DEF: Haymaker Acquisition Corp. 4 Seeks Shareholder Approval to Extend Business Combination Deadline Amidst Search for Infrastructure Target

Haymaker Acquisition Corp. 4 is seeking shareholder approval to extend its deadline for completing a business combination by up to 12 months, from July 28, 2025, to July 28, 2026, while pursuing a non-binding letter of intent with a profitable infrastructure materials company.

Summary

• Haymaker Acquisition Corp. 4 (HYAC) is holding an Annual General Meeting on July 24, 2025, to vote on four key proposals.
• The primary proposal is to amend the company's articles of association to extend the deadline for consummating a business combination from July 28, 2025, to July 28, 2026, on a monthly basis for up to twelve times.
• The Board of Directors believes it is improbable to complete an initial business combination by the current July 28, 2025, deadline and recommends shareholders approve the extension to avoid liquidation.
• Shareholders have the option to redeem their public shares for approximately $10.68 per share, based on the Trust Account balance of approximately $254,180,747.94 as of June 27, 2025.
• The company has entered into a non-binding letter of intent (LOI) with a profitable and growing infrastructure materials company, which is seeking to achieve over $80 million in pro forma Adjusted EBITDA for the year ending December 31, 2025, through existing business and additional acquisitions.
• Other proposals include the appointment of Brian Shimko as a Class I director for a three-year term expiring at the 2028 Annual Meeting, ratification of WithumSmith+Brown, PC as the independent auditor for fiscal year 2025, and approval of an adjournment proposal if needed.
• The Sponsor, holding 5,750,000 founder shares (approximately 19.5% of outstanding ordinary shares), intends to vote in favor of all proposals.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative. While the company has identified a potential target with promising metrics and the Board is working to secure an extension, the fundamental need for an extension indicates a failure to meet initial timelines. Significant risks related to redemptions, potential liquidation, and regulatory hurdles remain, which could dilute shareholder value or lead to a complete loss for warrant holders. The positive aspects are primarily forward-looking and subject to significant contingencies.

Positives

• The company has identified a potential business combination target, a profitable and growing infrastructure materials company, and has entered into a non-binding letter of intent.
• The LOI target has demonstrated strong revenue growth and attractive Adjusted EBITDA margins, with a pro forma Adjusted EBITDA target of over $80 million for the year ending December 31, 2025, assuming successful consummation of planned acquisitions.
• The private equity sponsor controlling the LOI target has a successful history of implementing a 'buy and build' strategy and completing IPOs with other portfolio companies.
• The Board of Directors unanimously recommends voting FOR all proposals, including the extension, indicating their commitment to completing a business combination.
• The Sponsor intends to vote in favor of all proposals, providing significant voting power for their approval.

Negatives

• The company requires an extension to its business combination deadline, indicating a failure to meet the original timeframe set at its IPO.
• The Board believes it is 'improbable' to complete a business combination before the current July 28, 2025, deadline.
• If the extension is not approved, the company will be forced to liquidate, and warrants will expire worthless, while founder shares will receive no monies from the Trust Account.
• Significant redemptions by public shareholders in connection with the extension could substantially reduce the funds available in the Trust Account, potentially requiring additional capital for a business combination, which may not be available on acceptable terms or at all.
• The per-share redemption price of approximately $10.68 is lower than the recent NYSE closing price of $11.10, suggesting a potential loss for shareholders who redeem.
• The company may be deemed an unregistered investment company under the Investment Company Act due to not entering a definitive business combination agreement within 18 months of its IPO, which could force liquidation.
• To mitigate investment company risk, the company will liquidate Trust Account securities and hold funds in cash, which will result in minimal interest earnings, reducing the amount public shareholders would receive upon redemption or liquidation.

Risks

• There is no assurance that the proposed extension will enable the company to complete an initial business combination.
• Redemptions by shareholders could leave insufficient cash to consummate a business combination on commercially acceptable terms or at all.
• The market price and liquidity of the company's securities may be volatile, and shareholders may be unable to sell their shares at favorable prices.
• The company risks being deemed an unregistered investment company under the Investment Company Act, which could force liquidation and render warrants worthless.
• Holding Trust Account funds in cash will result in minimal interest earnings, reducing the per-share redemption amount.
• Any business combination may be subject to U.S. foreign investment regulations (CFIUS review), which could impose conditions, limitations, or prevent consummation, or cause significant delays.
• NYSE may delist the company's securities if a business combination is not completed within three years of initial listing (July 26, 2026), leading to reduced liquidity, potential penny stock status, and difficulty raising capital.
• If delisted, the company's securities could be subject to penny stock regulations, reducing trading activity and making it difficult for shareholders to sell shares.
• State securities regulators might hinder the sale of securities if the company is no longer listed on a national exchange.
• The LOI target's strategy may not be executed successfully, on the proposed timeline, or at all, and its financial metrics are subject to ongoing confirmatory due diligence.
• Past performance of the PE Sponsor's 'buy and build' strategy is not indicative of future results for the LOI target.

Future Outlook

The company intends to continue efforts to enter into and consummate an initial business combination, specifically pursuing a non-binding letter of intent with a profitable and growing infrastructure materials company. The parties expect to enter into a definitive business combination agreement and file a Form S-4 registration statement in the coming months. The extension of the business combination deadline to July 28, 2026, is crucial for these plans to materialize. If the extension is approved, the company will remain a reporting company, and its securities will continue to be publicly traded. However, if a business combination is not completed by the extended date, the company will liquidate.

Management Comments

• The Board of Directors believes it is improbable that an initial business combination will be negotiated and completed before July 28, 2025.
• The Board believes that, in order for the company to potentially consummate an initial business combination, it will need to obtain the Extension.
• The Board has determined that the Extension Amendment Proposal, the Director Appointment Proposal, the Auditor Proposal and, if presented, the Adjournment Proposal are advisable and recommends voting FOR such proposals.

