BGP Acquisition Corp. (OTCQX:BGPPF) (OTCQX:BGPAF) (NEO:BGP.U) (NEO:BGP.WT.U) and Craft 1861 Global, Inc., have entered into a definitive business combination agreement, which is intended to constitute the corporation's qualifying transaction.
Craft Global Highlights
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Craft Global has entered into exclusive long-term strategic licensing rights partnerships for all cannabinoids with global organizations including the World Boxing Council, Moto GP, Maserati Venturi/Formula E, Premiere League football teams and a collegiate intellectual property agency, with a significant pipeline of additional sporting, celebrity and corporate partnership opportunities in negotiation.
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A $100 million equity investment, which is a condition to closing of the business combination is expected to provide sufficient liquidity for operations. Craft Global is also in negotiations with the investor to provide a $100 million committed credit facility.
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Craft Global expects over $201 million of revenue and $72 million of EBITDA in 2023 as their partnerships are launched, and over $542 million of revenues and $314 million in EBITDA in 2024, the first year when all partnerships will be live for 12 months.
Transaction Highlights
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BGP will issue 430,000 proportionate voting shares to Craft Global shareholders in upfront equity consideration, complemented by an earn-out of an additional 100,000 proportionate voting shares based on certain trading price milestones.
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New Craft will be fully-funded for its business plan at closing, with over $167.8 million in cash and a committed and undrawn credit line for $100 million.
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Craft Global shareholders are rolling 100% of their equity, resulting in a pro forma market capitalization of approximately $580 million.
Pursuant to the terms of the business combination agreement, the transaction will be structured between BGP, BGP Merger Sub Inc., Craft Global, and BGP Acquisition Sponsor LP, whereby, among other things, BGP will indirectly acquire all of the outstanding shares of Craft Global in exchange for $430 million of proportionate voting shares.
Following closing, BGP will continue to operate the business of Craft Global and intends to rename itself CRAFT 1861 Global Holdings ("New Craft"), which will remain a reporting issuer under Canadian securities laws. BGP has reserved the symbols "HUMN" and "HUMN.WT" for the subordinate voting shares and BGP warrants, respectively. Completion of the business combination is currently expected to occur in the fourth quarter of 2022.
Management Team and Board of Directors
Following closing of the business combination, Robert Aranda will continue to serve as New Craft's CEO. Upon closing, New Craft's board of directors is expected to include:
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Robert Aranda, New Mexico, United States – CEO of Craft Global.
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Ruth Epstein, California, United States – CEO of BGP.
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Shelly Lombard, New York, New York – Wall Street veteran.
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Ryan Boone, Tennessee, United States – technology leader.
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Harvey Schiller, New York, New York – American sports executive.
- Photo by Tim Foster on Unsplash
