NEW YORK and LIVONIA, Mich., Dec.
12, 2019 /PRNewswire/ -- B. Riley Principal Merger Corp.
(NYSE: BRPM, BRPM WS, BRPM.U) ("BRPM"), a special purpose
acquisition company ("SPAC") sponsored by an affiliate of B. Riley
Financial, Inc. (Nasdaq: RILY) ("B. Riley Financial"), and Alta
Equipment Holdings Inc. ("Alta"), a leading provider of premium
industrial and construction equipment and related services,
announced today that they have entered into a definitive merger
agreement for a business combination transaction to create a
leading publicly-traded equipment dealership platform with an
anticipated pro forma enterprise value of approximately
$550 million.
In connection with the closing of the business combination, BRPM
intends to change its name to Alta Equipment Group Inc. ("Alta
Equipment") and intends to apply to list its shares of common stock
on The New York Stock Exchange under the ticker symbol "ALTG." Alta
Equipment is anticipated to have pro forma revenue of $900 million for the year ended December 31, 2019, after taking into account the
effect of the acquisition of two dealers by Alta contingent on the
closing of the business combination which are currently under
non-binding letter of intent and pending negotiation of definitive
agreements (the "Potential Acquisitions").
Founded in 1984, Alta owns and operates as one of the largest
integrated equipment dealership platforms in the U.S., providing
diversified product and service offerings across the industrial and
heavy construction equipment markets for an array of manufacturers
including Hyster-Yale Materials Handling, Inc., AB Volvo, and JCB
Co., Ltd., among more than 30 others. With broad end market
coverage in the construction, logistics and warehousing, wholesale
and retail trade, and manufacturing industries, Alta's business
model consists of populating its geographies with new, used and
rental equipment and contracting with its vast customer base to
provide product support and services. Following the consummation of
the business combination and the closing of the Potential
Acquisitions, Alta Equipment will operate in 43 locations across
Michigan, Illinois, New England, New York and Florida. The business combination is expected
to accelerate Alta's acquisition strategy, including its
geographical market expansion plans.
The Alta Equipment executive management team will continue to be
led by Chief Executive Officer, Ryan
Greenawalt. The board of directors is expected to include
Mr. Greenawalt, who will serve as Chairman, and Dan Shribman, Chief Investment Officer of B.
Riley Financial and the Chief Financial Officer of BRPM.
Mr. Greenawalt joined Alta in 2008 and under his leadership,
Alta has successfully acquired 16 equipment dealers, grown revenue
at a compounded annual rate of approximately 27% for the period
from 2008 to 2019 (after taking into account the Potential
Acquisitions that are anticipated to close at the time of the
business combination), and created substantial equity value.
Ryan Greenawalt, Chief Executive
Officer of Alta, said, "The business combination with BRPM is an
important next step in our growth strategy as we look to leverage
our strong operating platform by expanding our dealer network in a
fragmented market and driving profitable growth and cash flow. This
transaction is a great fit for Alta, providing efficient access to
the public markets in partnership with a savvy investment firm with
a terrific track record of supporting growth companies and
positioning them to build shareholder value. We look forward to
partnering with Bryant Riley,
Chairman and CEO of B. Riley Financial, Dan
Shribman and the B. Riley Financial team and to becoming a
publicly-listed company."
Dan Shribman, Chief Investment
Officer of B. Riley Financial and the Chief Financial Officer of
BRPM, said, "We are thrilled to be able to partner with Ryan and
his team. Alta exhibits a rare combination of value, growth and
tremendous leadership. Ryan's stewardship over the last decade
speaks for itself. The pro forma business is anchored off an
extremely high-quality parts- and service-led cash flow stream that
we believe public markets will come to appreciate. Our growth lever
is a robust acquisition pipeline, which we believe we are uniquely
positioned to execute as the only publicly-listed industrial and
construction dealership group in the country."
Bryant Riley, Chairman and CEO of
B. Riley Financial, said, "Alta is the exact type of company we
envisioned bringing to market when we raised BRPM. This is a
high-quality growth business with a proven management team that we
believe deserves and will benefit from public currency. We have
already seen a strong reception from a diverse group of long-term
oriented shareholders, and we are excited to serve as a strategic
partner to Alta in support of its future growth."
Investment Thesis
As a public company, Alta Equipment is expected to drive strong
profitability and a recurring cash flow stream through its higher
margin parts and services operations and accretive acquisitions in
the equipment dealer market. Its ability to generate cash flow on a
consistent basis is expected to support its balanced capital
allocation plan of growth-oriented capital expenditures, debt
reduction, M&A funding, and returning cash to stockholders over
time.
