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Act II Global Acquisition Corp. Announces Shareholder Approval of Business Combination
June 24 2020 - 10:46PM
Company to be renamed Whole Earth Brands, Inc., and its shares of common stock and warrants are expected to begin to trade on Nasdaq under the symbols FREE and FREEW on June 25, 2020
The business combination was approved by Act II’s shareholders and warrant holders at the reconvened meetings held on June 24, 2020, and it is expected to close on June 25, 2020
Act II Global Acquisition Corp. (NASDAQ: ACTT) (“Act II”), a special purpose acquisition company, announced that it held the reconvened meetings of shareholders and warrant holders today, June 24, 2020, and approved all proposals, including the business combination with Merisant Company (“Merisant”) and MAFCO Worldwide LLC (“MAFCO”).
The business combination proposal and each of the other proposals voted on at the shareholder and warrant holder meetings were approved. Approximately 95% of the votes cast at the shareholder meeting were in favor of all of the proposals presented at such meeting, and holders representing more than 73% of the outstanding public warrants approved the warrant amendment, which is described further below. Act II will be renamed Whole Earth Brands, Inc., and its shares of common stock and warrants are expected to begin trading on Nasdaq under the symbols FREE and FREEW, respectively, on June 25, 2020. The parties expect the closing of the business combination to occur on June 25, 2020.
As a result of the warrant amendment, which is expected to be effective prior to trading on June 25, 2020, each of Act II’s outstanding warrants, which currently entitle a holder to purchase one Class A share of Act II at an exercise price of $11.50 per share, will become exercisable for one-half share of common stock of Whole Earth Brands, Inc. at an exercise price of $5.75 per one-half share. Each public warrant issued and outstanding immediately prior to the warrant amendment shall automatically be entitled to receive a cash distribution in the amount of $5.75 per such public warrant. The warrants are expected to reflect the amended terms when trading commences on June 25, 2020.
”We are pleased to announce this important milestone toward completing the business combination and to see the overwhelming support of our shareholders, which reflects the strategic value and growth opportunity inherent in Whole Earth Brands. The Company will now have the capital, along with the team and the brands to extend our industry leadership and capitalize on the powerful consumer trends toward zero and no-sugar-added products across the globe.” commented Irwin Simon, Executive Chairman of Act II. “All of us at Whole Earth Brands are excited to accelerate growth and drive long-term value for our shareholders.”
Shareholders holding an aggregate of 26,426,669 Class A common shares (approximately 88% of the Class A common shares) chose not to exercise their right to redeem such public shares for a pro rata portion of Act II’s trust account.
About Act II Global Acquisition Corp.
Act II is a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses that completed its initial public offering in April 2019. Act II focuses on companies in the “better for you” sectors, such as consumer packaged goods and other consumables as well as hospitality, including restaurants. The Company is led by 25-year organic and natural products industry visionary Irwin D. Simon, Executive Chairman.
About Whole Earth Brands
Following the closing, the combined company will be rebranded as Whole Earth Brands. Whole Earth Brands will look to expand its branded products platform through investment opportunities in the natural alternatives and clean label categories across the global consumer product industry. Over time, Whole Earth Brands will look to become a portfolio of brands that Open a World of Goodness™ to consumers and their families. Whole Earth Brands expects to list on the NASDAQ stock exchange in connection with the closing. www.wholeearthbrands.com
Forward Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements, such as projected financial information, may be identified by the use of words such as “forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,” “will,” “expect,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include statements about our beliefs and expectations contained herein. Such forward-looking statements with respect to strategies, prospects and other aspects of the businesses of Merisant and MAFCO, Act II or the combined company after completion of the business combination are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those expressed or implied by such forward-looking statements.
