Nabors Energy Transition Corp. (NETC) Merger with Vast Solar (Private)

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February 17, 2023

  • Nabors Energy Transition Corp. (NETC) to merge with Vast Solar (Private) in a transaction valuing the pro forma entity at $250 million in Enterprise Value ($586 million equity value) assuming zero redemptions.
  • Vast shareholders will receive equity consideration of $209 million at $10.2 per share.
  • Transaction includes 2,799,999 earnout shares to Vast shareholders, 433,333 shares incrementally vesting at $12.5, $15.0, $17.5 and remaining 1.50 million shares upon procurement of a certain contract.
  • NETC Public shareholders will receive *27.60 million Vast ordinary shares (1 for 1).
  • NETC Sponsor will receive 2.825 million shares as merger consideration & 3.90 million shares as earnout consideration (or 58%).
  • Affiliates of Nabors and AgCentral Energy each committed up to $15.0 million of capital in a combination of a pre-closing convertible note financing and a PIPE of ordinary shares of Vast at closing. Vast is targeting a minimum of $35.0 million of additional capital from other third-party investors.
  • Minimum net cash condition of $50.0 million.   
  • No termination fees.
  • Business combination transaction is targeted to close in second or third quarter of 2023.
  • SPAC Details:
    • Unit Structure: 1 share of Class A common stock + 0.50 Redeemable Warrant
    • #Cash in Trust: $286 million (*103.6 % of Public Offering)
    • Public Shares Outstanding: 27.6 million shares
    • Private Shares Outstanding: 6.90 million shares
  • Estimated Trust Value/Share: *$10.36
  • Liquidation Date: February 18, 2022
  • Current Liquidation Date: May 18, 2023 (on 2/17/2023, NETC extended the date by an additional 3-month period from 2/18/2023 to 5/18/2023, as permitted under NETC’s charter)
  • Outside Liquidation Date: August 18, 2023
Redemption Rate0%
Transaction Price (Assumed)$10.20 per share
Enterprise Value$250 million
Market Cap Value$586 million
  • SPAC Public Shareholders Receive:
    • *27.60 million Vast Ordinary Shares (1 for 1)
  • SPAC Sponsor Receive: Equity Consideration:
    • 2.825 million Vast Ordinary SharesEarnout Consideration: 3.90 million Vast Ordinary Shares
  • Target Shareholders Receive (~*38.05%):
    • $209 million of Equity Consideration at $10.20 per share (20.9 million Vast ordinary shares)
    • Earnout Consideration: 2,799,999 Vast Ordinary Shares (5-years post-closing starting 70 days after closing)
  • If there is a change in control during earnout period, following shares will be issued:
    • 1,500,000 (-) Earnout shares issued before such change in control
    • No further shares will be issued after that
  • If there is a change in control during earnout period which entitles the shareholders to receive consideration implying a value per Share of:
  • PIPE / Financing:
    • Nabors Lux and AgCentral entered into:
      • Note Subscription Agreement:
        • Agreed to subscribe for up to $5.0 million of principal each (or $10.0 million in aggregate) of Senior Convertible Notes from Vast in a private placement & will convert into common equity shares at closing at a conversion price of $10.20 per share
      • Equity Subscription Agreement (PIPE)
        • Agreed to subscribe up to $15 million each (or $30 million in aggregate) of Vast Ordinary Shares at $10.20 per share
      • Commitments may be reduced to the extent the post-closing net cash balance is more than $120 million
    • Expected to raise additional equity of $35 million from third parties
  • Redemption Protections:
    • Nil
  • Support Agreement:
    • Standard voting support
    • Earnout Consideration: 3.90 million Vast Ordinary Shares or (*58%) [5-years post-closing starting 70 days after closing]
  • If there is a change in control during earnout period which entitles the sponsors to receive consideration implying a value per Share of:
  • Lock-up:
    • SPAC Sponsor: 6 months post-closing
    • Key Target shareholders: 6 months post-closing
  • Closing Conditions:
    • Termination date: February 14, 2024
    • Minimum net cash condition of $50 million
      • Cash includes:
Cash in Trust
Less:Redemption Payments
Less:Any Stock Buyback Tax (Excise Tax)
Add:Proceeds of Convertible Financing
Add:Proceeds of PIPE Financing
Less:SPAC + Target Transaction Expenses
  • Implementation of Vast Split Adjustment and MEP Share Conversion
  • Completion of NETC existing Convertible Note Conversion
  • Other customary closing conditions
  • Termination:
    • No termination fee
    • Other standard termination clauses
  • Advisors:
    • Target Legal Advisors: White & Case LLP and Gilbert + Tobin
    • SPAC Financial Advisor: Guggenheim Securities, LLC
    • SPAC Legal Advisors: Vinson & Elkins L.L.P. and King & Wood Mallesons
  • Comparables (N/A):
    • No Valuations provided
  • Equity Incentive Plan:
    • Initial pool expected to be of 7.5% shares of Combined Company post-closing

*Denotes estimated figures by CPC

#Estimated as on February 14, 2023 (From Investor Presentation)