Transaction is Expected to Close in the Fourth
Quarter 2020
Combined company is anticipated to trade on the
NASDAQ under the symbol “CLVR"
Joint Webcast Scheduled for Today at 11:00 a.m.
ET
Schultze Special Purpose Acquisition Corp. (NASDAQ: SAMA, SAMAW,
and SAMAU) (“SAMA”) and Clever Leaves International Inc. (“Clever
Leaves” or the “Company”) jointly announced today that they have
entered into a definitive agreement (the “Business Combination
Agreement”), pursuant to which a newly formed holding company,
Clever Leaves Holdings Inc., will acquire SAMA and Clever Leaves
and is anticipated to become a NASDAQ-listed public company trading
under the ticker symbol “CLVR” with an anticipated initial
enterprise value of approximately $255 million.
The transaction has been unanimously approved by the Boards of
Directors of both SAMA and Clever Leaves and is expected to close
in the fourth quarter of 2020, subject to regulatory and
shareholder approvals, as well as other customary closing
conditions. Upon closing, the company will be known as Clever
Leaves Holdings Inc. Clever Leaves’ executive management team, led
by Kyle Detwiler, Chief Executive Officer, and Andrés Fajardo,
President, will continue to lead the combined company.
Clever Leaves’ Investment Highlights:
- Leader in Low-Cost, Medicinal-Focused Cannabis Cultivation and
Extraction. Clever Leaves has one of the largest cultivation and
extraction operations in Latin America and is among the largest in
the world, including Canada’s licensed producers and top
extractors. As a result of its primary operations in Colombia,
Clever Leaves’ operating costs, as measured by a cost per gram of
dry cannabis flower, are a fraction of its Canadian peers;
- Thoughtfully Constructed, Vertically Integrated Multi-National
Operator (MNO) With Significant Infrastructure. With approximately
$125 million raised to date, which includes institutional investors
with a demonstrated track record in the cannabis sector, and
approximately 500 employees, Clever Leaves has established
significant infrastructure and positioned itself to achieve global
reach between its Colombia cultivation and extraction operations,
its Portuguese cultivation facilities and its global distribution
infrastructure in the EU, which is currently headquartered in
Germany. Clever Leaves’ branded nutraceutical manufacturer, Herbal
Brands, will provide additional distribution capabilities for
non-cannabis related products and is well-positioned in the event
of legalization in the United States, if and when such event
occurs;
- Pharmaceutical-Grade EU GMP-Certified Production Authorized for
Export. Clever Leaves recently became one of the few, fully
integrated cannabis companies in the world to be granted a European
Union Good Manufacturing Practices (EU GMP) certification for its
pharmaceutical post-harvest facility to produce Active
Pharmaceutical Ingredients (API), semi-finished and finished
cannabis products for medical purposes. EU GMP certification is
required in many instances to commercialize medical cannabis
products in the EU and is expected to expand Clever Leaves’ ability
to serve international markets. This milestone is expected to allow
Clever Leaves to distribute its products into select key
pharmaceutical markets in the EU, including Germany;
- Talented and Experienced Leadership with Operational and
Regulatory Expertise. Led by Kyle Detwiler and Andrés Fajardo,
Clever Leaves has a solid core management team that is
well-positioned to drive anticipated growth going forward;
- Attractive Financial Profile with Strong Revenue and EBITDA
Growth Potential. With its low-cost operating model, significant
asset base and solid leadership, SAMA and Clever Leaves believe
that the Company is well-positioned for substantial revenue and
EBITDA growth and is expected to achieve positive free cash flow by
the fourth quarter of 2021;
- Significant Opportunity for Strategic Acquisitions. With an
expected cash balance of $111 million at closing (assuming no
redemptions by SAMA’s public stockholders), which is significantly
in excess of the Company’s capital needs, Clever Leaves’ global
sales and distribution capabilities can be meaningfully expanded
including through disciplined M&A;
- Attractive Valuation. Based on 2022 projections, the parties
believe the business combination is attractively valued, with an
enterprise value of 1.8x and 5.4x projected 2022 revenue and
EBITDA, respectively, which is a meaningful discount to its
U.S.-listed peer group; and,
- Expected NASDAQ Listing. Clever Leaves is expected to be one of
a few cannabis companies listed on the NASDAQ thereby making this
investment opportunity available to a substantially broader base of
investors.
