Item 8.01 Other Events.
As previously reported, on December 21, 2020, Colonnade Acquisition Corp., a
Cayman Islands exempted company limited by shares ("CLA"), entered into the
Agreement and Plan of Merger by and among CLA, Beam Merger Sub, Inc., a Delaware
corporation and a direct wholly-owned subsidiary of CLA, and Ouster, Inc., a
Delaware corporation ("Ouster"). In connection with the proposed business
combination between CLA and Ouster (the "Business Combination"), CLA filed a
registration statement on Form S-4 (File No. 333-251611) (as amended, the
"Registration Statement") with the U.S. Securities and Exchange Commission (the
"SEC"). On February 12, 2021, the Registration Statement was declared effective
by the SEC and, on February 18, 2021, CLA filed a Definitive Proxy
Statement/Prospectus relating to CLA's extraordinary general meeting scheduled
to be held on March 9, 2021 (the "Definitive Proxy Statement/Prospectus") to,
among other things, obtain the approvals required to consummate the Business
Combination.
Since the initial filing of the Registration Statement, purported shareholders
of CLA have filed a complaint and sent demand letters in connection with the
Business Combination. On February 8, 2021, Vinh Nguyen, a purported shareholder
of CLA, filed a lawsuit in the Supreme Court of the State of New York, County of
New York, captioned Vinh Nguyen v. Colonnade Acquisition Corp., et al., Index
No. 650883/2021, against CLA and members of its board of directors (as amended
on February 25, 2021, the "Complaint"). The Complaint alleges that the members
of CLA's board of directors breached their fiduciary duties and that CLA aided
and abetted such breaches in connection with the Business Combination. The
Complaint further alleges, among other things, that (i) defendants engaged in an
insufficient sales process and agreed to inadequate consideration in connection
with the proposed transaction, and (ii) the Registration Statement filed in
connection with the Business Combination is materially misleading. The Complaint
seeks, among other things, to enjoin the Business Combination and an award of
attorneys' fees and expenses. In addition, on January 21, 2021 and February 8,
2021, CLA received letters from attorneys representing Harrison Holetz and Eric
Sabitini, respectively, purported CLA shareholders, demanding certain
"corrective disclosures" be made in an amendment or supplement to the
Registration Statement (the "Demand Letters").
The parties to the Complaint and Demand Letters subsequently engaged in
arm's-length negotiations to attempt to resolve the claims asserted, and reached
an agreement whereby CLA would file in this Current Report on Form 8-K certain
supplemental disclosures regarding the Business Combination. CLA and CLA's board
of directors believe that the allegations and claims asserted in the Complaint
and Demand Letters lack merit, and that the supplemental disclosures set forth
herein are not required or necessary under applicable laws. However, solely in
order to avoid the risk of the Complaint and Demand Letters delaying or
otherwise adversely affecting the Business Combination and to minimize the
costs, risks, and uncertainties inherent in defending the claims, CLA hereby
voluntarily amends and supplements the Definitive Proxy Statement/Prospectus, as
set forth in this Current Report on Form 8-K. CLA and the members of its board
of directors deny any liability or wrongdoing in connection with the Definitive
Proxy Statement/Prospectus, and nothing in this Current Report on Form 8-K
should be construed as an admission of the legal necessity or materiality under
applicable laws of any of the supplemental disclosures.
SUPPLEMENT TO DEFINITIVE PROXY STATEMENT/PROSPECTUS
This supplemental information should be read in conjunction with the Definitive
Proxy Statement/Prospectus, which should be read in its entirety and is
available free of charge on the Internet site maintained by the SEC at
http://www.sec.gov. Page references in the below disclosures are to pages in the
Definitive Proxy Statement/Prospectus, and defined terms used but not defined
herein have the meanings set forth in the Definitive Proxy Statement/Prospectus.
To the extent the following information differs from or conflicts with the
information contained in the Definitive Proxy Statement/Prospectus, the
information set forth below shall be deemed to supersede the respective
information in the Definitive Proxy Statement/Prospectus. New text is
underlined, and deleted text is stricken through.
The disclosure on page 126 of the Definitive Proxy Statement/Prospectus is
hereby supplemented by amending and restating the fourth and ninth paragraphs as
follows:
Between October 6, 2020 and October 26, 2020, CLA's management team conducted
extensive due diligence on Ouster including (i) an in depth review of the
financial models prepared by Ouster's management which focused on a granular
review of projected revenue, unit demand, unit selling prices, cost of goods
sold, and operating margins (the "Draft Projections"); (ii) research on the
lidar market and competitive companies; and (iii) an in depth valuation of
Ouster considering numerous valuation methodologies as well as a comparative
analysis of Ouster to other existing or soon to be publicly traded lidar
companies Velodyne Lidar, Inc. ("Velodyne") and Luminar Technologies, Inc.