These factors include, but are not limited to: (1) potential adverse effects of the ongoing global COVID-19 pandemic; (2) the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement with respect to the business combination; (3) the outcome of any legal proceedings that may be instituted against Act II, the combined company or others following the announcement of the business combination and the definitive agreement with respect thereto; (4) the inability to complete the business combination due to the failure to obtain financing to complete the business combination or to satisfy conditions to closing in the definitive agreements with respect to the business combination; (5) 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; (6) the ability to comply with Nasdaq listing standards following the consummation of the business combination; (7) the risk that the business combination disrupts current plans and operations of Merisant and/or MAFCO as a result of the announcement and consummation of the business combination; (8) 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 relationships with suppliers, obtain adequate supply of products and retain its management and key employees; (9) costs related to the business combination; (10) changes in applicable laws or regulations; (11) the possibility that Merisant, MAFCO or the combined company may be adversely affected by other economic, business, and/or competitive factors; (12) the inability to achieve estimates of expenses and profitability; (13) the impact of foreign currency exchange rates and interest rate fluctuations on results; and (14) other risks and uncertainties indicated from time to time in the definitive proxy statement/prospectus of Act II, including those under “Risk Factors” therein, and other documents filed (or furnished) or to be filed (or furnished) with the Securities and Exchange Commission by Act II. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Merisant, MAFCO and Act II undertake no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200624005876/en/
Scott Van Winkle / Cory Ziskind
ICR
646-277-1200
scott.vanwinkle@icrinc.com; cory.ziskind@icrinc.com
A Potential 100% Upside
Link:
https://seekingalpha.com/article/4355665-act-ii-global-acquisition-potential-100-upside?utm_source=otcmarkets&utm_medium=referral
Act II Global Acquisition is a blank check company led by the founder of Hain Celestial Company.
It has a plan to merge with Merisant and MAFCO Worldwide to create Whole Earth Brands at a relatively low valuation.
The combined company's share price might be worth $18.60 per share, while its warrant could have 100% upside potential.
Act II Global Acquisition Corporation (NASDAQ:ACTT) has been quite volatile in the past few weeks. Since June 2020, its share price has fluctuated between $10.10 and $11.22, and its warrants have stayed in the range of $1-2.5. The upcoming acquisition of Merisant Company and MAFCO Worldwide, which would become Whole Earth Brands, would give Act II a lot of potential upside.
Strong management team
One of the most critical success factors for SPACs (special purpose acquisition companies) is their management team. What we like about Act II is its strong management team with outstanding business records. Irwin D. Simon, the executive chairman of Act II, has more than 30 years of global business experience. He was the founder of The Hain Celestial Group (NASDAQ:HAIN), the leading company in natural and organic food, beverage, and personal care products. Irwin Simon has run Hain Celestial for more than 25 years, growing the company to $3 billion in net revenue by 2018. He is also currently the chairman and CEO of Aphria (APHA), one of the largest global cannabis companies in the world. However, he does not own any shares in the SPACs. John Carroll, Act II's CEO, also has tremendous experience with food business globally. John has spent 14 years with Hain Celestial in various positions and departments, including groceries, snacks, personal care, and seasonings. Previously, he was with Heinz Frozen Foods, The Hershey Company (NYSE:HSY), and Church & Dwight (NYSE:CHD). John Carrol owns 100% of 7.5 million class B shares of Act II.
Relatively undervalued merger multiple
Act II has entered into an agreement to acquire Merisant and MAFCO Worldwide to create Whole Earth Brands, a global platform of branded products and ingredients for consumers. Merisant, the new company’s Branded Consumer Packaging Goods (Branded CPG) segment is considered the global supplier of sugar substitutes and natural sweeteners with several leading brands, including Equal and Canderel, Whole Earth and PureVia. Canderel and Equal are the two most famous brands, with brand awareness levels of 81-95% in the U.S., U.K., France, Australia, and South Africa.
Source: Whole Earth Brands presentation
In 2019, the Branded CPG generated nearly $166 million in net sales. In the first quarter, its sales dropped by 3.2% year-over-year, from $41.5 million to $40.2 million, due to COVID-19’s negative impact. However, in April, sales have picked up substantially, up 21% year over year from $12.8 million in April 2019 to $15.5 million in April 2020.
