Business Context and Reporting Period
This Form 8-K was filed by Cartesian Growth Corporation, not Alti Global, Inc., on October 25, 2022. It reports amendments to the proposed business combination with Alvarium Investments Limited, Tiedemann Wealth Management Holdings, LLC, TIG Trinity GP, LLC, TIG Trinity Management, LLC and related entities. The transaction was intended to create Alvarium Tiedemann Holdings, Inc. and combine wealth and asset-management businesses. This is a transaction update, not a periodic financial report.
Key Financial and Transaction Metrics
- Companies Enterprise Value: $1.0799 billion, subject to cash, debt, transaction-expense and other closing adjustments.
- Aggregate cash consideration: $100 million, reduced to Available Cash if Available Cash is less than $100 million.
- Consideration allocation: 30.94% to Alvarium shareholders, 35.21% to TIG Entities members and 33.85% to TWMH members.
- Initial private placements: 16,836,715 shares for aggregate proceeds of $164,999,807, subject to amended share-count mechanics.
- Cartesian must have at least $5,000,001 of net tangible assets after private placements and shareholder redemptions.
- Initially reserved equity: 11,788,132 shares for the equity incentive plan and 1,813,559 shares for the employee stock purchase plan.
- Transaction expenses, cash, indebtedness and final equity consideration remained subject to certificates, reconciliation and potential expert determination before closing. The filing does not provide final revenue, earnings, cash-flow, margin, liquidity or consolidated debt figures for the operating businesses.
Material Changes Versus the Prior Agreement
- The original business combination agreement was amended and restated on October 25, 2022.
- The Outside Date was extended or established as January 4, 2023.
- At closing, 1,050,000 TWMH member earn-out units and shares and 1,050,000 TIG Entities member earn-out units and shares will be issued.
- Cartesian will cancel Sponsor Redemption Shares and issue Non-Redeeming Bonus Shares to qualifying public shareholders and private-placement investors. No bonus shares will be issued if public redemptions are below 61.59%; the actual amount depends on redemptions and private-placement shares.
- Cartesian will initially reserve the specified shares for its equity incentive and employee stock purchase plans.
- The lock-up for 50% of shares held by Inactive Target Holders was reduced from 100% to 50%.
- Termination fees were established at $5.5 million payable by Alvarium, severally, and $11 million payable jointly and severally by the TIG Entities and TWMH if Cartesian terminates for failure to close by the Outside Date, subject to stated exceptions. The fees bear 8% interest and are generally the exclusive damages remedy, except for fraud, willful misconduct and equitable relief.
- Sponsor support amendments address forfeiture of up to 2,850,000 Sponsor Redemption Shares, additional Sponsor earn-out shares, transfer of 8,900,000 private-placement warrants and registration of certain Sponsor securities.
- PIPE subscription amendments revised the number of subscribed shares based on forfeited Sponsor shares and non-redeemed public shares.
- Option amendments set the purchase price for up to 3,625,000 Sponsor-held option shares at $10.50 per share before the first anniversary of closing and $11.50 per share thereafter until expiration.
Outlook, Conditions, Risks and Unusual Items
- Closing remained contingent on shareholder approval, an effective registration statement, Nasdaq listing approval, HSR Act clearance, required regulatory approvals, completion of reorganizations and satisfaction or waiver of customary representations, covenants and material-adverse-effect conditions.
- The proposed structure includes a Cayman Islands-to-Delaware domestication, exchange of Alvarium equity, a merger of Umbrella Merger Sub into Umbrella and post-closing contribution and restructuring steps.
- Earn-outs are tied to Class A share VWAP targets of $12.50 and $15.00 over 20 trading days within a 30-trading-day period during the five-year earn-out period. A change of control can accelerate satisfaction of unearned targets.
- Cartesian, Alvarium, TWMH and the TIG Entities are subject to interim operating covenants limiting acquisitions, indebtedness, equity issuances, distributions, compensation changes and other actions before closing. Interim debt caps include $41.5 million for the TIG Entities and $12 million for TWMH, subject to the agreement’s exceptions.
- Material risks include failure to obtain approvals, excessive shareholder redemptions, insufficient available cash, inability to maintain Nasdaq listing, transaction costs, regulatory and litigation risks, market and economic conditions, and failure to realize anticipated benefits.
- The filing contains forward-looking statements and expressly states that no assurance can be given regarding the timing or completion of the business combination.
Important Facts for Investors to Verify
- Confirm the correct issuer: the supplied filing identifies Cartesian Growth Corporation, while the request metadata identifies Alti Global, Inc.
- Verify whether the business combination closed by the January 4, 2023 Outside Date and identify any subsequent amendments, termination or closing filings.
- Determine actual shareholder redemption levels, Available Cash, private-placement funding and the resulting number of Non-Redeeming Bonus Shares.
- Review the final payment spreadsheets and closing adjustments for cash, indebtedness, transaction expenses and equity consideration.
- Assess dilution from PIPE shares, earn-outs, Sponsor shares, warrants, options and the equity incentive and employee stock purchase plans.
- Review the registration statement, definitive proxy statement, audited financial statements and risk factors for the operating companies, none of which are presented as current-period financial results in this Form 8-K.