("Luminar"). The comparative analysis focused on a comparison of projected
operating metrics, including revenue, Adjusted EBITDA, revenue growth, gross
margin, and Adjusted EBITDA margin for calendar years 2020 - 2025.
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On October 26, 2020, Mr. Trafelet submitted CLA's initial letter of intent (the
"LOI") to Ouster along with an in-depth presentation which discussed the
proposed terms of the transaction, company valuation and market positioning
strategy, and provided background on the Sponsor as well as a summary of the
additional value that CLA believed it and its team could bring to the
transaction. The LOI valued Ouster at a fully-diluted pre-money equity valuation
of $3.1 billion. The LOI also proposed that in connection with the potential
transaction, CLA would raise a PIPE of between $200 million and $300 million and
a 30 day due diligence period. Subject to the ultimate size of the PIPE, as
proposed in the LOI, Ouster and its existing stockholders would own
approximately 85% to 87% of the pro forma company after consummation of a
transaction.
The disclosure on page 127 of the Definitive Proxy Statement/Prospectus is
hereby supplemented by amending and restating the sixth and eighth paragraphs as
follows:
On November 13, 2020, CLA had a board meeting during which the proposed
transaction with Ouster was discussed. Prior to the board meeting, the board of
directors of CLA (the "CLA Board") was provided a copy of the revised LOI and
accompanying presentation CLA submitted to Ouster on October 26, 2020.
Mr. Trafelet led the discussion regarding the proposed transaction with
Ouster. Mr. Trafelet discussed the history of the proposed transaction,
including a brief discussion on how CLA arrived at the lower fully-diluted
pre-money equity valuation of $1.5 billion from $3.1 billion given (i) the
tightening of the PIPE market, (ii) consideration of the recent trading
performance of other lidar companies who had completed business combinations
with special purpose acquisition companies of Velodyne, which had recently
completed a business combination with a special purpose acquisition company,
(iii) consideration of the recent trading performance of special purpose
acquisition companies who had announced business combinations with lidar
companies but had not yet completed their proposed transactions the special
purpose acquisition company which had announced a business combination with
Luminar but had not yet completed the proposed transaction, and (iv) the belief
that the combined company would be more attractive to investors at a lower
valuation. Mr. Sambuco also informed the CLA Board that the proposed transaction
with Ouster included an obligation to raise the PIPE Investment which would be
announced simultaneously with the execution of transaction documents between CLA
and Ouster. Mr. Trafelet noted that the Sponsor Related PIPE Investor agreed to
invest (or cause its affiliates to invest) at least $25 million of the total
PIPE Investment.
On November 19, 2020, members of CLA management had a call with Ouster's
management team to discuss the Draft Projections, including certain assumptions
made therein. Following the call, and at the advice of CLA, Ouster management
elected to revise the Draft Projections to better focus on demand forecasts and
product-cost projections, by, among other things, modifying the projected costs
of goods and unit sales prices.
The disclosure on page 131 of the Definitive Proxy Statement/Prospectus is
hereby supplemented by amending and restating the fourth paragraph and adding a
new paragraph immediately thereafter as follows:
The post-money enterprise value to Adjusted EBITDA multiples of 6.2x of Ouster's
2024 projected Adjusted EBITDA and 2.8x of Ouster's 2025 projected Adjusted
EBITDA compare favorably to the valuations for recent transactions involving
competing lidar companies. As of early December 2020, Velodyne was trading at an
enterprise value to 2024 Adjusted EBITDA multiple of 20.4x and Luminar was
trading at an enterprise value to 2025 Adjusted EBITDA multiple of 36.6x. A
special purpose acquisition company which had announced, but had not yet
completed, a business combination with Aeva was then trading at a level implying
an enterprise value to 2025 Adjusted EBITDA multiple of 7.8x ,which were valued
at2024/2025 post-money enterprise value to Adjusted EBITDA multiples of 7.8x to
36.6x.
The post-money enterprise value to revenue multiples of 1.9x of Ouster's 2024
projected revenue and 1.0x of Ouster's 2025 projected revenue also compare
favorably to recent transactions involving lidar companies. As of early December
2020, Velodyne was trading at an enterprise value to 2024 revenue multiple of
4.4x and Luminar was trading at an enterprise value to 2025 revenue multiple of
16.0x. The special purpose acquisition company which had announced, but had not
yet completed, a business combination with Aeva was then trading at a level
implying an enterprise value to 2025 revenue multiple of 3.1x.