Industry Context

This filing reflects a common challenge faced by Special Purpose Acquisition Companies (SPACs) in the current market environment: the difficulty of identifying and consummating suitable business combinations within their initial mandated timelines. The need for an extension is a recurring theme for many SPACs, often driven by market volatility, increased regulatory scrutiny (e.g., SEC's SPAC Rule Proposals regarding investment company status), and the complexity of due diligence. The company's shift to holding Trust Account funds in cash to mitigate investment company risk is a direct response to evolving SEC guidance, impacting potential returns for non-redeeming shareholders. The focus on an 'infrastructure materials company' aligns with broader investment trends in infrastructure development and essential services, which can be attractive for their stability and growth potential.

Comparison to Industry Standards

• The company's need for an extension beyond its initial 24-month period is common among SPACs, particularly given the increased regulatory scrutiny and market conditions that have made de-SPAC transactions more challenging. Many SPACs, such as Lionheart II Corp, Lionheart III Corp, and Growth for Good Acquisition Corp (all mentioned in director bios), have faced similar pressures or completed business combinations with varying degrees of success.
• The proposed target's pro forma Adjusted EBITDA of over $80 million for FY2025, if achieved, would position it as a significant player in the infrastructure materials sector, potentially comparable to mid-cap companies in the construction materials or aggregates industry, though specific comparable companies are not named.
• The strategy of the PE Sponsor, described as a 'buy and build' approach, is a recognized private equity strategy for creating value by acquiring and integrating multiple smaller companies to form a larger, more diversified entity. This strategy has been successfully applied by other firms in various sectors, including those in adjacent sectors as mentioned in the document.
• The per-share redemption price of approximately $10.68, compared to the IPO price of $10.00, indicates a modest return for redeeming shareholders, which is typical for SPACs that hold funds in U.S. government securities, but the current market price of $11.10 suggests that holding shares might offer a better return if a successful business combination is achieved.

Management Changes

Corporate Governance

Legal Proceedings

• Roger Meltzer, a director, was named as a defendant in three consolidated class action derivative stockholder actions related to The Hain Celestial Group, alleging breach of fiduciary duty and Exchange Act violations. The case remains pending as of the filing date, with a Magistrate's report recommending dismissal.

Related Party Transactions

• Haymaker Sponsor IV LLC (Sponsor) paid $25,000 for 5,750,000 founder shares (Class B ordinary shares) in March 2023.
• The Sponsor purchased 797,600 private placement units at $10.00 per unit for gross proceeds of $7,976,000 simultaneously with the IPO.
• An affiliate of Andrew Heyer (Vice President) receives $20,000 per month for office space, utilities, and administrative services.
• An affiliate of Christopher Bradley (Chief Financial Officer) receives $20,000 per month for advisory services, accrued and payable upon successful business combination.
• The Sponsor loaned the company up to $300,000 via an IPO Promissory Note (repaid on July 28, 2023).
• The Sponsor provided a WCL Promissory Note for up to $1,500,000 for working capital, with $400,000 drawn as of December 31, 2024. This loan may be convertible into units at $10.00 per unit.
• The Sponsor, directors, and officers have interests that may differ from shareholders, including ownership of founder shares and warrants that would be worthless upon liquidation, and potential future compensatory arrangements with an acquired business.
• The Sponsor, directors, officers, advisors, or their affiliates may purchase public shares or warrants in privately negotiated transactions or on the open market to increase the likelihood of proposal approval or satisfy listing requirements, subject to specific SEC rules.

Stakeholder Impact

• **Shareholders**: Public shareholders face a decision to redeem their shares for cash (at approximately $10.68 per share) or hold them, risking potential loss if the extension is not approved or a business combination is not completed by the extended date. Non-redeeming shareholders will retain voting rights on future business combinations and redemption rights. Warrants will expire worthless if liquidation occurs. The value of their investment is highly dependent on the successful consummation of a business combination.
• **Sponsor/Founder Shareholders**: Their founder shares and private placement units will become worthless if the company liquidates, providing a strong incentive for them to support the extension and a successful business combination. They will not receive any monies from the Trust Account upon liquidation.
• **Management/Directors**: Their compensation and continued roles are contingent on the successful completion of a business combination. They have financial interests (e.g., founder shares, potential future compensation) that align with the company's ability to complete a transaction.
• **Creditors**: In the event of liquidation, the company is obligated under Cayman Islands law to provide for claims of creditors, which could reduce the per-share distribution from the Trust Account to public shareholders.

Next Steps

• Hold the Annual General Meeting of Shareholders on July 24, 2025, to vote on the Extension Amendment Proposal, Director Appointment Proposal, Auditor Proposal, and Adjournment Proposal.
• If the Extension Amendment Proposal is approved, continue efforts to enter into and consummate an initial business combination by the Extended Date (July 28, 2026).
• Enter into a definitive business combination agreement with the LOI target in the coming months.
• File a registration statement on Form S-4 in due course, providing detailed information about the business combination.
• Hold a separate annual general meeting or extraordinary general meeting to seek shareholder approval for the proposed business combination.
• If the Extension Amendment Proposal is not approved, or if a business combination is not consummated by the Extended Date, cease operations and liquidate the company.

Key Dates

Recommendation

Keywords

SPAC, Haymaker Acquisition Corp. 4, Business Combination, Extension, Proxy Statement, SEC Filing, Redemption, Trust Account, Infrastructure Materials, Adjusted EBITDA, Corporate Governance, Shareholder Meeting, Liquidation, Warrants, CFIUS, NYSE Delisting, Investment Company Act