George J. Schultze, Chairman and CEO of SAMA, said, “We are
incredibly excited to partner with Clever Leaves and look forward
to consummating this transaction. The Company is led by an
outstanding and highly accomplished management team, and we believe
that with its disruptive, low-cost and vertically integrated
operating model, Clever Leaves is well-positioned for substantial
growth and profitability. We view the transaction valuation as
highly attractive to investors, and upon closing, we expect Clever
Leaves to be among the best-capitalized companies in the cannabis
industry. We believe that our strategic alignment, coupled with our
own background in successfully building businesses, including
through targeted M&A, has the potential to create significant
value for shareholders over time.”
Kyle Detwiler, CEO of Clever Leaves, added, “We are proud of
what we have accomplished to date in achieving an industry-leading
position through our high-quality EU GMP certified operations and
scalable cultivation and extraction capacity. These attributes have
made us a global leader in low-cost cultivation with
pharmaceutical-grade production primed for export. Our business
combination with SAMA will significantly strengthen our balance
sheet and take us to the next level, enabling us to accelerate the
commercialization of our high-quality products as well as expand
our operations and distribution in attractive markets around the
world. Together with SAMA, we intend to work collaboratively to
achieve accelerated growth and profitability.”
Andrés Fajardo, President of Clever Leaves, concluded, “Clever
Leaves’ interests are fully aligned with the SAMA team and we
expect to benefit from their vast experience as both investors and
operators assisting companies such as ours achieve their goals,
while helping us pursue M&A opportunities to augment commercial
opportunities in different geographies.”
Key Transaction Terms
The transaction will be effected pursuant to the Business
Combination Agreement entered into by SAMA and Clever Leaves. The
agreement provides that a new holding company, Clever Leaves
Holdings Inc. (“Holdco”), will acquire Clever Leaves by means of a
plan of arrangement under the Business Corporations Act (British
Columbia) (the “Arrangement”), and SAMA pursuant to the merger of a
newly formed subsidiary of Holdco, with and into SAMA, with SAMA
surviving as a wholly-owned subsidiary of Holdco (the “Merger” and,
together with the Arrangement and other transactions contemplated
by the Business Combination Agreement, the “Business Combination”).
As a result of the Business Combination, SAMA and Clever Leaves
will become wholly-owned subsidiaries of Holdco, with Holdco
expected to be listed on the NASDAQ.
Under the terms of the Business Combination Agreement, the
transaction is valued at a fully diluted enterprise value of
approximately $255 million, which includes an estimated $74 million
of net cash ($111 million in cash, assuming no redemptions, and $37
million in debt) on the balance sheet at closing. Clever Leaves
intends to use the proceeds from the Business Combination to help
fund the combined company’s business operations near-term and
potential M&A opportunities.
Clever Leaves’ shareholders will be rolling over 96% of their
equity ownership into Holdco, reflecting a continuing majority
ownership of the combined company in excess of 55% (assuming no
redemptions). Clever Leaves will have an earn out of up to 1.8
million shares reflecting an alignment of interests and limited
dilution. The earn-out is tied to the trading price of Holdco
shares after the closing of the Business Combination, vesting in
two equal tranches at share price targets of $12.50 within a
two-year period post-closing and $15.00 within a four-year period
post-closing. These price-based performance triggers provide a
significant incentive for material post-closing value creation. The
stockholders of SAMA will receive one common share of Holdco for
each share of SAMA and the SAMA warrants will become exercisable
for Holdco common shares on the same terms as the existing
warrants. The transaction is subject to a minimum cash condition of
$60 million, after any redemptions, compared with approximately
$132 million of cash held in SAMA’s trust.
