Benzinga | Jun 29, 2021 06:46AM EDT

Cannae Holdings, Inc. Announces Termination Of Previously Announced $75M Forward Purchase Agreement And New Equity Backstop Commitment Of Up To $200M In Trebia Acquisition Corp. And System1 Business Combination

rebia Acquisition Corp. to Combine with System1, a Leading Omnichannel Customer Acquisition Platform~~W0:

lliam P. Foley, II to Join the Newly Combined Company's Board of Directors~~W0:

Cannae Holdings, Inc. (NYSE:CNNE) ("Cannae" or the "Company") today announced that the Company, in conjunction with the announced Trebia Acquisition Corp. (NYSE:TREB, TREB WS))))) ("Trebia") and System1 ("System1") business combination, has terminated its previously announced $75 million forward purchase agreement and agreed to an equity backstop commitment of up to $200 million in the combined company with 50% of this commitment being applied against the first $200 million of Trebia stockholder potential future redemptions and the next $100 million applied against Trebia stockholder potential future redemptions beyond $200 million, if any. Cannae will retain its approximately 15% indirect economic interest in the outstanding founder shares of Trebia.

William P. Foley, II, Chairman of Cannae, commented, "We are very excited to participate in the combination of Trebia and System1 given the opportunity set that we see ahead for the combined company. System1 is differentiated in the digital marketing sector given its significant scale and diversification across the full spectrum of advertising verticals. This has allowed the company to deliver impressive growth across multiple industry verticals and market environments. Given the company's position and outlook, I am pleased that we have the opportunity to partner with this exciting business."

Transaction Overview

The transaction is anticipated to provide approximately $175 million1 of cash to System1's balance sheet2. These proceeds will be used to continue to fund System1's growth initiatives, invest in System1's RAMP platform, and for acquisitions.

* The $518 million of cash held in Trebia's trust account is backstopped by the $200 million equity commitment from Cannae, together with $218 million of the Bank of America debt commitment, which will be utilized as a backstop for potential future redemptions by Trebia public stockholders. This, in conjunction with the potential for management to roll additional equity, creates a 100% backstop for potential future redemptions.

* Holders of a significant majority of equity of System1 and Protected.net have committed to roll their equity into the combined company.

* The post-money enterprise value of the combined company is $1.4 billion at the $10.00 per share price2.

* Michael Blend, System1's Co-Founder & CEO, and Tridivesh Kidambi, its CFO, will continue in their current roles along with the rest of the System1 executive team.

* Michael Blend will remain Chairman of the Board of System1 and will be joined by William P. Foley, II and Frank R. Martire, Jr. after the transaction closes. System1 expects to add up to 4 more directors in the upcoming months.

The boards of directors of both System1 and Trebia have approved the proposed transaction, subject to, among other things, the approval by Trebia's stockholders and satisfaction or waiver of the other conditions stated in the definitive documentation.

Additional information on Cannae's $200 million equity backstop agreement will be provided in a Current Report on Form 8-K to be filed by the Company with the Securities and Exchange Commission and available at www.sec.gov.

Additional information about the proposed transaction, including a copy of the business combination agreement and investor presentation, will be provided in a Current Report on Form 8-K to be filed by Trebia with the Securities and Exchange Commission and available at www.sec.gov.

The transaction is expected to close in Q4 of 2021.