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Polaris Acquisition Corp., a blank-check company, has agreed to an all-stock deal worth nearly $700 million for private equity-backed automotive telematics company Hughes Telematics Inc.
The deal affords the Atlanta-based target $140 million in working capital, in addition to $90 million already provided by majority owner Apollo Management LP, according to a statement Monday. Apollo, a New York-based private equity firm, will maintain its stake in the target and has agreed, along with management and other shareholders, to a two-year lock-up agreement. Polaris founders have a one-year lock-up. Upon the deal's close, Huges Telematics' shareholders will receive nearly 45 million shares in Polaris common stock, and eligible to obtain 29 million more, based upon meeting specific stock price targets in the next five years. Hughes shareholders will own nearly 65% of the combined company, and the management team is expected to remain in place, the statement said. The deal is the latest by a special purpose acquistion company, formed with the express purpose of acquiring other companies. Some within the industry have warned that the acquisition should be for two to three times the amount the SPAC raised in its offering, or it risks being rejected by SPAC shareholders. Polaris went public in January, raising $150 million. Its current market capitalization is nearly $173 million. - Carolyn Murphy See full story on TheDeal.com See Dealwatch: SPAC attack See Dealscape: SPACs look at gaining shareholder approval CategoriesPrivate capital video
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