USA Buys Property | Recent Delaware Court Of Chancery Spac Opinions

Recent Delaware Court Of Chancery Spac Opinions

Recent Delaware Court Of Chancery Spac Opinions

Based on GHVI’s current price, Matterport has an enterprise value of $3.1 billion. Based on this value and Matterport’s projected total revenue, its valuation multiples for 2021 and 2022 are 25.2x and 15.3x, respectively. Since Matterport is a growth stock, the company’s 2025 EV-to-sales multiple of 4.1x looks much more attractive. Considering that Twilio and Unity Software are trading at NTM EV-to-sales multiples of 22.3x and 24.1x, respectively, Matterport looks undervalued. Simply enter the email address you used to create your account and click “Reset Password”. Other tech rivals such as Peek and Asteroom have also pounced on segments of the 3D tour market, and the takeaway is that 3D tours are here to stay — even if other companies would like to take part of Matterport’s crown.

  • The SPAC adopted amended bylaws imposing the restrictions before the business combination closed.
  • “We believe the proposed transaction with Gores Holdings VI unlocks the potential of our platform and accelerates our mission to make every building and every space more valuable and accessible,” Matterport CEO RJ Pittman, said in a statement.
  • The court ultimately denied Synergy’s petition on the basis that Section 226 of the DGCL limits the authority of a custodian to wind up the affairs of the corporation and terminate its existence, and not to revive a corporation.
  • Matterport is going public via a SPAC merger with Gores Holdings VI .
  • The portal has seen surging interest in its 3D offerings during the coronavirus pandemic.

GHIV will merge with United Wholesale Mortgage , which is a 35-year-old giant in the residential mortgage lending industry. When the transaction closes, the combined company will operate under UWM Corporation. The GHVI and Matterport merger is confirmed, while a shareholder vote ultimately approves the merger. However, SPACs are made for the sole purpose of acquiring another company and shareholders don’t usually reject the merger. The parties submitted post-trial briefing, and I heard post-trial argument on December 21, 2021. The transfer restrictions will expire on or around January 18, 2022.

The portal has seen surging interest in its 3D offerings during the coronavirus pandemic. In the case of Gore Holdings VI, shares were trading at around $14 Thursday, with less than 24 hours before the company officially merged with Matterport. https://xcritical.com/ That share price represents a general upward trend since mid May, when shares bottomed out at less than $11, but it’s a considerable drop since February, when news of the Matterport merger propelled prices to more than $24 per share.

I observed that the case should be heard and decided before the expiration of the transfer restrictions, given “the plaintiff’s concerns about market risk” and the “potential for selling pressure.” The 52 percent pullback in GHVI stock has provided buying opportunities for long-term bargain investors. Matterport expects to generate sales of $123 million in 2021 and forecasts its sales growing by 65 percent in 2022 and 60 percent in 2023. In 2025, the company projects revenue of $747.3 million and an attractive gross margin of 73 percent. It expects to turn EBITDA positive in 2024 and foresees an EBITDA of $78.5 million in 2025.

The SPAC adopted amended bylaws imposing the restrictions before the business combination closed. The plaintiff, a former officer of Legacy Matterport, contends that the restrictions were adopted without his consent in violation of Section 202 of the Delaware General Corporation Law. He also asserts that the challenged bylaw provision does not apply to him by its plain terms.

Matterport Going Public Via Spac Merger

Companies that facilitate these deals — such as Gore Holdings VI in this case — exist purely to merge. They don’t do, produce or create anything, but rather form and go public, thus taking on the burden of initially getting onto the stock market. Operators of and investors in such companies are effectively betting that they’ll make big returns if they merge with a successful company and share prices rise.

In addition to seeking declaratory relief as to the validity of the restrictions, the plaintiff brings breach of fiduciary claims against Legacy Matterport’s former directors. Matterport, a spatial data firm and the real estate industry’s top progenitor of 3D tours, is set to go public via a merger with Gores Holdings VI, a special purpose acquisition company sponsored by Gore Group, a global asset management firm. Brown argues that these restrictions do not apply to him because he “hld” no Matterport shares “immediately following” the July 22, 2021 de-SPAC transaction’s closing. The defendants assert that Brown’s reading of the provision would “nullify” the transfer restrictions because “no Legacy Matterport stockholder received Matterport shares” instantly after the transaction closed.

matterport spac merger

The defendants assert that they would have taken discovery on “Brown’s reasons for delaying submitting his letters of transmittal, and Brown’s understanding of the value of the merger consideration he received,” had he raised this argument sooner. In my view, neither issue would change the outcome of this decision, as neither affects the A&R Bylaws’ text. When construing a corporation’s bylaws, the court is bound by the principles of contract interpretation. Words are “given their commonly accepted meaning 7 unless the context clearly requires a different one or unless legal phrases having a special meaning are used.” When a “bylaw’s language is unambiguous, the court need not interpret it or search for the parties’ intent.” Despite the drop since February, though, assuming share prices hold steady in the coming days the investors that agreed to buy Matterport shares for $10 a pop stand to make a profit.

Who Owns Ghvi?

After the transaction closes, GHVI public shareholders and sponsors will own 14.8 percent of Matterport, while PIPE investors will own 10.1 percent. The spatial data and 3D tour company estimates the enterprise value of the combined companies will clock in at approximately $2.3 billion. Still, the company does face growing competition and its debut on the stock market will serve as a kind of litmus test to see if investors believe it can maintain its position as king of the 3D tour. Among other competitors, Zillow launched a 3D tour offering in 2018 and made it widely available in 2019.

