Legacy Acquisition Corp. (NYSE: “LGC”) (“Legacy” or the “Company”),
a publicly-traded Special Purpose Acquisition Company, announced
today that, in response to the recent dislocation in the equity
markets, Legacy has agreed to an amendment (the “Amendment”) to the
terms of the previously announced Amended and Restated Share
Exchange Agreement (as amended by the Amendment, the “Share
Exchange Agreement”) with Blue Valor Limited, a company
incorporated in Hong Kong (the “Seller”) and an indirect,
wholly-owned subsidiary of BlueFocus Intelligent Communications
Group (“BFICG”), pursuant to which Legacy will purchase all of the
issued and outstanding shares of a newly formed and wholly-owned
subsidiary of the Seller that at closing will hold the Blue Impact
group business. The effectiveness of the Amendment is conditioned
upon the approval of BFICG’s board of directors.
Under the terms of the Amendment and the warrant agreement
amendment described below, among other things, Legacy will
substantially reduce outstanding dilutive securities and simplify
its capital structure and certain outstanding shares of Legacy’s
common stock held by Legacy’s sponsor, Legacy Acquisition Sponsor I
LLC (“Sponsor”), will be transferred back to the Company and cease
to be outstanding. Separately, Legacy received today an update on
operations of Blue Impact’s China-based Madhouse business.
Share Exchange Agreement
Amendment
To facilitate the business combination, the Sponsor will transfer
3,500,000 outstanding shares of Legacy’s common stock back to
Legacy which shares will be cancelled and cease to be outstanding.
In consideration for such shares, the Sponsor was granted the
right to receive up to 2,000,000 shares of common stock after the
closing of the business combination (“Closing”) as follows: (a)
1,000,000 shares, if post-Closing Legacy stock has a volume
weighted average trading price of at least $15 per share for any 30
day period or if post-Closing Legacy is sold for a share price of
at least $15 per share and (b) 1,000,000 shares, if post-Closing
Legacy stock has a volume weighted average trading price of at
least $20 per share for any 30 day period or if post-Closing Legacy
is sold for a share price of at least $20 per share; provided, that
the maximum number of shares that the Sponsor can receive is
2,000,000.
In addition, the shares of Legacy’s common stock payable to the
Seller at the Closing will be reduced from 30,000,000 to 27,000,000
shares. The foregoing represents a reduction of 3,000,000 shares of
Legacy’s common stock which would have been outstanding immediately
following the Closing under the terms of the previously announced
business combination.
The Seller will be granted the right to receive such 3,000,000
shares of Legacy’s common stock following the Closing (the
“Post-Closing Shares”) (i) if post-Closing Legacy’s stock has a
volume weighted average trading price of at least $20 per share for
any 30 day period or if Legacy is sold for a share price of at
least $20 per share post-Closing, or (ii) upon the 10th anniversary
of the Closing. The amount of Post-Closing Shares which may be
received and the conditions for receiving the same are subject to
certain adjustments as set forth in the Amendment.
To facilitate the business combination, Legacy is considering a
private placement exempt from the registration requirements of the
Securities Act of 1933, as amended (the “Securities Act”) pursuant
to Rule 506(c) (or other available exemption) of shares of common
stock (a “PIPE Financing”) for up to $75 million in proceeds
(before fees) solely to eligible accredited investors or qualified
institutional buyers.
Warrant Agreement Amendment
Legacy has 30,000,000 public warrants and 17,500,000 private
placement warrants outstanding, each entitling a holder thereof the
right to acquire 0.5 of a share of common stock at an exercise
price of $5.75. Legacy has obtained voting agreements from a
limited number of holders of its public warrants (holding
approximately 65.9% of the outstanding public warrants) agreeing to
vote in favor of an amendment of the warrant agreement under which
the public and private placement warrants were
issued.
