Hyperloop Transportation Technologies (HyperloopTT), a leading transportation and technology licensing company focused on realising the hyperloop, have entered into a definitive merger agreement with Forest Road Acquisition Corp II, a publicly traded special purpose acquisition company, that is expected to result in HyperloopTT becoming a publicly listed company.
The transaction ascribes to HyperloopTT a pre-money equity value of $600 million, including outstanding options and warrants.
Existing HyperloopTT shareholders and convertible note holders will roll 100% of their interests in the transaction and the combined company will assume the outstanding HyperloopTT options and warrants, which will remain outstanding to the extent not otherwise exercised prior to closing.
Approximately $289 million of common stock will be issued at closing to the HyperloopTT shareholders and convertible note holders. Assuming no redemptions, the transaction is expected to deliver up to $330 million in net proceeds to the combined company at close.
Upon the closing of the transaction, the newly combined company will be named Hyperloop Transportation Technologies and will continue to be led by Chief Executive Officer Andrés de León and the HyperloopTT management team.
Since its inception in 2013, HyperloopTT has made significant progress towards the adoption of hyperloop systems.
Hyperloop is a vacuum tube-based system that moves people and goods in levitating capsules at airplane speeds on the ground. These speeds are achieved by using passive magnetic levitation technology and a linear electric motor in a tube with minimal pressure, reducing resistance.
As a mobility solution with transformative power, hyperloop is potentially cleaner, safer, healthier, and more efficient than existing forms of transportation.
The company developed a full scale hyperloop test track in Toulouse, France, a hyperloop insurance framework model, and model safety and certification guidelines.
With the deployment of the company’s test track, HyperloopTT has built a robust technology portfolio relating to patents across levitation and propulsion, low pressure tube transportation, and passenger experience.
These patents are the basis of a technology that combines sustainability with the ability to reach destinations faster, which can redefine the urban landscape, create new economic opportunities, and disrupt the $2+ trillion transportation industry.
Led by an experienced team of hyperloop business and technology professionals, HyperloopTT relies on a global network of technologists, scientists, engineers, and expert contributors, resulting in an asset-light technology development business model.
Through this partner network, the company is driving a suite of next generation technologies to power transportation in the future.
de León said the transaction was a major milestone for HyperloopTT and the hyperloop industry as a whole.
"The transaction is a moment that could not have been possible without our countless supporters around the world, who have built HyperloopTT into a company that is perfect for this moment. Our innovative business model has allowed HyperloopTT to succeed, while facing enormous challenges," he noted.
"The team has worked tirelessly these past nine years to gain the support of the private and public sector in countries around the world. We thank Forest Road for working with us through this process and embrace this next step with humility, gratitude, and determination," he added.
Tom Staggs and Kevin Mayer, Co-CEOs and Co-Chairpersons of Forest Road, said: "When we were introduced to HyperloopTT we quickly saw its potential to address some of the most profound transportation challenges of our time. The company has a deep base of intellectual property that gives it a robust competitive advantage in this space."
"The company’s asset-light ‘Hyperloop-as-a-Service’ business model is built to develop and support projects efficiently, presenting a possible solution that is environmentally and economically-minded. We believe their technology has the opportunity to create meaningful shareholder value and positively impact our world," he added.
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