On the other hand, MAFCO, the Flavors & Ingredients segment of the new company, has a strong global position in natural licorice extract and licorice derivative products. What we like about the business is the long-term relationship of more than a decade with its big customers, including Altria (NYSE:MO), Hershey, Mondelez International (NASDAQ:MDLZ), and Haribo. Several of its top 10 customers have been buying its licorice products for more than half a century. The Flavors & Ingredients segment has been down a lot, due to the declining sales in International Tobacco. Its net revenue has decreased by 10.4% in the first quarter and 7.5% in April. Without International Tobacco’s negative sales impact, its revenue should have grown by 0.9% in the first quarter and 14.3% in April.
The Flavors & Ingredients segment is more profitable, with its EBIT margin three times as high as the Branded CPG segment’s EBIT margin. However, Branded CPG seems to be more efficient over time, growing EBIT from negative $3.8 million in 2017 to $10.4 million in 2019.
Source: Author’s table & Whole Earth Brands presentation
By 2020, Whole Earth Brands (the combined company) is expected to generate $270 million-$290 million in revenue, representing a low- to mid-single-digit sales growth. Its expected EBITDA is estimated to be between $63 million and $67 million, with margins staying the range of 23-25%.
The merger between Act II and Merisant and MAFCO would result in an enterprise value of $439 for the company, including $390 million in equity value and $49 million in net debt. If we assume the 2020 adjusted EBITDA would reach $65 million, the deal values the combined company (Whole Earth Brands) at roughly 6.75x EBITDA. Compared to other companies including McCormick (NYSE:MKC) and Post Holdings (NYSE:POST), Whole Earth Brands seems to be quite cheap.
Source: Whole Earth Brands presentation
A potential 81-100% upside
If Whole Foods Brands were valued at the median enterprise value multiple of 11.9x, it should be worth $773.5 million. With pro forma shares outstanding of 39 million and net debt of $49 million, Act II's share price should be worth $18.6 per share after the merger, 81% upside from the current trading price.
Investors might consider investing in the warrants. Act II is proposing to adjust the warrant terms as follows:
Proposal No. 1 - The Warrant Amendment Proposal - To consider and vote upon an amendment (the “Warrant Amendment”) to the warrant agreement that governs all of Act II’s outstanding warrants to provide that, immediately prior to the consummation of the Business Combination (as defined in the accompanying proxy statement/prospectus), (i) each of Act II’s outstanding warrants, which currently entitle the holder thereof to purchase one Act II Class A Share at an exercise price of $11.50 per share, will become exercisable for one-half of one share at an exercise price of $5.75 per one-half share ($11.50 per whole share), and (ii) each holder of a warrant will receive, for each such warrant, a cash payment of $0.75 (although the holders of the private placement warrants have waived their rights to receive such payment) (the “Warrant Amendment Proposal”)
If this warrant amendment is approved, each warrant will receive $0.75 in cash payment, but warrant holders would need two warrants to exercise the right to buy one share.
$
One share value
18
Half share value
9
Exercise price
5.75
One warrant value
3.25
Cash payment
0.75
One warrant worth
4
Source: Author’s table
Act II could redeem the warrants when the common share is trading at least $18 for 20 out of 30 trading days. If the common share is trading at $18 per share, each warrant would be worth roughly $4, 100% from the current trading price at $2.
Thank you, sir.
Hi... I asked them earlier and think we will probably see it by the open tomorrow jaj-dan... GLTU
Whole Earth Brands $FREE
So will they change the name of this board or is there a new one? Thank you
Is the warrant price drop related to the .75 payout coming or did it also drop in trading?
Haha. FreeSeas was garbage. Had that one a long time ago
Yahoo has the symbol correct, but the name wrong as it used to belong to another company: FreeSeas Inc. (FREE)
shown as $FREEW on Etrade this morning.
