Item 8.01. Other Events.
As previously disclosed, on January 11, 2021, ArcLight Clean Transition Corp., a
Cayman Islands exempted company ("ArcLight"), and Proterra Inc, a Delaware
corporation ("Proterra"), announced that ArcLight and Proterra entered into an
Agreement and Plan of Merger (the "Merger Agreement").
On February 10, 2021, a purported stockholder of ArcLight filed a complaint
against ArcLight, ArcLight's board of directors, Phoenix Merger Sub, Inc., a
Delaware corporation and a wholly-owned direct subsidiary of ArcLight ("Phoenix
Merger Sub") and Proterra in the Supreme Court of the State of New York for the
County of New York, in a case captioned Ong v. ArcLight Clean Transition Corp.,
et al., Index No. 650965/2021. The Ong complaint alleges that ArcLight's board
of directors breached their fiduciary duties by omitting allegedly material
information in the Registration Statement initially filed by ArcLight on Form
S-4 on February 3, 2021 in connection with the Proposed Transaction (the
"Registration Statement"), and that ArcLight, Merger Sub and Proterra aided and
abetted such alleged breaches of fiduciary duty. As relief, the Ong complaint
seeks, among other things, an injunction barring ArcLight from proceeding with
the Proposed Transaction, or, alternatively, rescission of the Proposed
Transaction in the event that it is consummated, as well as unspecified costs
and attorneys' fees. On February 11, 2021, another purported stockholder of
ArcLight filed a complaint against ArcLight and ArcLight's board of directors in
the Supreme Court of the State of New York for the County of New York, in a case
captioned Murray-Brown v. ArcLight Clean Transition Corp., et al., Index No.
651001/2021. On March 6, 2021, this second purported stockholder filed an
amended complaint. The amended Murray-Brown complaint alleges that ArcLight's
board of directors breached their fiduciary duties in connection with the
Registration Statement and the Proposed Transaction more generally, and that
ArcLight aided and abetted such alleged breaches of fiduciary duty. As relief,
the amended Murray-Brown complaint seeks relief similar to that sought in the
Ong complaint. On March 15, 16, and 23, 2021, May 28, 2021, and June 2, 2021,
six other purported stockholders wrote to ArcLight, separately, alleging that
the Registration Statement omitted allegedly material information and demanding
that ArcLight provide supplemental disclosures.
While ArcLight believes that the disclosures set forth in the Registration
Statement comply fully with applicable law, in order to moot the purported
stockholders' disclosure claims in the lawsuits and demands, to avoid nuisance,
cost and distraction, and to preclude any efforts to delay the closing of the
Business Combination, ArcLight has determined to voluntarily supplement the
Registration Statement with the supplemental disclosures set forth below (the
"Supplemental Disclosures"). Nothing in the Supplemental Disclosures shall be
deemed an admission of the legal necessity or materiality under applicable laws
of any of the disclosures set forth herein. To the contrary, ArcLight
specifically denies all allegations in the lawsuits and demands that any
additional disclosure was or is required. ArcLight believes the allegations in
the lawsuits and demands are without merit.
Supplemental Disclosures to Registration Statement
The following supplemental information should be read in conjunction with the
Registration Statement, which should be read in its entirety. All page
references are to pages in the Registration Statement, and terms used below,
unless otherwise defined, have the meanings set forth in the Registration
Statement. Underlined text shows text being added to a referenced disclosure in
the Registration Statement.
The following disclosure is added before the first paragraph on page 113 of the
Registration Statement under the heading "Negotiations with Proterra".
In connection with the consummation of the Business Combination, (i) Barclays
Capital Inc. ("Barclays") is entitled to (a) expense reimbursement and customary
indemnification in connection with its services as a M&A advisor to ArcLight and
a lead placement agent for the PIPE Financing and (b) customary placement agent
fees from ArcLight in connection with its services as a lead placement agent for
the PIPE Financing, (ii) BofA Securities, Inc. ("BofA") is entitled to customary
fees in connection with its service as a financial advisor to Proterra, as well
as expense reimbursement and customary indemnification (BofA also acted as joint
placement agent for the PIPE Financing but did not receive fees in connection
with such services), (iii) Citigroup Global Markets Inc. ("Citigroup") is
entitled to customary advisory fees from ArcLight, as well as expense
reimbursement and customary indemnification, in connection with its services as
a M&A advisor and capital markets advisor to ArcLight, and (iv) Morgan Stanley &
Co. LLC ("Morgan Stanley") is entitled to customary fees in connection with its
service as a lead placement agent for the PIPE Financing and as a financial
advisor to Proterra, as well as expense reimbursement and customary
indemnification. Additionally, in connection with the consummation of the
Business Combination, Barclays and Citigroup will be entitled to deferred
underwriting compensation, as set forth in the registration statement for
ArcLight's initial public offering, which closed on September 25, 2020. These
fees will be paid at the closing of the Business Combination and the PIPE
Financing, as applicable, and are conditioned upon the successful completion of
the Business Combination and the PIPE Financing, as applicable. If the Business
Combination and the PIPE Financing do not close, Barclays, BofA, Citigroup and
Morgan Stanley will be entitled to expense reimbursement and customary
indemnification, but will not be entitled to such fees.
