CAEP.NASDAQCantor Equity Partners Iii, INC

425: AIR to Go Public via $1.75B SPAC Merger with Cantor Equity Partners III

Sentiment:

Business Combination Announcement 7 November 2025 8:57 AM

📋All filings for Cantor Equity Partners Iii, INC

AIR Limited, the global leader in hookah and advanced inhalation technologies, announced a definitive business combination agreement with Cantor Equity Partners III, Inc., valuing the combined entity at approximately $1.749 billion and expecting a Nasdaq listing under 'AIIR' in H1 2026.

Capital raiseSPAC and PubCo, with the Company's prior written consent, may enter into and consummate subscription agreements with investors relating to an equity or convertible debt investment (PIPE Investment).They may also enter into non-redemption, backstop, or other alternative financing arrangements with potential investors.The proceeds from the business combination, combined with strong organic cash flow, will provide financial flexibility and support category expansion efforts.

Summary

Cantor Equity Partners III, Inc. (CAEP), a special purpose acquisition company, and AIR Limited (AIR) have entered into a definitive business combination agreement.
The combined entity will be named AIR Global Limited (PubCo) and is expected to list on Nasdaq under the ticker 'AIIR' in the first half of 2026.
The transaction implies a pro forma enterprise value of approximately $1.749 billion, reflecting AIR's estimated 2025 year-end net debt of approximately $293 million.
AIR's Al Fakher brand is the global market leader in flavored hookah, holding over 60% market share by sales volume in the United States as of 2024.
AIR generated $375 million in net revenue and $150 million in Adjusted EBITDA for core products in 2024, demonstrating a 5% revenue CAGR and 9% Adjusted EBITDA CAGR between 2020 and 2024.
Net operating cash flow conversion averaged over 88% from 2020 to 2024.
The transaction involves a Cayman Merger (CAEP into Genesis Cayman Merger Sub Limited, with CAEP surviving as a wholly-owned subsidiary of PubCo) and a Jersey Merger (AIR into Genesis Jersey Merger Sub Limited, with AIR surviving as a wholly-owned subsidiary of PubCo).
CAEP shareholders will receive one PubCo Ordinary Share for each CAEP Class A or Class B ordinary share (excluding redeemed shares and certain forfeited Class B shares).
AIR shareholders will receive PubCo Ordinary Shares based on an aggregate number derived from $1,456,000,000 (subject to adjustments) divided by fully-diluted company shares, then by $10.00, plus 5% of that ratio.
Certain PubCo Ordinary Shares received by AIR shareholders and Sponsor will be subject to lock-up and earnout restrictions.
Sponsor (Cantor EP Holdings III, LLC) will forfeit 3,400,000 CAEP Class B Ordinary Shares and subject 1,500,000 PubCo Ordinary Shares to earnout restrictions based on price targets ($12.50 and $15.00).
All Company Options will be cancelled for no consideration. Restricted share unit awards will be converted into PubCo conditional awards.
The transaction is subject to customary closing conditions, including shareholder and regulatory approvals, and the effectiveness of the Form F-4 registration statement.

Sentiment

Score: 8

Explanation: The filing announces a definitive business combination with strong financial performance, market leadership, and significant innovation in a growing industry. The strategic partnerships and global expansion plans are positive indicators. While there are standard de-SPAC risks and earnout conditions, the overall tone and disclosed metrics suggest a highly favorable outlook for the combined entity.

Positives

Implied pro forma enterprise value of $1.749 billion for the combined entity.
AIR's Al Fakher brand is the global market leader in flavored hookah, with over 60% market share in the U.S. as of 2024 and 14 million consumers worldwide.
Strong financial performance with $375 million net revenue and $150 million Adjusted EBITDA for core products in 2024.
Consistent growth demonstrated by a 5% revenue CAGR and 9% Adjusted EBITDA CAGR between 2020 and 2024.
High net operating cash flow conversion, averaging over 88% from 2020 to 2024.
Significant investment in innovation, with over $115 million invested since 2019 and 100+ patents across 18 patent families.
Diversified product portfolio including traditional hookah, OOKA (charcoal-free device), VANT (functional ingredients), and nicotine pouches.
Strategic partnerships, including a collaboration with cultural icon Snoop Dogg for premium Al Fakher flavors.
Strong digital assets and e-commerce platforms in leading global markets (U.S., Germany) enabling high-margin growth.
Favorable regulatory positioning for hookah in some jurisdictions, with exemptions from flavored tobacco bans in certain U.S. states/localities.
Scalable global infrastructure with eight production facilities supporting over 90 markets.
Experienced management team and support from long-term institutional investors like Kingsway Capital.