Under the warrant agreement amendment, at or as promptly as
practicable after the Closing each public warrant will be cancelled
in exchange for (i) $1.00 in cash per warrant, if the aggregate
gross cash proceeds from the trust (after redemptions) and any PIPE
Financing equals at least $225 million or (ii) $0.50 in cash and
0.055 shares of common stock per warrant, if otherwise.
To facilitate the business combination, the Sponsor has agreed that
with respect to the 14,587,770 private placement warrants
beneficially owned by it to accept only shares of common stock at a
rate of 0.11 of a share of common stock per warrant (or 1,604,655
shares of common stock in total). The remaining 2,912,230
private placement warrants beneficially owned by certain
institutional investors in the Sponsor may be exchanged, at the
election of their beneficial owners, for the same stock
consideration or the consideration to be received by the holders of
the public warrants.
Madhouse Update
Blue Impact expects its China-based Madhouse business to achieve
steady profit growth for full year 2020. This profit
growth is expected notwithstanding uncertainties accompanying the
coronavirus (COVID 19) outbreak. Several factors help moderate
against a material adverse impact on the Madhouse business and its
financial results, including:
- Madhouse’s business is dedicated to, and substantially all of
its revenues are derived from, buying digital and mobile based
advertising space for its paid media clients through its electronic
ad platform;
- over 80% of Madhouse’s revenues come from China-based game
developers, ecommerce web sites and app providers marketing to
potential customers located primarily outside of China via
mobile and digital channels including Google, Facebook, and
Twitter; and
- the ability of Madhouse’s employees to generally work and
effectively operate and interface remotely with customers and other
Blue Impact business employees.
Important Information About the Business Combination and
Where to Find It
In connection with the proposed business combination
contemplated by the Amended and Restated Share Exchange Agreement,
Legacy filed a preliminary proxy statement with the U.S. Securities
and Exchange Commission (the “SEC”) on December 2, 2019, and
intends to file a definitive proxy statement with the SEC. In
addition, in connection with the proposed warrant agreement
amendment, Legacy intends to file a preliminary proxy statement
with the SEC. Legacy’s security holders and other interested
persons are advised to read the applicable proxy statement(s) and
the amendments thereto and other relevant materials to be filed in
connection with the business combination and warrant agreement
amendment with the SEC, including, when available, a definitive
proxy statement on Schedule 14A and documents incorporated by
reference therein, as these materials will contain important
information about the business combination and warrant agreement
amendment, as applicable. When available, the definitive proxy
statement and other relevant materials for the business combination
and warrant agreement amendment will be mailed to the applicable
securityholders of Legacy as of a record date to be established for
voting on the business combination and warrant agreement amendment.
Stockholders will also be able to obtain copies of the preliminary
proxy statements, the definitive proxy statements and other
documents filed with the SEC that will be incorporated by reference
therein, without charge, once available, at the SEC’s web site at
www.sec.gov, or by directing a request to: Legacy Acquisition
Corp., 1308 Race Street, Suite 200, Cincinnati, Ohio 45202,
Attention: Secretary, (513) 618-7161.
Participants in the Solicitation
Legacy and its directors and executive officers may be deemed
participants in the solicitation of proxies from Legacy’s
securityholders with respect to the business combination and
warrant agreement amendment, as applicable. A list of the names of
those directors and executive officers and a description of their
interests in Legacy will be contained in Legacy’s definitive proxy
statements that will be filed with respect to the business
combination and warrant agreement amendment, respectively, and in
its annual report on Form 10-K for the fiscal year ended December
31, 2019, which was filed with the SEC and is available free of
charge at the SEC’s web site at www.sec.gov, or by directing a
request to: Legacy Acquisition Corp., 1308 Race Street, Suite 200,
Cincinnati, Ohio 45202, Attention: Secretary, (513) 618-7161.
Additional information regarding the interests of such participants
will be contained in the proxy statement for the business
combination and warrant agreement amendment, respectively, when
available.
