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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material under §240.14a-12

M3-BRIGADE ACQUISITION II CORP.

(Name of Registrant as Specified in Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1)  

Title of each class of securities to which transaction applies:

 

Not Applicable

  (2)  

Aggregate number of securities to which transaction applies:

 

Not Applicable

  (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

Not Applicable

  (4)  

Proposed maximum aggregate value of transaction:

 

$732,752,032(1)

  (5)  

Total fee paid:

 

$79,943(2)

  Fee paid previously with preliminary materials.
  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1)  

Amount Previously Paid:

 

  (2)  

Form, Schedule or Registration Statement No.:

 

  (3)  

Filing Party:

 

  (4)  

Date Filed:

 

(1)   Includes cash consideration and stock consideration. The base purchase price payable under the Merger Agreement (as defined in the attached proxy statement) is $732,752,032, subject to a possible adjustment as set forth in the Merger Agreement. It is not possible as of the time of this filing to determine the value of the possible adjustment, or whether this possible adjustment would be positive or negative in value. Solely for purposes of calculating the filing fee, the proposed maximum aggregate value of the transaction assumes that no such adjustment to the purchase price will be required.
(2)   The amount is the product of $732,752,032 multiplied by the SEC’s filing fee of $109.10 per $1,000,000.

 

 

 


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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION, DATED SEPTEMBER 27, 2021

M3-BRIGADE ACQUISITION II CORP.

1700 Broadway

19th Floor

New York, NY 10019

Dear M3-Brigade Acquisition II Corp. Stockholder:

We cordially invite you to attend a special meeting in lieu of the 2021 annual meeting of the stockholders (the “Special Meeting”) of M3-Brigade Acquisition II Corp., a Delaware corporation (“we,” “us,” “our” or the “Company”), to be held virtually on [                ], 2021 at [                ] [a.m./p.m.]. The Special Meeting will be conducted virtually due to the public health concerns resulting from the COVID-19 pandemic and to support the health and well-being of our stockholders. You will be able to attend the Special Meeting by visiting https://www.cstproxy.com/m3brigadeii/2021.

On August 16, 2021, the Company, Blue Steel Merger Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger Sub”), and Syniverse Corporation, a Delaware corporation (“Syniverse”), entered into an Agreement and Plan of Merger (as it may be amended from time to time in accordance with its terms, the “Merger Agreement”), which provides for, among other things, the merger of Merger Sub with and into Syniverse, with Syniverse continuing as the surviving corporation and a wholly owned subsidiary of the Company (the “Merger”). The transactions set forth in the Merger Agreement, including the Merger, will constitute a “Business Combination” as contemplated by the Company’s Amended and Restated Certificate of Incorporation (the “current certificate of incorporation”). Following the consummation of the Business Combination, the Company will change its name to Syniverse Technologies Corporation. You are being asked to vote on the Business Combination and related matters.

Subject to the terms of the Merger Agreement, at the effective time of the Merger, each share of common stock of Syniverse (the “Syniverse Common Stock”) that is issued and outstanding immediately prior to the effective time of the Merger will be cancelled and converted into the right to receive a portion of the Aggregate Merger Consideration (defined below) equal to (i) the Exchange Ratio (defined below) multiplied by (ii) the number of shares of Syniverse Common Stock held by the applicable holder as of immediately prior to the effective time of the Merger, rounded to the nearest whole share. “Aggregate Merger Consideration” means the number of shares of Class A Common Stock, par value $0.0001 per share (“Class A Stock”) equal to (i) $704,440,000, subject to adjustments for (a) the Twilio Investment (defined below), (b) certain leakage that has occurred after November 30, 2020 through immediately prior to the effective time of the Merger and (c) the aggregate exercise price of Syniverse’s outstanding in-the-money options as of immediately prior to the effective time of the Merger, multiplied by (ii) one minus the Investment Percentage (as defined below), at a value of $10.00 per share. “Exchange Ratio” means the Aggregate Merger Consideration divided by the aggregate fully diluted number of shares of Syniverse Common Stock. Please refer to the section of the accompanying proxy statement entitled “Proposal No. 1—The Business Combination Proposal—The Merger Agreement—Consideration” for additional information.