When do we get the extra money for the warrants
5.75 would’ve been a super deal hahaha
It was in the new section here on ihub a new artical has corrected it with the correct amount of $0.75
I think that is a typo as well. As I heard $0.75. But where was this copied from? If it's from their SEC filings, then they're locked into literally $5.75.
I believe it is a typo 5.75 is for one half when exercising the warrant .75 is the cash distribution share
This is what I just found. I’m curious what my account looks like tomorrow after the changes.
Am I reading this wrong, or will you get $5.75 cash for every warrant you held prior to today then be able to convert 2 warrants for one share for $11.50 basically?
As a result of the warrant amendment, which is expected to be effective prior to trading on June 25, 2020, each of Act II’s outstanding warrants, which currently entitle a holder to purchase one Class A share of Act II at an exercise price of $11.50 per share, will become exercisable for one-half share of common stock of Whole Earth Brands, Inc. at an exercise price of $5.75 per one-half share. Each public warrant issued and outstanding immediately prior to the warrant amendment shall automatically be entitled to receive a cash distribution in the amount of $5.75 per such public warrant. The warrants are expected to reflect the amended terms when trading commences on June 25, 2020.
The business combination of Act II Global Acquisition Corp. ( $ACTT /W/U) and Whole Earth Brands, Inc. is expected to be completed prior to the open of business on Thursday, June 25, 2020. New company to trade under ticker $FREE
As far as the warrant vote, is each now = 1/2 share plus 75 cents of compensation?
Can't remember if that is correct.
$ACTT
Check out this large merger play, that IMO, is looking stellar. Whole Earth Brands will be voting on merging with $ACTT later today and will most likely go through. I'm hearing 52% so far. It looks like they have created a new management team and want to rapidly expand through this merger.
Whole Earth Brands has two main brands Marisant and Mafco. Marisant mainly makes artificial sweeteners, including freaking Equal (yes, that Equal at every coffee shop) and many other stevia based products. They also produce baby foods (I've used their formula, two thumbs up) dog food and many others as well having multiple legit subsidiaries.
Mafco is a licorice producer used by many large corporate partners including Hershey, etc.
Whole Earth products are sold all over....Walgreens, Costco, Amazon, Wal Mart etc etc And is a rapidly growing market, especially with the explosion of keto diets. The only tiny negative I see is a slight decrease in revs/profits the last three years, but I think that is the reason for the merger and expansion.
Per the CEO: Mr. Simon commented, “We are excited to create Whole Earth Brands, a global, industry leading platform, focused on on-trend food products and ingredients. We are in the early stages of the global secular consumer shift away from sugar and increased emphasis on natural ingredients and clean labels. Whole Earth Brands will be uniquely positioned as a global player addressing this sizeable opportunity and will provide a strong foundation for robust organic growth and future strategic acquisitions. Our brands, significant free cash flow and the highly accomplished leadership team combined with our public listing and flexible balance sheet will allow us to reinvest in the business in a way that has not been done before and execute an accelerated growth strategy, driving long-term shareholder value.”
Whole Earth had 2019 sales of 272M and 108M in profits! With only roughly 40M outstanding shares and a tiny market cap of roughly 440M, this is looking very undervalued IMO. Actually not very, this is looking CRAZILY undervalued right now. If approved it could be trading on the Nasdaq by Friday (so I hear).
This has only ran about 10% since the merger news and over all the deal is very cheap, so has plenty of room to run IMO.
Some quick DD:
http://www.equal.com/
Large block buy at close:
https://twitter.com/Richard29…/…/1275546410507808769/photo/1
Amazon products/reviews:
https://www.amazon.com/s…
Investor Presentation, which is very in depth:
https://static1.squarespace.com/…/Whole+Earth+Brands+Invest…
Disclosure: I own shares of $ACTT
Thanks SilverNight..I'll read up again on the filings.
