425: Haymaker SPAC to Merge with Suncrete in $82.5M PIPE Deal

Haymaker Acquisition Corp. 4 has entered into a definitive business combination agreement with Concrete Partners Holding, LLC (Suncrete), with Suncrete, Inc. becoming the new public entity (PubCo) and securing an $82.5 million PIPE investment.

Summary

• Haymaker Acquisition Corp. 4 (SPAC) has entered into a Business Combination Agreement with Concrete Partners Holding, LLC (Suncrete) and Suncrete, Inc. (PubCo).
• The transaction involves a domestication of SPAC to Delaware, followed by a two-step merger where SPAC and Suncrete become wholly-owned subsidiaries of PubCo.
• A private placement (PIPE Investment) of approximately $82.5 million in PubCo Class A Common Stock and/or Pre-Funded Common Stock Purchase Warrants has been secured from accredited investors and qualified institutional buyers.
• The transaction is subject to a minimum cash condition of $150,000,000 in available cash at closing, after redemptions and including the PIPE Investment.
• Existing Suncrete equityholders will receive 32,532,500 shares of PubCo Class B Common Stock or PubCo Class A Common Stock.
• Dothan Independent GP, LP, an affiliate of the Company, contributed $500,000 to the Sponsor for an indirect interest in 2,800,000 SPAC Founder Shares and 398,800 SPAC Cayman Warrants, and PubCo will issue an additional 2,500,000 shares of PubCo Class B Common Stock to Dothan Independent.
• The Sponsor will forfeit up to 333,333 shares of PubCo Class A Common Stock immediately upon the Initial Merger Effective Time.
• The SPAC's public shareholders will have redemption rights for their Class A Ordinary Shares.
• The PubCo board of directors will consist of up to eight members, including the CEO of Suncrete, two SPAC designees (Andrew Heyer and Christopher Bradley), and up to four additional Suncrete designees.

Sentiment

Score: 7

Explanation: The filing announces a definitive business combination agreement, a crucial step for Suncrete to go public, backed by a substantial PIPE investment and stakeholder support. While standard risks for such transactions are present, the detailed planning and commitments suggest a positive outlook for the transaction's completion.

Positives

• A definitive business combination agreement has been reached, providing a clear path for Suncrete to become a publicly traded company.
• A significant PIPE investment of approximately $82.5 million has been secured, demonstrating investor confidence and providing capital for the combined entity.
• Support agreements from key Suncrete equityholders and the SPAC Sponsor are in place, indicating alignment among major stakeholders.
• The combined entity, PubCo, is expected to be listed on the New York Stock Exchange, enhancing liquidity and market visibility.
• The transaction includes provisions for an Omnibus Incentive Plan and an Employee Stock Purchase Plan, which can help attract and retain talent.

Negatives

• The consummation of the business combination is subject to a minimum cash condition of $150,000,000, which depends on the level of SPAC shareholder redemptions and the PIPE investment.
• The Sponsor will forfeit up to 333,333 shares of PubCo Class A Common Stock, indicating some dilution or adjustment for the founding shareholders.
• The redemption or repurchase of SPAC Warrants (other than those held by the Sponsor) is a 'commercially reasonable efforts' goal, not a guaranteed outcome, potentially leaving outstanding warrants.
• The 'Outside Date' for termination can be extended if PCAOB Financial Statements are not delivered by October 20, 2025, introducing a potential for delay.

Risks

• The Business Combination and PIPE Investment may not be completed in a timely manner or at all.
• Failure by the parties to satisfy the conditions to the consummation of the PIPE Investment and the Business Combination, including the approval of Haymaker's shareholders.
• Failure to realize the anticipated benefits of the Business Combination.
• The outcome of any potential legal proceedings that may be instituted against PubCo, Suncrete, Haymaker, or others following announcement of the Business Combination.
• The level of redemptions of Haymaker's public shareholders, which may reduce the public float of, reduce the liquidity of the trading market of, and/or maintain the quotation, listing, or trading of the Class A ordinary shares of Haymaker or the shares of PubCo Class A Common Stock.
• The failure of PubCo to obtain or maintain the listing of its securities on any stock exchange on which the PubCo Class A Common Stock will be listed after closing of the Business Combination.
• Costs related to the Business Combination and as a result of PubCo becoming a public company.
• Changes in business, market, financial, political, and regulatory conditions.
• Risks relating to Suncrete's anticipated operations and business, including the success of any future acquisitions.
• The risk that issuances of equity or debt securities following the closing of the Business Combination, including issuances of equity securities in connection with Suncrete's acquisition strategy, may adversely affect the value of Suncrete's common stock and dilute its stockholders.
• The risk that after consummation of the Business Combination, PubCo experiences difficulties managing its growth and expanding operations.
• Challenges in implementing the business plan, due to lack of an operating history, operational challenges, significant competition, and regulation.

Future Outlook

The filing outlines the intent to complete a business combination, leading to Suncrete becoming a publicly traded company under PubCo. It anticipates the successful integration of operations, realization of strategic advantages, and growth opportunities within the concrete industry. Management expects to achieve future financial condition and performance targets, subject to various business, economic, and regulatory risks, and the satisfaction of closing conditions for both the Business Combination and the PIPE Investment.

Management Comments

• Christopher Bradley, Chief Executive Officer and Chief Financial Officer of Haymaker Acquisition Corp. 4, signed the Current Report on Form 8-K/A.
• Ned N. Fleming, III, Executive Chairman of Concrete Partners Holding, LLC, signed the Business Combination Agreement.

