Oak Woods (NASDAQ:OAKU) announced in an 8-K this morning that it has entered into a definitive agreement to combine with Huajin at a valuation of $250 million.
Transaction Overview
Oak Woods has about $58.5 million in its trust with a transaction deadline coming up on September 28. Huajin is to pay Oak Woods $330,000 within 15 days, a portion of which is to be used on extension contributions and incentives as well as operating expenses.
The two parties have agreed to make their best efforts at arranging a PIPE of unspecified size for the deal.
Huajin is to be valued at $250 million in issued shares, minus the company’s net debt. Oak Woods must maintain more than $5 million in order for the deal to close, and Huajin is to pay the SPAC a $2 million breakup fee if the deal is terminated under some conditions.
Both the company and sponsor have agreed to a one-year lock-up, but the sponsor may begin trading shares if the company trades at or above $12 for 20 of 30 trading days at least 150 days out from close.
The combined company will have a Board of five directors at close, three of which will be appointed by Oak Woods.
Quick Takes: Very little information has been released thus far on this combination and the gaps in information currently include a basic description of the company.
Oak Woods has also operated with a relatively thin staff. Lixin Zheng has worn the CEO, CFO and Chairman hats since the SPAC’s March IPO. He brings experience from managing the Hong Kong-listed Ajisen (HK:0538) fast casual restaurant chain and previously took Rinpak Technology public on the Taipei exchange.
The SPAC’s Board also includes the NYSE’s youngest-ever floor trader, Lauren Simmons, and Mitchell Cariaga, who initially served as an independent director for Brilliant Acquisition Corporation but resigned in February 2022.
Keeping with the theme, Oak Woods did not elaborate on its strategy in great detail in its S-1, but noted that it was most interested in combining with a medical services or healthcare target with strong ESG qualities.
As with the time zones, many times investors have to wait a little longer on details involving Asian deals, and this is no exception.
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