The Beneficient Company Group, L.P. executed a non-bonding letter of intent to acquire Avalon Acquisition Inc. (NasdaqGM:AVAC) from a group of shareholders for $1.8 billion in a reverse merger transaction on March 15, 2022. The Beneficient Company Group, L.P. (BCG) entered into a definitive merger agreement to acquire Avalon Acquisition Inc. from a group of shareholders in a reverse merger transaction on September 21, 2022. The combination implies an enterprise valuation of $3.5 billion, including approximately $200 million in gross proceeds from Avalon’s cash in trust – assuming no redemptions and common equity valuation of $2.5 billion. Upon the closing of the transaction, and assuming no public stockholders redeem their shares, existing Beneficient shareholders are expected to continue owning 88% of the combined company, with public stockholders expected to own 10%, and Avalon sponsors expected to own 2%. Upon the closing of the transaction, the combined company will be named Beneficient and is expected to be listed on Nasdaq. The current executive team will remain to lead Avalon.

The consummation of the Transactions is subject to certain customary conditions, including, among other things: the expiration or termination of the waiting period (or any extension thereof) applicable under the Hart-Scott Rodino Antitrust Improvements Act of 1976; after giving effect to the Transactions (including the Avalon Stockholder Redemption); Avalon shall have at least $5,000,001 of net tangible assets; the required approval of the stockholders of Avalon shall have been obtained for the Avalon Merger among other matters (the “ Requisite Avalon Stockholder Approval ”); the required approval of the sole stockholder of BCG shall have been obtained; certain holders of BCG shall have executed and delivered a lock-up agreement in favor of Avalon; Avalon's initial listing application with the Nasdaq Stock Market LLC in connection with the transactions contemplated by the Business Combination Agreement shall have been conditionally approved and the shares of Class A Common Shares, Company Series A Preferred Stock and Company Warrants to be issued in respect of the Avalon Public Warrants in connection with the business combination shall have been approved for listing with the Nasdaq Stock Market LLC; the effectiveness of the Registration Statement (Form S-4) in accordance with the provisions of the Securities Act of 1933, as amended; the resignation or removal of the directors and officers of Avalon; the Registration Rights Agreement shall be in full force and effect in accordance with the terms thereof as of the Closing. The Boards of Directors of both Beneficient and Avalon have unanimously approved the proposed business combination. As of October 3, 2022, Beneficient has delivered to Avalon its audited financials for calendar years 2020 and 2021, along with the transition period ended March 31, 2022. As on January 5, 2023, Avalon extend the period of time to consummate initial business combination by three months from January 8, 2023 to April 8, 2023. As on April 5, 2023, Avalon further extend the period of time to consummate initial business combination by three months from April 8, 2023 to July 8, 2023. The Second Extension is the second of up to two three-month extensions permitted under the Company’s governing documents. Avalon Acquisition Inc. will hold a special meeting on June 6, 2023 to approve the transaction. The transaction has been approved by the shareholders of Avalon at a meeting held on June 6, 2023. Transaction is expected to be completed in the first half of 2023. The transaction is expected to close on June 7, 2023.

Lazard and ICR Capital LLC served as financial advisors to Beneficient and Matthew Fry of Haynes and Boone, LLP acted as legal advisor and due diligence provider and Greenberg Traurig, LLP acted as legal advisor. Houlihan Capital provided a fairness opinion and acted as financial advisor to Avalon Acquisition Inc. and William N. Haddad of Venable LLP acted as legal advisor and due diligence provider. Continental Stock Transfer & Trust Company acted as transfer agent and Morrow Sodali LLC acted as information agent to Avalon for a fee of $32,500. BCG will pay Lazard the following fees: (i) a monthly financial advisory fee of $75,000 (with any monthly financial advisory fees paid in excess of $750,000 being credited against other fees payable as described in the Lazard Engagement Letter) and (ii) a fee payable upon consummation of any transaction involving Avalon equal to (a) 0.20% of the Transaction Value (as defined in the Lazard Engagement Letter) (excluding the Excess Trust Amount Value (as defined in the Lazard Engagement Letter)), plus (b) 1.0% of any amounts retained following the consummation of the Business Combination. BCG will pay ICR the following fees: (i) a $40,000 retainer due upon the date of the consummation of the Business Combination and to be held by ICR until the termination of the ICR Consulting Agreement, (ii) a monthly financial advisory fee of $20,000, (iii) a monthly investor relations fee of $20,000, (iv) a fee of $250,000 due upon the consummation of the Business Combination, and (v) a fee of $250,000 due upon the consummation of the Business Combination based on key performance indicators.

The Beneficient Company Group, L.P. completed the acquisition of Avalon Acquisition Inc. (NasdaqGM:AVAC) from a group of shareholders in a reverse merger transaction on June 7, 2023.