Business Context and Reporting Period
This Form 8-K, dated December 21, 2020, reports that Colonnade Acquisition Corp. (CLA), a Cayman Islands exempted company, entered into a definitive Merger Agreement with Ouster, Inc., a Delaware corporation. The transaction constitutes a business combination where CLA will merge with Ouster via a wholly-owned subsidiary. Upon closing, CLA will be renamed "Ouster, Inc." and will undergo a domestication from the Cayman Islands to the State of Delaware.
Key Financial Metrics and Transaction Terms
- Transaction Valuation: Ouster is valued at an implied equity value of $1.5 billion, calculated based on an exchange ratio resulting in 150,000,000 shares of Ouster PubCo common stock (derived from $1,500,000,000 divided by $10.00 per share).
- PIPE Investment: Concurrent with the Merger Agreement, CLA entered into subscription agreements for a $100,000,000 PIPE Investment. Investors subscribed for 10,000,000 shares of Ouster PubCo common stock at $10.00 per share.
- Liquidity Condition: A condition to closing requires that the aggregate cash available from the Trust Account (after redemptions) plus the PIPE Investment equals at least $100,000,000.
- Net Tangible Assets: CLA must have at least $5,000,001 of net tangible assets upon closing.
- Operating Metrics: The filing text does not provide specific revenue, profit, cash flow, margin, or debt figures for Ouster or CLA.
Material Changes and Transaction Structure
The primary material change is the execution of the Merger Agreement, which alters the corporate structure and ownership of both entities. Key structural changes include:
- Share Conversion: All outstanding Ouster shares will be cancelled and exchanged for Ouster PubCo common stock.
- Domestication: CLA will deregister in the Cayman Islands and domesticate in Delaware. Existing CLA Class B shares will convert to Class A, which will then convert to Ouster PubCo common stock.
- Warrant Conversion: Existing CLA warrants and private placement warrants will convert into warrants to purchase Ouster PubCo common stock.
- Support Agreements: The Sponsor and Key Stockholders of Ouster (holding a majority of voting power) have entered into support agreements to vote in favor of the transaction.
Guidance, Outlook, Risks, and Conditions
Conditions to Closing: The transaction is subject to customary conditions, including shareholder approval from both CLA and Ouster, effectiveness of the Form S-4 registration statement, expiration of the HSR Act waiting period, NYSE listing approval, and the absence of injunctions.
Timeline: The Merger Agreement may be terminated if the closing does not occur by June 30, 2021 (the "Agreement End Date").
Risks and Contingencies: The filing highlights significant risks, including the potential failure to complete the business combination, failure to satisfy the minimum cash condition, regulatory approval delays, disruption to Ouster's business operations, employee retention issues, and volatility in the lidar technology industry. Forward-looking statements are subject to these uncertainties.
Lock-up Provisions: Sponsor shares are subject to a one-year lock-up (or earlier release if the share price exceeds $12.00 for 20 trading days within a 30-day period after 150 days). Ouster stockholders are subject to a 180-day lock-up.
Investor Verification Checklist
- Verify the final cash balance in the Trust Account after shareholder redemptions to ensure the $100,000,000 minimum cash condition is met.
- Confirm the approval status of the Form S-4 proxy statement/prospectus by the SEC.
- Monitor the voting results of both CLA and Ouster shareholders regarding the Merger Agreement.
- Review the definitive proxy statement for detailed financial information on Ouster, as this 8-K does not contain audited financial statements.
- Assess the status of antitrust reviews under the Hart-Scott-Rodino Act.
- Check for any legal proceedings or injunctions that could prevent the consummation of the merger.