Item 1.01. Entry into a Material Definitive Agreement
On
The Merger Agreement
Structure of the Transaction
The acquisition is structured as a "double dummy" transaction, resulting in the following:
(a) Each of Holdings, Kingswood Merger Sub and Wentworth Merger Sub are newly formed entities that were formed for the sole purpose of entering into and consummating the transactions set forth in the Merger Agreement. Holdings is a wholly-owned direct subsidiary of Kingswood and both Kingswood Merger Sub and Wentworth Merger Sub are wholly-owned direct subsidiaries of Holdings. (b) Upon Closing: (i) Kingswood Merger Sub will merge with and into Kingswood (the "Kingswood Merger"), with Kingswood surviving the Kingswood Merger as a wholly owned subsidiary of Holdings (the "Kingswood Surviving Company "); and (ii) simultaneously with the Kingswood Merger, Wentworth Merger Sub will merge with and into Wentworth (the "Wentworth Merger"), with Wentworth surviving the Wentworth Merger as a wholly-owned subsidiary of Holdings (the "Wentworth Surviving Company ").Kingswood Surviving Company will acquire, and Holdings will contribute toKingswood Surviving Company (the "Holdings Contribution") all units of theWentworth Surviving Company directly held by Holdings after the Wentworth Merger, such that, following the Holdings Contribution, theWentworth Surviving Company will be a wholly-owned subsidiary of theKingswood Surviving Company (together with the Kingswood Merger, the Wentworth Merger and the other transactions related thereto, the "Transactions"). (c) In addition, contemporaneously with the execution of the Merger Agreement, (i) certain holders of Wentworth's membership units ("Wentworth Securityholders") representing a majority of Wentworth's outstanding membership interests entered into a Wentworth Support Agreement (the "Wentworth Support Agreement"), pursuant to which such Wentworth Members agreed, among other things, to approve the Merger Agreement and the Transactions, and (ii) certain holders of Kingswood's common stock, par value$0.0001 per share ("Kingswood Common Stock"), and Kingswood Private Placement Warrants ("Private Placement Warrants") entered into a Founder Support Agreement (the "Founder Support Agreement"), pursuant to which, among other things, such holders of Kingswood Common Stock agreed to approve the Merger Agreement and the Transactions. Consideration
The aggregate consideration payable to the Wentworth Members for the Transactions (the "Wentworth Merger Consideration") consists of Holdings Common Shares issued on the Closing Date (the "Share Consideration"), and the assumption of all indebtedness of Wentworth as of the Closing Date (the "Assumed Indebtedness").
The Wentworth Merger Consideration is equal to the quotient of: (a) the difference of (i) Enterprise Value, minus (ii) Closing Wentworth Indebtedness, minus (iii) Sponsor Share Value, minus (iv) Outstanding Transaction Expenses, minus (v) Wentworth Class B Redemption Amount, dividedby (b) the Per Share Price, subject to the Minimum Company Share Amount.
Proxy Statement/Prospectus and Stockholder Meeting
As promptly as practicable after the date of the Merger Agreement, (i) Kingswood
will prepare and file with the
Closing
The Closing will be on a date that is three (3) Business Days after the date on which all Closing conditions have been satisfied or waived or such other time as Kingswood and Wentworth may mutually agree in writing.
Representations, Warranties and Covenants
The Merger Agreement contains customary representations, warranties, and covenants of (a) Wentworth and (b) Holdings, Kingswood, Kingswood Merger Sub and Wentworth Merger Sub relating to, among other things, their ability and authority to enter into the Merger Agreement and their capitalization.
Conditions to Closing General Conditions
The obligation of the parties to consummate the Transactions is conditioned on,
among other things, the satisfaction or waiver (where permissible) by Kingswood
and Wentworth of the following conditions, (a) the waiting period for the HSR
Filing has expired or been terminated; (b) there shall not be in force any Law
that has the effect of prohibiting or otherwise preventing the consummation of
the Transactions; (c) the Offer shall have been completed in accordance with the
terms of the Proxy Statement/Prospectus; (d) the Form S-4 has been effective and
no stop order suspending the effectiveness of the Form S-4 is in effect and no
proceedings for that purpose is pending before or threatened by the
Kingswood Conditions to Closing
The obligations of Kingswood to consummate the Transactions are subject to the satisfaction of conditions, any one or more of which may be waived in writing by Kingswood:
? Each of the representations and warranties of Wentworth relating toCorporate Organization of Wentworth , Subsidiaries, Due Authorization, Current Capitalization and Brokers' Fees, in each case shall be true and correct in all material respects as of the Closing Date. ? The representations and warranties of Wentworth relating to Absence of Changes shall be true and correct in all respects as of the Closing Date. ? Each of the representations and warranties of Wentworth contained in Merger Agreement shall be true and correct as of the Closing Date as though then made except where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to result in, a Material Adverse Effect. ? Wentworth shall have performed as of or prior to the Closing all covenants of Wentworth in all material respects. ? Wentworth shall have delivered to Kingswood a certificate signed by an officer of Wentworth certifying that the conditions relating to Wentworth's representations and warranties and covenants, have been fulfilled. ? Wentworth shall deliver or cause to be delivered to Kingswood a certificate of the secretary or other officer of Wentworth and each of its Subsidiaries as to (A) no amendment to the organizational documents of Kingswood or any of its Subsidiaries, and (B) the actions taken by the board of directors or managers of Wentworth to authorize the Merger Agreement. ? No event shall have occurred between execution of the Merger Agreement and Closing Date that has had a Material Adverse Effect. ? The amended and restated certificate of incorporation of Holdings shall have been adopted. ? The amended and restated bylaws of Holdings shall have been adopted. ? Wentworth shall deliver to Kingswood and Holdings, counterparts to a Lock-Up Agreement. ? Wentworth shall have delivered to Kingswood a fully executed certificate by an executive officer of Wentworth setting forth the Wentworth's good faith calculation of all Outstanding Company Expenses and the Wentworth Merger Consideration (including the calculation of the Company Converted Debt and the Minimum Company Share Amount).
