Home ownership platform Better and Aurora Acquisition revised their merger agreement to replace the SPAC’s cash in trust and PIPE with bridge financing and convertible notes.
The implied equity value for Better is still approximately $6.9 billion.
The new agreements replace the previous up to $1.78 billion of financing from Aurora and SB Northstar, a fund managed by SB Management, a subsidiary of SoftBank ($1.5 billion PIPE and $278 million backstop of Aurora’s trust account share redemptions) of which $950 million would have been used to purchase shares from existing Better stockholders, with a $1.5 billion transaction in which all proceeds go directly to Better’s balance sheet (i.e., no secondary purchase from existing Better shareholders) to accelerate growth.
The $1.5 billion transaction comprises a $750 million bridge note funded immediately that converts into common equity at the closing of Better’s merger with Aurora, and an additional commitment by Aurora’s sponsor and SoftBank to fund up to a $750 million (less whatever remains in Aurora’s trust account after redemptions) convertible note at Better’s option within 45 days after the merger closes. The transaction adds onto SoftBank Vision Fund 2’s original $500 million investment in Better, in which it purchased shares from existing Better stockholders in April 2021.
With the $750 million bridge financing, Better will have over $1 billion of cash and cash equivalents on its balance sheet, the companies said in a news release. Read more.
