Dealwatch: Magic Circle Companies Strike £ 3bn As Advisory Recreation For $ 1.5Bn Genius Sports activities Deal
There has been an abundance of significant transactions this week as advisors seek to capitalize on the opportunities offered by the coronavirus business environment.
Most noticeable was the sale of Kazakhstan and London-listed copper company KAZ Minerals for £ 3 billion to Nova Resources and Special Purpose Acquisition Company (SPAC) dMY Technology Group Inc. II as part of its agreement to merge with Genius Sports in the UK Group (GSG).
In the latter deal, SPAC, listed on the New York Stock Exchange, and GSG, a data and technology company for the sports, betting and media industries, achieved an implied stock valuation of £ 1.5 billion.
GSG and dMY II shareholders will exchange their respective shares for shares in a new combined company, NewCo, which will be listed on the NYSE. The deal also includes a group of institutional and seasoned industry investors who are committed to participating through a private common stock investment in public equity (PIPE) funding of approximately $ 330 million at $ 10 per share.
The combined company is expected to have approximately $ 150 million in growth capital and a largely debt-free balance sheet to accelerate expansion through organic growth and strategic acquisitions.
Kirkland & Ellis advised Genius Sports with a transatlantic team that included New York partners Edward Lee, Abhishek Kolay and Srinivas Kaushik, London partners Rory Mullarkey and Aprajita Dhundia, supported by Chicago partner Richard Campbell.
Macfarlanes advised GSG’s senior management team with a team led by corporate and M&A partner Howard Corney and tax partners Mark Hunter and Rob Collard.
A cross-border White & Case team advised the SPAC, dMY Technology Group Inc. II, headed by partners Joel Rubinstein and Jonathan Rochwarger in New York and Tali Sealman in Silicon Valley. The team also included capital market partner Era Anagnosti in Washington DC and a London contingent of M&A partners Ian Bagshaw and Richard Jones.
This is the second SPAC founded by Niccolo de Masi and Harry You. White & Case also advises the first dMY Technology Group on the upcoming $ 1.78 billion combination with Rush Street Interactive, a fast growing online casino and sports betting company in the US.
White & Case’s Bagshaw told Legal Business, “The most important thing to us is that this is part of the ‘SPAC attack’. It’s a bit of a War of the Worlds, but there are plenty of SPAC drones approaching European targets as a hybrid of an M&A deal and a quick US IPO.
‘Given the number of SPACs in the market, this will have a profound impact on the European market and take away opportunities for private equity and European exchanges. It’s an emerging threat as a third alternative for midsize businesses with deals valued at £ 500 billion to £ 1 billion. ‘
Bagshaw found that SPACs are attractive because they include US public equity, resulting in US valuation and liquidity, rather than lower European valuation and liquidity.
He also points out challenges related to compressed timeframes for such transactions, where acquisitions must be completed 18 to 24 months after the SPAC is listed or the money must be returned.
‘There is real firepower coming – the US market is saturated so companies are looking to Europe, especially in technology, media, new world economy and Covid accelerated business models. SPACs are changing the way many European companies are doing, ”added Bagshaw.
Earlier this week, London and Kazakhstan-listed copper company KAZ Minerals became the target of Nova Resources, a consortium led by KAZ Minerals Chairman Oleg Novachuk and non-executive director Vladimir Kim, on a £ 3 billion deal .
The transaction brought the city’s elite into effect, with Clifford Chance, Linklaters and Macfarlane’s key roles being entrusted.
CC worked for Nova Holdings with a team led by London corporate partners Tim Lewis and James Bole, including finance partners Nick Kinnersley and Karen Hodson, antitrust partner Jennifer Storey, protection partner William Winterton, and tax, pension and employment partners Sonia Gilbert and Nick Mace belonged. On the left, KAZ Minerals advised with a team led by London-based corporate partner Ian Hunter and senior partner Charlie Jacobs.
In the meantime, Macfarlanes advised the investment bank VTB Capital as financial advisor to Nova Resources with a team led by corporate and M&A partner Robert Boyle. VTB also provided the financing with advice from Macfarlanes partner Kirstie Hutchinson, while derivatives and trading advice was provided by partner Will Sykes.