Pivotal Gets Another $100 Million Backstop
by Kristi Marvin on 2019-12-17 at 10:22am

This deal is on…but it’s expected to become a Bulletin Board stock

Pivotal Acquisition Corp. (PVT), released this morning that they have secured another $100 million backstop commitment, this time with the Ontario Teachers’ Pension Plan and another large global financial institution (unnamed). This new backstop is in addition to their previous backstop with MGG Investment Group, to give Pivotal a total of $200 million in combined commitments.  As a result, this SPAC transaction is now fully secured so their shareholder vote tomorrow looks like a go.

However, the press release also stated that Pivotal expects that it is, “...unlikely to meet the minimum holder requirements for listing on the New York Stock Exchange upon consummation of the transaction with KLD. As a result, it is anticipated that upon the closing of the transaction with KLD, the Company’s securities will be delisted from the New York Stock Exchange. It is anticipated that the Company’s securities will thereafter be traded on a to-be-determined tier of the OTC Bulletin Board.

Basically, we have another Federal Street situation.  The entire trust of PVT (or most of it) is expected to be redeemed and they will de-list to the Bulletin Board. If you recall, Federal Street did a $750 million PIPE with Thomas H. Lee Partners (THL) ahead of their shareholder vote because it was anticipated that their entire trust would be redeemed as well. Subsequent to that, Fed Street/Agiliti de-listed to the Pink Sheets.  However, it has not yet been determined at what tier of the Bulletin Board PVT will de-list.

So while shareholders are protected via the redemption process, warrant holders are not totally out of luck either.  That is, if Pivotal decides to do a warrant tender similar to what Federal Street/Agilit did last year.  Back in March of 2019, after Agiliti de-listed, they announced a tender offer for their outstanding warrants at $0.40 per warrant. However, a month later, Agiliti increased the purchase price to $0.95 per warrant.  As a result, 99.47% of the total outstanding warrants were tendered for an aggregate amount of approximately $35.9 million.

All told, this deal is getting done, but in an unconventional way.  And remember – the Pivotal team still has another SPAC out searching (PIC), so it is likely they’ll do something to keep the warrant holders in Pivotal 1 happy, lest it leaves a bad taste in their mouth for Pivotal 2.

Backstop

The new $100 million financing will be of the same terms as MGG’s, consisting of a 5-year Debenture. The Debentures will be repayable at any time prior to maturity without any prepayment penalty. However, in the event the Company elects to prepay the Debentures, the holders will have a right to purchase common stock from the Company in an amount commensurate in value to the prepayment at a price of $18 per share, subject to adjustment (the “conversion price”).

Furthermore, the holders will have the option to convert the Debentures into shares of the Company at the conversion price at any time. The Debentures will pay interest in cash at a rate of 4% and in kind at a rate of 7%. The principal amount and paid-in-kind interest will be due at maturity of the Debentures. In connection with the issuance of the Debentures, certain holders will also purchase from the Company shares of common stock of the Company and warrants to purchase shares for the aggregate price of approximately $1.77 million.

 

Pivotal Gets Another $100 Million Backstop
Recent Posts
by Nicholas Alan Clayton on 2025-07-01 at 11:33am

Ribbon (NASDAQ:RIBB) has entered into a definitive agreement to combine with Japanese biotech firm DRC Medicine at a pro forma equity value of $422 million. Tokyo-based DRC Medicine manufactures reusable anti-bacterial and anti-allergen wearables and aims to go deeper into the medical device and pharmaceutical space. Transaction Overview Ribbon is expected to provide $50.4 million...

by Henrique Santa Rosa, CFA on 2025-07-01 at 11:09am

In June 2025, the SPAC market was marked by a notable rise in meeting delays, with adjournments and postponements playing a central role in extension activity, as sponsors navigated a more cautious market environment. Still, several SPACs secured shareholder approvals, and seven business combinations were completed during the month. At the same time, IPO issuance...

by Kristi Marvin on 2025-07-01 at 8:42am

An In-Depth Look at SPAC Activity Through the Second Quarter & First Half 2025 Below is a summary of the first half of 2025 SPAC market. If you’d like a pdf copy, you can access the link HERE. Q2 kicked off in chaos. President Trump’s shifting and often contradictory tariff announcements sent markets reeling, driving...

by Nicholas Alan Clayton on 2025-07-01 at 8:25am

At the SPAC of Dawn The market is set to be showered with new SPACs today as three more SPACs priced their IPOs overnight, bringing 2025’s total to 66, already surpassing the full-year total of 2024. After hours, Ribbon (NASDAQ:RIBB) also added a new SPAC deal to June’s tally just under the wire, bringing the...

by Nicholas Alan Clayton on 2025-06-30 at 9:04pm

NMP Acquisition Corp. (NASDAQ:NMPAU) announced the pricing of its $100 million IPO and its units are expected to begin trading on the Nasdaq under the symbol “NMPAU”, Tuesday, July 1, 2025. The new SPAC plans to combine with a target company that has a resilient business model with potential to scale up revenue. NMP’s management...

logo

Copyright © 2025 SPACInsider, Inc. All Rights Reserved