In addition, Barclays (together with its affiliates), BofA (together with its
affiliates), Citigroup (together with its affiliates) and Morgan Stanley
(together with its affiliates) are each full service financial institutions
engaged in various activities, which may include sales and trading, commercial
and investment banking, advisory, investment management, investment research,
principal investing, hedging, market making, brokerage and other financial and
non-financial activities and services. From time to time, certain of such
financial institutions and/or their respective affiliates have provided, and may
in the future provide, various investment banking and other commercial dealings
unrelated to the Business Combination or the PIPE Financing to ArcLight and its
affiliates, and/or Proterra and its affiliates, and have received, and may in
the future receive, customary compensation in connection therewith.
In addition, in the ordinary course of its business activities, Barclays, BofA,
Citigroup, Morgan Stanley and their respective affiliates, officers, directors
and employees may make or hold a broad array of investments and actively trade
debt and equity securities (or related derivative securities) and financial
instruments (including bank loans) for their own account and for the accounts of
their customers. Such investments and securities activities may involve
securities and/or instruments of ArcLight or its affiliates. Barclays, BofA,
Citigroup, Morgan Stanley and their respective affiliates may also make
investment recommendations and/or publish or express independent research views
in respect of such securities or financial instruments and may hold, or
recommend to clients that they acquire, long and/or short positions in such
securities and instruments.
The following disclosure replaces the third paragraph on page 68 of the
Registration Statement under the heading "Neither the ArcLight Board nor any
committee thereof obtained a third-party valuation in determining whether or not
to pursue the Business Combination".
Neither the ArcLight Board nor any committee thereof is required to obtain an
opinion from an independent investment banking or accounting firm that the price
that ArcLight is paying for Proterra is fair to ArcLight from a financial point
of view. Neither the ArcLight Board nor any committee thereof obtained a third
party valuation in connection with the Business Combination. In analyzing the
Business Combination, the ArcLight Board and management conducted due diligence
on Proterra and researched the industry in which Proterra operates. The ArcLight
Board reviewed, among other things, financial due diligence materials prepared
by professional advisors, including quality of earnings reports and tax due
diligence reports previously prepared in connection with Proterra's most recent
issuance of preferred stock, financial and market data information on selected
comparable companies, the implied purchase price multiple of Proterra and the
financial terms set forth in the Merger Agreement, and concluded that the
Business Combination was in the best interest of its shareholders. The
comparable companies considered by the board were (a) BYD Company Ltd., Navistar
International Corp., NFI Group Inc., NIO Inc., PACCAR Inc., Tesla, Inc. and
Volvo AB with respect to Proterra Transit; (b) AKASOL AG, Aptiv PLC, Ballard
Power Systems Inc., Bloom Energy Corporation, Contemporary Amperex Technology
Co. Ltd., Cummins Inc., Plug Power Inc., Samsung SDI Co., Ltd. and Visteon
Corporation with respect to Proterra Powered; and (c) ChargePoint, Inc., Eaton
Corporation, Emerson Electric Co., Generac Holdings Inc. and Schneider Electric
SE with respect to Proterra Energy. Accordingly, investors will be relying
solely on the judgment of the ArcLight Board and management in valuing Proterra,
and the ArcLight Board and management may not have properly valued Proterra's
business. The lack of a third-party valuation may also lead an increased number
of shareholders to vote against the Business Combination or demand redemption of
their shares, which could potentially impact our ability to consummate the
Business Combination.
The following disclosure replaces the ninth bullet on page 114 of the
Registration Statement under the heading "Valuation supported by financial
analysis and due diligence".
The ArcLight Board determined that the valuation analysis conducted by
ArcLight's management team, based on the trading levels of comparable companies
and the materials and financial projections provided by Proterra, supported the
equity valuation of Proterra. The comparable companies considered by the board
were (a) BYD Company Ltd., Navistar International Corp., NFI Group Inc., NIO
Inc., PACCAR Inc., Tesla, Inc. and Volvo AB with respect to Proterra Transit;
(b) AKASOL AG, Aptiv PLC, Ballard Power Systems Inc., Bloom Energy Corporation,
Contemporary Amperex Technology Co. Ltd., Cummins Inc., Plug Power Inc., Samsung
SDI Co., Ltd. and Visteon Corporation with respect to Proterra Powered; and (c)
ChargePoint, Inc., Eaton Corporation, Emerson Electric Co., Generac Holdings
Inc. and Schneider Electric SE with respect to Proterra Energy. As part of this
determination, ArcLight's management, Board and legal counsel conducted due
diligence examinations of Proterra and discussed with Proterra's management the
financial, technical, manufacturing and legal outlook of Proterra.