Negatives

All Company Options that have not been exercised immediately prior to the Jersey Merger will be cancelled for no consideration.
PubCo Ordinary Shares issued to Company Shareholders are subject to lock-up restrictions for six months post-closing, with limited early release exceptions.
Earnout shares for both Company Shareholders (5% of consideration) and Sponsor (1,500,000 shares) are subject to forfeiture if specific PubCo share price targets ($12.50 and $15.00) are not met within five years.
The transaction involves an estimated $293 million in net debt for AIR at 2025 year-end.

Risks

The Transactions may not be completed in a timely manner or at all, which could adversely affect the price of CAEP's securities.
Failure to satisfy the conditions to the consummation of the Transactions, including obtaining necessary shareholder approvals.
Failure to realize the anticipated benefits of the Transactions.
The level of redemptions by CAEP's public shareholders could reduce the public float and liquidity of PubCo Ordinary Shares.
Lack of a third-party fairness opinion in determining whether to pursue the Transactions.
Failure of PubCo to obtain or maintain the listing of its securities on Nasdaq after closing.
Costs related to the Transactions and the expenses of becoming a public company.
Changes in business, market, financial, political, and regulatory conditions could adversely impact PubCo.
Increased competition in the industries in which PubCo will operate.
Difficulties in managing growth and expanding operations post-consummation of the Transactions.
Challenges in implementing PubCo's business plan due to operational issues, significant competition, and regulation.
Risk of being considered a shell company by any stock exchange or the SEC, which may impact listing ability and reliance on certain rules.
Outcome of any potential legal proceedings that may be instituted against PubCo, CAEP, or others following the announcement.
Potential liabilities under Environmental Laws, including those related to Hazardous Materials.
Risks associated with Computer Security Incidents, data breaches, or unauthorized access to IT Systems.
Non-compliance with Anti-Corruption Laws, Anti-Money Laundering Laws, Sanctions, and Trade Laws.
Product regulatory matters, including potential failure to comply with Applicable Product Laws or obtain/maintain Marketing Authorization.

Future Outlook

The combined company, AIR Global Limited, expects to list on Nasdaq under 'AIIR' in the first half of 2026. The transaction proceeds and strong cash flow generation will support category expansion, scaling premium innovations, entering new markets, and advancing digital transformation. The company aims to capitalize on the increasing presence of social inhalation as a popular lifestyle phenomenon globally.

Management Comments

"AIR is revolutionizing social inhalation by combining our heritage of superior flavors with breakthrough technology to meet evolving consumer demand across all regions." Stuart Brazier, CEO of AIR.
"Hookah consumption has become a global lifestyle trend, particularly in the United States, because it brings people together offline to share moments and create memories. We want to continue to capitalize on social inhalations increasing presence as a popular lifestyle phenomenon, and this transaction with CAEP will provide us with a Nasdaq-listed public company that will raise our profile and provide financing flexibility to accelerate our innovation and global expansion." Stuart Brazier, CEO of AIR.
"AIR's combination of innovation, forward-looking vision, and disciplined execution has created a truly unique, category-defining company with market-leading brands. We are thrilled to partner with AIR and help drive their expansion into the public markets." Brandon Lutnick, Chairman and CEO of Cantor Fitzgerald and CAEP.

Industry Context

The announcement positions AIR as a leader in the growing global hookah market, estimated at $15-20 billion for flavored hookah molasses in 2025. The company's focus on innovation, including charcoal-free devices (OOKA) and functional inhalation systems (VANT), aligns with evolving consumer preferences for diversified and potentially less harmful alternatives. Strategic partnerships, like the one with Snoop Dogg, aim to enhance brand appeal and market penetration, particularly in Western markets where social inhalation is gaining traction as a lifestyle trend. The company also highlights regulatory positioning, noting exemptions for hookah in some flavored tobacco bans, which could provide a competitive advantage.

Comparison to Industry Standards

Al Fakher brand is the market leader in flavored hookah, larger than the next four competitors combined, with over 60% market share by sales volume in the United States as of 2024.
A commissioned study published in a peer-reviewed journal suggests the OOKA device offers reductions in users' exposure to certain harmful and potentially harmful substances compared to traditional hookah.
Hookah use is characterized by occasional social consumption and lower levels of youth experimentation as compared to cigarettes, according to a CDC survey.
The company's 5% revenue CAGR and 9% Adjusted EBITDA CAGR between 2020 and 2024 demonstrate strong growth relative to industry averages, especially in a potentially regulated sector.
Investment of over $115 million in new product innovations since 2019 and 100+ patents across 18 patent families indicates a strong commitment to R&D and intellectual property protection, potentially exceeding industry norms for traditional tobacco/inhalation companies.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Board of Directors of PubCo	NA	Individuals designated by the Company (subject to applicable listing requirements)	Jersey Closing	Formation of new public entity post-merger
Officers of PubCo	NA	Individuals designated by the Company (subject to applicable listing requirements)	Jersey Closing	Formation of new public entity post-merger
Directors of Surviving Cayman Company	Board of Directors of SPAC	Directors of Cayman Merger Sub	Cayman Effective Time	Merger of Cayman Merger Sub into SPAC
Officers of Surviving Cayman Company	Officers of SPAC	Officers of Cayman Merger Sub	Cayman Effective Time	Merger of Cayman Merger Sub into SPAC
Sole Director of Surviving Jersey Company	Directors of the Company (listed in Part 2 of Schedule 1)	Mary-Ann Orr (listed in Part 1 of Schedule 1)	Jersey Effective Time	Merger of Jersey Merger Sub into the Company