In connection with the Business Combination, SAMA intends to
seek an amendment to its charter to extend the life of SAMA through
December 31, 2020 in order to have adequate time to close the
transaction. The description of the Business Combination contained
herein is only a summary and is qualified in its entirety by
reference to the Business Combination Agreement relating to the
transaction. For additional information, see SAMA’s Current Report
on Form 8-K, which will be filed promptly and can be obtained,
without charge, at the website of the U.S. Securities and Exchange
Commission (“SEC”) at www.sec.gov.
Canaccord Genuity and EarlyBirdCapital are serving as financial
advisors to SAMA, with Greenberg Traurig, LLP, Stikeman Elliott and
Posse Herrera Ruiz serving as legal advisors. Cowen is serving as
financial advisor to Clever Leaves, with Freshfields Bruckhaus
Deringer US LLP, Dentons Canada LLP, and Brigard & Urrutia
Abogados SAS serving as legal advisors.
Webcast Information
SAMA and Clever Leaves management will host a webcast to discuss
the proposed transaction on July 27th at 11:00 a.m. ET. Hosting the
call will be George Schultze, Chairman, President, & CEO of
SAMA; Gary Julien, Executive Vice President, Director of SAMA; Kyle
Detwiler, Chief Executive Officer of Clever Leaves; and Andrés
Fajardo, President of Clever Leaves.
The webcast and a related investor presentation with more
detailed information regarding the proposed transaction will be
available at https://samcospac.com/ under the tab “Investor
Relations” or can be accessed via
http://public.viavid.com/index.php?id=140961. The investor
presentation will also be filed today with the SEC and can be
viewed at the SEC’s website at www.sec.gov.
About Schultze Special Purpose Acquisition Corp.
Schultze Special Purpose Acquisition Corp. is a blank check
company formed for the purpose of entering into a merger, stock
exchange, asset acquisition, stock purchase, recapitalization,
reorganization or other similar business combination with one or
more businesses or entities. SAMA’s sponsor is an affiliate of
Schultze Asset Management, LP, an alternative investment management
firm founded in 1998 that focuses on distressed, special situation
and event-driven securities and has invested over $3.2 billion
since inception with a notable track-record through its active
investment strategy. SAMA itself is backed by an experienced team
of operators and investors with a successful track-record of
creating material value in public and private companies.
About Clever Leaves International Inc.
Clever Leaves is a multi-national cannabis company with a
mission to operate in compliance with federal and state laws and
with an emphasis on ecologically sustainable, large-scale
cultivation and pharmaceutical-grade processing as the cornerstones
of its global cannabis business. With operations and investments in
the United States, Canada, Colombia, Germany and Portugal, Clever
Leaves has created an effective distribution network and global
footprint, with a foundation built upon capital efficiency and
rapid growth. Clever Leaves aims to be one of the industry’s
leading global cannabis companies recognized for its principles,
people, and performance while fostering a healthier global
community.
Additional Information and Where to Find It
In connection with the Business Combination, Holdco intends to
file a Registration Statement on Form S-4 (the “Form S-4”) with the
SEC which will include a prospectus with respect to Holdco’s
securities to be issued in connection with the Business Combination
and a proxy statement with respect to SAMA’s stockholder meeting at
which SAMA’s stockholders will be asked to vote on the proposed
Business Combination. SAMA, Clever Leaves and Holdco urge
investors, stockholders and other interested persons to read, when
available, the Form S-4, including the proxy statement/prospectus,
as well as other documents filed with the SEC, because these
documents will contain important information about the Business
Combination. The definitive proxy statement/prospectus will be
mailed to stockholders of SAMA as of a record date to be
established for voting on the Business Combination. SAMA’
stockholders will also be able to obtain a copy of such documents,
without charge, by directing a request to: Schultze Special Purpose
Acquisition Corp, 800 Westchester Avenue, Suite 632, Rye Brook, New
York 10573; e-mail: sdu@samco.net. These documents, once available,
can also be obtained, without charge, at the SEC’s web site
(http://www.sec.gov).
