Filing Overview
Registrant: FinTech Acquisition Corp. IV (FTIV), the SPAC pursuing a business combination with Perella Weinberg Partners (PWP). Filing date: June 11, 2021. The Form 8-K was filed under Item 8.01 to provide supplemental disclosures to FTIV’s definitive proxy statement in connection with shareholder litigation challenging the proposed transaction.
Business Context and Transaction Status
Under the December 29, 2020 Business Combination Agreement, FTIV would acquire interests in PWP, which would become the operating partnership in an Up-C structure jointly owned by FTIV, PWP Professionals and certain existing PWP partners. The definitive proxy statement was dated May 27, 2021, and FTIV’s special shareholder meeting remained scheduled for June 22, 2021. The board continued to unanimously recommend approval of the transaction.
Financial Metrics and Liquidity
This filing does not provide current-period revenue, profit, cash flow, margins, debt, liquidity or other operating financial metrics for FTIV or PWP. It states that the proposed transaction valuation discussions contemplated a cash-free, debt-free basis with normalized working capital and were premised on PWP’s projected 2021 and 2022 net income and EBITDA, but the filing does not provide those projected amounts.
Material Changes and Supplemental Disclosures
- FTIV disclosed that it evaluated more than 54 potential acquisition targets, signed eight nondisclosure agreements and evaluated illustrative transaction structures with five targets.
- FTIV submitted nonbinding letters of intent to two targets other than PWP and signed a letter of intent with a retail data-capture and analytics company referred to as Target A before ultimately pursuing PWP.
- Keefe, Bruyette & Woods was retained as a nonexclusive buy-side transaction advisor, with compensation contingent on closing the PWP combination. JMP Securities was retained as a nonexclusive capital markets advisor, with compensation contingent on closing the PIPE investment. Neither provided a fairness opinion.
- The board’s due diligence review of PWP lasted approximately nine weeks and covered operations, contracts, intellectual property, labor, financing, accounting, tax and legal matters.
- The filing added disclosures regarding potential business relationships among PWP, Cohen & Company, FinTech Masala affiliates and other related parties, including advisory services and investments involving affiliated entities.
Litigation, Outlook and Risks
Two purported shareholder lawsuits challenge the transaction. The complaints allege breaches of fiduciary duty, aiding and abetting, and inadequate proxy disclosure. Plaintiffs seek injunctive relief, rescission or rescissory damages, and reimbursement of attorneys’ and experts’ fees and costs. FTIV believes the claims lack merit and denies that supplemental disclosure was legally required, but voluntarily provided the additional disclosures to reduce litigation-related delay, cost and uncertainty. The filing states that the supplemental disclosure does not change the transaction consideration or the scheduled shareholder meeting.
Key transaction risks include failure to obtain shareholder approval, failure to complete the PIPE investment, inability to maintain Nasdaq listing, regulatory delays, litigation outcomes, shareholder redemptions, failure to achieve anticipated benefits, integration and growth challenges, retention of key personnel, competition, transaction costs, economic conditions and COVID-19-related effects. The transaction and related projections remain subject to substantial uncertainty.
Investor Verification Checklist
- Verify the final shareholder vote and whether the business combination and PIPE investment closed.
- Review the definitive proxy statement and related filings for transaction consideration, projected 2021–2022 net income and EBITDA, redemption assumptions and pro forma capitalization.
- Assess the status and resolution of the two shareholder lawsuits and any effect on transaction timing or terms.
- Review related-party relationships and advisory arrangements involving PWP, Cohen & Company and FinTech Masala affiliates.
- Confirm post-closing Nasdaq listing, liquidity, debt and operating results, none of which are provided in this Form 8-K.