Matterport And Gores Holdings Vi Announce Closing Of Business Combination

“We believe the proposed transaction with Gores Holdings VI unlocks the potential of our platform and accelerates our mission to make every building and every space more valuable and accessible,” Matterport CEO RJ Pittman said in a statement. The statement indicates stockholders will hold roughly 75% of the combined company. Matterport had revenue of $85.9 million in 2020, up 87% year over year, according to the statement. Matterport stockholders will roll all their equity over and the existing management team will remain in charge.

In the proposed de-SPAC merger, Gores would be the surviving entity and would be renamed Matterport, and Legacy Matterport would become a wholly owned subsidiary of Matterport. In July 2021, Gores adopted bylaws in anticipation of the business combination, which imposed transfer restrictions on certain shares of Matterport Class A common stock, referred to matterport spac as “Lockup Shares.” The transaction was completed and the bylaws became effective. In de-SPAC transactions where target company shares are to be exchanged for SPAC shares via submission to the transfer agent or an exchange agent with a letter of transmittal, shareholders can delay receiving their SPAC shares and thereby evade the lock-up restrictions.

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The blank-check company Gores VI will also provide Matterport with $345 million in cash it previously raised. Sign up for a free Matterport account with 1 active space, 1 user, and access to a suite of tools. LLC acted as financial advisors to Gores Holdings VI and as joint lead placement agents to Gores Holdings VI. Moelis & Company LLC also acted as financial advisor to Gores Holdings VI. Weil, Gotshal & Manges, LLP acted as legal advisor to Gores Holdings VI.

Accordingly, it is common for key stockholders of the target company to agree not to transfer their shares of the SPAC for a certain period following the closing, typically 6 or 12 months, subject to certain customary exceptions. These transfer restrictions are often paired with corresponding restrictions on the SPAC’s sponsors, who may be subject to a similar or identical lock-up applicable to their shares, warrants or other securities of the SPAC. These restrictions can project confidence to the market and serve as an incentive for performance, particularly because such restrictions commonly fall away if the combined company’s share price surpasses certain pre-determined price thresholds before the end of the lock-up period. Existing lock-up agreements containing the “immediately following” formulation used in Matterport may not be enforceable against holders who did not exchange their target company shares for SPAC shares reasonably promptly following the closing of the business combination transaction. The court rejected the defendants’ argument that Brown’s reading of the provision would “nullify” the transfer restrictions because no Legacy Matterport stockholder received Matterport shares” instantly after the transaction closed. The evidence demonstrated that some Legacy Matterport stockholders would have received their Matterport shares within a few days of closing.

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While target shareholders beneficially own SPAC shares at the effective time of the business combination transaction, they are not legally holders of such shares until any applicable exchange steps are completed. A CEO’s shares in a company acquired by a special purpose acquisition company were not subject to a lockup restriction, the Delaware Court of Chancery held. The provision defined lockup shares as shares held “immediately” following the de-SPAC transaction, but under the logistics of the share transfer, the CEO was not actually issued shares until over 100 days later (Brown v. Matterport, Inc., January 10, 2022, Will, L.). For parties negotiating or considering entering into a future de-SPAC transaction, it is critical to carefully negotiate the scope of the lock-up and any other restrictions on alienation of the shares of the combined company. To avoid ambiguity, it may be preferred to add language clarifying that the restrictions apply to any shares “held by the holders immediately after the effective time or otherwise issued or issuable to the holders in connection with the business combination transaction”.

• Gores Holdings VI and The Gores Group are separate entities with separate management, although there is overlap in size and industry of target acquisition and personnel involved.
• In the proposed de-SPAC merger, Gores would be the surviving entity and would be renamed Matterport, and Legacy Matterport would become a wholly owned subsidiary of Matterport.
• As a result, Brown’s reading of the bylaws did not nullify the transfer restrictions.
• Readers are cautioned not to put undue reliance on forward-looking statements, and Matterport assumes no obligation and, except as required by law, does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.
• The addition of LiDAR support for iPhone customers to capitalize on Apple’s new depth sensor and increase the fidelity and accuracy of Matterport digital twins.
• The court agreed, finding that obtaining shares over 100 days after closing was not “immediately” for purposes of the Lockup Shares provision.

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. Readers are cautioned not to put undue reliance on forward-looking statements, and Matterport assumes no obligation and, except as required by law, does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Matterport does not give any assurance that it will achieve its expectations.

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The ability of the target company’s insiders to sell their SPAC shares after the merger is a key point of negotiation in any de-SPAC transaction. Even in transactions where the transfer agent issues such shares automatically to holders of the target company’s stock, there is often a day or longer period between the closing and when the stockholders actually hold their public shares. Whether that short delay counts as “immediately” enough for the restrictions to apply has yet to be tested. In a typical de-SPAC transaction, a target company combines with the SPAC , and the stock of the target is cancelled and exchanged for the right to receive shares of the SPAC. The issuance of those shares is generally handled by the SPAC’s transfer agent, either directly or pursuant to an exchange agreement and letters of transmittal which must be completed by stockholders .

