Bitcoin miner Griid goes public in $3.3bn SPAC deal

BY Fraser Tennant

In a combination that will take the bitcoin miner public, Griid Infrastructure LLC is to merge with special purpose acquisition company (SPAC) Adit EdTech Acquisition Corp in a transaction valued at $3.3bn.

Under the terms of the definitive agreement, current Griid equity holders will own approximately 90 percent, Adit EdTech public stockholders will own approximately 8 percent and Adit EdTech’s sponsor will own approximately 2 percent of the outstanding shares of voting stock of the combined company at closing, respectively.

Upon completion of the transaction. the combined company is expected to operate under the name ‘GRIID Infrastructure Inc.’ and be led by Griid’s existing management team.

“We are building an American infrastructure company with the largest pipeline of committed, carbon-free power among public bitcoin miners at the lowest cost of scaled production,” said Trey Kelly, chief executive of GRIID. “Our team has demonstrated a track record of successful execution over the past three years since starting the company, and we look forward to delivering expansion of capacity through this transaction.”

Based in Cincinnati, Ohio, Griid is a profitable, vertically integrated bitcoin self-mining company that owns and operates a growing portfolio of energy infrastructure and bitcoin mining facilities across the US. Griid supports the growth of carbon-free energy generation by procuring low-cost energy to build, manage and operate its portfolio of vertically integrated bitcoin mining facilities.

“Carbon-free mining is the future of bitcoin,” said David Shrier, chief executive of Adit EdTech. “GRIID’s combination of a large pipeline of low-cost, carbon-free power, distinctive access to next generation application-specific integrated circuits (ASICs) and market-leading execution position them to generate attractive profitability and growth.”

Unanimously approved by the board of directors of Adit EdTech and the board of managers of Griid, the transaction is expected to close in the first quarter of 2022, subject to customary closing conditions, including the receipt of regulatory approvals and approval of Adit EdTech’s stockholders.

Eric Munson, managing partner at Adit EdTech concluded: “GRIID’s focus on utilising next generation computing power for more efficient clean power utilisation and grid management demonstrates the broader economic potential of green infrastructure.”

News: Bitcoin miner Griid Infrastructure to go public via $3.3 bln SPAC deal

Flight plan: LATAM Airlines eyes Chapter 11 exit

BY Fraser Tennant

In a bid to exit its Chapter 11 bankruptcy, airline holding company LATAM Airlines Group SA and its affiliates in Brazil, Chile, Colombia, Ecuador, Peru and the US have filed a plan of reorganisation alongside a restructuring support agreement (RSA).

The largest airline in Latin America, Chile-based LATAM sought Chapter 11 bankruptcy protection in New York in May 2020 as world travel came to a halt amid the  disruption caused by the coronavirus (COVID-19) pandemic.

The plan of reorganisation proposes the infusion of $8.19bn into the group through a mix of new equity, convertible notes and debt, which will enable the group to exit Chapter 11 with appropriate capitalisation to effectuate its business plan. Upon emergence, LATAM is expected to have total debt of approximately $7.26bn and liquidity of approximately $2.67bn.

Furthermore, LATAM will raise a $500m new revolving credit facility and approximately $2.25bn in total new money debt financing, consisting of either a new term loan or new bonds. The group also used and intends to use the Chapter 11 process to refinance or amend the group’s pre-petition leases, revolving credit facility and spare engine facility.

“The last two years have been characterised by hardship across the globe,” said Roberto Alvo, chief executive of LATAM. “We have reeled as global aviation and travel were brought to a virtual standstill by the largest crisis to ever face our industry. While our process is not yet over, we have reached a critical milestone in the path to a stronger financial future. 

“We are grateful to the parties who have come to the table through a robust mediation process to reach this outcome, which provides meaningful consideration to all stakeholders and a structure that adheres to both US and Chilean law,” he continued. “Their infusion of significant new capital into our business is a testament to their support and belief in our long-term prospects.”

Upon confirmation of the plan of reorganisation, the group intends to launch an $800m common equity rights offering, open to all shareholders of LATAM in accordance with their preemptive rights under applicable Chilean law, and fully backstopped by the parties participating in the RSA.

Mr Alvo concluded: “We are thankful for the exceptional team at LATAM that has weathered the uncertainty of the past two years and enabled our business to keep operating and serving our customers as seamlessly as possible.”

News: LATAM Airlines files restructuring plan to exit bankruptcy

Ericsson’s $6.2bn Vonage deal

BY Richard Summerfield

Ericsson has agreed to acquire cloud-based services group Vonage in an all-cash, $6.2bn deal, which is expected to close in the first half of 2022, subject to Vonage shareholder approval, regulatory approvals and other conditions.

Under the terms of the deal, Ericsson will pay $21 for each outstanding Vonage share, a 28 percent premium to Friday’s closing price and a 34 percent premium to the average of the last three months.

The deal, Ericsson’s biggest ever, marks the company’s latest attempt to diversify away from its core mobile infrastructure business following a failed attempt to move into media in the 2010s.

Vonage, which had sales of $1.4bn in the year to the end of September, tried to sell its legacy consumer business but abandoned the sale in February. The company had a market value of about $3.6bn in September before activist investor Jana Partners started agitating for it to sell itself or break up. Vonage operates across sectors such as healthcare, finance, education and transportation.

