Aeva Technologies, Inc. — Form 8-K Summary
Filing date: November 2, 2020; signed November 6, 2020. The filing was made by InterPrivate Acquisition Corp., the SPAC, regarding its proposed business combination with Aeva, Inc. The filing does not present a quarterly or annual operating-period financial update for Aeva.
Business Context and Transaction
InterPrivate, its wholly owned subsidiary WLLY Merger Sub Corp., and Aeva entered into a business combination agreement. Merger Sub will merge with Aeva, with Aeva surviving as a wholly owned subsidiary of InterPrivate. The transaction is structured as a reverse triangular merger and is intended to result in Aeva becoming a publicly traded company through InterPrivate.
- Aeva’s agreed transaction value is $1.7 billion, subject to a potential dollar-for-dollar reduction for a specified balance-sheet deficiency exceeding $50 million.
- Aggregate transaction consideration will be calculated as the Company Value plus the aggregate exercise price of outstanding Aeva options, divided by $10.00, and paid in InterPrivate common stock.
- Aeva preferred stock is expected to convert into Aeva common stock immediately before the merger, subject to required stockholder consent.
- Aeva options and restricted stock units will be converted into comparable awards relating to InterPrivate common stock.
Capitalization, Liquidity, and Other Financial Terms
- Investors agreed to purchase approximately 12.0 million InterPrivate shares at $10.00 per share through a private investment in public equity transaction, generating approximately $120 million of gross proceeds.
- The PIPE proceeds are intended to provide additional transaction capital and help satisfy the minimum cash condition.
- At closing, after redemptions and specified equity issuances, InterPrivate must have at least $150 million of aggregate cash, including funds in or outside the trust account.
- InterPrivate’s total outstanding liabilities, excluding specified transaction-related expenses, must not exceed $500,000 at closing.
- The filing text does not provide clear values for Aeva revenue, operating profit or loss, net income, cash flow, margins, cash balances, or debt.
Material Changes and Transaction Mechanics
- The transaction requires approval by InterPrivate stockholders and written consent from Aeva stockholders, including approval of the merger and related proposals.
- A Form S-4 registration statement, incorporating a proxy and consent solicitation statement, is expected to be filed with the SEC.
- InterPrivate will seek New York Stock Exchange listing of the shares issued in the transaction and the PIPE.
- Certain Aeva stockholders agreed to support the transaction and not transfer their covered shares or enter into inconsistent voting arrangements.
- At closing, the parties expect to enter into registration rights, lock-up, and stockholders agreements. Aeva pre-closing stockholders generally will be subject to a 180-day lock-up; specified Sponsor and EarlyBird securities will have longer or performance-based lock-up periods.
- The post-closing board is expected to have seven directors, with a majority independent, and certain corporate actions will require approval by at least 70% of the directors.
Guidance, Outlook, Risks, and Unusual Items
The filing does not provide firm operating guidance or historical financial forecasts in the supplied text. It includes forward-looking statements concerning the transaction, Aeva’s products and markets, and projected future results.
- Closing is subject to regulatory approvals, HSR clearance, an effective Form S-4, stockholder approvals, satisfaction of the minimum cash condition, execution of ancillary agreements, and the absence of a material adverse effect.
- The outside date for closing is March 31, 2021, unless the agreement is terminated earlier.
- InterPrivate may be entitled to a $68 million termination fee in specified circumstances involving a competing acquisition proposal, adverse recommendation changes, or certain Aeva breaches.
- Key risks include failure to complete the transaction, redemption levels reducing available cash, inability to obtain approvals or maintain NYSE listing, execution and commercialization risk, competition, supply-chain and manufacturing issues, intellectual-property protection, litigation, additional capital needs, and the possibility that Aeva never achieves or sustains profitability.
- The filing cautions that the agreement’s representations and warranties allocate contractual risk and should not be treated as factual descriptions of the parties’ current condition.
Important Facts for Investors to Verify
- Whether the merger and PIPE closed, and the final number of shares issued and cash available after redemptions.
- The final Aeva capitalization, including preferred-stock conversion, option and RSU exchange ratios, and dilution from the PIPE and warrants.
- Whether the $1.7 billion Company Value was reduced based on the audited-versus-unaudited balance-sheet comparison.
- Aeva’s audited financial statements, revenue trajectory, operating losses, cash burn, liquidity, debt, and capital requirements.
- Completion and effectiveness of the Form S-4, required stockholder approvals, regulatory clearances, and NYSE listing approval.
- The final lock-up, registration-rights, governance, and termination-fee terms in the executed agreements.