Multinational lottery operator Allwyn Entertainment plans to merge with blank-check firm Cohn Robbins Holdings in an enterprise value of approximately $9.3 billion.
Word of a pending agreement began circulating in December.
Current Allwyn equity holders are expected to retain approximately 83% ownership in the merged company, and no new shareholder will own more than 5% immediately following the transaction.
Allwyn’s expected implied pro forma total enterprise value of approximately $9.3 billion represents approximately 11.5x 2022E Adjusted EBITDA. However, due to a bonus pool of up to approximately 6.6 million CRHC shares to be made available exclusively to non-redeeming CRHC shareholders, those shareholders have the opportunity to establish ownership stakes at a maximum expected effective valuation multiple of 10.8x 2022E Adjusted EBITDA, or approximately $8.7 billion in total enterprise value. Bonus shares forfeited by redeeming shareholders will be distributed to non-redeeming shareholders on a pro rata basis, which is variable based on a range of exchange ratios for shares held by non-redeeming shareholders of between 1.08x and 1.40x, to be determined based on redemptions.
Assuming a price of $10 per share of the SPAC’s common stock at the closing of the transaction, non-redeeming shareholders would receive, in exchange for each share of CRHC common stock held, shares of the post-combination company with value equating to between $10.80 (asuming no redemptions) and $14 (assuming redemptions resulting in the maximum exchange ratio).
The SPAC holds approximately $828 million of cash in trust. Concurrent with the closing of the proposed transaction, investors have committed to purchase more than $350 million in a PIPE, which includes participation from a group of international investors, including $50 million from CRHC’s sponsor. Read more.
