Item 8.01 Other Events.
As previously reported, on February 23, 2021, Revolution Acceleration
Acquisition Corp, a Delaware corporation ("RAAC"), entered into an Agreement and
Plan of Merger (the "Merger Agreement"), by and among RAAC, Pickup Merger Corp,
a Delaware corporation and a direct, whollyowned subsidiary of RAAC ("Merger
Sub"), and Berkshire Grey, Inc., a Delaware corporation ("BG"), which provides
for, among other things, the merger of Merger Sub with and into BG, with BG
being the surviving corporation of the merger and a direct, wholly owned
subsidiary of RAAC as a consequence of the merger (together with the other
transactions contemplated by the Merger Agreement, the "Business Combination").
In connection with the Business Combination, RAAC filed a registration statement
on Form S-4 (File No. 333-254539) (as amended, the "Registration Statement")
with the U.S. Securities and Exchange Commission (the "SEC"). On June 24, 2021,
the Registration Statement was declared effective by the SEC. On June 24 2021,
RAAC filed a definitive proxy statement/prospectus relating to RAAC's special
meeting of stockholders in lieu of the 2021 annual meeting (the "RAAC Special
Meeting"), to be held on July 20, 2021, to consider matters and transactions
relating to the Business Combination (the "Definitive Proxy
Statement/Prospectus").
Since the initial filing of the Registration Statement, four purported
stockholders of RAAC sent demand letters (the "Demand Letters") requesting that
RAAC provide additional disclosures in an amendment to the Registration
Statement. RAAC believes that the allegations in the Demand Letters are
meritless, and no additional disclosure is required in the Registration
Statement. However, in order to avoid nuisance, cost and distraction, and to
preclude any efforts to delay the closing of the Business Combination, RAAC
hereby voluntarily amends and supplements the Definitive Proxy
Statement/Prospectus with the supplemental disclosures (the "Supplemental
Disclosures") set forth below in this Current Report on Form 8-K (this
"Report"). RAAC and its Board of Directors deny any liability or wrongdoing in
connection with the Definitive Proxy Statement/Prospectus, and nothing in this
Report should be construed as an admission of the legal necessity or materiality
under applicable laws of any of the Supplemental Disclosures.
SUPPLEMENT DISCLOSURES TO DEFINITIVE PROXY STATEMENT/PROSPECTUS
The Supplemental Disclosures should be read in conjunction with the Definitive
Proxy Statement/Prospectus, which should be read in its entirety and is
available free of charge on the SEC's website at http://www.sec.gov. Page number
references below are to page numbers in the Definitive Proxy
Statement/Prospectus, and capitalized terms used but not defined herein have the
meanings set forth in the Definitive Proxy Statement/Prospectus. To the extent
the information in the Supplemental Disclosures differs from or conflicts with
the information contained in the Definitive Proxy Statement/Prospectus, the
information set forth in the Supplemental Disclosures shall be deemed to
supersede the respective information in the Definitive Proxy
Statement/Prospectus. New text is underlined, and deleted text is stricken
through.
1
The disclosure on page 171 of the Definitive Proxy Statement/Prospectus is
hereby supplemented by amending and restating the third full paragraph as
follows:
The key elements of the projections of Berkshire Grey provided by management of
Berkshire Grey to RAAC are summarized in the table below:
Forecast Year Ended, December 31(1)
($ in millions) 2021E 2022E 2023E 2024E 2025E
Projected Revenue $ 59 $ 119 $ 248 $ 495 $ 927
Projected Gross Profit(2) 4 28 90 217 441
Projected Adjusted EBITDA(3) (91 ) (96 ) (54 ) 41 232
Projected Free Cash Flow (95 ) (115 ) (85 ) 4 145
(1) This prospective financial information was not prepared with a view toward
compliance with published guidelines of the SEC or the guidelines established
by the AICPA for preparation or presentation of prospective financial
information.
(2) Includes direct and indirect costs of goods sold (including operations).
(3) Adjusted EBITDA is a non-GAAP measure. Adjusted EBITDA is calculated as
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization),
adjusted to exclude certain unusual or non-recurring items, certain
non-cash items and other items that are not indicative of ongoing operations
(including stock-based compensation and depreciation and amortization). For a
historical reconciliation of Adjusted EBITDA to the most directly comparable
GAAP measure of net income, please see the section entitled "Berkshire Grey's
Management's Discussion and Analysis of Financial Condition and Results of
Operations."