To raise additional proceeds to fund the Business Combination, the Company has entered into a subscription agreement (the “Twilio Subscription Agreement”) with Twilio Inc., a Delaware corporation (“Twilio”), pursuant to which, among other things, Twilio will, at the Closing, purchase Class A Stock and, if applicable, shares of Class C common stock, par value $0.0001 per share, of the Company (“Class C Stock”), for an aggregate purchase price of up to $750 million. Under the Twilio Subscription Agreement, the size of Twilio’s investment will be reduced below $750 million only to the extent the total transaction proceeds in our Trust Account (net of redemptions) and the PIPE Investment exceed $375 million, with such reduction equal to the amount of such excess, subject to a minimum investment by Twilio of $500 million (the aggregate amount paid by Twilio reflecting such adjustment, if applicable, the “Twilio Investment”). The number of shares of Class A Stock, and if applicable, shares of Class C Stock, to be received by Twilio in connection with the Twilio Investment will be equal to (x) the number of shares of Class A Stock constituting the Aggregate Merger Consideration multiplied


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by (y) the Investment Percentage. “Investment Percentage” is defined in Twilio’s pre-existing framework agreement with Syniverse, dated as of February 26, 2021 (as amended on August 16, 2021 and as it may be further amended from time to time in accordance with its terms, the “Framework Agreement”) and means (i) the Twilio Investment, divided by (ii) $973 million, subject to adjustments for (a) the Twilio Investment, (b) certain leakage that has occurred after November 30, 2020 through immediately prior to the effective time of the Merger and (c) the aggregate exercise price of Syniverse’s outstanding in-the-money options as of immediately prior to the effective time of the Merger, divided by (iii) 0.9.

In addition to the Twilio Subscription Agreement, the Company has entered into (i) a subscription agreement with M3-Brigade Sponsor II LP, a Delaware limited partnership (our “Sponsor”), pursuant to which, among other things, our Sponsor will, at the Closing, purchase from the Company an aggregate of $15 million in shares of Class A Stock for a purchase price of $10.00 per share (the “Sponsor Subscription Agreement”), (ii) a subscription agreement with Brigade Capital Management, LP (“Brigade”), pursuant to which, among other things, Brigade (on behalf of its managed funds and accounts) will, at the Closing, purchase from the Company an aggregate of (x) $37.5 million in shares of Class A Stock for a purchase price of $10.00 per share and (y) $112.5 million in shares of a newly issued series of convertible preferred stock, par value $0.0001 per share, of the Company (the “Preferred Stock”), the terms of which will be substantially as set forth in the form of Certificate of Designations attached as Annex C to this proxy statement, at a purchase price of $970.00 per share (the “Brigade Subscription Agreement”), and (iii) a subscription agreement with Oak Hill Advisors, L.P. (“Oak Hill” and, together with Brigade and the Sponsor, the “PIPE Investors”), pursuant to which, among other things, Oak Hill (on behalf of its managed funds and accounts) will, at the Closing, purchase from the Company an aggregate of (x) approximately $16.67 million in shares of Class A Stock for a purchase price of $10.00 per share and (y) approximately $83.33 million in shares of Preferred Stock, at a purchase price of $970.00 per share (the “Oak Hill Subscription Agreement” and, together with the Brigade Subscription Agreement and the Sponsor Subscription Agreement, the “PIPE Subscription Agreements” and the transactions contemplated by the PIPE Subscription Agreements, collectively, the “PIPE Investment”). The aggregate proceeds from the PIPE Investment are expected to be $265 million, which, together with the Twilio Investment, the funds in the Trust Account (as defined below) and the proceeds from the debt refinancing described in the accompanying proxy statement, will be used at the Closing to refinance the outstanding indebtedness and other obligations of Syniverse and its subsidiaries under Syniverse’s existing credit facilities, pay certain transaction expenses and fund the post-combination company’s balance sheet. For additional information regarding the PIPE Subscription Agreements, the Twilio Subscription Agreement and certain other related agreements that have been or will be entered into in connection with the Business Combination on or prior to the closing of the Business Combination (the “Closing”), see “Proposal No. 1—The Business Combination Proposal—Related Agreements” in the accompanying proxy statement.

