HH&L Acquisition Co. (HHLA) Merger with DiaCarta (Private)

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October 15, 2022

  • HH&L Acquisition Co. (HHLA) to acquire DiaCarta (private) in a transaction valuing the pro forma entity at $584 million in enterprise value (Equity value of $655 million at 90% redemptions and $1000 million at 0% redemption) . 
  • DiaCarta shareholders will receive 46 million common stock shares of HH&L at $10/share.
  • HHLA is expected to raise $50 million of Common Stock PIPE at $10/share.
  • Sponsor shall forfeit 1,539,300 class B shares if the gross cash available at closing is less than $40 million (subject to adjustments).
  • Deferred underwriting fee of $14,490,000 has been waived by the underwriters (Credit Suisse & Goldman Sachs).
  • No minimum cash condition.
  • Business combination transaction is targeted to close in first quarter of 2023.
  • SPAC Details:
    • Unit Structure: 1 Class A ordinary share + 0.50 Redeemable Warrant
    • #Cash in Trust: $416,517,794 (100.6% of Public Offering)
    • Public Shares Outstanding: 41.40 million
    • Private Shares Outstanding: 10.35 million
    • Reported Trust Value/Share: $10.06
    • Liquidation Date: February 9, 2023

Figure 1 Transaction Summary-90% redemptions

Figure 2 Transaction Summary-0% Redemption

  • PIPE / Financing:
    • Expected to raise $50 million of Common Stock PIPE @10/share
  • Redemption Protections:
    • None
  • Support Agreement:
    • Standard voting support
    • Sponsor shall forfeit 1,539,300 SPAC Class B Ordinary Shares (Forfeited shares) if:
      • SPAC closing cash < $40 million
      • If SPAC Closing Cash is equal to or more than $40 million, there shall be no Forfeited Shares
  • In addition, Sponsor may elect (no obligation) to forfeit Sponsor Shares to facilitate financing (Financing Contribution Shares):
    • If the aggregate number of Forfeited Shares (without reduction) and Financing Contribution Shares exceeds 2,052,400 SPAC Class B Ordinary Shares, then the number of Forfeited Shares shall be reduced to an amount equal to (a) – (b) where
  • 2,052,400 SPAC Class B Ordinary Shares
  • Financing Contribution Shares actually contributed or forfeited by the Sponsor

Figure 3 *Forfeiture of Sponsor Shares

  • Lock-up:
    • SPAC Sponsor Holders: 12 months post-closing
      • Early Release: If equal to or above $12.00 per share after 6 months from the closing date
    • Certain Target shareholders: 12 months post-closing
      • Early Release: If equal to or above $12.00 per share after 6 months from the closing date
  • Closing Conditions:
    • Termination date: August 14, 2023 (ten months after the date of the Business Combination Agreement)
    • Completion of SPAC domestication & Target Domestication
    • No minimum cash condition
    • Other customary closing conditions
  • Termination:
    • Standard termination clauses
  • Advisors:
    • Target Financial Advisor: Revere Securities LLC
    • SPAC Financial Advisor: Cohen & Company Capital Markets (CCM)
    • Target Legal Advisors: Loeb & Loeb LLP
    • SPAC Legal Advisors: White & Case  
    • CCM Legal Advisor: Morgan, Lewis & Bockius LLP
  • Comparables (N/A):
    • No Valuations provided
  • Equity Incentive Plan:
    • 15% SPAC shares outstanding on closing shall be reserved
    • Automatic annual increase to share reserve of 3% (beginning on the first day of each fiscal year for 10 years after closing)
  • Deferred Underwriting fee:
    • Goldman Sachs & Credit Suisse have waived their respective portions of $14,490,000 deferred underwriting fee accrued from them for participating as underwriters in SPAC’s IPO, thereby reducing the estimated expenses of the Business Combination by the same amount

*Denotes estimated figures by CPC

#Reported as on September 30, 2022