Business Context and Reporting Period
This Form 8-K was filed by Cartesian Growth Corporation, a Cayman Islands special purpose acquisition company, with an earliest reported event date of September 19, 2021. The request metadata identifies Alti Global, Inc., but the filing itself identifies Cartesian Growth Corporation as the registrant. The filing reports entry into a definitive business combination agreement with Tiedemann Wealth Management Holdings, LLC, the TIG entities, Alvarium Investments Limited and related parties.
The proposed transaction would combine the businesses under a new public company expected to be renamed Alvarium Tiedemann Holdings, Inc. Cartesian would domesticate from the Cayman Islands to Delaware, and the transaction would include the acquisition of Alvarium and the contribution of the Tiedemann and TIG businesses through an umbrella structure.
Key Financial and Transaction Metrics
- Companies enterprise value: $1.0799 billion.
- Aggregate cash consideration: $100.0 million, subject to reduction if available cash is below that amount.
- Alvarium equity value: $334.1 million.
- TIG Entities equity value: $380.2 million.
- TWMH equity value: $365.5 million.
- Initial PIPE financing: 16,836,715 shares at $9.80 per share, for aggregate proceeds of approximately $165.0 million.
- The filing separately states that 16,936,715 shares will be issued to PIPE investors in connection with closing, reflecting an additional 100,000 shares under a side letter.
- Available cash must be at least $75.0 million for the companies to be required to complete the transaction.
- Cartesian must have at least $5,000,001 of net tangible assets after the private placement and shareholder redemptions.
- Sponsor committed to purchase up to $12.5 million of shares from certain redeeming shareholders at no more than $10.00 per share.
- The filing does not provide operating revenue, net income, cash flow, margins, balance-sheet debt, or liquidity metrics for the businesses for a comparable reporting period.
Material Changes Versus the Prior Comparable Period
This is a transaction announcement rather than an earnings or periodic financial report. Accordingly, the filing does not present comparative operating results or quantify changes in revenue, profitability, cash flow, margins, debt, or liquidity versus a prior period.
The material change is the execution of the business combination agreement and related financing, support, governance, registration, tax and employment arrangements. Closing remains subject to shareholder approval, regulatory clearances, effectiveness of an SEC registration statement, Nasdaq listing approval, minimum cash requirements and other customary conditions.
Guidance, Outlook, Risks and Unusual Items
- Earn-out consideration may be issued to Alvarium shareholders, TWMH members and TIG members if the post-closing stock price reaches $12.50 and $15.00 VWAP targets for 20 trading days within a 30-trading-day period during the five-year earn-out period.
- If a change of control occurs during the earn-out period, unsatisfied earn-out targets may be deemed satisfied.
- Sponsor shares are subject to forfeiture based on redemption levels and additional earn-out conditions. The sponsor also agreed to transfer 8.9 million private placement warrants to transaction participants.
- The tax receivable agreement generally requires the combined company to pay 85% of specified net tax benefits from exchanges of umbrella interests for Class A common stock.
- Registration rights and lock-up provisions will restrict sales of specified shares and warrants for periods ranging from no lock-up to three years.
- Michael Tiedemann is expected to serve as chief executive officer for an initial five-year term at a base salary of $575,000, with bonus, equity and potential severance arrangements.
- The agreement may be terminated if closing has not occurred by March 18, 2022, subject to specified extensions, or upon failure of approvals, regulatory conditions, closing conditions or contractual obligations.
- Principal risks include failure to obtain shareholder or regulatory approvals, inability to complete the transaction or obtain Nasdaq listing, redemption-related funding shortfalls, transaction costs, litigation, disruption of operations, financial-services regulation, market conditions and failure to realize anticipated benefits.
- The filing contains forward-looking statements and expressly cautions investors not to rely on projected transaction outcomes or anticipated benefits.
Important Facts for Investors to Verify
- Confirm the final transaction structure, ownership percentages, share issuance and treatment of redemptions in the definitive proxy statement and Form S-4.
- Verify the financial statements and historical operating metrics for Alvarium, TWMH and the TIG entities, which are not included in the provided filing text.
- Reconcile the stated PIPE share counts of 16,836,715 and 16,936,715 and determine the final proceeds and dilution.
- Determine whether the $75.0 million minimum available-cash condition and $5,000,001 net tangible-asset condition are satisfied after redemptions and transaction expenses.
- Review the final earn-out calculations, sponsor forfeiture provisions, warrant transfers and lock-up schedules for their dilution and governance effects.
- Assess the economic impact of the tax receivable agreement, including the potential obligation to remit 85% of specified tax benefits.
- Confirm whether all shareholder, HSR, regulatory, SEC registration and Nasdaq listing approvals were obtained and whether the transaction ultimately closed.