Matterport stock is set to climb after the merger deal due to the technology company’s huge growth potential. The company helps individuals and companies create virtual representations of 3D spaces. These interactive versions of the real world help people access and analyze properties virtually. The company thinks that its total addressable market size is worth $240 billion, with around 20 billion spaces around the globe. The A&R Bylaws define Lockup Shares as “the shares of Class A common stock held by the Lock-up Holders immediately following the Business Combination Transaction.” I do not find that language ambiguous. I therefore look to the plain language of the provision, which is straightforward.

Company

Those investors include an array of big-name firms including Tiger Global Management, Senator Investment Group, Dragoneer Investment Group, Fidelity Management & Research Company and others. Matterport, which was founded in 2011, first announced plans to go public via a SPAC merger in February. At the time, the company revealed the merger matterport spac merger would score it $640 million in capital, with $310 million from Gores Holdings VI itself and another $295 million coming from fully committed common stock purchases at $10 per share. CCIV stock is dropping due to a market sell-off in small-cap and growth stocks, as well as bearish sentiment building ahead of the shareholder merger vote.

The significant fall has pushed CCIV below its 50- and 200-day moving averages, though it now looks to be much more reasonably valued. The company believes there’s a large total addressive market of more than $1.2 trillion for the digitization of spaces, with less than one percent of space currently digitized and Matterport leading the way. One of Matterport’s top rivals in the space, GeoCV, shut down nearly two years ago after a patent infringement dispute between the two firms.

Section 7.10 of the A&R Bylaws defined “Lockup Shares,” in relevant part, as “shares of Class A common stock held by the Lockup Holders immediately following the closing of the Business Combination Transaction.” The transfer restrictions were set to expire 180 days after the closing of the business combination. Brown held only the right to receive Matterport Class A common shares at that time. The evidence 10 demonstrates that Brown was not issued Matterport shares until at least November 5 and 19, 2021-after he sent executed letters of transmittal to Matterport’s transfer agent. Roughly three and a half months elapsed between the business combination closing and the date Brown possessed any Matterport shares. Obtaining shares over 100 days after closing is not “immediately.”

The court ultimately denied Synergy’s petition on the basis that Section 226 of the DGCL limits the authority of a custodian to wind up the affairs of the corporation and terminate its existence, and not to revive a corporation. Nathan E. Barnett and Benjamin Strauss are partners at McDermott Will & Emery LLP. This post is based on their MWE memorandum, and is part of theDelaware law series; links to other posts in the series are availablehere. Related research from the Program on Corporate Governance includesSPAC Law and Mythsby John C. Coates . Gores Group is led by Alec Gores, who has extensive experience as an entrepreneur, business operator, private equity investor, and now SPAC manager.

“Held” is the past tense of 8 “hold,” which means “to have possession or ownership.” “Immediately” means “without delay.” “Following” means “being next in order or time.” The proxy statement informed stockholders of the inherent conflicts of the SPAC’s fiduciaries and informed the stockholders about their ability to redeem their shares, and the stockholders overwhelmingly approved the transaction. Following the merger, it was reported that MultiPlan’s largest customer would be forming a competitor—this was not disclosed in the proxy statement—which resulted in a decline in MultiPlan’s share value and ensuing stockholder litigation. Gores Holdings VI is a special purpose acquisition company sponsored by an affiliate of The Gores Group for the purpose of effecting a merger, acquisition, or similar business combination. On July 22, 2021, the A&R Bylaws became effective when Gores filed an amended certificate of incorporation and the transaction was completed.

Matterport Is A Good Long

In an exclusive interview with Benzinga, Matterport’s CEO explained how the company is capitalizing on the largest asset class in the world. Menu icon A vertical stack of three evenly spaced horizontal lines. Last month, his Gores Group IV merged with United Wholesale Mortgage in a deal that valued the wholesale mortgage lender at $16.1 billion.

The statement indicates stockholders will hold roughly 75% of the combined company. Matterport had revenue of $85.9 million in 2020, up 87% year over year, according to the statement. Matterport stockholders will roll all their equity over and the existing management team will remain in charge.

Is Matterport Overvalued?

Brown could not have waived an argument about the meaning of the very contractual language upon which he sought declaratory relief. Saba, 224 A.3d at 977 (quoting Hill, 119 A.3d at 38); see also PHL Variable Ins. Tr., 28 A.3d 1059, 1070 (Del. 2011) (“If is unambiguous, then there is no room for judicial interpretation and ‘the plain meaning . . . controls.'” (quoting LeVan v. Indep. Mall, Inc., 940 A.2d 929, 933 (Del. 2007))). The A&R Bylaws were adopted on July 21, 2021 but did not go into effect until the next day. A near-identical version of the bylaws, which only differed in the naming of the SPAC, was adopted simultaneously with the A&R Bylaws and was effective in the interim. GHVI stock will immediately convert to Matterport stock after the deal is completed and cease to exist in its SPAC avatar.

In 2020, Matterport expects it will have generated $86 million in revenue, up from $46 million the year prior. The company projects steady year-over-year revenue growth reaching $747 million in 2025. Those projects also come after Matterport has worked to democratize its offerings. From its inception, Matterport has been known as the gold standard for 3D home scans, with the company’s technology creating a kind of Google Street View experience for property interiors. High-end, proprietary cameras that cost thousands of dollars were required to make the scans.

The company says it has more than 10 billion square feet of space in its spatial data library, which it says is the largest in the world and growing. The company also said it has digitized millions of buildings in more than 150 countries. The companies will raise roughly $295 million from investors including Tiger Global Management, Senator Investment Group, Dragoneer Investment Group and Fidelity Management & Research Co. and accounts managed by Blackstone Group. The blank-check company Gores VI will also provide Matterport with $345 million in cash it previously raised. Venture capital-backed real estate technology firm Matterport will merge with a blank-check company and go public in a deal that values the startup at $2.3 billion.

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