You can. I don't remember the redemption details.
Yes they did, lol
Can I still buy ACTTW tomorrow. Can we hold the warrants for some time or is there any date by which we need to convert to the Common shares? TIA & GLTU!
Retail investors are sleepin on this.
You might get one more chance in the tens tomorrow
Great move for sure...Thinking of adding more here in the AH? $ACTT
Nice late day move vote tomorrow
Seems no one sees value in this SPAC,.... hmmm, I’m going large Monday!!!!
I think it will this week as it will have the vote/merger catalysts coming up... They already have the votes to pass it 52.1%
I wish our football SPAC would get some of that premium
I bought some commons today. I would usually buy warrants but they seem overpriced at the moment
Shareholder vote on Wednesday June 24th.
Shares trading for about redeem cash??? Very strange $ACTT
Vote next week also
ACTT $13 Target price today this stock is looking like a rocket ship
Whole Earth Brands is projecting Free Cash Flow margins of 23.2% in 2020
I like the sound of that weed....
ACTT $20 TARGET PRICE
Set up for huge growth here...
Whole Earth Brands Investor Presentation
Investor Presentation
https://static1.squarespace.com/static/5dfba23f489186009e7a03e4/t/5ee8b608f156dc620d24bc22/1592309262747/Whole+Earth+Brands+Investor+Presentation+June+2020.pdf
Do you have any info on whole earth brands?
Warrants looking great here $ACTT $ACTTW
$ACTT $ACTTW Act II Global Acquisition Corp. Amends Terms to Purchase Agreement and Receives Unanimous Consent from Private Placement Investors
Business is benefitting from a favorable and accelerating consumer shift away from sugar and towards natural, with the category growing at high-single to double-digit rates in key markets and business gaining share
Amended transaction terms reflect an improved valuation of 6.75x pro forma adjusted 2020 EBITDA1 compared to 7.9x under the transaction terms announced in May 2020
Following the transaction close, reflecting the revised transaction terms, anticipated net leverage will decrease to 0.8x from 1.4x under the transaction terms announced in May 2020 providing incremental capacity to support accelerated growth and future acquisitions
Investors reaffirm previously announced $75 million private placement with unanimous consent
The transaction is expected to close before the end of June 2020
June 16, 2020 08:00 AM Eastern Daylight Time
NEW YORK & CHICAGO--(BUSINESS WIRE)--Act II Global Acquisition Corp. (NASDAQ: ACTT) (“Act II”), a special purpose acquisition company, announced today that it entered into an agreement on June 15, 2020 (the “Amendment”) to revise certain terms of its previously announced purchase agreement with certain affiliates of MacAndrews & Forbes Incorporated (the “Sellers”) related to the proposed purchase of the business and operations of Merisant Company (“Merisant”) and MAFCO Worldwide LLC (“MAFCO”).
“The overwhelming support of our private placement investors reflects the strength of the company’s underlying businesses and the attractive valuation and positioning of our business combination.”
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Act II has received unanimous support of its investors in the $75 million private placement announced on February 12, 2020. The private placement, which is set to close concurrently with the proposed business combination, is expected to support the combined company with an improved leverage profile and enhanced cash position to execute the growth strategy of Whole Earth Brands.
Under the terms of the amended purchase agreement, the transaction is now valued at approximately $439 million1 at closing, as compared to approximately $516 million in the agreement announced in May 2020. The purchase price adjustment reflects a $77.5 million reduction in transaction value at closing, primarily driven by a purchase price reduction, reduction in fees and expenses, and additional sponsor shares being placed in escrow with a $20 per share hurdle.1
Irwin Simon, Executive Chairman of Act II, commented, “The more time I have spent with the company, the management and the products, the more excited I am to build the next natural food and ingredient giant. The company’s global portfolio of brands are synonymous with the rapidly growing zero and no-sugar-added global market and have achieved broad distribution and consumer recognition across channels, retailers and food service operators around the globe. Consumers recognize and trust the company’s brands, such as Whole Earth, Pure Via, Canderel, Equal and Magnasweet. Further, the company’s capabilities and product development have established decades long ingredient relationships with some of the largest companies in the world. The company has built established industry leadership that is on-point with consumer demand and is driving high levels of brand awareness and respected market expertise. I am excited for the opportunity that lies ahead, delivering continued growth and incremental opportunities across the natural and healthy products market. I believe the company is well positioned to support and capitalize on the powerful macro forces driving consumer demand across the globe.”
