Ranpak (PACK) - 2018 Q4 - Annual Report

Acquisition Details - The Company has agreed to pay $950,000,000 in cash for the acquisition of Rack Holdings, subject to adjustments based on working capital and cash levels at closing[14]. - The Stock Purchase Agreement was unanimously approved by the Company's Board of Directors, indicating strong internal support for the acquisition[12]. - The company anticipates that the business combination will enhance its market position in environmentally sustainable packaging solutions through the acquisition of Ranpak[204]. Financing Structure - Financing for the Business Combination includes $300,000,000 from the Initial Public Offering, $150,000,000 from forward purchase agreements, and up to $650,000,000 from senior secured credit facilities[16]. - The Initial Public Offering generated gross proceeds of $300,000,000 from the sale of 30,000,000 units at $10.00 per unit, with each unit consisting of one Class A ordinary share and one-half of one warrant[31]. - The Company has entered into subscription agreements for the purchase of 14,200,000 shares for an aggregate price of $142,000,000, which will close immediately prior to the Business Combination[24]. - The company raised $300,000,000 from the Initial Public Offering, with $10.00 per unit placed in a U.S.-based Trust Account[37]. - The Anchor Investors have committed to purchase 15,000,000 Forward Purchase Shares and 5,000,000 redeemable warrants for a total of $150,000,000, which will be used for the Initial Business Combination[67]. Operational Status - The Company has not engaged in any operations or generated revenue to date, aside from interest earned from the Initial Public Offering proceeds[30]. - The company currently has no operating history or revenues, making it challenging to evaluate its ability to achieve its business objectives[63]. - The company has incurred substantial costs related to the Stock Purchase Agreement, which may impact its financial condition if the transaction does not close[61]. Business Combination Conditions - The Business Combination is subject to customary closing conditions, including shareholder approval and compliance with regulatory requirements[17]. - If shareholder approval is sought, the Initial Business Combination will only proceed if a majority of the outstanding shares voted are in favor[51]. - Public shareholders are restricted from redeeming more than 20% of the shares sold in the Initial Public Offering if shareholder approval is sought[55]. - The company must complete its Initial Business Combination by January 22, 2020, which may limit due diligence and negotiation leverage with potential target businesses[74]. Shareholder Considerations - Shareholders will have the opportunity to redeem their Class A Shares at a price equal to the amount in the Trust Account, less income taxes payable[48]. - If the Initial Business Combination is unsuccessful, public shareholders may only receive an estimated $10.00 per share upon redemption, and warrants will expire worthless[90]. - The company has no specified maximum redemption threshold, allowing for the possibility of completing a business combination even if a majority of shareholders disagree[151]. Risks and Challenges - The company may face intense competition from other entities with similar business objectives, which could hinder its ability to complete a business combination[57]. - If the anticipated Business Combination fails, the company may struggle to find a new target business within the required timeframe[62]. - The company may face risks associated with acquiring and operating a business in foreign countries, which could adversely impact its financial condition and results of operations[176]. - The company may incur substantial debt to complete a business combination, which could negatively impact shareholder value and financial condition[143]. Financial Performance - For the year ended December 31, 2018, the company reported a net income of $1,386,748 compared to a net loss of $(8,515) in 2017, marking a significant turnaround[198]. - Total assets increased to $309,233,566 in 2018 from $870,815 in 2017, indicating substantial growth in the company's financial position[198]. - The company incurred operating expenses of $3,731,698 in 2018, a decrease from $8,515 in 2017, reflecting improved operational efficiency[198]. Governance and Management - The company is dependent on a small group of executive officers and directors, and their loss could adversely affect operations[129]. - Key personnel may negotiate employment agreements with a target business, which could create conflicts of interest in selecting a business combination[133]. - The company’s management may resign after the Initial Business Combination, potentially leading to unfamiliarity with U.S. securities laws for the new management[178].