Wentworth Conditions to Closing
The obligations of Wentworth to consummate the Transactions are subject to the . . .
Item 7.01. Regulation FD Disclosure.
On
Additional Information
In connection with the Transactions, Holdings intends to file with the
Participants in the Solicitation
Kingswood, Holdings, Wentworth and their respective directors and executive
officers may be considered participants in the solicitation of proxies with
respect to the Transactions under the rules of the
Non-Solicitation
This Current Report on Form 8-K is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Transactions and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of Kingswood, Holdings or Wentworth, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. No offer of securities shall be made except by means of a definitive prospectus meeting the requirements of the Securities Act.
Forward-Looking Statements
This Current Report on Form 8-K and the attachments hereto contain forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995, including statements about the parties' ability to close the Transactions, the anticipated benefits of the Transactions, and the financial condition, results of operations, earnings outlook and prospects of Kingswood and/or Wentworth and may include statements for the period following the consummation of the Transactions. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as "plan," "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project," "continue," "could," "may," "might," "possible," "potential," "predict," "should," "would" and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements are based on the current expectations of the
management of Kingswood and Wentworth as applicable and are inherently subject
to uncertainties and changes in circumstances and their potential effects and
speak only as of the date of such statement. There can be no assurance that
future developments will be those that have been anticipated. These
forward-looking statements involve a number of risks, uncertainties or other
assumptions that may cause actual results or performance to be materially
different from those expressed or implied by these forward-looking statements.
These risks and uncertainties include, but are not limited to those discussed
and identified in public filings made with the
· expectations regarding Wentworth's strategies and future financial performance, including its future business plans or objectives, prospective performance and opportunities and competitors, revenues, products and services, pricing, operating expenses, market trends, liquidity, cash flows and uses of cash, capital expenditures, and Wentworth's ability to invest in growth initiatives and pursue acquisition opportunities; · the implementation, market acceptance and success of Wentworth's business model and growth strategy; · Wentworth's future capital requirements and sources and uses of cash; · Wentworth's ability to obtain funding for its operations and future growth; · developments and projections relating to Wentworth's competitors and industry; · the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement; · the outcome of any legal proceedings that may be instituted against Kingswood or Wentworth following announcement of the Merger Agreement and the transactions contemplated therein; · the inability to complete the Transactions due to, among other things, the failure to obtain Kingswood stockholder approval or Kingswood's inability to obtain the financing necessary to consummate the Transactions; · the risk that the announcement and consummation of the Transactions disrupts Kingswood's or Wentworth's current plans; · the ability to recognize the anticipated benefits of the Transactions; · unexpected costs related to the Transactions; · the amount of any redemptions by existing holders of Kingswood Common Stock being greater than expected; · limited liquidity and trading of Kingswood's securities; · geopolitical risk, war, and changes in applicable laws or regulations; · the possibility that Kingswood and/or Wentworth may be adversely affected by other economic, business, and/or competitive factors; · operational risk; · risk that the COVID-19 pandemic, and local, state, and federal responses to addressing the pandemic may have an adverse effect on our business operations, as well as our financial condition and results of operations; and · the risks that the consummation of the Transactions is substantially delayed or does not occur.
Should one or more of these risks or uncertainties materialize or should any of the assumptions made by the management of Kingswood and Wentworth prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.
All subsequent written and oral forward-looking statements concerning the Transactions or other matters addressed in this Current Report on Form 8-K and attributable to Kingswood, Wentworth or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Current Report on Form 8-K. Except to the extent required by applicable law or regulation, Kingswood and Wentworth undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of Current Report on Form 8-K to reflect the occurrence of unanticipated events.
Item 9.01. Financial Statements and Exhibits.
Exhibit No. Description 2.1 Agreement and Plan of Merger, dated as ofJuly 7, 2022 , by and amongKingswood Acquisition Corp. ,Binah Capital Group, Inc. ,Kingswood Merger Sub, Inc. ,Wentworth Merger Sub, LLC andWentworth Management Services LLC 10.1 Founder Support Agreement, dated as ofJuly 7, 2022 , by and amongKingswood Acquisition Corp. ,Wentworth Management Services LLC and founding stockholders ofKingswood Acquisition Corp. 10.2 Wentworth Support Agreement, dated as ofJuly 7, 2022 , by and amongWentworth Management Services LLC ,Kingswood Acquisition Corp. and founding members ofWentworth Management Services LLC 99.1 Press Release, datedJuly 7, 2022 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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