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- END OF SUPPLEMENT TO PROXY STATEMENT -
Important Additional Information and Where to Find It
CLA has filed the Definitive Proxy Statement/Prospectus with the SEC for the
extraordinary general meeting to be held in connection with its Business
Combination with Ouster. CLA's shareholders and other interested persons are
advised to read the Definitive Proxy Statement/Prospectus and documents
incorporated by reference therein filed in connection with the Business
Combination, as these materials contain important information about Ouster, CLA
and the Business Combination. The Definitive Proxy Statement/Prospectus and
other relevant materials for the extraordinary general meeting have been mailed
to shareholders of CLA as of February 8, 2021, the record date for the
extraordinary general meeting. CLA's shareholders may also obtain copies of the
Definitive Proxy Statement/Prospectus and other documents filed with the SEC
that will be incorporated by reference therein, without charge, at the SEC's
website at www.sec.gov, or by directing a request to: Colonnade Acquisition
Corp., 1400 Centrepark Blvd, Suite 810, West Palm Beach, FL 33401.
Participants in the Solicitation
CLA and its directors and executive officers may be deemed participants in the
solicitation of proxies from CLA's shareholders with respect to the Business
Combination. A list of the names of those directors and executive officers and a
description of their interests in CLA is contained in CLA's Definitive Proxy
Statement/Prospectus, which was filed with the SEC on February 18, 2021 and is
available free of charge at the SEC's website at www.sec.gov. or by directing a
request to Colonnade Acquisition Corp., 1400 Centrepark Blvd, Suite 810, West
Palm Beach, FL 33401.
Ouster and its directors and executive officers may also be deemed to be
participants in the solicitation of proxies from the shareholders of CLA in
connection with the Business Combination. A list of the names of such directors
and executive officers and information regarding their interests in the Business
Combination is included in the Definitive Proxy Statement/Prospectus for the
Business Combination.
No Offer or Solicitation
This Current Report on Form 8-K shall not constitute a solicitation of a proxy,
consent or authorization with respect to any securities or in respect of the
Business Combination. This Current Report on Form 8-K shall also not constitute
an offer to sell or the solicitation of an offer to buy any securities, nor
shall there be any sale of securities in any states or jurisdictions in which
such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction. No offering 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, or an
exemption therefrom.
Forward-Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements
within the meaning of the federal securities laws, including statements
regarding the anticipated timing of the extraordinary meeting. These
forward-looking statements generally are identified by the words "believe,"
"project," "expect," "anticipate," "estimate," "intend," "strategy," "future,"
"opportunity," "plan," "may," "should," "will," "would," "will be," "will
continue," "will likely result," and similar expressions. Forward-looking
statements are predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a result, are
subject to risks and uncertainties. Many factors could cause actual future
events to differ materially from the forward-looking statements in this
document, including but not limited to: (i) the risk that the Business
Combination may not be completed in a timely manner or at all, (ii) the risk
that the Business Combination may not be completed by CLA's business combination
deadline and the potential failure to obtain an extension of the business
combination deadline if sought by CLA, (iii) the failure to satisfy the
conditions to the consummation of the Business Combination, including the
adoption of the Merger Agreement by the shareholders of CLA and Ouster, the
satisfaction of the minimum trust account amount following redemptions by CLA's
public shareholders and the receipt of certain governmental and regulatory
approvals, (iv) the lack of a third-party valuation in determining whether or
not to pursue the Business Combination, (v) the occurrence of any event, change
or other circumstance that could give rise to the termination of the Merger
Agreement, (vi) the effect of the announcement or pendency of the Business
Combination on Ouster's business relationships, performance and business
generally, (vii) the ability to implement business plans, forecasts and other
expectations after the completion of the Business Combination and (viii) the
risk of downturns in the highly competitive lidar technology and related
industries. The foregoing list of factors is not exhaustive. You should
carefully consider the foregoing factors and the other risks and uncertainties
described in the "Risk Factors" section of CLA's prospectus dated August 20,
2020 relating to its initial public offering, its Quarterly Reports on Form
10-Q, the registration statement on Form S-4 and the Definitive Proxy
Statement/Prospectus discussed above and other documents filed by CLA from time
to time with the SEC. These filings identify and address other important risks
and uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Forward-looking statements speak only as of the date they are made. Readers are
cautioned not to put undue reliance on forward-looking statements, and Ouster
and CLA assume no obligation and do not intend to update or revise these
forward-looking statements, whether as a result of new information, future
events, or otherwise. Neither Ouster nor CLA gives any assurance that either
Ouster or CLA will achieve its expectations.
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