Filing summary: TPG Pace Holdings Corp. — fiscal year ended December 31, 2017
Important issuer mismatch: The supplied filing is TPG Pace Holdings Corp.’s 2017 Form 10-K, not an Accel Entertainment, Inc. filing. It describes a blank-check company and provides no Accel Entertainment operating results. The period covered is February 14, 2017 (inception) through December 31, 2017; this is not a standalone fourth-quarter report.
Business context and reporting period
TPG Pace Holdings was formed to pursue a merger, acquisition, or similar business combination. At year-end it had no operating business, had generated no revenue, and was searching for potential targets. The filing states it had reviewed opportunities but had no committed target or assurance it would complete a transaction.
Key financial metrics
| Metric | Reported amount |
|---|---|
| Revenue | $0 |
| Net loss, inception through year-end | $376,372 |
| Basic and diluted loss per share | $0.01 |
| Operating cash used | $474,505 |
| Cash outside the trust at year-end | $372,073 |
| Funds in trust at year-end | $450,000,000 |
| Total assets | $450,506,795 |
| Total liabilities | $15,907,390, including $15,750,000 deferred underwriting compensation |
| Shareholders’ equity | $5,000,005 |
| Public shares classified outside permanent equity | $429,599,400 |
The filing reports working capital of $434,599,405, but that figure includes the trust-related balance-sheet classification and should not be read as cash available for operating expenses. No operating margins or meaningful operating cash-flow trends are provided. The company reported no long-term debt; it had repaid a $300,000 non-interest-bearing sponsor loan at the IPO closing.
Material changes versus prior comparable period
No prior-year comparable operating period is presented because the company was incorporated in February 2017. The filing reports quarterly net losses of $79,538, $45,000, $94,400, and $157,434 for the periods shown, with the fourth-quarter loss higher than the third-quarter loss. The company completed its $450 million public offering in June 2017 and began separately trading its shares and warrants in August.
Outlook, risks, contingencies, and unusual items
- The company had 24 months from the June 30, 2017 offering close to complete a business combination, extendable to 27 months if it entered a qualifying agreement within the initial period. Otherwise, it was required to redeem public shares and liquidate; warrants would expire worthless.
- Management said the $372,073 of outside-trust cash might not cover operating and acquisition-search costs through the deadline. Additional sponsor or third-party financing was uncertain and not committed.
- Public shareholders could redeem shares in connection with a transaction, subject to trust terms and a minimum net tangible asset requirement of $5,000,001. Redemptions could reduce cash available for a transaction or prevent it from closing.
- Trust funds could be exposed to creditor claims or bankruptcy proceedings, potentially reducing redemption proceeds. The sponsor’s indemnity for certain claims was not independently verified and might not be collectible.
- Potential conflicts include the sponsor’s and management’s other investment activities and obligations to present opportunities to affiliated entities. An affiliated transaction would require an independent fairness opinion.
- Related-party arrangements included a $20,000 monthly fee for office, administrative, and support services and reimbursement of reasonable business expenses. Management reported $120,000 of administrative-service expense and $49,285 of private-aircraft travel reimbursements for the period.
- The $15.75 million deferred underwriting fee was payable only if a business combination was completed. The trust was invested in U.S. Treasury money-market funds on January 2, 2018, after the reporting date.
- No specific target-company guidance or operating outlook was provided. Management’s forward-looking statements were subject to substantial transaction, financing, timing, regulatory, and market risks.
Most important facts for investors to verify
- Confirm the issuer: this filing is for TPG Pace Holdings Corp., not Accel Entertainment, Inc.
- Confirm whether the intended request concerns this SPAC filing or Accel Entertainment’s own filing and reporting period.
- Distinguish the $450 million restricted trust balance from the $372,073 of cash available outside the trust.
- Review the trust, redemption, liquidation, warrant, sponsor-indemnity, and related-party terms before relying on the stated potential shareholder recovery.
- There are no Accel-specific revenue, earnings, cash-flow, debt, or guidance figures in the supplied filing.