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Governing Documents Amendment	The memorandum and articles of association of Cayman Merger Sub will become the governing documents of the Surviving Cayman Company.	Cayman Effective Time	Standard change for a merger, ensuring continuity of the surviving entity's governance structure.
Governing Documents Amendment	The memorandum and articles of association of the Surviving Jersey Company will be in the form attached as Exhibit F, provided to Company Shareholders with the Special Written Resolution.	Jersey Effective Time	Establishes the governance framework for the surviving operating entity post-merger.
PubCo Conversion	PubCo will convert from a private limited company to a public limited company upon approval of the A&R PubCo Charter.	Effective from Shareholder Approval Matters being approved at Extraordinary General Meeting	Enables PubCo to become a publicly traded entity on Nasdaq, subject to regulatory and listing requirements.
Subscriber Share Redemption	Ordinary shares issued to PubCo Nominees (Subscriber Shares) will be redesignated as redeemable deferred shares and immediately redeemed and cancelled.	As soon as reasonably practicable following the earlier of Cayman Closing and Jersey Closing	Cleans up initial incorporation shares, standard for de-SPAC transactions.
Shareholders Agreement Termination	The existing Shareholders Agreement of AIR Limited will automatically terminate in full upon the Jersey Effective Time.	Jersey Effective Time	Simplifies governance structure by removing prior shareholder agreements, aligning with public company status.
Board Composition	The board of directors of PubCo will consist of individuals designated by the Company, subject to applicable listing requirements.	Jersey Closing	Ensures the operating company's management team leads the new public entity.
Indemnification and D&O Insurance	Existing exculpation, indemnification, and expense advancement rights for D&O Indemnified Persons will survive for six years post-closing. PubCo will maintain D&O tail insurance for SPAC and Company directors/officers.	Cayman Closing and Jersey Closing	Provides continuity of protection for past and present directors and officers, a standard practice in M&A.
Equity Incentive Plan	PubCo will approve and adopt an omnibus incentive equity plan with an initial share reserve of 10% of fully diluted shares and an annual evergreen increase of up to 3% for ten years.	Immediately prior to Cayman Effective Time	Establishes a framework for future equity compensation, aligning management and employee incentives with shareholder value.

Legal Proceedings

The filing notes the risk of potential legal proceedings being instituted against PubCo, CAEP, or others following the announcement of the Transactions.
No written notice of any pending or threatened investigation by Governmental Authorities regarding Anti-Corruption Laws has been received by AIR Companies.
No Action involving AIR Companies with respect to Anti-Money Laundering Laws is current, ongoing, pending, or threatened.
No AIR Company is engaged in, subject to, or party to any Action regarding actual or possible violations of Sanctions.
No AIR Company has received written notice of any actual, alleged, or potential violation of any Trade Law or been a party to or the subject of any pending (or threatened) Action related to any actual, alleged, or potential violation of any Trade Law.
No written notice from the FDA or any other relevant Governmental Authority alleging material failure to comply with permits, revocation, or failure to obtain/renew permits has been received by AIR Companies.
No voluntary or mandatory recall, warning letter, or enforcement action initiated by the FDA or other relevant Government Authorities has occurred for AIR Companies since January 1, 2023.
No Actions, Governmental Orders, private settlement contracts, or material internal complaints, claims, disputes, grievances, or controversies pending or threatened involving any employee, applicant, or Contract Worker of the AIR Companies with respect to labor and employment matters (except as may be detailed in Section 7.17(f) of the Company Disclosure Letter, which is not provided).
No Action is pending or threatened against SPAC, or its directors or officers, that would reasonably be expected to have a SPAC Material Adverse Effect.

