Willkie represented Holley in the transaction, which values Holley at an enterprise value of approximately $1.55 billion.
On March 12, Holley, a large and fast-growing performance automotive aftermarket platform and Empower Ltd. (NYSE: EMPW), a publicly-traded special purpose acquisition company, announced they have entered into a definitive merger agreement that will result in Holley becoming a publicly listed company on the NYSE under the new ticker symbol “HLLY”. The transaction values Holley at an enterprise value of approximately $1.55 billion.
The transaction was financed through $250 million of cash held in Empower’s trust account, a $50 million forward purchase agreement from MidOcean Fund V, and a $240 million PIPE, which includes investments by Wells Capital Management, Inc. and Wasatch Global Investors. The company expects to use the proceeds from the transaction to invest in Holley’s growth initiatives, substantially reduce existing debt, support marketing efforts, and provide additional working capital. It is anticipated that the combined company will have approximately $485 million of net debt on its consolidated balance sheet.
Holley is controlled by Sentinel Capital Partners, L.L.C., a leading midmarket private equity firm, who will remain Holley’s largest shareholder upon closing. Founded in 1903, Holley is a leading designer, marketer, and manufacturer of high performance automotive aftermarket products, featuring the largest portfolio of iconic brands serving car and truck enthusiasts. Holley’s brands cover electronic fuel injection (Holley EFI), electronic tuning (APR, DiabloSport, Edge and Superchips), electronic ignition (MSD and ACCEL), carburetion (Holley), exhaust (Flowmaster and Hooker), safety (Simpson and Stilo) and other product categories. Holley’s net sales are estimated at $583 million for the fiscal year ended on December 31, 2020.
Sentinel specializes in buying and building lower midmarket businesses in the United States and Canada in partnership with management. Sentinel targets business services, consumer, healthcare services, and industrial businesses.
Empower is a blank check company formed by MidOcean Partners whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Empower raised $250,000,000 in its initial public offering in October 2020 and is listed on the NYSE under the ticker symbol "EMPW".
The Willkie team was led by partners Claire James and William Gump and included partner Cristopher Greer, associates Ransel Potter and Andrew Marmer; and law clerks Manuela Velasquez Fernandez and Julian Uribe Umana.