Business Context and Reporting Period
This Form 8-K is a current report filed by Global Partner Acquisition Corp. (GPAC) on July 27, 2017. The filing announces a proposed business combination between GPAC and Purple Innovation, LLC ("Purple"). On July 24, 2017, the parties executed a non-binding Letter of Intent (LOI) to pursue a merger.
Key Financial Metrics and Transaction Terms
The filing outlines the preliminary financial structure of the proposed acquisition:
- Enterprise Value: $1.1 billion for Purple.
- Consideration Structure: GPAC intends to pay approximately $90 million in cash, with the remainder paid in rollover equity interests in the combined public company.
- Adjustments: The purchase price is subject to customary adjustments.
Note: This filing does not provide Purple's historical revenue, profit, cash flow, margins, debt, or liquidity metrics. These figures are not disclosed in the text of this 8-K.
Material Changes and Transaction Status
The primary material event is the execution of the non-binding LOI. As of the filing date, the transaction is in the preliminary stage. The parties intend to negotiate and enter into a definitive agreement. No definitive financial changes to GPAC's balance sheet have occurred yet, as the transaction has not closed.
Guidance, Outlook, Risks, and Contingencies
The filing contains extensive forward-looking statements and identifies significant risks that could prevent the transaction from closing or alter its terms:
- Transaction Completion: There is no guarantee a definitive agreement will be reached or that the transaction will close.
- Due Diligence: Matters discovered during due diligence could affect the deal.
- Redemptions: The amount of cash available for the transaction may be reduced by stockholder redemptions.
- Regulatory and Listing: The combined company must meet NASDAQ listing standards.
- Operational Risks: Risks include Purple's ability to manage growth, execute product development, market acceptance, competition, rising costs, and intellectual property litigation.
- Approval Requirements: The deal requires security holder approvals and satisfaction of other closing conditions.
Investor Verification Checklist
- Verify the final terms of the definitive merger agreement once filed.
- Review the definitive proxy statement for details on the equity rollover structure and cash funding sources.
- Assess the level of stockholder redemptions, which will impact the cash available for the acquisition.
- Examine Purple's audited financial statements and historical performance data, which are not included in this 8-K.
- Monitor the outcome of due diligence and any potential changes to the $1.1 billion valuation.