Caravelle Group Co., Ltd., an ocean technology company providing international shipping services and a carbon neutral solution for wood drying (the “CO-Tech Solution”), announced today that it has entered into a definitive merger agreement with Pacifico Acquisition Corp. (Nasdaq: PAFO; “Pacifico”), 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 transferring over 100% of their equity into the combined company. The transaction is expected to generate approximately $100 million in cash proceeds, including an anticipated $60 million PIPE and up to $58 million in cash held in Pacifico’s trust account assuming no redemption by the Pacifico shareholders. These values exclude $350 million of earn-out shares that would be paid in common stock if applicable revenue requirements were met in 2023. Upon completion of the transaction, which is expected in the fall of 2022, the merged company will operate as Caravelle International Group and is expected to remain listed on Nasdaq.
Presentation of Caravel
Caravelle is an ocean technology company providing international shipping services and carbon neutral solutions for wood drying (the “CO-Tech solution”). The company has developed and commercialized a new approach to shipping time, space and the reallocation of engine and by-product heat to reduce carbon emissions, compared to traditional onshore processing. In addition to its wood transport and drying activities, Caravelle has developed innovative, value-added solutions for the fireproofing of wood and the extraction of wood vinegar as an organic fertilizer. Caravelle’s ocean technologies encourage a carbon neutral future for the transportation and wood processing industry, while recognizing sustainable benefits.
Caravelle is dedicated to researching ESG-focused technologies and helping developing countries achieve their carbon neutrality goals. As the global demand for wood and timber has increased, consuming an average of 3.7 billion m3 of wood per year, the environment has experienced a corresponding increase in carbon emissions. More than 1 billion m3 of wood are currently processed and then transported by sea every year. Caravelle’s CO-Tech model is the only ocean drying technology in the timber transport industry.
Caravelle is led by a management team with more than 20 years of experience in the timber supply chain, industrial engineering and international transport of timber and other raw materials.
Dr. Guohua Zhang, CEO of Caravelle, welcomed the signing of the agreement between Pacifico and Caravelle, saying: “As what we believe to be the first carbon-neutral public ocean technology company on the Nasdaq, Caravelle hopes reinvigorate the ocean economy and carbon neutral technology into exponential growth, as well as achieve ESG goals in the shipping industry.
Mr. Edward Cong Wang, CEO of Pacifico, said, “The Pacifico team is delighted to work with Caravelle as it continues to achieve its goal, which began over five years ago. Our respective teams believe that success today requires alignment with secular shifts towards ESG; Caravelle’s commitment to using carbon-neutral ocean co-technology to revolutionize the timber industry is unparalleled. We are committed to helping Caravelle in its transition from a large private company to a large public company by leveraging our deep understanding of private and public capital markets.
Key terms of the transaction
The pro forma enterprise value of the combined company is $527 million, including an expected PIPE of $60 million and up to $58 million of cash held in Pacifico’s trust account, subject to redemptions. These values exclude $350 million of top-up shares that would be paid in common stock if applicable revenue requirements were met in 2023. The transaction, which was approved by the Caravelle and Pacifico boards of directors, is subject to the approval of the shareholders of Caravelle and Pacifico, respectively, minimum cash requirements and other customary closing conditions. The proposed business combination provides that the shareholders of Caravelle will inject 100% of their capital into the merged company.
All cash remaining on the Combined Company’s balance sheet at the closing of the Transaction, after settlement of transaction-related expenses, is expected to be used by the Combined Company for working capital, growth and other general corporate purposes. ‘business. The proposed business combination is expected to be completed in the fall of 2022.
A more detailed description of the terms of the transaction and a copy of the definitive merger agreement will be included in a current report on Form 8-K that will be filed by Pacifico with the United States Securities and Exchange Commission (the “SEC “). Pacifico or one of its subsidiaries will file a registration statement (which will contain a proxy statement and a prospectus) with the SEC in connection with the transaction.
Chardan acts as a mergers and acquisitions and capital markets advisor for Pacifico. Jun He Law Offices LLC is acting as legal counsel to Caravelle in connection with the transaction. Loeb & Loeb LLP is acting as legal counsel to Pacifico.