Legato Merger Corp II (NASDAQ:LGTO) announced it has now closed its combination with construction firm Southland Holdings and the combined company’s shares and warrants will soon trade under the symbols “SLND” and “SLNDW”, respectively.
Shareholders redeemed about 91.6% of Legato II’s shares at the completion vote, however. Because the deal did not include a PIPE, this drops the total cash proceeds to about $23.6 million, but the deal did not carry a minimum cash condition.
Southland’s plans may not have been contingent on much new cash in any case. According to the parties’ investor presentation, Southland has been EBITDA-positive since at least 2013 and it generated $99 million in EBITDA in 2021.
If the company hits $125 million in EBITDA for 2022, Southland shareholders stand to receive 3,448,276 shares through an earnout and 1,724,138 more if EBITDA meets or exceeds $145 million. These shareholders will get the same amounts for 2023 targets of $145 million and $165 million.
The parties announced their combination in May 2022. Grapevine, Texas-based Southland provides construction services focused on large infrastructure projects out of offices in 18 US states and Canadian provinces.
Last week, Southland was awarded a $102 million road and bridge extension project by the state of Louisiana to build a 28-span bridge over a bayou.
ADVISORS
- Legato II is represented by Graubard Miller
- Southland is represented by Winstead PC. D.A.
- Davidson & Co. and Thompson Davis & Co. are acting as capital market advisors to Legato II.
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