- Chenghe Acquisition Co. (CHEA) to merge with Taiwan Color Optics (Private) in a transaction valuing the pro forma entity at *$495 million in Enterprise Value (*$372 million equity value) assuming zero redemptions.
- Taiwan color optics shareholders will receive an equity consideration of $380 million at $10.0 per share.
- As part of the closing condition Cayco should have acquired at least 90.1% of TCO before the closing.
- No minimum cash condition.
- No termination fees.
- Business combination transaction is targeted to close in the fourth quarter of 2023.
- SPAC Details:
- Unit Structure: 1 Class A Ordinary Share + 0.5 Redeemable Warrant
- #Cash in Trust: $122.71 million (106.7 % of Public Offering)
- Public Shares Outstanding: 11,500,000 shares
- Private Shares Outstanding: 2,875,000 shares
- Trust Value/Share: $10.67
- Current Liquidation Date: August 2, 2023
- Outside Liquidation Date: February 2, 2024
- Name of Target: Taiwan Color Optics
- Target Description: Founded in 2009, TCO is an optical and 3D sensing technology company that is primarily involved in the customization, design and supply of optical components and integrated chip for various industries including autonomous driving, intelligent lighting, as well as unmanned aerial vehicles. In collaboration with its clients, TCO conceptualizes and produces high precision optics and sensing modules that are specifically customized to clients’ needs for ease of integration in overall design and production. Applications for TCO’s products include automotive laser headlight systems, adaptive driving beams (ADB) as well as light detection and autonomous driving systems (LiDAR).
- Announced Date: July 21, 2023
- Expected Close: “Fourth Quarter of 2023”
- Press Release: https://www.sec.gov/Archives/edgar/data/1856948/000110465923082908/tm2321641d1_ex99-1.htm
- Transaction Terms:
| Redemption Rate | 0% |
| Share Price | $10.0 per share |
| Enterprise Value | *$372 million (Market Cap – CIT OR $495 million – $122.71 million) |
| Market Cap Value | *$495 million |
- Target Shareholders Receive (~*76.77%):
- Equity consideration of $380 million at $10.0 per share (38.0 million CayCo Ordinary Shares)
- SPAC Public Shareholders Receive (~*23.23%):
- 11.5 million CayCo Ordinary Shares (1 for 1)
- SPAC Sponsor Receive (~*5.81%):
- 2.87 million CayCo Ordinary Shares (1 for 1)
- PIPE / Financing:
- Nil
- Redemption Protections:
- Nil
- Support Agreement:
- Standard voting support
- Lock-up:
- SPAC Sponsor: 6 months post-closing
- Early release: If price ≥ $12.0 after 150 days post-closing
- Target Key shareholder: 6 months post-closing
- Early release: If price ≥ $12.0 after 150 days post-closing
- SPAC Sponsor: 6 months post-closing
- Closing Conditions:
- Termination date: December 5, 2023
- Company Acquisition Percentage ≥ 90.1%
- Company should obtain the following approvals:
| Phase I IC Approval | 30 business days after the date of Business Combination Agreement |
| Phase II IC Approval | 30 business days after receiving the Company Shareholder Approval |
| TCO Restructuring |
- Receipt of Taiwan IC Approval
- Other customary closing conditions
- Note: Company refers to Taiwan Color Optics, Inc
- Termination:
- No termination fees
- Other standard termination clauses
- Advisors:
- SPAC Legal Advisors: White & Case
- Target Legal Advisors: Landi Lawyer
- SPAC Capital Market Advisors: Cohen & Company Capital Markets
- Equity Incentive Plan:
- 10% of combined cayco shares outstanding post-closing
*Denotes estimated figures by CPC
#Reported as on 3rd July 2023 (From definitive proxy filed on July 5, 2023)