FAST II (NYSE:FZT) announced this morning that it has amended its combination with resort operator Falcon’s Beyond, shifting more value from both sides into earn-outs.

The deal’s $1 billion enterprise value technically remains, but Falcon’s Beyond shareholders will receive less equity at close. The valuation is now made up of a $620 million enterprise value with a new $400 million in additional shares tied to post-close company performance.

The original transaction already included 40,000,000 million shares that were set to be distributed to company shareholders at share price hurdles of $20, $25 and $30. A new 40,000,000 shares are to vest for company shareholders if it hits certain EBITDA and revenue targets in 2023 and 2024 with all steps requiring Falcon’s Beyond to hit at least $12.4 million in EBITDA and $70 million in revenue in 2023.

FAST II’s sponsor and financial advisor Jefferies stand to receive up to 2% of these shares each if the targets are achieved, but this is capped based on the deal’s total proceeds. Jefferies is to receive a maximim 1,600,000 shares if the deal’s proceeds exceed $50 million and 800,000 if proceeds fall below this threshold.

Up to 80% of the sponsor’s promote is now subject to forfeiture pro rata based on the deal’s total proceeds. The sponsor is to be left with a minimum of 1,250,000 promote shares and a maximum of 4,446,738, but this is to be reduced proportionately to the extent that proceeds fall below $222,336,870. It will also forfeit 2,148,913 (50%) of its private placement warrants if proceeds fall below $50 million.

Additionally, this minimum 1,250,000 promote shares are now subject to a two-year lock-up.

Falcon’s Beyond investor Infinite Acquisitions has agreed to fund $2 million in additional transaction expenses and the company will now owe FAST II a $12.5 million breakup fee should the deal terminate on its decision or breaches. One may recall that the FAST team got into hot water with the investors of its earlier SPAC when it attempted to retain a $33 million breakup fee rather than distribute this to shareholders in its liquidation.

FAST II and Falcon’s Beyond initially announced their combination in July 2022. The Orlando, Florida-based company is an experiential entertainment developer focused on themed resorts and attractions using both proprietary and partnered intellectual property (IP).

Through a 50-50 joint venture with Melia Hotels International, the company expects to operate four destination resorts with about 1,900 hotel rooms by the end of 2024. That joint venture already launched a theme park in Mallorca, Spain in 2007 that averaged about 240,000 visitors per year before the pandemic.

In its announcement materials, Falcon’s Beyond projected the three resorts set to be operated via the Melia JV in Punta Cana, Tenerife and Playa del Carmen to generate $305 million in revenue per year and $147 million in EBITDA. About 45% of the deal’s total proceeds are expected to go towards capex for its owned Falcon’s Central destination.