Nerdy (US:NRDY)2021-02-16 21:16Financial Proceeds and Business Combination - The company completed an initial public offering of 45,000,000 units at a price of $10.00 per unit, generating gross proceeds of $450,000,000 before underwriting discounts and expenses [20]. - The total gross proceeds from the public offering and the sale of private placement warrants amounted to $461,000,000, with $450,000,000 deposited in a trust account [21]. - The company has available funds for a business combination amounting to $484.25 million, assuming no redemptions and after payment of $15.75 million in deferred underwriting fees [66]. - The company intends to complete its business combination using cash from the public offering, private placement warrants, and forward purchase securities, with flexibility in using cash, debt, or equity [67]. - The anticipated cash consideration for the business combination may require cash to be paid to the target or its owners, which could exceed the available cash, potentially preventing the completion of the business combination [96]. - The amount in the Trust Account is initially expected to be approximately $10.00 per public share, with redemption rights allowing shareholders to redeem their shares at this price [95]. - If the Business Combination is not completed, the redemption amount per share is expected to be approximately $10.00, but may be less due to creditor claims [117]. - The company will redeem Public Shares at a per-share price equal to the aggregate amount in the Trust Account, minus up to $100,000 for dissolution expenses [112]. - The company expects to fund dissolution costs from the $1,100,000 proceeds held outside the Trust Account, plus up to $100,000 from the Trust Account [116]. - The company has access to up to $1,100,000 from the Public Offering proceeds to cover potential claims, with estimated liquidation costs around $100,000 [122]. Business Combination Strategy and Management - The proposed business combination is based on an enterprise value of $1,250,000,000, subject to certain debt-related adjustments [27]. - The company is expected to contribute approximately $265 million in cash to Nerdy at the closing of the proposed business combination [28]. - Following the closing, the company is anticipated to own approximately 60% of the OpCo Units and 90% of the OpCo Warrants [28]. - The company intends to seek a business combination in the technology industry that complements its management team's expertise and experience [32]. - The management team will leverage its extensive network of industry contacts to identify acquisition opportunities [33]. - The acquisition strategy focuses on technology, media, and business services sectors, targeting companies that can leverage technology for operational improvements [40]. - The company intends to acquire businesses that are at an inflection point, requiring management expertise and innovation to drive financial performance [40]. - The management team has developed a broad network of contacts that will provide substantial acquisition opportunities [54]. - The company will evaluate potential targets based on their ability to generate attractive returns and sustainable competitive advantages [44]. - The management team will seek to identify and unlock value in target companies through operational improvements and strategic initiatives [44]. Due Diligence and Approval Process - The acquisition process will involve thorough due diligence, including meetings with management, document reviews, and financial assessments [42]. - The business combination agreement is subject to various closing conditions, including shareholder approvals, which are expected to be sought in the second quarter of 2021 [30]. - Shareholder approval will be sought if required by law or stock exchange rules, and the decision to seek approval will be based on various business and legal factors [86]. - The company may conduct redemptions either through a general meeting or a tender offer, depending on the circumstances surrounding the business combination [97]. - To approve the business combination, approximately 37.5% of the 45,000,000 public shares, or 16,875,001 shares, must be voted in favor [99]. Regulatory and Compliance Considerations - The company is required to file periodic reports with the SEC, ensuring transparency and compliance with reporting obligations [136]. - The company has no current intention to suspend its reporting obligations under the Exchange Act prior to or after the Business Combination [137]. - The company’s Sponsor may not have sufficient assets to satisfy indemnity obligations related to claims against the Trust Account [134]. - The company will file audited financial statements as part of the proxy statement/prospectus for shareholders regarding the Proposed Business Combination [138]. - The company is classified as an "emerging growth company" and is eligible for certain exemptions from reporting requirements, including auditor attestation requirements [141]. - The company will remain an emerging growth company until it has total annual gross revenue of at least $1.07 billion or issues more than $1.0 billion in non-convertible debt securities within a three-year period [144]. Risks and Challenges - The company may face risks associated with pursuing a business combination with financially unstable or early-stage companies [78]. - The company may face intense competition from other entities, including private equity groups and other blank check companies, which may limit acquisition opportunities [128]. - TPG, the sponsor, may have conflicts of interest as it manages multiple investment vehicles that could compete for similar acquisition targets [129]. - The company may pursue acquisitions that do not meet all established criteria if deemed beneficial, with disclosures made to shareholders [41]. - The company has not engaged in any operations or generated any revenues as of December 31, 2020 [348]. - The company does not expect to have material exposure to interest rate risk due to the short-term nature of its investments in money market funds [348]. - The company has not engaged in any hedging activities since its inception and does not expect to do so in the future [350]. Redemption and Shareholder Rights - The company will not redeem public shares in an amount that would cause net tangible assets to fall below $5,000,001, to avoid being subject to the SEC's "penny stock" rules [96]. - The company’s initial shareholders have agreed to waive their redemption rights concerning their Founder Shares and any Public Shares in connection with the business combination [95]. - Public shareholders are restricted from seeking redemption rights for Excess Shares if they hold more than 15% of shares sold in the Public Offering [103]. - The company has 24 months from the Close Date to complete its Business Combination, or it will cease operations and redeem Public Shares [112]. - The company may require public shareholders to tender their certificates to exercise redemption rights [105]. - The redemption process includes a nominal cost of approximately $80.00 for tendering shares, which may be passed on to redeeming holders [107]. - Initial Shareholders have waived their rights to liquidating distributions from the Trust Account for Founder Shares if the Business Combination is not completed within 24 months [114].