It is anticipated that, upon completion of the Business Combination and assuming no redemption of shares of Class A Stock by our public stockholders: (i) the Company’s public stockholders (other than the PIPE Investors and Twilio) will retain an ownership interest of approximately 20.9% in the post-combination company; (ii) Brigade and Oak Hill (two of the PIPE Investors) will own approximately 7.2% and 4.8%, respectively, of the post-combination company (including Class A Stock and Preferred Stock on an as-converted basis); (iii) Twilio will own approximately 23.6% of the post-combination company; (iv) Carlyle Partners V Holdings, L.P. (“Carlyle”) will own approximately 36.7% of the post-combination company; (v) our Sponsor will own approximately 6.0% of the post-combination company (inclusive of the shares of Class A Stock acquired by our Sponsor as part of the PIPE Investment); and (vi) the Syniverse Stockholders (other than Carlyle) will own approximately 0.8% of the post-combination company. Additionally, following the Closing, and subject to the approval of the Syniverse Technologies Corporation 2021 Omnibus Incentive Plan (the “Incentive Award Plan”) by our public stockholders and the approval of the applicable award agreements by the board of directors of the post-combination company, pursuant to the Incentive Award Plan, the post-combination company expects to grant awards under the Incentive Award Plan. The awards (or associated benefits or amounts) that will be made to particular individuals or groups of individuals are not currently determinable.

At the Special Meeting, Company stockholders will be asked to consider and vote upon a proposal (the “Business Combination Proposal” or “Proposal No. 1”) to approve the transactions contemplated by the Merger


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Agreement, a copy of which is attached to the accompanying proxy statement as Annex A, including the Business Combination. In addition, you are being asked to consider and vote upon: (i) a proposal to approve, for purposes of complying with Section 312.03 of the New York Stock Exchange’s (“NYSE”) Listed Company Manual, (x) the issuance of more than 20% of the Company’s issued and outstanding Common Stock (as defined below) in connection with the Business Combination, the PIPE Investment and the Twilio Investment and (y) the issuance of more than one percent of the Company’s issued and outstanding Common Stock to a “Related Party” (as defined in Section 312.03 of the NYSE Listed Company Manual) in connection with the Business Combination and the Sponsor Subscription Agreement (the “NYSE Proposal” or “Proposal No. 2”); (ii) a proposal to adopt two separate proposed charters, proposed charter alternative A, substantially in the form attached to this proxy statement as Annex B-1 (“Charter Amendment Alternative A”), and proposed charter alternative B, substantially in the form attached to this proxy statement as Annex B-2 (“Charter Amendment Alternative B” and together with Charter Amendment Alternative A, the “Charter Amendments”) (the “Charter Proposal” or “Proposal No. 3”); (iii) a separate proposal with respect to certain governance provisions in the Charter Amendments, which are being separately presented in accordance with the U.S. Securities and Exchange Commission requirements and which will be voted upon on a non-binding advisory basis (the “Governance Proposal” or “Proposal No. 4”); (iv) a proposal to elect 12 directors to serve on our Board for a term ending on the date of the next annual stockholder meeting or until their successor is duly elected and qualified (the “Director Election Proposal” or “Proposal No. 5”); (v) a proposal to adopt the Incentive Award Plan, a copy of which is attached to the accompanying proxy statement as Annex J, including the authorization of the initial share reserve under the Incentive Award Plan (the “Incentive Award Plan Proposal” or “Proposal No. 6”); and (vi) a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Proposal, the Governance Proposal, the Director Election Proposal or the Incentive Award Plan Proposal (the “Adjournment Proposal” or “Proposal No. 7”).

