Software-accelerated electronics manufacturer Tempo Automation and ACE Convergence Acquisition have entered into a definitive merger agreement with a $919 million estimated post-transaction equity value.
If approved, Tempo Automation Holdings would trade on the Nasdaq under TMPO.
The transaction is expected to provide $391 million in gross cash proceeds to the company:
- $230 million from cash in trust by ACE, assuming no redemptions by shareholders. This is supported by a backstop of up to $95 million, comprised of up to $25 million by ACE Equity Partners, and up to $70 million as part of the Structural Capital and SQN Venture Partners senior term debt facility.
- $82 million fully committed PIPE anchored by Point72 Ventures Investments and ACE Equity Partners with participation from Firsthand Funds and Lux Capital.
- $25 million in convertible note financing, provided by ACE Equity Partners.
- $54 million in net proceeds from a senior term debt facility from Structural Capital and SQN Venture Partners, as part of a $150 million total facility, which also provides up to $70 million to support either future acquisitions or potential redemptions from shareholders of ACE.
Concurrent with the transaction, Tempo also plans two separate acquisitions. Tempo has entered into a definitive agreement to acquire Compass Diversified’s equity interests in subsidiary Compass AC Holdings, which is the parent company of Advanced Circuits.
Additionally, Tempo intends to acquire Whizz, a provider of electronics product design, development and manufacturing services, privately held and based in San Jose, CA. Read more.
