Verra Mobility to be Publicly Listed Company
with $2.4 Billion Enterprise Value upon Consummation of
Transaction
Verra Mobility (“Verra Mobility” or the “Company”), the leading
provider of tech-enabled smart transportation solutions and a
portfolio company of Platinum Equity, announced it has entered into
a definitive agreement and plan of merger with Gores Holdings II,
Inc. (“Gores Holdings II”) (NASDAQ CM: GSHT, GSHTU, and GSHTW), a
special purpose acquisition company sponsored by an affiliate of
The Gores Group, LLC (“The Gores Group” or “Gores”). Upon closing,
this transaction will introduce Verra Mobility as a publicly listed
company, with an anticipated initial enterprise value of
approximately $2.4 billion or 11.0x the Company’s estimated 2018
pro forma Adjusted EBITDA of approximately $219 million.
The consideration payable to the stockholders of Verra Mobility
will consist of a combination of cash and shares of Gores Holdings
II common stock. In addition to the $400 million of cash held in
Gores Holdings II’s trust account, additional investors have
committed to participate in the transaction through a $400 million
private placement, led by Alec Gores, Chairman and CEO of The Gores
Group, and including large institutional investors such as GIC,
Hamilton Lane and Northwestern Mutual. Upon completion of the
transaction, including the private placement, Platinum Equity and
other minority owners of Verra Mobility expect to hold
approximately 42% of the newly public Verra Mobility, subject to
various purchase price adjustments.
Verra Mobility is a global leader in smart mobility, serving the
world's largest commercial fleets and rental car companies in
managing tolling transactions and violations for more than 8.5
million vehicles and operating more than 4,000 red-light, speed,
and school bus stop arm safety cameras. Verra Mobility maintains
its leadership position in the marketplace through meaningful scale
and has demonstrated consistent revenue growth underscored by its
differentiated transaction processing model.
“We are thrilled to start the next chapter in the Verra Mobility
story alongside the Gores and Platinum teams,” said David Roberts,
CEO of Verra Mobility. “Platinum Equity’s operational expertise
ensured we had the resources we needed to diversify our product
portfolio and position our company for future growth. This
transaction benefits our company, our employees, our stockholders
and most importantly our customers who rely on us to bring them
smart transportation solutions that make mobility safer and easier.
We are very excited to continue to grow Verra Mobility as a
publicly listed company.”
Jacob Kotzubei, Partner at Platinum Equity, said, “Verra
Mobility is an incredible success story and an excellent example of
the effectiveness of Platinum’s integrated M&A&O approach.
Through a combination of growth through acquisition and operational
discipline, we partnered with management to rapidly transform the
company. Today, Verra Mobility is a global enterprise that delivers
a broad range of modern transportation services and solutions. We
believe the company is well-positioned for continued growth and has
a very bright future ahead.”
Mark Stone, CEO of Gores Holdings II, said, “Verra Mobility is
our ideal partner given its remarkable business, proven management
team and compelling growth opportunities ahead. At Gores, we pride
ourselves in our operational roots and are excited that Verra
Mobility fits our high standard for investment and offers a
superior option for our stockholders. We look forward to partnering
with Platinum, management and the board to continue the momentum
Verra Mobility has achieved over the last several years and to take
this business to the next level.”
Until recently, Verra Mobility was known as American Traffic
Solutions, and was rebranded following the acquisitions of Highway
Toll Administration and Euro Parking Collection, transactions that
helped transform the business into a global enterprise with a broad
range of transportation technology solutions. Verra Mobility is
headquartered in Mesa, Arizona and currently operates in 15
countries.
Key Transaction Terms
The transaction will be effected pursuant to the Agreement and
Plan of Merger (the “Merger Agreement”), entered into by and among
Gores Holdings II, Greenlight Holding II Corporation (Verra
Mobility’s parent) and the other parties thereto. Concurrently with
the consummation of the transaction, additional investors will
purchase shares of common stock of Gores Holdings II in a private
placement. After giving effect to any redemptions by the public
stockholders of Gores Holdings II, the balance of the approximately
$400 million in cash held in Gores Holdings II’s trust account,
together with the $400 million in private placement proceeds, will
be used to pay cash consideration to certain stockholders of the
Company, pay transaction expenses and reduce Verra Mobility’s
existing indebtedness to 3.9x 2018 estimated pro forma Adjusted
EBITDA. The remainder of the consideration payable to the
stockholders of Verra Mobility will consist of shares of Gores
Holdings II common stock.
In order to facilitate the transaction, Gores Holdings II’s
sponsor has agreed to cancel a portion of the 10,000,000 founder
shares. As a result of such cancellation, the acquisition of shares
of common stock of Gores Holdings II in the private placement will
be issued at a discount. In addition, the shares of Gores Holdings
II common stock received by the stockholders of the Company in the
transaction will be restricted from trading for at least 180 days
following the completion of the transaction.