The disclosure on page 174 of the Definitive Proxy Statement/Prospectus is
hereby supplemented by amending and restating the fifth paragraph as follows:
On January 14, 2021, RAAC sent Berkshire Grey an initial draft of the Term
Sheet, which provided for the following terms, among other things: (i) a reverse
triangular merger transaction structure for the proposed Business Combination,
with the stockholders of Berkshire Grey becoming stockholders of RAAC following
the transaction, (ii) a transaction value range (on a pre-transaction basis) for
Berkshire Grey of $2 billion to $2.25 billion with no cash proceeds payable to
Berkshire Grey equity holders, (iii) consideration based on newly issued shares
of RAAC Common Stock valued at $10.00 per share, (ii) (iv) a $100 million equity
financing achieved through a private investment in public equity (the "PIPE
Investment"), (iii) (v) a minimum cash condition for the benefit of each party
in an amount to be determined, (iv) (vi) that the post-closing board of
directors would include one member nominated by RAAC, with the parties agreeing
to cooperate to identify and select the ultimate go-forward board composition of
the combined company and (v) (vii) an exclusivity period extending for 30 days
from the date of the Term Sheet. The transaction valuation range (on a
pre-transaction basis) for Berkshire Grey was calculated using a future
valuation date of 12/31/2024, valued by applying 2025E projected revenue to a
peer multiple range of enterprise value to next-twelve-month revenue. Such
implied future firm value was then discounted 20% over a four-year period to
obtain the present valuation and further discounted to ensure a compelling entry
point for a high growth business where the fulfillment automation industry is at
an inflection point and on the verge of taking off. Mr. Delaney will serve on
the post-closing board of directors as the one member nominated by RAAC, and all
of RAAC's other current directors and officers will resign from their positions
upon consummation of the Business Combination. None of RAAC's current directors
or officers are contemplated to become employees of New Berkshire Grey, and no
discussions between RAAC and Berkshire Grey or their respective representatives
have occurred in connection therewith.
The disclosure on page 175 of the Definitive Proxy Statement/Prospectus is
hereby supplemented by amending and restating the third paragraph as follows:
On January 19, 2021, RAAC held a meeting via videoconference with the
Consultant, to discuss the additional commercial due diligence process with
respect to the potential Business Combination. Having specialized expertise in
the area, it was determined that the Consultant would conduct due diligence to
further assess the technology and competitive landscape, value proposition and
customer traction of Berkshire Grey. On January 21, 2021, RAAC and Berkshire
Grey, along with their respective advisors, held a meeting via videoconference
focused on due diligence of Berkshire Grey's customers, competition, business
pipeline and technology.
2
The disclosure on page 175 of the Definitive Proxy Statement/Prospectus is
hereby supplemented by amending and restating the eighth paragraph as follows:
On January 29, 2021, Skadden sent Goodwin an initial draft of the Merger
Agreement, which, in addition to the terms set forth in the Term Sheet, provided
for the following terms, among other things: (i) the conversion of all
outstanding shares of Berkshire Grey Preferred Stock into shares of Berkshire
Grey Common Stock prior to the consummation of the Business Combination, (ii)
the right of holders of outstanding Company Options to receive an option
relating to shares of RAAC Class A Common Stock on substantially the same terms
following the consummation of the Business Combination, (iii) approval of the
Business Combination by written consent of Berkshire Grey's stockholders
substantially concurrent with the parties' entry into the Merger Agreement, (iv)
an ability for the RAAC Board to modify its recommendation to the RAAC
Stockholders with respect to the Business Combination if the failure to do so
would reasonably be expected to constitute a breach of its fiduciary duties (a
"Change in Recommendation"), (v) RAAC subject to "hell or high water"
obligations with respect to obtaining antitrust approvals, (vi) a mutual closing
condition as to a registration statement having been deemed effective and (iv)
(vii) a closing condition for RAAC's benefit as to the absence of a material
adverse effect on Berkshire Grey.
