Merger PAFOU

Caravelle Group Co., Ltd, an Ocean Technology and Shipping Company, to Become Publicly Traded via Merger with Pacifico Acquisition Corp.

, SPAC Research

Caravelle Group Co., Ltd, an ocean technology company providing international shipping services and a carbon-neutral solution for wood desiccation (the “CO-Tech solution”), announced today that it has entered into a definitive merger agreement with Pacifico Acquisition Corp. (Nasdaq: PAFO), a publicly traded special purpose acquisition company or SPAC. The transaction values the combined company at a pro forma enterprise value of approximately $527 million with existing Caravelle shareholders rolling over 100% of their equity into the combined company. The transaction is expected to provide approximately $100 million of cash proceeds, including an anticipated $60 million PIPE and up to $58 million of cash held in the trust account of Pacifico assuming no redemptions by Pacifico stockholders. These values exclude $350 million of earn-out shares that would be paid in common stock if applicable revenue-based requirements are met in 2023. Upon completion of the transaction, which is anticipated in the fall of 2022, the combined company will operate as Caravelle International Group and is expected to remain listed on Nasdaq.

Caravelle is an ocean technology company providing international shipping services and carbon-neutral solutions for wood desiccation (the “CO-Tech solution”). The Company has developed and commercialized a novel approach toward shipping time, space, and the repurposing of engine heat and biproducts to reduce carbon emissions, relative to traditional onshore processing. In addition to its activities in timber transportation and desiccation, Caravelle has developed innovative, value-added solutions for wood fireproofing and the extraction of wood vinegar for use as an organic fertilizer. Caravelle’s ocean technologies encourage a carbon neutral future for the timber shipping and processing industry, while also recognizing sustainable profits.

The pro forma enterprise value of the combined company is $527 million including an anticipated $60 million PIPE and up to $58 million of cash held in the trust account of Pacifico, subject to redemptions. These values exclude $350 million of earn-out shares that would be paid in common stock if applicable revenue-based requirements are met in 2023. The transaction, which has been approved by the boards of directors of Caravelle and Pacifico, is subject to approval by the stockholders of Caravelle and Pacifico, respectively, minimum cash requirements, and other customary closing conditions. The proposed business combination contemplates that Caravelle stockholders will roll 100% of their equity into the combined company.

 All cash remaining on the combined company’s balance sheet at the closing of the transaction, after the settlement of transaction-related expenses, is expected to be utilized by the combined company for working capital, growth, and other general corporate purposes. The proposed business combination is expected to be completed in the fall of 2022.

Chardan is acting as M&A and capital markets advisor to Pacifico. Jun He Law Offices LLC is acting as legal counsel to Caravelle in the transaction. Loeb & Loeb LLP is acting as legal counsel to Pacifico.

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