As part of the transaction, Gores Holdings II will also enter
into a tax receivable agreement with certain stockholders of the
Company, which will provide for the sharing of tax benefits
relating to certain pre-transaction tax attributes as those
attributes are realized by Gores Holdings II.
The transaction has been unanimously approved by the boards of
directors of both Gores Holdings II and the Company, and is
expected to close in the third quarter of 2018, subject to
customary closing conditions, including the receipt of regulatory
approval, and approval of the stockholders of Gores Holdings II.
Upon closing of the transaction, the name of Gores Holdings II will
be changed to Verra Mobility Corporation.
Deutsche Bank Securities Inc. acted as lead capital markets
advisor, lead private placement agent, and financial advisor to
Gores Holdings II. Goldman, Sachs & Co acted as joint capital
markets advisor and joint private placement agent and financial
advisor along with Moelis & Company and Credit Suisse LLC as
financial advisors. Weil, Gotshal & Manges LLP acted as legal
advisor to Gores Holdings II. Gibson, Dunn & Crutcher LLP acted
as legal advisor to Platinum Equity and Verra Mobility.
Conference Call Information
Investors may listen to a presentation regarding the proposed
transaction on Thursday, June 21, 2018, starting at 11:00 a.m. ET.
The call can be accessed by dialing (888) 820-4544 (domestic
toll-free number) or (471) 279-3876 (international) and providing
the conference ID: 89361, or asking for the Gores transaction
announcement call.
A replay of the teleconference and webcast will also be
available from June 21, 2018 at 2:00 p.m. ET to June 28, 2018 at
11:59 p.m. ET. The replay can be accessed by dialing (800) 839-5128
(domestic toll-free number) or (402) 220-1504 (international).
About Verra Mobility
Verra Mobility is a global leader in smart mobility. The Company
develops technology-enabled solutions that help the world move
safely and easily. The Company serves the world's largest
commercial fleets and rental car companies to manage tolling
transactions and violations for more than 8.5 million vehicles.
Verra Mobility is a leading provider of connected systems,
processing nearly 165 million transactions each year through
connectivity with more than 50 individual tolling authorities and
more than 400 issuing authorities. Verra Mobility fosters the
development of safe cities, working with police departments and
municipalities by operating more than 4,000 red-light, speed, and
school bus stop arm safety cameras. Arizona-based Verra Mobility
Corporation currently operates in 15 countries and in 18 languages.
For more information, visit VerraMobility.com.
About Gores Holdings II, Inc.
Gores Holdings II is a special purpose acquisition company
sponsored by an affiliate of The Gores Group, for the purpose of
effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with
one or more businesses. Gores Holdings II completed its initial
public offering in January 2017, raising approximately $400 million
in cash proceeds. Gores Holdings II’s officers and certain of its
directors are affiliated with The Gores Group. Founded in 1987 by
Alec Gores, The Gores Group is a global investment firm focused on
acquiring controlling interests in mature and growing businesses
which can benefit from the firm's operating experience and flexible
capital base. Over its 30 year history, The Gores Group has become
a leading investor having demonstrated a reliable track record of
creating value in its portfolio companies alongside management.
Headquartered in Los Angeles, The Gores Group maintains offices in
Boulder, CO, and London. For more information, please visit
www.gores.com.
About Platinum Equity
Founded in 1995 by Tom Gores, Platinum Equity is a global
investment firm with $13 billion of assets under management and a
portfolio of more than 30 operating companies that serve customers
around the world. The firm is currently investing from Platinum
Equity Capital Partners IV, a $6.5 billion global buyout fund.
Platinum Equity specializes in mergers, acquisitions and operations
– a trademarked strategy it calls M&A&O® – acquiring and
operating companies in a broad range of business markets, including
manufacturing, distribution, transportation and logistics,
equipment rental, metals services, media and entertainment,
technology, telecommunications and other industries. Over the past
23 years Platinum Equity has completed more than 200
acquisitions.
Forward-Looking Statements
This press release may contain a number of “forward-looking
statements” as defined in the Private Securities Litigation Reform
Act of 1995. Forward-looking statements include information
concerning Gores Holdings II’s or the Company’s possible or assumed
future results of operations, business strategies, debt levels,
competitive position, industry environment, potential growth
opportunities and the effects of regulation, including whether this
transaction will generate returns for stockholders. These
forward-looking statements are based on Gores Holdings II’s or the
Company’s management’s current expectations, estimates, projections
and beliefs, as well as a number of assumptions concerning future
events. When used in this press release, the words “estimates,”
“projected,” “expects,” “anticipates,” “forecasts,” “plans,”
“intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,”
“propose” and variations of these words or similar expressions (or
the negative versions of such words or expressions) are intended to
identify forward-looking statements.
