Business Context and Reporting Period
Landcadia Holdings III, Inc. filed this Form 8-K on January 25, 2021, reporting events dated January 24, 2021. Landcadia, a special purpose acquisition company, entered into a definitive agreement to combine with HMAN Group Holdings Inc. and its subsidiaries, collectively referred to as Hillman. Following closing, Landcadia is expected to be renamed Hillman Solutions Corp., with Hillman Holdco surviving as a wholly owned subsidiary.
Transaction and Key Financial Terms
| Item | Reported terms |
|---|---|
| Aggregate merger consideration | Approximately $911.3 million, plus approximately $28.28 million attributable to the forfeiture of 2.828 million sponsor-held Class B shares valued at $10.00 per share. |
| PIPE financing | 37.5 million Landcadia Class A shares subscribed for an aggregate $375.0 million, or $10.00 per share. |
| Minimum cash proceeds condition | At least $639.0 million from Landcadia’s trust account and the PIPE investment after redemptions, transaction expenses and other Landcadia liabilities. |
| Post-closing leverage condition | New Hillman net debt may not exceed $885.0 million, plus permitted additional borrowings of up to $100.0 million under Hillman’s existing revolving credit facility. |
| Minimum post-closing cash | At least $50.0 million of cash and cash equivalents. |
| Other debt-related condition | Hillman’s outstanding debentures, trust preferred securities and notes must be redeemed. |
The filing does not provide Hillman’s historical revenue, net income, operating cash flow, margins, detailed balance-sheet data, or liquidity ratios. It also does not provide a completed post-transaction capitalization table.
Material Changes Versus the Prior Comparable Period
The filing reports a proposed business combination and related financing rather than quarterly or annual operating results. Accordingly, it does not present a comparable-period financial statement or quantify changes in revenue, profitability, cash flow, margins, debt, or liquidity versus a prior period.
- Landcadia and Hillman entered into the Merger Agreement on January 24, 2021.
- PIPE investors committed $375.0 million of equity financing.
- The sponsors agreed to forfeit 2.828 million Class B shares at closing, and TJF Sponsor agreed to forfeit an additional 1.0 million Class B shares.
- Landcadia’s sponsors, directors and management agreed to vote in favor of the transaction, subject to the agreement’s terms.
Guidance, Outlook, Risks and Contingencies
The transaction was subject to stockholder approvals, effectiveness of a Form S-4 registration statement and proxy statement, minimum financing and cash requirements, leverage limits, debt redemptions, antitrust clearance, Nasdaq listing approval and other customary conditions. The stated outside date for closing was July 24, 2021.
The Merger Agreement could be terminated in specified circumstances, including failure to close by the outside date, failure to obtain required stockholder or regulatory approvals, inability to satisfy the net tangible asset condition, or failure by Hillman Holdco to deliver the required voting and support agreement.
Management did not provide formal operating guidance in the filing. Forward-looking statements concerning the transaction and its anticipated benefits were subject to risks including failure to complete the combination, inability to realize expected synergies or growth, competition, retention of key employees, transaction costs, regulatory changes, legal proceedings, COVID-19 impacts, financing and listing risks, and broader economic or business conditions.
PIPE shares were to be issued in an unregistered offering under Section 4(a)(2) of the Securities Act. New Hillman was required to seek resale registration for those shares after closing. Sponsor and certain insider shares were subject to transfer restrictions generally lasting one year, with an early price-based release provision.
Important Facts for Investors to Verify
- Whether the merger closed and whether Landcadia was subsequently renamed Hillman Solutions Corp.
- Actual trust-account proceeds, public-share redemptions, transaction expenses and total cash available at closing.
- Hillman’s final post-closing debt, cash balance and compliance with the stated leverage and liquidity conditions.
- Historical and projected revenue, earnings, margins and cash flow, which are not provided in this filing.
- Completion of the PIPE financing, debt redemptions, stockholder approvals, antitrust clearance and Nasdaq listing.
- Final ownership percentages, dilution from the PIPE and sponsor forfeitures, and applicable lock-up and registration rights.