Merger ATA.U

Rally Enters into Agreement to Become Publicly Traded Via Business Combination with Americas Technology Acquisition Corp.

, SPAC Research

Rally Communitas Corp., a leading technology company for mass mobility in the United States doing business under the “Rally” and “OurBus” brands, and Americas Technology Acquisition Corp., a special purpose acquisition company (NYSE: ATA, ATA.WS, ATA.U), today announced the signing of a definitive business combination agreement. The combined entity, to be renamed “Rally Mobility Corp”, is expected to be listed on the NYSE under the symbol RLLY. Upon the closing of the transaction, Rally will be led by its CEO and founder, Mr. Numaan Akram. The boards of directors of Rally and ATA have unanimously approved the transaction.

Rally is a technology company engaged in the business of marketplace operation for mass mobility in the United States and globally, providing a single platform to commercialize idle and highly fragmented regional private bus capacity. Rally empowers consumers and creates demand for fleet owners by aggregating riders seeking to travel between cities and to special event locations like sports arenas and rock concerts. Rally’s marketplace includes 3,000 small businesses that each own approximately 10 buses. The private bus industry collectively facilitates nearly 600 million annual passenger trips in the United States. Rally’s technology identifies the availability of these bus operators whose fleets are typically 50% utilized. By doing so, Rally unlocks the value of the industry's idle vehicle capacity in an annual market estimated by Rally to be approximately $135 billion globally.

Under the terms of the proposed transaction, a new publicly traded holding company will be formed under the name “Rally” (“Pubco”) which will have two wholly owned subsidiaries, one of which, prior to closing, will merge with and into Rally, with Rally surviving, and one of which will merge with and into ATA, with ATA surviving.

The transaction reflects an implied pro-forma enterprise value at closing of approximately $208 million excluding earnout consideration and without taking into account escrow/release of shares to holders of contingent value rights (“CVRs”). Transaction consideration to security holders of Rally will take the form of newly issued Pubco securities, with the total number of issued shares to be determined in accordance with the terms of the Merger Agreement, taking into account potential adjustments for debt and transaction expenses as of the closing date. Assuming no adjustments to transaction consideration (and without taking into account the shares to be held back from distribution at closing and deposited into escrow to satisfy obligations to CVR holders after the closing), the aggregate value of shares to be issued to Rally stockholders at the closing is expected to be approximately $165 million. Rally stockholders may also receive up to an additional 4.5 million shares of Pubco common stock upon the achievement of certain revenue and share price targets during the post-closing earnout period.

In connection with the transaction, non-redeeming ATA shareholders and investors that subscribe for shares in a private placement to be consummated concurrent with the business combination will receive CVRs entitling holders to certain down-side price protection and a premium return, subject to trading prices of Pubco common stock during the 18-month period after the closing. Obligations to CVR holders, to the extent applicable, will be satisfied by distribution of shares contributed into escrow at the closing by Rally stockholders and ATA’s Sponsor.

Proceeds from the transaction are expected to be used by Rally for to scale existing routes and launch additional routes, as well as for general working capital purposes. The parties expect the transaction to be consummated during the fourth quarter of 2022.

Chardan is acting as sole financial advisor and lead capital markets advisor to Rally. Nelson Mullins Riley & Scarborough LLP is acting as legal counsel to Rally. Ellenoff Grossman & Schole LLP is acting as U.S. legal counsel to ATA.


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