Added Simon, “The overwhelming support of our private placement investors reflects the strength of the company’s underlying businesses and the attractive valuation and positioning of our business combination.”
Albert Manzone, who will be the Chief Executive Officer of Whole Earth Brands commented, “From the time I joined MacAndrews and Forbes in 2016, I have worked to position the company to benefit from growth capital. We have an experienced, professional and global team, which looks forward to the opportunity to perform for our shareholders. The global move away from sugar is a mega trend that will play out for years. The move towards natural and flavored ingredients is also a significantly growing trend that is reshaping the global consumer packaged goods landscape. During 2020, our performance is accelerating due to favorable consumer behavior shifts towards no-sugar products and plant-based natural products, each supporting our long-term growth. Across all of our key markets, the sweetener category is growing high-single digits to double-digits with our CPG branded business at the forefront of the growth and gaining market share. There is tremendous operating leverage within the Whole Earth Brands platform. We could not be more excited to join forces with Irwin and the Act II team. We believe that this transaction will unlock the full potential of the companies we have built.”
Immediately following the closing of the proposed business combination and assuming no redemptions, the Company expects 39.0 million shares2 of Whole Earth Brands, Inc. common stock, inclusive of those shares issuable to the private placement investors, to be issued and outstanding.
The minimum cash in trust requirement of the transaction has been reduced to $153 million from $210 million, reflecting the reduced cash needs driven primarily by the reduction in purchase price.
The closing of the private placement is conditioned on the substantially concurrent closing of the business combination.
The extraordinary general meeting of the shareholders and the special meeting of the public warrant holders will be reconvened on Wednesday, June 24, 2020, at 3:30 p.m. ET and 3:00 p.m. ET, respectively. The record date remains May 1, 2020. Act II has also extended the deadline by which holders of its Class A ordinary shares may submit such shares for redemption until Monday, June 22, 2020, at 5:00 p.m. ET (two business days prior to the vote at the reconvened extraordinary general meeting), in accordance with the procedures described in the definitive proxy statement/prospectus.
1At closing and assuming no redemptions and ACTT share price of $10.00 per share.
2Excludes 3.0 million shares issued to the Act II’s sponsor that will be held in escrow. For more details on the escrow terms please refer to the definitive proxy statement/prospectus of Act II filed with the SEC.
About Act II Global Acquisition Corp.
Act II is a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses that completed its initial public offering in April 2019. Act II focuses on companies in the “better for you” sectors, such as consumer packaged goods and other consumables as well as hospitality, including restaurants. The Company is led by 25-year organic and natural products industry visionary Irwin D. Simon, Executive Chairman.
About Whole Earth Brands
Following the closing, the combined company will be rebranded as Whole Earth Brands. Whole Earth Brands will look to expand its branded products platform through investment opportunities in the natural alternatives and clean label categories across the global consumer product industry. Over time, Whole Earth Brands will look to become a portfolio of brands that Open a World of Goodness™ to consumers and their families. Whole Earth Brands expects to list on the NASDAQ stock exchange in connection with the closing. www.wholeearthbrands.com
ACTT dip today. Good chance to grab some warrants.
ACT Teleconf reaffirms Whole Earth Brands transaction with revised transaction terms; Transaction expected to close in June 2020
ACTTW merger with Whole Earth Brands. This one looks like it could have some potential to run. Picked up a starter of 300 warrants at $1.42.
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