Business Context and Reporting Period
This Form 8-K was filed by Apollo Strategic Growth Capital (APSG), the SPAC that proposed combining with GBT JerseyCo Limited (GBT) and subsequently becoming Global Business Travel Group, Inc. The report was filed December 8, 2021, with an earliest event date of December 2, 2021.
On December 2, 2021, APSG and GBT entered into a Business Combination Agreement. GBT would become a direct subsidiary of the renamed public company in an Up-C structure. Existing GBT owners were expected to retain a majority voting interest in the public company and a majority economic interest in GBT, while existing APSG shareholders would hold a minority interest.
Key Financial and Transaction Metrics
- PIPE financing: Investors agreed to purchase 33.5 million shares at $10.00 per share, for aggregate proceeds of $335 million. The APSG sponsor agreed to purchase 2 million of those shares.
- Minimum closing cash: Closing required at least $300 million of available cash, including trust-account funds after redemptions and gross PIPE proceeds.
- Additional debt financing: GBT subsidiaries obtained commitments for a new $1 billion, five-year senior secured term loan facility. Approximately $600 million was intended to refinance existing term loans and $400 million to provide incremental financing, including support for potential shareholder redemptions.
- Debt funding: $800 million of initial borrowings were scheduled for December 2021, with the remaining $200 million available on a delayed-draw basis for six months, subject to customary conditions.
- Debt pricing: Initial margins were 6.50% for LIBOR loans and 5.50% for base-rate loans, with a 1.00% LIBOR floor. Beginning with the period ending December 31, 2022, margins were expected to vary with leverage.
- Earnout: Eligible GBT holders were to receive 15 million contingent OpCo C Ordinary Shares. Half would vest if the public-company stock VWAP reached $12.50 for 20 of 30 trading days, and the remainder if VWAP reached $15.00 under the same test, generally within five years after closing.
The filing does not provide operating revenue, profit, cash flow, margin, balance-sheet liquidity, or historical debt metrics for GBT or APSG for a comparable reporting period.
Material Changes Versus the Prior Comparable Period
- The filing announces a proposed transformative business combination rather than quarterly or annual operating results; therefore, comparable-period financial changes are not presented.
- APSG agreed to pursue domestication from the Cayman Islands to Delaware, conversion of its securities, and a new public-company capital structure.
- GBT would reorganize its equity structure, with PubCo holding voting and economic interests in GBT and continuing GBT owners holding exchangeable OpCo B interests and corresponding Class B common stock.
- The proposed transaction added $335 million of PIPE equity commitments and up to $1 billion of new secured debt commitments.
Guidance, Outlook, Risks, Contingencies, and Unusual Items
- Closing conditions: Required shareholder approval, regulatory clearances under the HSR Act and U.K. National Security and Investment Act, an effective Form S-4 registration statement, NYSE approval, completion of the domestication, minimum cash of $300 million, and APSG net tangible assets of at least $5,000,001.
- Termination: Either party could terminate if closing had not occurred by August 2, 2022, subject to other termination rights for failed shareholder approval, regulatory prohibitions, breaches, or changes in recommendation.
- Egencia adjustment: Equity issued at closing could be adjusted for a post-closing equity adjustment related to GBT’s acquisition of Egencia from Expedia. No adjustment would be made if the parties settled the adjustment in cash for $5 million or less.
- Leverage and interest-rate risk: The proposed financing would materially increase secured debt and expose GBT to variable interest rates and leverage-based pricing.
- Shareholder dilution and selling pressure: The PIPE, earnout shares, sponsor shares, options, exchange rights, and registration rights could increase the public share count and future resale supply.
- Transaction risks: The filing identifies risks involving failure to close, shareholder redemptions, regulatory delays, litigation, transaction costs, integration and anticipated-benefit risks, competition, retention of customers and employees, economic conditions, and COVID-19.
- Sponsor vesting: Of specified sponsor shares, 13,631,318 were to vest immediately and 6,713,932 were subject to stock-price or change-of-control triggers during a five-year period; unearned shares could be forfeited.
Most Important Facts for Investors to Verify
- Whether the Business Combination Agreement was ultimately approved and closed, and the actual closing date and final ownership percentages.
- The final amount of APSG trust-account cash after redemptions, PIPE proceeds actually funded, and total transaction consideration.
- Whether the $1 billion term loan was funded, its final balance, interest rate, covenants, maturity, and use of proceeds.
- GBT’s audited historical and pro forma revenue, profitability, cash flow, liquidity, leverage, and margins, which are not included in this filing text.
- The final Egencia post-closing equity adjustment and its effect on share issuance and ownership.
- The number of shares outstanding after the transaction, including PIPE shares, earnout shares, sponsor shares, options, warrants, and exchangeable OpCo interests.
- The final regulatory, shareholder, registration, and NYSE listing outcomes, as well as any subsequent amendments to the transaction agreements.