or
variations of them or similar terminology. Such forward-looking
statements are subject to risks, uncertainties, and other factors
that could cause actual results to differ materially from those
expressed or implied by such forward-looking statements.
These forward-looking statements are based upon estimates and
assumptions that, while considered reasonable by SBEA and its
management, and the Company and its management, as the case may be,
are inherently uncertain and are inherently subject to risks,
variability and contingencies, many of which are beyond the
Company’s control. Factors that may cause actual results to differ
materially from current expectations include, but are not limited
to: (1) SBEA’s ability to complete the business combination; (2)
the outcome of any legal proceedings that may be instituted against
SBEA, the combined company or others following the announcement of
the business combination and any definitive agreements with respect
thereto; (3) the inability to complete the business combination due
to the failure to obtain approval of the stockholders of SBEA, to
obtain financing to complete the business combination or to satisfy
other conditions to closing; (4) changes to the proposed structure
of the business combination that may be required or appropriate as
a result of applicable laws or regulations or as a condition to
obtaining regulatory approval of the business combination; (5) the
ability to meet stock exchange listing standards following the
consummation of the business combination; (6) the risk that the
business combination disrupts current plans and operations of the
Company as a result of the announcement and consummation of the
business combination; (7) the ability to recognize the anticipated
benefits of the business combination, which may be affected by,
among other things, competition, the ability of the combined
company to grow and manage growth profitably, maintain key
relationships and retain its management and key employees; (8)
costs related to the business combination; (9) changes in
applicable laws or regulations; (10) the possibility that the
Company or the combined company may be adversely affected by other
economic, business, and/or competitive factors; (11) the Company’s
estimates of expenses and profitability; (12) the failure to
realize anticipated pro forma results or projections and underlying
assumptions, including with respect to estimated stockholder
redemptions, purchase price and other adjustments; and (13) other
risks and uncertainties set forth in the section entitled “Risk
Factors” and “Cautionary Note Regarding Forward-Looking Statements”
in SBEA’s final prospectus relating to its initial public offering
dated February 25, 2021, in the registration statement on Form S-4
(the “Form S-4”) relating to the business combination to be filed
with the Securities and Exchange Commission (“SEC”), and in
subsequent filings with the SEC, including the final
prospectus/proxy statement relating to the business combination.
There may be additional risks that neither SBEA nor the Company
presently know or that SBEA and the Company currently believe are
immaterial that could also cause actual results to differ from
those contained in the forward-looking statements.
Nothing in this communication should be regarded as a
representation by any person that the forward-looking statements
set forth herein will be achieved or that any of the contemplated
results of such forward-looking statements will be achieved. You
should not place undue reliance on forward-looking statements,
which speak only as of the date they are made. Neither SBEA nor the
Company undertakes any duty to update these forward-looking
statements or to inform the recipient of any matters of which any
of them becomes aware of which may affect any matter referred to in
this communication.
Additional Information about the Proposed Business
Combination and Where to Find It
This communication is being made in respect of the proposed
transaction involving SBEA and the Company. In connection with the
proposed business combination, the Form S-4 is expected to be filed
by a newly-formed holding company (“PubCo”) with the SEC that will
include a proxy statement of SBEA and that will also include a
prospectus of PubCo. SBEA’S STOCKHOLDERS AND OTHER INTERESTED
PERSONS ARE ADVISED TO READ, WHEN AVAILABLE, THE FORM S-4,
INCLUDING THE PRELIMINARY PROXY STATEMENT/PROSPECTUS AND THE
AMENDMENTS THERETO AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS
AND OTHER DOCUMENTS FILED IN CONNECTION WITH THE PROPOSED BUSINESS
COMBINATION, AS THESE MATERIALS WILL CONTAIN IMPORTANT INFORMATION
ABOUT SBEA, PUBCO, THE COMPANY AND THE PROPOSED BUSINESS
COMBINATION. This communication does not contain all the
information that should be considered concerning the proposed
business combination and is not intended to form the basis of any
investment decision or any other decision in respect of the
business combination. When available, the definitive proxy
statement/prospectus and other relevant materials for the proposed
business combination will be mailed to stockholders of SBEA as of a
record date to be established for voting on the proposed business
combination. Stockholders will also be able to obtain copies of the
preliminary proxy statement/prospectus, the definitive proxy
statement/prospectus and other documents filed with the SEC,
without charge, once available, at the SEC’s website at
www.sec.gov.
Participants in the Solicitation
SBEA, PubCo and their respective directors and executive
officers may be deemed participants in the solicitation of proxies
from SBEA’s stockholders with respect to the proposed business
combination. A list of the names of those directors and executive
officers and a description of their interests in SBEA is contained
in SBEA’s final prospectus related to its initial public offering
dated February 25, 2021, which was filed with the SEC and is
available free of charge at the SEC’s website at www.sec.gov.
Additional information regarding the interests of such participants
will be contained in the proxy statement/prospectus for the
proposed business combination when available.
The Company and its directors and executive officers may also be
deemed to be participants in the solicitation of proxies from the
stockholders of SBEA in connection with the proposed business
combination. A list of the names of such directors and executive
officers and information regarding their interests in the proposed
business combination will be included in the proxy
statement/prospectus for the proposed business combination that
will be filed on Form S-4 when available.
No Offer or Solicitation
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities, or a solicitation
of any vote or approval, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of section 10 of the Securities Act, or an exemption
therefrom.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211102005685/en/
MKA Greg Marose / Charlotte Kiaie, 646-386-0091
gmarose@mkacomms.com / ckiaie@mkacomms.com
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