These forward-looking statements are not guarantees of future
performance, conditions or results, and involve a number of known
and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside Gores Holdings II’s or the
Company’s management’s control, that could cause actual results to
differ materially from the results discussed in the forward-looking
statements. These risks, uncertainties, assumptions and other
important factors 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 and the
proposed transaction contemplated thereby; (2) the inability to
complete the transaction contemplated by the Merger Agreement due
to the failure to obtain approval of the stockholders of Gores
Holdings II or other conditions to closing in the Merger Agreement;
(3) the ability to meet NASDAQ’s listing standards following the
consummation of the transaction contemplated by the Merger
Agreement; (4) the inability to complete the private placement; (5)
the risk that the proposed transaction disrupts current plans and
operations of the Company as a result of the announcement and
consummation of the transaction described herein; (6) the ability
to recognize the anticipated benefits of the proposed transaction,
which may be affected by, among other things, competition, the
ability of the combined company 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 transaction; (8) changes in applicable laws or
regulations; (9) the possibility that the Company 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 final prospectus of Gores Holdings II, including those under
“Risk Factors” therein, and other documents filed or to be filed
with the Securities and Exchange Commission (“SEC”) by Gores
Holdings II.
Forward-looking statements included in this release speak only
as of the date of this release. Neither Gores Holdings II nor the
Company undertakes any obligation to update its forward-looking
statements to reflect events or circumstances after the date of
this release. Additional risks and uncertainties are identified and
discussed in Gores Holdings II’s reports filed with the SEC and
available at the SEC’s website at www.sec.gov.
Non-GAAP Financial Measures
Pro forma Adjusted EBITDA is a non-GAAP financial measure and
should not be construed as an alternative to net income as an
indicator of operating performance or as an alternative to cash
flow provided by operating activities as a measure of liquidity
(each as determined in accordance with GAAP).
Additional Information about the Transaction and Where to
Find It
Gores Holdings II intends to file with the SEC a preliminary
proxy statement of Gores Holdings II in connection with the
proposed transaction and will mail a definitive proxy statement and
other relevant documents to its stockholders. This press release
does not contain all the information that should be considered
concerning the proposed transaction and the other matters to be
voted upon at the special meeting and is not intended to provide
the basis for any investment decision or any other decision in
respect of such matters. Gores Holdings II’s stockholders and other
interested persons are advised to read, when available, the
preliminary proxy statement, the amendments thereto, and the
definitive proxy statement in connection with Gores Holdings II’s
solicitation of proxies for the special meeting to be held to
approve the proposed transaction and other related matters, as
these materials will contain important information about the
Company and Gores Holdings II and the proposed transaction. The
definitive proxy statement will be mailed to the stockholders of
Gores Holdings II as of a record date to be established for voting
on the proposed transaction and the other matters to be voted upon
at the special meeting. Such stockholders will also be able to
obtain copies of the proxy statement, without charge, once
available, at the SEC’s website at http://www.sec.gov, or by
directing a request to: Gores Holdings II, 9800 Wilshire Boulevard,
Beverly Hills, CA 90212, attention: Jennifer Kwon Chou
(jchou@gores.com).
Participants in the Solicitation
Gores Holdings II and its directors and officers may be deemed
participants in the solicitation of proxies of Gores Holdings II
stockholders in connection with the proposed transaction. Gores
Holdings II stockholders and other interested persons may obtain,
without charge, more detailed information regarding the directors
and officers of Gores Holdings II in Gores Holdings II’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2017,
which was filed with the SEC on March 30, 2018.
Information regarding the persons who may,
under SEC rules, be deemed participants in the solicitation of
proxies to Gores Holdings II stockholders in connection with the
proposed transaction will be set forth in the proxy statement for
the transaction when available. Additional information regarding
the interests of participants in the solicitation of proxies in
connection with the proposed transaction and the other matters to
be voted upon at the special meeting will be included in the proxy
statement that Gores Holdings II intends to file with the SEC.
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version on businesswire.com: https://www.businesswire.com/news/home/20180621005659/en/
For inquiries regarding The Gores Group and affiliates,
please contact:Jennifer Kwon ChouManaging DirectorThe Gores
Group310-209-3010jchou@gores.comorMichael SitrickSitrick &
Company310-432-4150Mike_Sitrick@sitrick.comorFor investor
inquiries regarding Platinum Equity, please contact:Dan
WhelanPlatinum Equity310-282-9202dwhelan@platinumequity.comorFor
investor inquiries regarding Verra Mobility, please
contact:Charles TerritoSenior Vice President, Sales, Account
Management and MarcommVerra
Mobility480-443-7000media@verramobility.com
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