Alta has established itself as the M&A partner of choice for
equipment dealers as a result of its business integration process,
and sees robust opportunity for further industry consolidation in a
market largely represented by independent, family-owned
dealerships. Its strong operating platform, profitable business
model, consolidation track record and new access to the capital
markets position Alta financially to further expand its footprint
and scale through accretive acquisitions.
Transaction Terms & Financing
The business combination has been approved by the boards of
directors of both Alta and BRPM. Meetings with the investment
community are anticipated to be held in early January 2020 in a series of informational
meetings. The business combination is expected to close in the
first quarter of 2020, subject to regulatory and stockholder
approvals.
The approximately $550 million
business combination is expected to be funded through a combination
of equity and debt financings, including:
- $300 million in a new asset-based
revolving credit facility being arranged by JPMorgan Chase Bank,
N.A., of which approximately $140
million will be drawn at closing;
- $170 million in a new term loan
credit facility under documentation with a syndication of
institutional investors;
- $35 million of common stock
committed to be sold in a private placement with certain
institutional and accredited investors; and
- $25 million of units consisting
of one share of common stock and one-half of one redeemable warrant
to be sold to B. Riley Principal Investments or its designees at
$10.00 per unit in a private
placement pursuant to a forward purchase agreement.
Proceeds from the financings will be used to complete the
Potential Acquisitions and to repay all existing Alta indebtedness.
In addition, Mr. Greenawalt and management will roll a substantial
majority of their equity interests in Alta into Alta Equipment
common stock.
Advisors
B. Riley FBR, Inc. is acting as the exclusive placement agent to
BRPM. Winston & Strawn LLP is acting as legal advisor to BRPM.
KPMG is acting as financial advisor to Alta. Howard & Howard is
acting as legal advisor to Alta.
Conference Call
The management of BRPM and Alta will host an investor conference
call on December 13, 2019, at
10:00 a.m. EST, to discuss the
proposed transaction. For interested investors who wish to
participate, the domestic toll-free access number is (844) 270-2148
and the international toll-free access number is (412) 902-6510.
Once connected with the operator, request access to the B. Riley
Principal Merger Corp. and Alta Equipment Holdings, Inc. Business
Combination Call.
A replay of the call will also be available from 11:00 a.m. EST on December
13, 2019 until 11:59 p.m. EST
on December 27, 2019. To access the
replay, the domestic toll-free access number is (877) 344-7529 and
the international toll-free access number is (412) 317-0088.
Participants should provide the pin code of 10137517 and request
access to the B. Riley Principal Merger Corp. and Alta Equipment
Holdings, Inc. Business Combination Call.
An investor presentation with more detailed information
regarding the proposed transaction will be furnished by
BRPM with the SEC under cover of a Current Report on Form 8-K,
which can be viewed at the SEC's website at www.sec.gov.
A link to B. Riley Principal Merger Corp.'s SEC filings can be
found at https://brileyfin.com/principalmergercorp/.
About Alta Equipment Holdings Inc.
Alta Equipment Holdings Inc. ("Alta") is a leading provider of
premium materials handling equipment, construction equipment,
cranes, warehouse solutions, power generation equipment, and
contractors' rental equipment. Alta is headquartered in
Livonia, Michigan with 31
locations in Michigan,
Illinois, Indiana and New England. Alta is a full-line
materials handling and construction equipment distributor, offering
sale of new and used equipment, long and short-term rentals, parts
and service solutions and fleet management programs. More
information can be found at www.altaequipment.com.
About B. Riley Principal Merger Corp.
B. Riley Principal Merger Corp. ("BRPM") is a blank check
company incorporated for the purpose of effecting a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization
or other similar business combination with one or more businesses.
BRPM raised $143.75 million in its
initial public offering and began trading on the New York Stock
Exchange in April 2019. Its shares of
Class A common stock, units and warrants trade under the ticker
symbols "BRPM," "BRPM.U" and "BRPM WS," respectively.
No Offer or Solicitation
This press release is for informational purposes only and shall
not constitute an offer to sell or the solicitation of an offer to
buy any securities pursuant to the proposed business combination
and other transactions described herein or otherwise, nor shall
there be any sale of securities in any jurisdiction in which the
offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Important Information for Investors and Stockholders
In connection with the proposed business combination, BRPM
intends to file preliminary and definitive proxy statements with
the SEC. The preliminary and definitive proxy statements and other
relevant documents will be sent or given to the stockholders of
BRPM as of the record date established for voting on the proposed
business combination and will contain important information about
the proposed business combination and related matters. BRPM
stockholders and other interested persons are advised to read, when
available, the preliminary proxy statement and any amendments
thereto and, once available, the definitive proxy statement, in
connection with BRPM's solicitation of proxies for the meeting of
stockholders to be held to approve, among other things, the
proposed business combination, because the proxy statement will
contain important information about BRPM, Alta and the proposed
business combination. When available, the definitive proxy
statement will be mailed to BRPM stockholders as of a record date
to be established for voting on the proposed business combination.