Industry Context

This filing represents a significant step in the ongoing trend of private companies utilizing Special Purpose Acquisition Companies (SPACs) to enter public markets. The target, Suncrete, operates in the concrete and construction industry, which is subject to economic cycles, infrastructure spending, and raw material costs. The transaction aims to provide Suncrete with access to public capital markets for growth and strategic acquisitions, aligning with broader industry consolidation and expansion strategies.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

• The filing notes a risk regarding 'the outcome of any potential legal proceedings that may be instituted against PubCo, Suncrete, Haymaker or others following announcement of the Business Combination.'

Related Party Transactions

• SPAC issued unsecured Promissory Notes to the Sponsor totaling up to $6,000,000, which will be repaid or converted at the Acquisition Merger Effective Time.
• Dothan Independent GP, LP, an Affiliate of the Company, contributed $500,000 to the Sponsor in exchange for an indirect interest in 2,800,000 SPAC Founder Shares and 398,800 SPAC Cayman Warrants.
• PubCo will issue 2,500,000 shares of PubCo Class B Common Stock to Dothan Independent at the Acquisition Closing.
• A Sponsor Support Agreement was entered into by the Sponsor and certain SPAC officers and directors with Suncrete and PubCo, superseding a previous agreement.
• A Company Equityholder Support Agreement was entered into by certain Suncrete equityholders with SPAC, PubCo, and Suncrete.
• An amendment to the Management and Consulting Agreement between Suncrete and Dothan Management (an Affiliate of the Company) will be entered into, with PubCo assuming Suncrete's obligations.

Stakeholder Impact

• **SPAC Public Shareholders**: Will have the opportunity to redeem their shares or convert them into PubCo Class A Common Stock, subject to the terms of the business combination. Their vote is required for the transaction's approval.
• **Suncrete Equityholders**: Will convert their existing units into PubCo Class A or Class B Common Stock, becoming shareholders of the new public entity. Many will be subject to lock-up restrictions on their shares.
• **PIPE Investors**: Will acquire PubCo Class A Common Stock and/or Pre-Funded Warrants, providing capital to the combined company.
• **Sponsor**: Will convert its SPAC Founder Shares into PubCo Class B Common Stock, waive anti-dilution rights, and forfeit a portion of its shares. Subject to lock-up restrictions.
• **Management and Directors**: New board and management structure for PubCo, with certain SPAC directors/officers resigning and new indemnification agreements in place.
• **Employees of Suncrete**: Will continue with the Surviving Subsidiary Company, with Company Incentive Unit holders receiving Rollover Equity Awards in PubCo Class A Shares, subject to existing vesting terms.

Next Steps

• SPAC will change its jurisdiction of incorporation from the Cayman Islands to Delaware (Domestication).
• Merger Sub I will merge with and into SPAC (Initial Merger), with SPAC surviving as a wholly-owned subsidiary of PubCo.
• Merger Sub II will merge with and into Suncrete (Acquisition Merger), with Suncrete surviving as a wholly-owned subsidiary of PubCo.
• PubCo and Suncrete will jointly prepare and file a registration statement on Form S-4 (including a proxy statement/prospectus) with the SEC.
• The SEC must declare the Registration Statement effective.
• SPAC will mail the proxy statement/prospectus to its shareholders.
• SPAC shareholders will hold a meeting to vote on the Required SPAC Proposals, including the business combination and related matters.
• The Company will obtain the Requisite Company Approval via a Written Consent.
• The shares of PubCo Class A Common Stock and Assumed SPAC Warrants will be approved for listing on the New York Stock Exchange (or another mutually agreed national exchange).
• PubCo will adopt its Amended and Restated PubCo Charter and Bylaws.
• PubCo, SPAC, and the Sponsor will enter into an Assignment, Assumption, and Amendment Agreement (RRA Assignment) for existing registration rights.
• PubCo and certain members of Suncrete will enter into a new Registration Rights Agreement.
• Certain Suncrete equityholders and Sponsor Related Parties will enter into Lock-Up Agreements.
• Management Aggregator will distribute Company Incentive Units to its members prior to the Acquisition Merger Effective Time.
• SPAC will repay all outstanding Sponsor Notes (or Sponsor may elect to convert them).
• PubCo will file an effective registration statement on Form S-8 for the Omnibus Incentive Plan and the ESPP.
• The Company, PubCo, and Dothan Management will enter into an amendment to the Dothan Management Agreement.
• SPAC will use commercially reasonable efforts to redeem or repurchase all issued and outstanding SPAC Warrants (other than those held by the Sponsor) prior to or concurrently with the Closing Date.
• The Company will consummate the Project Thunder Transaction.

Key Dates

Recommendation

The filing announces a definitive business combination agreement, which is a significant and price-sensitive event for both Haymaker Acquisition Corp. 4 and Suncrete. The secured PIPE investment and broad stakeholder support are positive indicators for the transaction's completion. However, the consummation is subject to several conditions, including shareholder approval and a minimum cash threshold, and the forward-looking statements highlight various risks inherent in such transactions and future operations. Without specific financial projections or a detailed valuation analysis in this filing, a 'hold' recommendation is prudent, awaiting further operational and financial disclosures post-merger to assess long-term value and the combined entity's performance.

Keywords

SPAC, Business Combination, Merger, Suncrete, Haymaker Acquisition Corp. 4, PIPE Investment, De-SPAC, Public Listing, Corporate Governance, SEC Filing, Financial Reporting, Construction Industry