Matterport, a spatial data firm that makes software for virtual property tours, will merge with a special purpose acquisition company led by billionaire investor Alec Gores. Significantly, in the de-SPAC transaction, Legacy Matterport stockholders did not automatically become Matterport stockholders. Instead, Matterport’s transfer agent would issue Matterport Class A common shares to Legacy Matterport stockholders upon receipt of a letter of transmittal surrendering their Legacy Matterport shares. In reviewing the relevant provision of the New Matterport bylaws, the Court looked to their plain meaning and found the language to be unambiguous.

Matterport, a developer of subscription software that creates 3D digital versions of physical spaces, has made its debut on the Nasdaq following its merger with Gores Holdings VI, a SPAC backed by billionaire Alec Gores. As part of the deal, the VC-backed company has received $605 million in cash, including a $295 million PIPE led by a group of institutional investors such as Tiger Global, Dragoneer Investment Group and Gores Holdings VI. The SPAC merger valued Matterport at $2.9 billion. ”) and the markets in which Matterport operates, business strategies, debt levels, industry environment, potential growth opportunities, the effects of regulations and Gores’ or Matterport’s projected future results. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “forecast,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions . Venture capital-backed real estate technology firm Matterport will merge with a blank-check company and go public in a deal that values the startup at $2.3 billion.

Matterport And Gores Holdings Vi Announce Closing Of Business Combination

That timing could be viewed as consistent with a plain reading of the bylaw, said the court. As a result, Brown’s reading of the bylaws did not https://xcritical.com/ nullify the transfer restrictions. In February 2021, Legacy Matterport agreed to a business combination with Gores Holding VI, Inc., a SPAC.

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The release of the Matterport Capture app on the Google Play Store, giving billions of Android users in 175 countries the ability to quickly and easily capture buildings and spaces with compatible 360 cameras and the Matterport Pro2 3D camera. The Matterport deal represents the seventh SPAC merger for Gores, and second real estate-related independent public offering. As real estate professionals strategize on how to do business in 2021’s competitive, fast-paced housing market, they’ll discover the need for better tools to market their listings. Fees, and expenses paid in connection with the closing of the Business Combination. The addition of LiDAR support for iPhone customers to capitalize on Apple’s new depth sensor and increase the fidelity and accuracy of Matterport digital twins. This website is using a security service to protect itself from online attacks.

Brown filed a complaint contending that the share trading restrictions were adopted without his consent in violation of Section 202 of the Delaware General Corporation Law. He sought a declaration that the lockup shares provision was unenforceable as to his shares and that he could freely transfer his shares and/or conduct derivative trading without restriction. Brown also brought fiduciary claims against Legacy Matterport’s former directors.

There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. Aibusiness.com needs to review the security of your connection before proceeding. Professionals rely on HW Media for breaking news, reporting, and industry data and rankings. Last month, his Gores Group IV merged with United Wholesale Mortgage in a deal that valued the wholesale mortgage lender at $16.1 billion. The companies will raise roughly $295 million from investors including Tiger Global Management, Senator Investment Group, Dragoneer Investment Group and Fidelity Management & Research Co. and accounts managed by Blackstone Group.

The court bifurcated the claims and held an expedited trial on the limited issue of whether Brown was bound by the transfer restrictions. Brown argued that he held no Matterport shares “immediately following” the July 22, 2021 de-SPAC transaction’s closing. Instead, at that time he held only the right to receive Matterport Class A common shares. He was not actually issued Matterport shares until November 5 at the earliest, after he sent executed letters of transmittal to Matterport’s transfer agent. The court agreed, finding that obtaining shares over 100 days after closing was not “immediately” for purposes of the Lockup Shares provision. William J. Brown was the CEO of Matterport Operating, LLC , a privately held spatial data company, from November 2013 to December 2018.

In particular, the Court found that the common meaning of “immediately”—“without delay”—meant that Brown’s shares, which were received over 100 days after closing, could not be viewed as held “immediately” after closing. Founded in 1987 by Alec Gores, The Gores Group is a global investment firm focused on partnering with differentiated businesses that can benefit from the extensive industry knowledge and decades long experience. Gores Holdings VI and The Gores Group are separate entities with separate management, although there is overlap in size and industry of target acquisition and personnel involved. Accordingly, the court found that Brown’s Matterport shares were not Lockup Shares under the bylaws and he was therefore permitted to freely trade his Matterport shares and enter into derivative transactions with respect to those shares, without restriction. The decision illustrates that common formulations of lock-ups may give rise to unintended consequences which allow relevant major parties, insiders or management to trade during the intended lock-up period. Given frequent share price volatility both pre- and post-combination, lock-ups are a critical element of de-SPAC transactions and the agreements creating them must be drafted carefully.

Brown received equity compensation in the form of stock options granting him the right to purchase 1,350,000 shares of Legacy Matterport. Immediately after the business combination—and not to shares which were issuable at such time but not actually issued for some time because the holder failed to exchange their target company shares. In February 2021, Matterport Operating, LLC (“Legacy Matterport”) entered into an agreement to merge with a SPAC, Gores Holding VI, Inc. (“Gores”). Shortly before the merger was intended to close in July 2021, William J. Brown, Legacy Matterport’s former Chief Executive Officer, sued for declaratory relief from the lock-up trading restrictions imposed in connection with the business combination, arguing that they did not apply to certain of his shares.