Stockholders will also be able to obtain copies of the proxy
statement, without charge, once available, at the SEC's website at
www.sec.gov. Copies of the documents filed with the SEC by BRPM
when and if available, can be obtained free of charge by directing
a written request to B. Riley Principal Merger Corp., 299 Park
Avenue, 21st Floor, New York, New
York 10171 or by telephone at (212) 457-3300.
Participants in the Solicitation
BRPM and Alta and their respective directors and executive
officers may be deemed participants in the solicitation of proxies
of BRPM stockholders in connection with the proposed business
combination. Information about such persons, including their names
and a description of their interests in BRPM, Alta and the proposed
business combination, as applicable, will be set forth in the proxy
statement for the proposed business combination, when it becomes
available. The proxy statement will be available free of charge at
the SEC's website at www.sec.gov, or by directing a request to B.
Riley Principal Merger Corp., 299 Park Avenue, 21st Floor,
New York, New York 10171 or by
telephone at (212) 457-3300.
Forward-Looking Statements
This communication includes certain statements that may
constitute "forward-looking statements" for purposes of the federal
securities laws. Forward-looking statements include, but are not
limited to, statements that refer to projections, forecasts or
other characterizations of future events or circumstances,
including any underlying assumptions. The words "anticipate,"
"believe," "continue," "could," "estimate," "expect," "intends,"
"may," "might," "plan," "possible," "potential," "predict,"
"project," "should," "would" and similar expressions may identify
forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking. Forward-looking
statements may include, for example, statements about: the parties'
ability to effect the business combination; the benefits of the
business combination; the future financial performance of BRPM
following the business combination; and changes in Alta' strategy,
future operations, financial position, estimated revenues, and
losses, projected costs, prospects, plans and objectives of
management. These forward-looking statements are based on
information available as of the date of this press release, and
current expectations, forecasts and assumptions, and involve a
number of judgments, risks and uncertainties. Accordingly,
forward-looking statements should not be relied upon as
representing the parties' views as of any subsequent date, and BRPM
and Alta do not undertake any obligation to update forward-looking
statements to reflect events or circumstances after the date they
were made, whether as a result of new information, future events or
otherwise, except as may be required under applicable securities
laws. You should not place undue reliance on these forward-looking
statements. As a result of a number of known and unknown risks and
uncertainties, actual results or performance may be materially
different from those expressed or implied by these forward-looking
statements. Some factors that could cause actual results to differ
include, but are not limited to: (1) the occurrence of any event,
change or other circumstances that could give rise to the
termination of the merger agreement to be entered into in
connection with the proposed business combination (the "transaction
agreement"); (2) the outcome of any legal proceedings that may be
instituted against BRPM or Alta following announcement of the
proposed business combination and related transactions; (3) the
inability to complete the transactions contemplated by the
transaction agreement due to the failure to obtain approval of the
shareholders of BRPM or satisfy other conditions to the closing of
the proposed business combination and the inability to complete
Alta's acquisitions under letter of intent due to the failure to
satisfy the conditions to closing such acquisitions; (4) the
ability to obtain or maintain the listing of the Company's shares
of Class A common stock on the NYSE following the proposed business
combination; (5) the risk that the proposed business combination
disrupts the parties' current plans and operations as a result of
the announcement and consummation of the transactions described
herein; (6) the ability to recognize the anticipated benefits of
the proposed business combination, which may be affected by, among
other things, competition, the ability of the Company business to
grow and manage growth profitably, maintain relationships with
customers and suppliers and retain its management and key
employees; (7) costs related to the proposed business combination;
(8) changes in applicable laws or regulations; (9) the possibility
that BRPM or Alta may be adversely affected by other economic,
business, and/or competitive factors; and (10) other risks and
uncertainties indicated from time to time in the proxy statement to
be filed by BRPM with the SEC in connection with the proposed
business combination, including those under "Risk Factors" therein,
and other factors identified in BRPM's prior and future filings
with the SEC, available at www.sec.gov.
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SOURCE B. Riley Principal Merger Corp.; Alta Equipment Holdings
Inc.