Revelstone Capital Acquisition Corp. (RCAC) to acquire Set Jet (Private) in a transaction valuing the pro forma entity at *$136 million in Enterprise Value (*$173 million equity value) assuming zero redemptions from the current level of 78.6%.
Set Jet shareholders will receive an equity consideration of $80 million (excluding adjustments). Out of which 5,703,000 shares at $10.0 per share and 800,000 shares at reference price at which convertible noteholders will receive shares. They are also eligible to receive earnout consideration of 65.0 million in two tranches 3.5 million shares at $12.5, 1.0 million shares at $15.0 over a period of 5 years months post-closing. The remaining 2.0 million shares will be given as a Retention Bonus to certain executive officers and directors of SET JET at $15.0 over a period of 5 years months post-closing.
Company will raise $18.0 million PIPE investment, out of which $4.00 million will be given pre-closing and the remaining $14.0 million will be given in two tranches of $7.50 million and $6.5 million at initial closing date and additional closing date respectively.
As a condition of closing sponsor will forfeit 100,000 or (2.42%) Class B shares.
The Cumulative Debt for Borrowed Money of the Target shall be less than or equal to $14.97 million.
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 share of Common Stock + 0.5 Redeemable Warrant
#Cash in Trust: $36,882,032 (104.7 % of Public Offering)
Public Shares Outstanding: 3,519,819 shares
Private Shares Outstanding: 4,125,000 shares
Trust Value/Share: $10.47
Current Liquidation Date: August 21, 2023
Outside Liquidation Date: December 21, 2023
Name of Target: Set Jet
Target Description: Set Jet, Inc. is a membership-driven technology company facilitating luxurious “buy a seat, not the jet” private jet charters for its members to enjoy the ultimate travel experience at a fraction of the cost of a typical private jet charter. Set Jet’s proprietary technology platform enables security pre-screened and approved Members to self-aggregate and share a private jet charter between frequently traveled destinations to many of the West Coast’s top destinations including Aspen, Cabo San Lucas, Las Vegas, Los Angeles, Orange County, San Diego, Salt Lake City, and Scottsdale. The Company’s asset-light business model means it neither owns nor operates any aircraft. Professional Part 135 on-demand charter operator partners provide aircraft for Member charters, pilots, and related aircraft services. The Company liaisons between its members and the charter operator to help seamlessly assure a positive Member experience. The Company also staffs cabin hostesses for each flight and its ground operations personnel assist Member travelers with their charter journey.
Equity consideration of $80.0 million which will be given as follows: $57.03 million at $10.0 per share (5,703,000 SPAC Class A common stock) (Subject to adjustments)
5,703,000 shares
Add:
The amount by which the Company’s Debt for Borrowed Money net of the Company’s Cash and Cash Equivalents at Closing is less than $14,970,000 * (ii) 0.10
Less:
The amount by which the Company’s Debt for Borrowed Money net of the Company’s Cash and Cash Equivalents at Closing is greater than $14,970,000 * (ii) 0.10
$8.00 million at a reference price at which convertible note will be converted to company’s common stock (800,000 SPAC Class A Common Stock)
Earnout consideration of $65.0 million at $10.0 per share (5-years after closing):
3.5 million shares @$12.5 per share
1.0 million shares @$15.0 per share
2.0 million shares will be given as a Retention Bonus to certain executive officers and directors of SET JET at $15.0 over a period of 5 years months post-closing
Estimated Cash consideration ~ $14.97 million (balancing figure):
Aggregate Stock Consideration
$145 million
Less: Equity Consideration
$57.03 million
Less: Shares Value from conversion of Pre-PIPE Convertible Note
$8.00 million
Less: Earnout Consideration
$65.00 million
Balancing Figure
$14.97 million
PIPE / Financing:
Coleman Asset Management Group Ltd have entered into an agreement with SET JET and Revelstone to make a PIPE investment of $18.0 million which will include:
$4.0 million as Pre-PIPE financing against which convertible notes will be issued which will be converted into 0.80 million SPAC common A share post-closing and 0.40 million warrants exercisable at a price of $12.5 per share. The $4.0 million will be given in four equal tranches as follows (see image attached):
$14.0 million PIPE financing against which Class A common stock at $5 per shares of the combined company and 14 million warrants exercisable at a price of $12.5 per share will be issued to the PIPE investors, the $14 million will be given to the company in two tranches as follows (see image attached):
The PIPE Subscription Agreement may be terminated if the Initial Closing has not been consummated on or before December 31, 2023
The purpose of the PIPE Financing is to raise additional capital for use in connection with the Merger
The PIPE Shares will not be entitled to any redemption rights
Redemption Protections:
Nil
Support Agreement:
Standard voting support
As a condition of closing sponsor will forfeit 100,000 or (*2.42%) Class B shares
Lock-up:
SPAC Sponsor: 1 year post closing
Early release: If price ≥ $12.0 after 150 days post-closing
Target Key shareholder: 6 months post-closing
Closing Conditions:
Termination date: December 21, 2023
No minimum cash condition
Target Dissenting Shares ≤ 5%
Target’s Cumulative Debt (for Borrowed Money) ≤ $14.97 million
Sponsor will forfeit 100,000 or (2.42%) Class B shares
Other customary closing conditions
Termination:
No termination fees
Other standard termination clauses
Advisors:
SPAC Legal Advisors: Loeb & Loeb, LLP
Target Legal Advisors: Snell & Wilmer, LLP
Target M&A advisors: CHW Strategic Advisors
SPAC Financial Advisors: Roth Capital Partners
Financials (N/A):
No financials provided
Comparables (N/A):
No valuations provided
Equity Incentive Plan (also mentioned in earnout section above):
Up to 2.0 million shares will be given as a Retention Bonus to certain executive officers and directors of Target if:
Price equals or exceeds $15.0 after 180 days post-closing (5 years months post-closing)
*Denotes estimated figures by CPC
#Reported as on 21st July 2023 (Given in Business Combination Agreement)
