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Act II Global Acquisition to Combine with Flavors Holdings to form Whole Earth Brands
Friday 20 December 2019

20 December 2019 - US-based special purpose acquisition company Act II Global Acquisition Corp. (NASDAQ: ACTT) has entered into a definitive business combination with the owners of sugar substitutes maker Merisant Company and licorice products maker MAFCO Worldwide LLC, the company said.

Merisant and MAFCO comprise the operating subsidiaries of Flavors Holdings Inc. which is owned by affiliates of MacAndrews and Forbes Inc.

Subject to the terms and conditions set forth in a purchase and aale agreement, Act II will combine with the businesses of Merisant, MAFCO and certain of their subsidiaries.

Following the closing of the proposed transaction, it is expected that Act II will change its name to Whole Earth Brands and continue to be listed on the NASDAQ stock exchange.

It is anticipated that, upon consummation of the proposed transaction, the company will have an anticipated initial enterprise value of approximately USD 575m, or 8.1x the Flavors Holdings' estimated Calendar Year 2020 Pro Forma EBITDA of USD 71m.

Merisant is one of the world's leading manufacturers of tabletop non-caloric sweeteners.

The company markets its products under its flagship brands Whole Earth, Equal, Canderel, and Pure Via, along with several other adjacent consumer products in over 90 countries.

MAFCO has been one of the world's largest manufacturers of natural licorice products for over 150 years.

MAFCO's natural licorice products many of which are under the Magnasweet brand are used in a wide range of applications including food, beverage, pharmaceutical, confectionary, cosmetic, personal care and tobacco products.

Following the closing, it is expected that Whole Earth Brands will be led by Flavors Holdings' existing management team, including chief executive officer, Albert Manzone, and president of the Ingredients business, Lucas Bailey.

Manzone has more than 25 years of experience in the consumer products industry and has been with Flavors Holdings since 2016.

Bailey currently serves as president of MAFCO and has 15 years of experience in operational, financial and strategic planning and analysis roles.

Irwin D. Simon will serve as Executive chairman. Simon, founder and former CEO of Hain Celestial, currently serves as chairman of Act II and is an accomplished leader and innovator in the natural foods industry.

Subject to the terms set forth in the agreement, the transaction will be funded through a combination of cash available in the trust, roll-over stock and debt financing.

At closing, the owners of Merisant and MAFCO will receive USD 510m in total consideration, consisting of USD 450m in cash and 6m shares of class A Ordinary Shares of Act II, subject to adjustment in accordance with the terms of the definitive agreement.

In addition, at closing, the owners of Merisant and MAFCO will receive 1 m shares of class A Ordinary Shares of Act II placed in escrow, subject to release in accordance with the terms of the definitive agreement.

At closing, Act II is required to have at least USD 170m available to it from its trust account created in connection with its initial public offering, after payment to holders of Act II common stock that seek redemption in connection with the transactions and net of certain other expenses.

Furthermore, the Merisant and MAFCO owners will have the opportunity to receive incentive earnout shares totaling approximately 2.7m shares consisting of 1.4m shares, issuable if, among other things, the volume weighted-average per share trading price of the class A Ordinary Shares is at or above USD 14 per share for twenty trading days in any thirty day continuous trading period, and approximately 1.3m shares, issuable if, among other things, the volume weighted-average per share trading price of the class A Ordinary Shares is at or above USD 16 per share for twenty trading days in any thirty day continuous trading period.

Act II has received a commitment from TD Bank to provide for the contemplated debt financing.

The board of directors of Act II has unanimously approved the proposed transaction.

Completion of the proposed transaction, which is currently expected by the end of 1Q20, is subject to customary closing conditions, receipt of approvals from Act II's stockholders, and completion of the offer for Act II's stockholders to redeem their shares.

The description of the agreement is not complete, and investors should review the materials to be filed with the Securities and Exchange Commission in connection with the proposed transaction.

DLA Piper LLP served as legal advisor to Act II for the transaction. Goldman Sachs and Co. LLC and Moelis and company LLC served as financial advisors to Act II. Cantor Fitzgerald and Co. served as capital markets advisor to Act II. Wachtell, Lipton, Rosen and Katz served as legal advisor to Flavors Holdings. Citi acted as financial advisor to Flavors Holdings.
Details
Date Published: 20/12/2019
Target: Merisant Company, MAFCO Worldwide
Country: USA
Deal Size: 510m (USD)
Sector: Food/Beverages/Tobacco
Type: LBO
Financing: Cash and Stock
Status: Agreed
Vendor: Flavors Holdings Inc
Buyer: Act II Global Acquisition Corp
Buyer Advisor: DLA Piper , Goldman Sachs and Co , Moelis and Company , Cantor Fitzgerald and Co
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