Related Party Transactions

The Sponsor Support Agreement details specific arrangements with Cantor EP Holdings III, LLC (Sponsor), an affiliate of CAEP, including voting agreements, waiver of anti-dilution rights, forfeiture of 3,400,000 Class B shares, and earnout restrictions on 1,500,000 PubCo Ordinary Shares.
Sponsor loans to SPAC (Sponsor Working Capital Note, Sponsor Trust Contribution Note) will be repaid or converted into SPAC Class A Ordinary Shares upon closing.
The A&R Registration Rights Agreement involves PubCo, CAEP, Sponsor, and certain Company Shareholders, granting registration rights for resale of PubCo Ordinary Shares.
No Company Shareholder, officer, or director of an AIR Company, or their affiliates/family members, has been a party to any transaction with an AIR Company since January 1, 2023, other than employment contracts in the ordinary course, the Shareholders Agreement, or contracts for equity purchases, or as explicitly part of the Ancillary Documents for the merger.

Stakeholder Impact

**CAEP Shareholders**: Will receive PubCo Ordinary Shares in exchange for their CAEP shares, subject to redemption rights.
**AIR Shareholders**: Will receive PubCo Ordinary Shares in exchange for their AIR shares, subject to lock-up and earnout restrictions. Existing Company Options will be cancelled.
**Employees**: Company Equity Awards (restricted share units) will be converted into PubCo conditional awards. New PubCo Top Up Awards and PubCo Retention Awards will be issued.
**Customers**: Expected to benefit from continued product innovation, category expansion, and new offerings (e.g., Snoop Dogg collaboration, OOKA, VANT).
**Creditors**: The Company and Jersey Merger Sub will provide notice to their creditors in accordance with Jersey Companies Law.
**Management**: Key management from AIR will lead the combined public entity (PubCo).

Next Steps

PubCo to prepare and file a registration statement on Form F-4 with the SEC.
CAEP to solicit proxies from its shareholders for an Extraordinary General Meeting to approve the Business Combination Agreement and related matters.
Obtain all requisite approvals by shareholders of CAEP and AIR.
Obtain listing approval of Nasdaq for PubCo Ordinary Shares.
PubCo to approve and adopt an omnibus incentive equity plan (PubCo Equity Incentive Plan) prior to the Cayman Closing Date.
PubCo to issue Company Top Up Awards, PubCo Earnout RSUs, and PubCo Retention Awards after the Jersey Closing.
Sponsor, SPAC, and PubCo to enter into an amended and restated registration rights agreement by the Cayman Closing Date.
The Company to use reasonable best efforts to obtain executed Shareholder Support Agreements from any remaining Key Company Shareholders.
The Company and Jersey Merger Sub to give notice to all of their respective creditors and publish the contents of the notice in accordance with Jersey Companies Law.
Expected completion of the Proposed Business Combination in the first half of 2026.

Key Dates

Date	Description
1999	AIR Limited launched and headquartered in Dubai.
November 5, 2020	Amended and Restated Shareholders Agreement in relation to the Company entered into.
July 29, 2021	Amended and Restated Shareholders Agreement further amended and restated.
July 30, 2021	Company Memorandum and Articles of Association dated.
January 1, 2023	Start of period for certain representations and warranties (e.g., Liabilities, Compliance with Laws, Company Permits, Financial Statements, Insurance, Data Protection, Cybersecurity, Product Regulatory Matters).
May 2024	AIR Management Incentive Plan adopted.
2024	AIR generated $375 million in net revenue and $150 million in Adjusted EBITDA for core products. Al Fakher brand had over 60% market share in the U.S. and 14 million consumers worldwide.
April 10, 2025	AIR Management Incentive Plan amended.
June 25, 2025	Date of SPAC's initial public offering (IPO), Insider Letter, Sponsor Working Capital Note, Sponsor Trust Contribution Note, and Original Registration Rights Agreement.
June 26, 2025	CAEP's final prospectus filed with the SEC.
July 15, 2025	Confidentiality Agreement entered into between SPAC and the Company.
September 29, 2025	AIR Management Incentive Plan further amended.
October 23, 2025	CF&Co. M&A Engagement Letter between CF&Co. and SPAC.
November 5, 2025	Date for calculation of Fully-Diluted Company Shares (50,253,523) and Company Exchange Ratio (2.897309).
November 7, 2025	Date of Business Combination Agreement, Shareholder Support Agreement, Sponsor Support Agreement, and Press Release announcing the transaction.
First half of 2026	Expected completion of the Proposed Business Combination and Nasdaq listing under 'AIIR'.
June 25, 2030	Sponsor's rights for Private Placement Shares under Section 2.1 of A&R Registration Rights Agreement expire.
June 25, 2032	Sponsor's rights for Private Placement Shares under Section 2.2 of A&R Registration Rights Agreement expire.
Tenth anniversary of Agreement date	Termination of A&R Registration Rights Agreement.

Keywords

SPAC, Business Combination, De-SPAC, Hookah, Al Fakher, OOKA, VANT, Inhalation Technology, Tobacco Products, Consumer Goods, Nasdaq Listing, Cantor Equity Partners, AIR Limited, AIIR, Merger, Public Company

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