Connected nursery company Owlet Baby Care, Inc. and Sandbridge Acquisition Corporation (NYSE: SBG.U), a special purpose acquisition company co-sponsored by affiliates of Sandbridge Capital and PIMCO private funds, entered into a definitive merger agreement.
The business combination values Owlet on a pre-transaction basis at a $1,000 million equity value and values the post-transaction combined company at an enterprise value of approximately $1,074 million. It is expected to deliver up to $325m of cash to the combined company, after payment of estimated transaction expenses, through the contribution of up to $230m of cash held in Sandbridge’s trust account and a $130m concurrent private placement (PIPE) of common stock, priced at $10.00 per share. PIPE participants include funds managed by Fidelity Management & Research LLC, Janus Henderson Investors, Neuberger Berman Funds, OrbiMed, private funds affiliated with PIMCO, and Wasatch Global Investors.
As part of the transaction, Owlet’s current management and existing equity holders intend to roll nearly 100% of their equity into the combined company. Existing institutional backers of the company, including Eclipse Ventures and Trilogy Equity Partners, intend to roll 100% of their equity into the combined company.
The transaction has been unanimously approved by the Boards of Directors of both Owlet and Sandbridge. Completion of the proposed transaction is subject to approval of Sandbridge and Owlet stockholders and other closing conditions, including a registration statement being declared effective by the U.S. Securities and Exchange Commission and is expected to be completed in the second quarter of 2021.
Upon completion of the transaction, the combined company’s securities are expected to be traded on the New York Stock Exchange (NYSE) under the symbol “OWLT.”
Launched in 2012 and led by Kurt Workman, CEO, Owlet has built a connected and accessible nursery ecosystem that brings technology and vital data to modern parenting. The company’s flagship product, the Owlet Smart Sock baby monitor, uses proprietary pulse-oximetry technology to track a baby’s heart rate, oxygen levels and sleep patterns to provide parents with invaluable peace of mind. The Owlet Smart Sock integrates with Owlet’s camera product, the Owlet Cam, enabling parents to see and hear their babies via Owlet’s convenient smartphone app.
Sandbridge Acquisition Corporation (NYSE: SBG.U) is a special purpose acquisition company with a team that includes experienced industry operators and investors who have partnered with leading high-growth consumer companies, including Thom Browne, Rossignol, The RealReal, Farfetch and Hydrow. An affiliate of Sandbridge Capital and certain private funds managed by PIMCO are members of Sandbridge’s sponsor.