Participants in Solicitation
SAMA, Clever Leaves, Holdco and their respective directors,
executive officers and other members of their management and
employees, under SEC rules, may be deemed to be participants in the
solicitation of proxies of SAMA stockholders in connection with the
Business Combination. Investors and security holders may obtain
more detailed information regarding the names, affiliations and
interests of SAMA’s directors and executive officers in SAMA’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2019, which was filed with the SEC on March 10, 2020. Information
regarding the persons who may, under SEC rules, be deemed
participants in the solicitation of proxies to SAMA’s stockholders
in connection with the Business Combination will be set forth in
the proxy statement/prospectus contained in the Form S-4 for the
Business Combination, when these documents become available.
Information concerning the interests of SAMA’s and Clever Leaves’
participants in the solicitation, which may, in some cases, be
different than those of SAMA’s and Clever Leaves’ equity holders
generally, will be set forth in the proxy statement/prospectus
contained in the Form S-4 relating to the Business Combination when
it becomes available.
Non-Solicitation
This press release is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the proposed transaction and shall not constitute an
offer to sell or a solicitation of an offer to buy the securities
of SAMA, Clever Leaves or Holdco, nor shall there be any sale of
any such securities in any state or jurisdiction in which such
offer, solicitation, or sale would be unlawful prior to
registration or qualification under the securities laws of such
state or jurisdiction. No offer of securities shall be made except
by means of a prospectus meeting the requirements of Section 10 of
the Securities Act of 1933, as amended.
Forward Looking Statements
This press release includes forward-looking statements that
involve risks and uncertainties. Forward-looking statements are
statements that are not historical facts and may be identified by
the words "estimates," "projected," "expects," "anticipates,"
"forecasts," "plans," "intends," "believes," "seeks," "may,"
"will," "should," "future," "propose" and variations of these words
or similar expressions (or the negative versions of such words or
expressions). Such forward-looking statements are subject to risks
and uncertainties, which could cause actual results to differ from
the forward-looking statements. Factors that may cause such
differences include, without limitation, SAMA’s and Clever Leaves’
inability to complete the transactions contemplated by the Business
Combination Agreement; matters discovered by the parties as they
complete their respective due diligence investigation of the other;
the inability to recognize the anticipated benefits of the Business
Combination, which may be affected by, among other things, the
amount of cash available following any redemptions by SAMA
stockholders; the ability to meet NASDAQ's listing standards
following the consummation of the Business Combination; costs
related to the Business Combination; expectations with respect to
future operating and financial performance and growth, including
when Clever Leaves or Holdco will become cash flow positive; the
timing of the completion of the Business Combination; Clever
Leaves’ ability to execute its business plans and strategy and to
receive regulatory approvals; potential litigation involving the
parties; global economic conditions; geopolitical events, natural
disasters, acts of God and pandemics, including, but not limited
to, the economic and operational disruptions and other effects of
COVID-19; regulatory requirements and changes thereto; access to
additional financing; and other risks and uncertainties indicated
from time to time in filings with the SEC. Other factors include
the possibility that the proposed transaction does not close,
including due to the failure to receive required security holder
approvals, the failure to obtain an extension of the business
combination deadline if sought by SAMA or the failure to satisfy
other closing conditions. The foregoing list of factors is not
exclusive. Additional information concerning certain of these and
other risk factors is contained in SAMA’s most recent filings with
the SEC and will be contained in the Form S-4, including the proxy
statement/prospectus. All subsequent written and oral
forward-looking statements concerning SAMA, Clever Leaves or
Holdco, the transactions described herein or other matters and
attributable to SAMA, Clever Leaves, Holdco or any person acting on
their behalf are expressly qualified in their entirety by the
cautionary statements above. Readers are cautioned not to place
undue reliance upon any forward-looking statements, which speak
only as of the date made. Each of SAMA, Clever Leaves and Holdco
expressly disclaims any obligations or undertaking to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in their expectations with
respect thereto or any change in events, conditions or
circumstances on which any statement is based.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200727005374/en/
Schultze Special Purpose Acquisition Corp. George J. Schultze:
schultze@samco.net Gary M. Julien: gjulien@samco.net (914)
701-5260
Investor Relations Raphael Gross ICR raphael.gross@icrinc.com
(203) 682-8253
Media Relations KCSA Strategic Communications McKenna Miller
mmiller@kcsa.com (347) 487-6197
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