Business Context and Reporting Period
Reinvent Technology Partners Y, a special purpose acquisition company, filed this Form 8-K on October 21, 2021, under Items 7.01 and 8.01. The filing updates and supplements the definitive proxy statement/prospectus for its proposed business combination with Aurora Innovation, Inc., a self-driving technology company.
- Shareholder meeting: November 2, 2021, at 12:00 p.m. ET.
- Voting record date: September 30, 2021.
- Expected closing, subject to conditions: November 3, 2021.
- Following closing, the company expected to be renamed Aurora Innovation, Inc., with common stock and warrants expected to trade on Nasdaq under AUR and AUROW beginning November 4, 2021.
- The transaction includes the domestication of the Cayman Islands company as a Delaware corporation and the merger of RTPY Merger Sub Inc. with and into Aurora.
Key Financial and Valuation Information
This filing does not report current-period revenue, profit, cash flow, margins, or operating results for RTPY or Aurora. It primarily provides transaction disclosures and valuation information from the proxy materials.
| Item | Amount or range |
|---|---|
| Goldman Sachs transaction and PIPE engagement fees | $24.0 million, contingent on consummation of the business combination; expenses reimbursable separately and not contingent |
| Houlihan Lokey financial advisory fees | $2.5 million, plus reasonable expenses |
| Aurora cash and cash equivalents used in valuation analysis | $925.9 million as of March 31, 2021 |
| Aurora total debt used in valuation analysis | $0.0 million as of March 31, 2021 |
| Non-operating transaction expense liability | $38.9 million as of March 31, 2021 |
| Assumed aggregate merger consideration | $11.0 billion |
Houlihan Lokey’s discounted cash flow analysis used 2030 estimated revenue terminal multiples of 3.0x to 5.0x and gross profit terminal multiples of 5.0x to 7.0x, with discount rates of 15.0% to 25.0%.
| Valuation basis | Implied enterprise value | Implied equity value |
|---|---|---|
| 2030E total revenue terminal multiples | $4.676 billion to $19.397 billion | $5.563 billion to $20.284 billion |
| 2030E gross profit terminal multiples | $6.178 billion to $21.105 billion | $7.065 billion to $21.992 billion |
The filing adds comparable-company valuation multiples for estimated 2021 through 2030 revenue and gross profit. It also clarifies that financial projections provided to financial advisors are excluded from the SEC’s non-GAAP financial measure definition and therefore were not reconciled to GAAP measures.
Material Changes Versus the Prior Comparable Period
- The filing does not present a prior-period operating or financial comparison.
- It supplements the proxy statement with additional information regarding RTPY’s target search, relationships among transaction participants, advisor fees and independence, financial projections, valuation methodology, comparable-company analyses, and DCF results.
- RTPY stated that management evaluated nearly 30 potential targets, signed nondisclosure agreements with seven, and submitted no non-binding letters of intent other than to Aurora.
- The filing provides additional detail about a professional relationship involving Ian Smith of Allen & Co. and certain RTPY and Aurora directors or observers.
Guidance, Outlook, Risks, Contingencies, and Unusual Items
- Completion remained subject to shareholder approval, satisfaction of the minimum cash condition after potential redemptions, applicable regulatory approvals, completion of the PIPE investment, and other customary closing conditions.
- Six shareholder demand letters alleged that the proxy statement omitted material information or was false and misleading and alleged fiduciary-duty or securities-law violations.
- A shareholder complaint, Mau v. Reinvent Technology Partners Y, was filed on August 31, 2021, in New York state court with similar allegations.
- The company denied wrongdoing and stated that the claims lacked merit, but provided supplemental disclosures to reduce litigation expense and avoid potential disruption to the transaction. The disclosures were not an admission that further disclosure was legally required.
- Risks identified include failure to close the transaction, failure to obtain an extension of the business-combination deadline, insufficient cash following redemptions, failure of the PIPE investment, regulatory or litigation developments, Nasdaq listing risks, securities-price volatility, execution risk, employee-retention challenges, and the competitive and changing regulatory environment for self-driving technology.
- The projected financial information and forward-looking statements are subject to substantial uncertainty; the filing does not provide a clear current operating forecast for the combined company beyond the referenced valuation projections.
Important Facts for Investors to Verify
- Whether shareholders approved the business combination and whether all closing conditions, including the minimum cash condition and regulatory approvals, were satisfied.
- Actual redemptions, PIPE funding, post-closing cash, capitalization, and ownership percentages.
- Whether the transaction closed on the expected date and whether trading commenced under AUR and AUROW.
- The final terms and total cost of Goldman Sachs, Houlihan Lokey, and other transaction-related engagements.
- The status and potential financial impact of the shareholder demands and Mau v. Reinvent Technology Partners Y litigation.
- The reasonableness of Aurora’s long-term projections, including 2030 revenue and gross profit assumptions, terminal multiples, and discount rates.
- Subsequent SEC filings for Aurora’s actual revenue, cash burn, liquidity, debt, operating losses, and progress toward commercialization.