LONDON - Tembo E-LV B.V. ("Tembo"), a subsidiary of VivoPower International PLC (NASDAQ:VVPR), and Cactus (NYSE:WHD) Acquisition Corp. 1 Limited (NASDAQ:CCTS), a special purpose acquisition company, have entered into a definitive Business Combination Agreement (BCA). The BCA values the combined enterprise at a pro forma value of $904 million, assuming no redemptions by CCTS public shareholders.
The agreement follows due diligence and a third-party fairness opinion provided to CCTS's board of directors. The companies are preparing a Form F-4 registration statement for submission to the U.S. Securities and Exchange Commission (SEC) and aim to complete the business combination by the end of 2024, subject to the SEC's review process and CCTS shareholder approval.
Upon completion, the parties will submit an application to list the securities of a newly formed entity, Tembo Group, on the Nasdaq.
Advising on the transaction are Chardan as financial and capital markets advisor, White & Case LLP and NautaDutilh N.V. as U.S. and Dutch legal advisors to VivoPower and Tembo, and Ellenoff Grossman & Schole LLP and De Metz Advocaten N.V. as U.S. and Dutch counsel to CCTS.
Tembo specializes in 100% electric utility vehicles for industries such as mining, agriculture, and construction, aiming to offer safe, high-performance electrification solutions. VivoPower, a global sustainable energy solutions company, focuses on electric solutions for customized fleet applications and related services.
Cactus Acquisition Corp. was established to undertake mergers and business combinations. The completion of this merger is contingent on various conditions, including regulatory approvals and the satisfaction of closing conditions.
The press release includes forward-looking statements regarding the benefits and projected financial performance of the combined entity post-merger. These are subject to risks and uncertainties, including those related to the completion of the merger and market conditions.
This news is based on a press release statement and includes no endorsements or subjective assessments. The information provided is intended to inform shareholders and interested parties of the proposed business combination and its progress.
InvestingPro Insights
As VivoPower International PLC (NASDAQ:VVPR) progresses towards its business combination with Cactus Acquisition Corp., there are several financial metrics and analyst insights from InvestingPro that provide a deeper understanding of VivoPower's current financial health and market performance.
InvestingPro data indicates that VivoPower has a market capitalization of $9.72 million, reflecting the company's valuation within the stock market. However, the company's P/E ratio stands at -0.27, with an adjusted P/E ratio for the last twelve months as of Q2 2024 at -0.66, suggesting that the company is not currently profitable. Additionally, VivoPower's price has experienced significant volatility, with a 1-week price total return of 1.86% but a more concerning 1-year price total return of -52.63%, indicating a notable decline over the past year.
InvestingPro Tips highlight that VivoPower operates with a significant debt burden and may have trouble making interest payments on its debt. This could be a critical factor for investors to consider, given the company's negative operating income margin of -59.5% for the last twelve months as of Q2 2024. Furthermore, analysts do not anticipate the company will be profitable this year, and the valuation implies a poor free cash flow yield. These factors, combined with the high price volatility of VivoPower's stock, could influence investor sentiment and the perceived risk of the impending business combination with Cactus Acquisition Corp.
For those seeking more comprehensive analysis, InvestingPro offers additional insights on VivoPower, with a total of 16 InvestingPro Tips available at https://www.investing.com/pro/VVPR, which can help investors make more informed decisions based on the latest market data and expert analysis.
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