Relativity Acquisition Corp. (RACY) Merge with SVES (Private)

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February 17, 2023

  • Relativity Acquisition Corporation (RACY) to merge with SVES (private) in a transaction valuing the pro forma entity at $707.25 million in Enterprise Value assuming zero redemptions (from current level of 1.07%).
  • SVES shareholders will receive 63.2 million shares of Pubco Common Stock at $10.0 per share.
  • No minimum cash condition.
  • Business combination transaction is targeted to close in the third quarter of 2023.
  • SPAC Details:
    • Unit Structure: 1 share of common stock + 1 warrant
    • #Cash in Trust: $1.60 million (104.4% of Public Offering)
    • Public Shares Outstanding: 153,295 shares
  • Private Shares Outstanding: 4,247,500 shares (including 653,750 shares contained in private units)
    • Estimated Trust Value/Share: $10.44
    • Liquidation Date: February 15, 2023
    • Current Liquidation Date: May 15, 2023
    • Outside Liquidation Date: August 15, 2023
  • Name of Target: SVES
  • Description of Target: SVES LLC, SVES GO, LLC, SVES CP LLC and SVES Apparel LLC (collectively, “SVES”)  is a leading wholesale distributor of discount and off-price fashion. SVES delivers differentiated garment and accessory assortments to major off-price retailers in North America and Europe. The SVES management team is led by off-price industry veterans, including Co-Founders Timothy J. Fullum and Salomon Murciano.
  • Announced Date: February 13, 2023
  • Expected Close: “Third Quarter of 2023”
  • Press Release: https://www.sec.gov/Archives/edgar/data/1860484/000121390023010755/ea173356ex99-1_relativityacq.htm
  • Transaction Terms (N/A):
    • Enterprise Value: $707.25 million  
    • Market Value: Not provided
    • SPAC Public Shareholders Receive:
      • *153,295 shares of Pubco Common Stock (1 for 1)
    • SPAC Sponsor Receive:
      • *4,247,500 shares of Pubco Common Stock (1 for 1)
    • Target Shareholders Receive:
      • Equity consideration of $632 million at $10.0 per share (63.2 million shares of Pubco Common Stock)
  • PIPE / Financing:
    • None
  • Redemption Protections:
    • None
  • Support Agreement:
    • Standard voting support
  • Lock-up:
    • SPAC Sponsors (Insider shares & PP Shares): 6 months post-closing
      • Early release: If price ≥ $12.0 after 90 days post-closing
    • Key Target Shareholders: TBD
  • Closing Conditions:
    • Termination date: August 15, 2023 (automatic extension by 1 day for each day that such SVES financial statements have not been delivered after April 7, 2023)
    • Audited SVES financial statements by April 7, 2023
    • Completion of Lock-Up Agreements and Non-Competition Agreements
    • No minimum cash condition
    • Other customary closing conditions
  • Termination:
    • No termination fee
    • Other Standard termination clauses
  • Advisors:
    • SPAC Financial Advisors: Alliance Global Partners
    • Target Legal Advisors: McCarter & English
    • SPAC Legal Advisors: Ellenoff Grossman & Schole
  • Financials (N/A):
    • No historical or projected financials provided
  • Comparables (N/A):
    • No valuations provided
  • Management Equity Incentive Plan
    • No information provided

*Denotes estimated figures by CPC

#Estimated as on December 28, 2022 (Filing of extension meeting results)