The disclosure on page 176 of the Definitive Proxy Statement/Prospectus is
hereby supplemented by amending and restating the fourth paragraph as follows:
On February 11, 2021, the RAAC Board held a meeting via videoconference, with
all directors in attendance, which was attended by representatives of RAAC
management and Skadden, to discuss, among other things, the status of
discussions regarding the potential transaction. Representatives from Skadden
then reviewed with the RAAC Board the directors' fiduciary duties in connection
with evaluating the proposed Business Combination. RAAC's management team and
representatives of Skadden then reviewed the provisions of the Merger Agreement
and the subscription agreement for prospective PIPE Investors, and the RAAC
Board expressed to RAAC management its continued support in respect of the
negotiation of the terms of the Business Combination. Following the RAAC Board
meeting, the independent directors of RAAC, consisting of Mr. Museles, Ms.
Caldwell and Mr. Fish, met separately in an executive session to discuss, among
other things, the proposed Business Combination and to consider any
relationships that members of the RAAC Board have with Berkshire Grey and its
equity holders and found that no such relationships existed that would affect
the impartiality or independence of any member of the RAAC Board.
The disclosure on page 176 of the Definitive Proxy Statement/Prospectus is
hereby supplemented by amending and restating the ninth paragraph as follows:
Also, on February 16, 2021, Goodwin sent Skadden a revised draft of the Merger
Agreement, which provided for, among other things: (i) a proposed minimum cash
amount of $175,000,000, (ii) the requirement that the minimum cash amount be net
of all RAAC transaction expenses, (iii) removing the RAAC Board's ability to
effect a Change in Recommendation, (iii) (iv) the narrowing of the scope of
actions by Berkshire Grey that would require RAAC's approval between signing and
closing, (v) requiring receipt of the Berkshire Grey stockholder approval after
the registration statement is deemed effective rather than at signing, (iv) (vi)
removal of the closing condition for RAAC's benefit as to the absence of a
material adverse effect on Berkshire Grey, (v) (vii) the addition of a closing
condition for Berkshire Grey's benefit that no RAAC Stockholder (other than
Berkshire Grey Stockholders holding RAAC Class A Common Stock after the
consummation of the Business Combination) will hold more than 9.8% of the
outstanding public company shares and (vi) (viii) adding a closing condition for
Berkshire Grey's benefit with respect to the receipt by Berkshire Grey of an
opinion from Goodwin as to the tax-free treatment of the merger.
3
The disclosure on page 177 of the Definitive Proxy Statement/Prospectus is
hereby supplemented by adding the following paragraph after the fifth paragraph
as follows:
On February 20, 2021, Goodwin sent Skadden drafts of the post-combination equity
plan and form of award agreement. Over the course of February 21, 2021 and
February 22, 2021, Skadden and Goodwin discussed the terms of the equity plan,
including Berkshire Grey's proposed initial share reserve of 5% of the shares
expected to be outstanding as of closing with a 5% evergreen amount.
The disclosure on page 177 of the Definitive Proxy Statement/Prospectus is
hereby supplemented by amending and restating the sixth paragraph as follows:
On February 21, 2021, Skadden and Goodwin spoke via telephone to discuss
remaining open points in the Merger Agreement. Additional follow up meetings
were held via telephone between Skadden and Goodwin over the course of February
22, 2021 and February 23, 2021, to discuss and resolve open issues with respect
to the Merger Agreement and ancillary documents. Following one such discussion,
on February 22, 2021, Goodwin sent a draft of the Merger Agreement to Skadden
proposing that the New Berkshire Grey Board consist of up to 13 directors,
initially including up to 12 nominees mutually agreed upon by RAAC and Berkshire
Grey and one nominee to be designated by RAAC.
The disclosure on page 178 of the Definitive Proxy Statement/Prospectus is
hereby supplemented by adding the following paragraph after the third paragraph
as follows:
On March 26, 2021, Berkshire Grey and RAAC spoke via telephone to discuss
onboarding two independent directors for the New Berkshire Grey Board, with
annual compensation ranging between $180,000 and $250,000 plus additional
amounts for committee participation.
The disclosure on page 179 of the Definitive Proxy Statement/Prospectus is
hereby supplemented by amending and restating the tenth paragraph as follows:
Valuation.The RAAC Board's belief that the Business Combination presents an
attractive investment opportunity at the agreed valuation based on extensive due
diligence performed by RAAC's management team, the RAAC Advisors, the Consultant
and RAAC's legal advisors and RAAC's careful investigation of Berkshire Grey. In
particular, RAAC determined that Berkshire Grey's growth-adjusted valuation
compares favorably with peers in the industry. Based on publicly available
information and management estimates, the RAAC Board found that Berkshire Grey's
valuation compares favorably to peers in the automation-oriented industrial
technology, automation software and e-commerce enablers industries when
analyzing 2020 to estimated 2022 revenue compound annual growth rate, estimated
2021 gross margin, estimated 2021 EBITDA margin, enterprise value to estimated
2021 revenue multiple and enterprise value to estimated 2021 EBITDA multiple.
