Falcon’s Beyond Global LLC, a company that develops entertainment experiences, agreed to go public through a merger with blank-check firm Fast Acquisition Corp. II.
The transaction values the combined entity at about $1 billion including debt, according to a statement, confirming an earlier Bloomberg News report. Falcon’s Beyond shareholders are rolling their equity positions in the company and are expected to own roughly 80 percent of the combined firm, assuming there are no redemptions. The company is set to trade on the Nasdaq under the ticker FBYD.
Katmandu Collections LLLP has agreed to invest $60 million in the company via a private placement, and the Fast special purpose acquisition company has agreed to forfeit 20 percent of its founder shares, which will be allocated to private-placement investors and non-redeeming shareholders.
In another effort to minimize redemptions, 50 percent of all SPAC shares will become convertible preferred equity paying an 8 percent dividend, which can be converted at $11 or will be mandatorily converted at $14.30. The convertible was Fast’s answer to a slew of private investments in public equity, or PIPEs, priced at discounts to $10, in an effort to provide investors with “true downside protection,” said Doug Jacob, who founded the SPAC.
Falcon’s Beyond volunteered to a valuation reduction partly to give shareholders in the SPAC more exposure to future performance, Executive Chairman Scott Demerau said in an interview.
“We wanted to show we are aligned with public shareholders and are focused on the long-term success of the company,” he said, adding that the firm selected the Fast SPAC because of its management team’s strong understanding of the hospitality and entertainment industries.
Orlando, Florida-based Falcon’s Beyond, led by Demerau and CEO Cecil Magpuri, in November announced a joint venture with Melia Hotels International SA to build and develop a theme park in Punta Cana, Dominican Republic — which uses characters from animated children’s program “CoComelon” — with projects in Tenerife, Spain, and Playa Del Carmen, Mexico, to follow. Separately, Falcon’s Beyond has said it’s developing a theme park outside of Saudi Arabia’s capital, Riyadh, with Qiddiya Investment Co.
Falcon’s Beyond also is in talks with New World Development Co.’s K11 to develop experiential locations in Greater China, Magpuri said, adding that the company wants to go head to head with larger rivals, including Walt Disney Co.
The Fast SPAC, affiliated with investment firm &vest, is led by CEO Sandy Beall. It raised $222 million in a March 2021 initial public offering.
Guggenheim Securities LLC advised Falcon’s Beyond on the merger agreement, and Jefferies Financial Group Inc. advised the Fast SPAC.