Merger VELO

BBQguys goes public via merger with Velocity Acquisition

, SPAC research

BBQ Holding, LLC, a leading specialty e-commerce platform for higher-end BBQ grills, grilling accessories and outdoor living products for both homeowners and professional builders, and Velocity Acquisition Corp. announced today they have entered into a definitive business combination agreement that will result in BBQGuys becoming a publicly listed company on NASDAQ under the new ticker symbol “BBQG”. The transaction values the Company, which generated revenue of $264 million in 2020, at a pro forma equity value of approximately $963 million and an enterprise value of approximately $839 million.

Founded in 1998, BBQGuys is one of the largest specialty e-commerce platforms for higher-end grills, grilling accessories and outdoor kitchen products, and is rapidly evolving into a complete outdoor living lifestyle brand. Unlike mass-market and brick-and-mortar specialty retailers, or manufacturers selling direct-to-consumer, BBQGuys offers a comprehensive consumer experience for the grilling and outdoor living enthusiast. Complemented by a strong focus on sales and customer support, this experience includes deep category expertise, tailored fulfillment capabilities, and a digital content engine for not only consumers looking for grilling techniques and recipes, but also professional customers seeking outdoor planning concepts. BBQGuys fosters and maintains long-tenured relationships with key brand partners, plus an attractive and growing portfolio of owned brands (including Blaze and Victory) that address gaps in the market and benefit from BBQGuys’ established infrastructure to commercialize its innovation pipeline.

The transaction implies a pro forma enterprise valuation for BBQGuys of $839 million, or 17.0x projected 2022 pro forma Adjusted EBITDA of $49 million. Estimated cash proceeds to the Company from the transaction are expected to consist of Velocity’s $230 million of cash in trust (assuming no redemptions). The Company expects to use the proceeds from the transaction to invest in BBQGuys’ key growth initiatives, including acquisitions, and provide additional working capital in addition to covering transaction-related costs.

Upon the closing of the transaction, and assuming none of Velocity’s public stockholders elect to redeem their shares, existing BBQGuys shareholders, including BVP, are expected to own 71% of the combined company, the Velocity sponsors are expected to own 5% of the combined company, and public stockholders are expected to own 24% of the combined company. As part of BVP’s “Share the Gains” program, BVP’s principals are allocating 10% of their carried interest to the non-senior management employees of BBQGuys (subject to vesting).

Credit Suisse acted as exclusive financial advisor to BBQGuys. Jefferies acted as the M&A advisor to Velocity. Citigroup and Canaccord Genuity acted as financial and capital markets advisors to Velocity. Sidley Austin LLP acted as the legal advisor to BBQGuys and Winston & Strawn LLP acted as the legal advisor to Velocity.


 

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