The disclosure on page 179 of the Definitive Proxy Statement/Prospectus is
hereby supplemented by amending and restating the twelfth paragraph as follows:
Financial Condition. The RAAC Board also considered factors such as Berkshire
Grey's projected financial results, outlook, financial plan, cash on balance
sheet and lack of debt, as well as valuations and trading of publicly traded
companies and valuations of precedent merger and acquisition targets in similar
and adjacent sectors. Based on publicly available information and management
estimates, the RAAC Board found that Berkshire Grey's financial condition
compared favorably to target companies of recent precedent transactions when
analyzing sizes, revenue growths, enterprise value to sales multiples and
enterprise value to EBITDA multiples.
4
IMPORTANT LEGAL INFORMATION
Cautionary Statement Regarding Forward-Looking Statements
This report contains certain forward-looking statements within the meaning of
the federal securities laws with respect to the proposed transactions between BG
and RAAC. Forward-looking statements may be identified by the use of the words
such as "estimate," "plan," "project," "forecast," "intend," "expect,"
"anticipate," "believe," "seek," "strategy," "future," "opportunity," "may,"
"target," "should," "will," "would," "will be," "will continue," "will likely
result," or similar expressions that predict or indicate future events or trends
or that are not statements of historical matters. These forward-looking
statements include, but are not limited to, statements regarding the proposed
transaction between BG and RAAC, including statements as to the expected timing,
completion and effects of the proposed transaction. These statements are based
on various assumptions, whether or not identified in this report, and on the
current expectations of RAAC's and BG's management and are not predictions of
actual performance, and, as a result, are subject to risks and uncertainties.
These forward-looking statements are provided for illustrative purposes only and
are not intended to serve as, and must not be relied on by any investor as, a
guarantee, an assurance, a prediction or a definitive statement of fact or
probability. Actual events and circumstances are difficult or impossible to
predict and will differ from assumptions. Many actual events and circumstances
are beyond the control of RAAC and BG. These forward-looking statements are
subject to a number of risks and uncertainties, including, but not limited to,
(i) the risk that the proposed transaction may not be completed in a timely
manner or at all, which may adversely affect the price of RAAC's securities,
(ii) the risk that the proposed transaction may not be completed by RAAC's
business combination deadline and the potential failure to obtain an extension
of the business combination deadline if sought by RAAC, (iii) the failure to
satisfy the conditions to the consummation of the proposed transaction,
including the adoption of the merger agreement by the stockholders of RAAC, the
satisfaction of the minimum trust account amount following redemptions by RAAC's
public stockholders and the receipt of certain governmental and regulatory
approvals, (iv) the inability to complete the PIPE investment in connection with
the proposed transaction, (v) the lack of a third party valuation in determining
whether or not to pursue the proposed transactions, (vi) the occurrence of any
event, change or other circumstance that could give rise to the termination of
the merger agreement, (vii) the amount of redemption requests made by RAAC's
public stockholders, (viii) the effect of the announcement or pendency of the
proposed transaction on BG's business relationships, operating results and
business generally, (ix) risks that the proposed transaction disrupts current
plans and operations of BG and potential difficulties in BG customer and
employee retention as a result of the proposed transaction, (x) risks relating
to the uncertainty of the projected financial information with respect to BG,
(xi) risks relating to increasing expenses of BG in the future and BG's ability
to generate revenues from a limited number of customers, (xii) risks related to
BG generating the majority of its revenues from a limited number of products and
customers, (xiii) the passing of new laws and regulations governing the robotics
and artificial intelligence industries that potentially restrict BG's business
or increase its costs, (xiv) potential litigation relating to the proposed
transaction that could be instituted against BG, RAAC or their respective
directors and officers, including the effects of any outcomes related thereto,
(xv) the ability to maintain the listing of RAAC's securities on The Nasdaq
Stock Market LLC, either before or after the consummation of the business
combination, (xvi) the price of RAAC's securities may be volatile due to a
variety of factors, including changes in the competitive and highly regulated
industries in which RAAC plans to operate, variations in operating performance
across competitors, changes in laws and regulations affecting RAAC's business
and changes in the combined capital structure, (xvii) the ability to implement
