Ranpak Holdings Corp. — Filing Summary
Issuer and period: The supplied Form 10-K is filed by One Madison Corporation, a blank-check company, for the fiscal year ended December 31, 2018. It is not Ranpak Holdings’ operating-company 10-K; Ranpak is the proposed acquisition target. The filing does not provide Ranpak’s standalone financial results.
Business context and transaction
One Madison had no operating business or operating revenue and was pursuing a business combination. On December 12, 2018, it agreed to acquire all equity interests in Rack Holdings Inc. (Ranpak), described as a global provider of fiber-based protective packaging, for $950 million in cash, subject to working-capital, cash, debt and transaction-expense adjustments and a post-closing true-up. A January 24, 2019 amendment specified that €140 million would be credited as $160.825 million toward the consideration.
The proposed funding included $300 million in IPO trust proceeds, net of redemptions; $150 million under forward-purchase agreements; $142 million of subscription equity; and senior secured financing. The transaction remained subject to shareholder, regulatory and other closing conditions at the time of this filing; it had not closed.
Financial results and liquidity
| Metric | Year ended Dec. 31, 2018 | Prior comparable period |
|---|---|---|
| Revenue | $0 | $0 |
| Total expenses | $3.732 million | $8,515 (inception to Dec. 31, 2017) |
| Interest income | $5.118 million | $0 |
| Net income (loss) | $1.387 million | $(8,515) |
| Net cash used in operating activities | $(1.218) million | $(19,401) |
| Total assets / liabilities | $309.234 million / $18.037 million | $870,815 / $816,830 |
| Cash outside trust at year-end | $2.891 million | $1,896 |
At year-end, the trust account held approximately $305.1 million, principally in short-term U.S. Treasury securities. The balance sheet also showed $1.0 million in escrow, $4.0 million in a non-interest-bearing working-capital note, and $10.5 million of deferred underwriting compensation payable only if a business combination closes. The company reported no long-term debt. Public shares subject to possible redemption were classified outside permanent equity; reported shareholders’ equity was $5.0 million.
Changes, outlook and risks
- Expenses rose substantially as the company completed its IPO, evaluated targets and negotiated the Ranpak transaction. Management attributed about $3.082 million to transaction-related professional, consulting and travel costs; approximately $2.586 million was accrued at year-end.
- The company expected no operating revenue before closing. It provided no operating forecast or guidance for Ranpak in this filing.
- The auditor’s report and management disclosures stated that the mandatory liquidation deadline raised substantial doubt about the company’s ability to continue as a going concern. If no business combination is completed within the permitted period, public shares are to be redeemed and warrants may expire worthless.
- Key transaction risks include shareholder redemptions reducing available cash, failure to secure committed financing or satisfy closing conditions, possible deterioration in Ranpak before closing, and the risk of transaction costs and limited outside-trust cash if the deal fails. The filing also notes that seller indemnification is not provided; representation-and-warranty insurance has significant limits and exclusions.
- Management reported effective disclosure controls and internal control over financial reporting as of December 31, 2018. The financial statements received an unqualified audit opinion, alongside the going-concern warning.
Important facts for investors to verify
- Confirm issuer identity and obtain Ranpak’s own audited financial statements; this filing reports One Madison’s SPAC finances, not Ranpak’s operating performance.
- Verify the transaction’s closing status, final purchase-price adjustments, shareholder redemptions and the actual sources and amounts of funded equity and debt.
- Reconcile the financing disclosures: the filing cites up to $650 million of senior secured financing, while the listed facilities total $695 million including contingency facilities.
- Check the applicable business-combination and liquidation deadline: the filing primarily states January 22, 2020, while one financial-statement note refers to January 2, 2020.
- Assess dilution, voting and redemption terms, including the forward-purchase and subscription shares, founder-share conversion, warrants and related-party arrangements.