The following disclosure replaces the third sentence in the fourth new paragraph
on page 109 of the Registration Statement under the heading "Background to the
Business Combination".
Of those potential targets, ArcLight entered into mutual confidentiality
agreements with approximately 25 potential business combination targets, and
such confidentiality agreements generally contained customary terms for a
special purpose acquisition company and a private company target, including
confidentiality provisions and use restrictions for information provided by each
party and generally with terms of two years or less.
Additional Information
In connection with the Business Combination, the Registration Statement on Form
S-4 (File No. 333-252674) (the "Registration Statement") has been declared
effective by the Securities and Exchange Commission (the "SEC"), which includes
the related proxy statement and prospectus of ArcLight with respect to the
Extraordinary General Meeting. This communication is not a substitute for the
Registration Statement, the definitive proxy statement/prospectus or any other
document that ArcLight has or will send to its shareholders in connection with
the transactions contemplated by the Business Combination. ArcLight's
shareholders and other interested persons are advised to read the Registration
Statement and the related proxy statement/prospectus and any documents filed in
connection therewith, as these materials will contain important information
about Proterra, ArcLight, and the Business Combination. The definitive proxy
statement and related materials have been mailed to ArcLight's shareholders who
were holders of record as of the close of business on May 4, 2021. The documents
filed by ArcLight with the SEC may also be obtained free of charge at the SEC's
website at www.sec.gov. In addition, the documents filed by ArcLight may be
obtained free of charge from ArcLight at https://www.arclightclean.com or by
directing a request to: ArcLight Clean Transition Corp., 200 Clarendon Street,
55th Floor, Boston, MA 02116.
Participants in the Solicitation
ArcLight, Proterra and their respective directors, executive officers, other
members of management and employees, under SEC rules, may be deemed to be
participants in the solicitation of proxies of ArcLight's shareholders in
connection with the Business Combination. Investors and security holders may
obtain more detailed information regarding the names and interests in the
Business Combination of ArcLight's directors and officers, and Proterra's
directors and executive officers, in ArcLight's filings with the SEC, including
the Registration Statement.
Forward Looking Statements
Certain statements in this Current Report on Form 8-K may be considered
forward-looking statements. Forward-looking statements generally relate to
future events or ArcLight's or Proterra's future financial or operating
performance. In some cases, you can identify forward-looking statements by
terminology such as "may", "should", "expect", "intend", "will", "estimate",
"anticipate", "believe", "predict", "potential" or "continue", or the negatives
of these terms or variations of them or similar terminology. Such
forward-looking statements are subject to risks, uncertainties and other factors
which could cause actual results to differ materially from those expressed or
implied by such forward looking statements.
Any forward-looking statements are based upon estimates and assumptions that,
while considered reasonable by ArcLight and its management, and Proterra and its
management, as the case may be, are inherently uncertain and subject to material
change. Factors that may cause actual results to differ materially from current
expectations include, but are not limited to, various factors beyond
management's control, including general economic conditions and other risks and
uncertainties set forth in the section entitled "Risk Factors" and "Cautionary
Note Regarding Forward-Looking Statements" in the Registration Statement, as
well as factors associated with companies, such as Proterra, that are engaged in
commercial electric vehicle technology, including anticipated trends, growth
rates, and challenges in those businesses and in the markets in which they
operate; macroeconomic conditions related to the global COVID-19 pandemic;
trends with respect to government funding for public transit; the willingness of
corporate and other public transportation providers to adopt and fund the
purchase of electric vehicles for mass transit; expected adoption of
electrification technologies for commercial vehicles; the size and growth of the
market for alternative energy vehicles in general and medium-and heavy-duty
electric vehicles, including transit buses and other commercial vehicles, in
particular; the effects of increased competition; the ability to stay in
compliance with laws and regulations that currently apply or become applicable
to the commercial electric vehicle technology business and government
contractors; the failure to realize the anticipated benefits of the transaction;
the amount of redemption requests made by ArcLight's public stockholders; the
ability of the issuer that results from the transaction to issue equity or
equity-linked securities or obtain debt financing in connection with the
transaction or in the future.
Nothing in this Current Report on Form 8-K should be regarded as a
representation by any person that the forward-looking statements set forth
herein will be achieved or that any of the contemplated results of such
forward-looking statements will be achieved. You should not place undue reliance
on forward-looking statements, which speak only as of the date they are made.
Neither ArcLight nor Proterra undertakes any duty to update these
forward-looking statements.
Disclaimer
This communication is for informational purposes only and is neither an offer to
purchase, nor a solicitation of an offer to sell, subscribe for or buy, any
securities or the solicitation of any vote in any jurisdiction pursuant to the
Business Combination or otherwise, nor shall there be any sale, issuance or
transfer or securities in any jurisdiction in contravention of applicable law.
No offer of securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act.
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