business plans, forecasts, and other expectations after the completion of the
proposed transaction, and identify and realize additional opportunities, (xviii)
unexpected costs, charges or expenses resulting from the proposed transaction,
(xix) risks of downturns and a changing regulatory landscape and (xx) the
effects of natural disasters, terrorist attacks and the spread and/or abatement
of infectious diseases, such as COVID-19, on the proposed transactions or on the
ability to implement business plans, forecasts, and other expectations after the
completion of the proposed transactions. The foregoing list of factors is not
exhaustive. You should carefully consider the foregoing factors and the other
risks and uncertainties described in the "Risk Factors" section of the
Definitive Proxy Statement/Prospectus and other documents filed by RAAC from
time to time with the SEC. These filings identify and address other important
risks and uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements. If any of
these risks materialize or our assumptions prove incorrect, actual events and
results could differ materially from those contained in the forward-looking
statements. There may be additional risks that neither RAAC nor BG presently
know or that RAAC and BG currently believe are immaterial that could also cause
actual events and results to differ from those contained in the forward-looking
statements. In addition, forward-looking statements reflect RAAC's and BG's
expectations, plans or forecasts of future events and views as of the date of
this report. RAAC and BG anticipate that subsequent events and developments will
cause RAAC's and BG's assessments to change. While RAAC and BG may elect to
update these forward-looking statements at some point in the future, RAAC and BG
specifically disclaim any obligation to do so, unless required by applicable
law. These forward-looking statements should not be relied upon as representing
RAAC's and BG's assessments as of any date subsequent to the date of this
report. Accordingly, undue reliance should not be placed upon the
forward-looking statements. Neither RAAC nor BG gives any assurance that either
RAAC or BG, or the combined company, will achieve the results or other matters
set forth in the forward-looking statements.
5
Additional Information and Where to Find It
This report relates to the proposed Business Combination between RAAC and BG.
RAAC filed the Registration Statement, which was declared effective, and filed
the Definitive Proxy Statement/Prospectus which it mailed to its stockholders as
of the record date established for voting on the Business Combination and the
other proposals regarding the Business Combination set forth in the registration
statement. RAAC may also file other documents with the SEC regarding the
proposed transaction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS
AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION
STATEMENT AND DEFINITIVE PROXY STATEMENT/PROSPECTUS, AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE
DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. The documents filed by RAAC with the
SEC, including the Definitive Proxy Statement/Prospectus, may be obtained free
of charge at the SEC's website at www.sec.gov. In addition, the documents filed
by RAAC may be obtained free of charge upon written request to RAAC at 1717
Rhode Island Ave NW, Suite 1000, Washington, DC 20036, Attn: Investor Relations.
Participants in the Solicitation
RAAC and its directors and executive officers may be deemed to be participants
in the solicitation of proxies from stockholders of RAAC in connection with the
proposed transaction under the rules of the SEC. RAAC's stockholders and other
interested persons may obtain, without charge, more detailed information
regarding the names, affiliations and interests of directors and executive
officers of RAAC in the Definitive Proxy Statement/Prospectus well as its other
filings with the SEC. Other information regarding persons who may, under the
rules of the SEC, be deemed the participants in the proxy solicitation of RAAC's
stockholders in connection with the proposed Business Combination and a
description of their direct and indirect interests, by security holdings or
otherwise, is included in the Definitive Proxy Statement/Prospectus and will be
contained in other relevant materials to be filed with the SEC regarding the
proposed Business Combination (if and when they become available) . You may
obtain free copies of these documents at the SEC's website at www.sec.gov.
Copies of documents filed with the SEC by RAAC will also be available free of
charge from RAAC using the contact information above.
No Offer or Solicitation
This report is not a proxy statement or solicitation or a proxy, consent or
authorization with respect to any securities or in respect of the proposed
Business Combination and shall not constitute an offer to sell or a solicitation
of an offer to buy the securities of RAAC, BG or the combined company, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offer of securities shall
be deemed to be made except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act, and otherwise in accordance with applicable
law.
6
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