The Seller, BFICG, and their respective directors and executive
officers may also be deemed to be participants in the solicitation
of proxies from the securityholders of Legacy in connection with
the business combination or warrant agreement amendment. A list of
the names of such directors and executive officers and information
regarding their interests in the business combination or warrant
agreement amendment, as applicable, will be included in Legacy’s
definitive proxy statements that will be filed with respect to the
business combination and warrant agreement amendment,
respectively.
Forward-Looking Statements:
This press release includes “forward-looking statements” within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995. Legacy’s and the Blue
Impact business’ (including the Madhouse business’) actual results
may differ from their expectations, estimates and projections and
consequently, you should not rely on these forward-looking
statements as predictions of future events. Words such as “expect,”
“estimate,” “project,” “budget,” “forecast,” “anticipate,”
“intend,” “propose,” “plan,” “contemplate,” “may,” “will,” “shall,”
“would,” “could,” “should,” “believes,” “predicts,” “potential,”
“continue,” “positioned,” “goal,” “conditional” and similar
expressions are intended to identify such forward-looking
statements. These forward-looking statements include, without
limitation, our statements regarding the impact of the Amendment on
our dilutive securities and capital structure, our statements
regarding the warrant agreement amendment and the anticipated
changes to be made to the terms of our warrants, and statements
regarding Madhouse’s anticipated financial performance.
These forward-looking statements involve significant risks and
uncertainties that could cause the actual results to differ
materially from the expected results. Most of these factors are
outside Legacy’s and the Blue Impact business’ control and are
difficult to predict. Factors that may cause such differences
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 Share Exchange Agreement, (2) the outcome of any
legal proceedings that may be instituted against Legacy and other
transaction parties following the announcement of the Share
Exchange Agreement and the transactions contemplated therein; (3)
the inability to complete the proposed business combination,
including due to failure to obtain approval of the stockholders of
Legacy or other conditions to closing in the Share Exchange
Agreement; (4) the occurrence of any event, change or other
circumstance that could otherwise cause the business combination to
fail to close; (5) the receipt of an unsolicited offer from another
party for an alternative business transaction that could interfere
with the proposed business combination; (6) the inability to obtain
or maintain the listing of Blue Impact’s common stock on the New
York Stock Exchange following the proposed business combination;
(7) the risk that the proposed business combination disrupts
current plans and operations as a result of the announcement and
consummation of the proposed business combination; (8) the ability
to recognize the anticipated benefits of the proposed business
combination; (9) costs related to the proposed business
combination; (10) changes in applicable laws or regulations; (11)
the aggregate number of Legacy shares requested to be redeemed by
Legacy’s stockholders in connection with the proposed business
combination; (12) the ability of the Blue Impact business to
ameliorate or otherwise mitigate its existing material weaknesses
and any material weaknesses in internal control over financial
reporting or significant deficiencies that may be identified in the
future; (13) estimates for the financial performance of the Blue
Impact business may prove to be incorrect or materially different
from actual results; (14) the impact of coronavirus outbreak on
capital markets and Blue Impact's business; and (15) other risks
and uncertainties indicated from time to time in the proxy
statement relating to the proposed business combination, including
those under “Risk Factors” therein, and in Legacy’s other filings
with the SEC. Legacy cautions that the foregoing list of factors is
not exhaustive. Legacy cautions readers not to place undue reliance
upon any forward-looking statements, which speak only as of the
date made. Legacy does not undertake or accept any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements to reflect any change in its
expectations or any change in events, conditions or circumstances
on which any such statement is based.
No Offer or Solicitation
This press release shall not constitute a solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the business combination. This press release 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, or an exemption therefrom.
Any securities that may be offered pursuant to any PIPE
Financing will not be registered under the Securities Act, or any
state securities laws, and until so registered, may not be offered
or sold in the United States except pursuant to an exemption from
the registration requirements of the Securities Act and applicable
state securities laws.
Investors:
Peter StablerICRpeter.stabler@icrinc.com
Media:
Phil DenningICRPhil.denning@icrinc.com
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