Business Context and Reporting Period
This Form 8-K, dated March 9, 2015, reports that Capitol Acquisition Corp. II ("Capitol") has entered into a definitive Merger Agreement with Lindblad Expeditions, Inc. ("Lindblad"). Lindblad is an expedition travel company operating in partnership with National Geographic. The transaction is structured as a reverse merger where Lindblad stockholders will receive approximately $330 million in aggregate consideration, consisting of $90 million in cash and approximately 24 million shares of Capitol common stock. The deal is expected to close by May 15, 2015, subject to stockholder approval and other conditions.
Key Financial Metrics
The filing does not provide audited revenue, profit, cash flow, or margin data for Lindblad. It explicitly states that Lindblad's financial information is unaudited, prepared as a private company, and does not conform to SEC Regulation S-X. Non-GAAP measures such as EBITDA are referenced but specific values are not disclosed in this text.
- Transaction Value: Approximately $330,000,000.
- Cash Consideration: Approximately $90,000,000.
- Stock Consideration: Approximately 24,000,000 shares of Capitol common stock.
- Debt Financing Target: Lindblad is required to secure a debt facility of no less than $112,000,000 by May 1, 2015, to satisfy current indebtedness.
- Debt Commitment Target: A commitment letter for at least $80,000,000 is required by April 20, 2015.
- Liquidity Requirement: Capitol must maintain at least $5,000,001 in net tangible assets post-closing.
Material Changes and Conditions
The primary material change is the entry into the Merger Agreement. The transaction is contingent upon several critical conditions:
- Stockholder Approval: Approval by Capitol stockholders is required.
- Financing: Lindblad must obtain a debt commitment letter by April 20, 2015, and consummate a debt financing of at least $112 million by May 1, 2015. Failure to meet these financing milestones allows Lindblad to terminate the agreement.
- Regulatory and Legal: No governmental orders prohibiting the transaction and receipt of necessary third-party consents.
- Net Tangible Assets: Capitol must retain at least $5,000,001 in net tangible assets after the transaction.
Guidance, Risks, and Unusual Items
The filing contains extensive forward-looking statements regarding the anticipated closing date and financial impacts, which are subject to significant risks. Key risks include the failure to obtain stockholder approval, inability to secure the required debt financing, material adverse changes to Lindblad's business, and regulatory hurdles. The filing notes that Lindblad's financial data includes non-GAAP measures (EBITDA) which will be adjusted in the definitive proxy statement. The transaction may be terminated if not consummated by May 15, 2015 (or June 29, 2015 if extended by stockholders).
Investor Verification Checklist
- Verify the final terms of the $112 million debt facility and whether the $80 million commitment letter was secured by April 20, 2015.
- Review the definitive proxy statement for adjusted financial data and a detailed description of Lindblad's historical performance.
- Confirm the outcome of the Capitol stockholder vote on the proposed transaction.
- Assess the status of required third-party consents and regulatory approvals.
- Examine the Registration Rights Agreement to understand the liquidity and resale rights for Lindblad stockholders receiving Capitol shares.