“The core of our strategy is to build leading mobile networks through technology leadership,” said Börje Ekholm, president and chief executive of Ericsson. “This provides the foundation to build an enterprise business. The acquisition of Vonage is the next step in delivering on that strategic priority. Vonage gives us a platform to help our customers monetize the investments in the network, benefitting developers and businesses. Imagine putting the power and capabilities of 5G, the biggest global innovation platform, at the fingertips of developers. Then back it with Vonage’s advanced capabilities, in a world of 8 billion connected devices. Today we are making that possible.”

“Ericsson and Vonage have a shared ambition to accelerate our long-term growth strategy,” said Rory Read, chief executive of Vonage. “The convergence of the internet, mobility, the cloud and powerful 5G networks are forming the digital transformation and intelligent communications wave, which is driving a secular change in the way businesses operate. The combination of our two companies offers exciting opportunities for customers, partners, developers and team members to capture this next wave. We believe joining Ericsson is in the best interests of our shareholders and is a testament to Vonage’s leadership position in business cloud communications, our innovative product portfolio, and outstanding team.”

Ericsson said the deal would be financed through its existing cash pool. The company also noted that it expected revenue synergies of about $400m and some cost efficiencies from the transaction, which should be accretive to adjusted earnings per share and free cash flow by 2024.

News: Sweden's Ericsson snaps up cloud firm Vonage in $6.2 bln deal

Tech woes: Riverbed files for Chapter 11

BY Fraser Tennant

As a result of pandemic headwinds, closure of factories, labour shortages and continued slowdown in network optimisation sales, US information technology company Riverbed Technology has filed for Chapter 11 bankruptcy in order to implement a pre-packaged restructuring support agreement (RSA).

The RSA will allow Riverbed to reduce its debt by more than $1bn,  add a total of $100m of investment capital and significantly simplify its balance sheet – fuelling its next phase of growth, and positioning the company for long-term success.

Riverbed entered into the RSA with its equity sponsors and an ad hoc group of lenders holding a super-majority of its funded secured debt. Once the restructuring transactions, which are subject to customary closing conditions,  are complete, the ad hoc group of institutional investors – which includes Apollo Global Management – will become the majority owners of Riverbed.  

“We are continuing to move forward with our accelerated recapitalisation,” said Dan Smoot, president and chief executive of Riverbed Technology. “After thoroughly evaluating the different mechanisms through which to implement the recapitalisation, our analysis made it clear that Riverbed could achieve a cleaner, more financially beneficial outcome by utilizing the court-supervised process, setting our company up for even greater growth and innovation opportunities in the future.”

Riverbed expects to successfully complete its financial restructuring process and emerge in from Chapter 11 bankruptcy in mid-December. In the meantime, Riverbed’s operations and the acceleration of its strategy will continue as normal.

“We are pleased to continue our long-term support of Riverbed in this next chapter as they strengthen their financial position to deliver leading performance and visibility solutions to companies around the world,” said Chris Lahoud, a partner at Apollo Global Management. “Riverbed has an exceptional team and strong market opportunities, and we are confident in their strategy to deliver innovative customer solutions and long-term profitable growth.”

Founded in 2002, Riverbed solutions enable organisations to visualise, optimise, remediate and accelerate the performance of any network for any application, while supporting business objectives to mitigate cyber security risk and enhance the digital experience for all end-users.

Mr Smoot concluded: “The overwhelming support we have received from our investors is a testament to their confidence in our growth prospects and in Riverbed following the recapitalisation. Furthermore, since we announced this development, many of our customers and business partners have voiced their support and confidence in Riverbed.”

News: Riverbed Technologies files for Chapter 11 bankruptcy protection following pandemic headwinds

Record breaker: VC investment in Canada hits $11.8bn, reveals new report

BY Fraser Tennant

Canadian venture capital (VC) investment has hit record levels in 2021, with a year-to-date (YTD) total of CA$11.8bn, according to a new report by the Canadian Venture Capital & Private Equity Association (CVCA).

The YTD total, which includes $3.5bn invested across 174 deals in the third quarter (Q3), propelled 2021 beyond the previous highest annual VC investment of $6.2bn recorded in 2019.

In its report, ‘Q3 2021 Canadian Venture Capital Market Overview’, the CVCA reveals that the average deal size is a record-setting $20.7m – approximately double the $11m recorded in 2019 and the previous highest year on record. Moreover, the average growth-stage investment YTD in Q3 2021 was $129m, which has more than tripled over the last three years.

In addition, investments into later and growth-stage companies have received 63 percent of total VC dollars invested in Q3 2021, a significant increase from prior years (50 percent in 2019 and 49 percent in 2020).

In terms of deal size, there were 55 megadeals ($50m-plus) YTD, accounting for 74 percent of investment in 2021 so far. Notable megadeals in Q3 included Vancouver-based Dapper Labs’ $319m closing, Toronto-based Clearco’s $270m funding and the $265m investment in Montréal-based Blockstream.

“Investment in Canada’s startups has never been stronger,” said Kim Furlong, chief executive of the CVCA. ​“With the recent crop up of new continuation funds and the average growth stage investment rising, we are seeing a willingness to hold with investors as they stay the course in their investments — a testament to the maturing Canadian venture ecosystem.”

Concurrent with its 2021 VC investment analysis, the CVCA has also published a report into private equity investment in Canada over the same period – ‘Q3 2021 Canadian Private Equity Market Overview’ – which reveals a YTD total of $13.2bn invested across 584 deals.

“We are on the journey through post-pandemic recovery,” concluded Ms Furlong. ​“Some of the performance figures we are seeing in Q3 are trending towards pre-covid levels. The consumer and retail sector, for example, has seen some significant investment growth, at almost five times the levels experienced since a low in 2018.”

Report: Q3 2021 Canadian Venture Capital Market Overview