Each of these proposals is more fully described in this proxy statement, which each stockholder is encouraged to read carefully and in its entirety before voting. The record date for the Special Meeting is [                ], 2021. Only stockholders of record at the close of business on that date may vote at the Special Meeting or any adjournment thereof.

Our publicly traded Class A Stock, public units and public warrants are currently listed on the NYSE under the symbols “MBAC,” “MBAC.U” and “MBAC.WS,” respectively. We intend to apply to continue the listing of our publicly traded Class A Stock and public warrants on NYSE under the symbols “SYNV” and “SYNV.WS,” respectively, upon the Closing. As a result, our public units will separate into the component securities upon the Closing and will no longer trade as a separate security.

Pursuant to our current certificate of incorporation, we are providing our public stockholders with the opportunity to redeem, upon the Closing, shares of Class A Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the trust account (the “Trust Account”) that holds the proceeds of our IPO (including interest not previously released to the Company to pay its franchise and income taxes). The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commission totaling $14,000,000 that we will pay to the underwriters of our IPO or transaction expenses incurred in connection with the Business Combination. For illustrative purposes, based on the balance of the Trust Account of $[                ] as of [                ], 2021, the record date for the Special Meeting, the estimated per share redemption price would have been approximately $[                ]. Public stockholders may elect to redeem their shares whether or not they vote at the Special Meeting, and regardless of how they may vote. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of Class A Stock included in the public units sold in our IPO. We refer to this as the “15% threshold.” We have no specified maximum redemption threshold under our current certificate of incorporation, other than the aforementioned 15% threshold and the $5,000,001 minimum of net tangible assets described below. Each


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redemption of shares of Class A Stock by our public stockholders will reduce the amount in the Trust Account. The Merger Agreement provides that Syniverse’s obligation to consummate the Business Combination is conditioned on the sum of the amount in the Trust Account (net of redemptions) and the proceeds from the PIPE Investment equaling or exceeding $375 million. We refer to this as the “minimum cash condition.” The conditions to Closing in the Merger Agreement are for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of Class A Stock by our public stockholders, these conditions are not met (or waived), then Syniverse may elect not to consummate the Business Combination. In addition, in no event will we redeem shares of our Class A Stock in an amount that would result in the Company’s failure to have net tangible assets equaling or exceeding $5,000,001. Based on the amount of $[                ] in our Trust Account as of [                ], 2021, the record date for the Special Meeting, and taking into account the anticipated gross proceeds of $265 million from the PIPE Investment and the up to $750 million proceeds from the Twilio Investment, approximately [                ] shares of Class A Stock may be redeemed and still enable us to have sufficient cash to satisfy the minimum cash Closing condition in the Merger Agreement. We refer to this as the “maximum redemptions scenario.” Holders of our outstanding public warrants do not have redemption rights in connection with the Business Combination. Holders of our outstanding public units must elect to separate their units into the underlying Class A Stock and public warrants prior to exercising their redemption rights with respect to their Class A Stock.

The Sponsor Parties (as defined in the accompanying proxy statement) have agreed to waive any redemption rights they may have with respect to their shares of Class A Stock and their shares of Class B common stock, par value $0.0001 per share, of the Company (“Class B Stock” and, together with the Class A Stock, the “Common Stock”) in connection with the consummation of the Business Combination. Currently, the Sponsor Parties own 20% of our issued and outstanding shares of Common Stock. The Sponsor Parties have agreed to vote their shares of the Company’s Common Stock in favor of the Business Combination and the other proposals described in this proxy statement.

We are providing the accompanying proxy statement and accompanying proxy card to our stockholders in connection with the solicitation of proxies to be voted at the Special Meeting (including following any adjournments or postponements of the Special Meeting). Information about the Special Meeting, the Business Combination and other related business to be considered by the Company’s stockholders at the Special Meeting is included in this proxy statement. Whether or not you plan to attend the Special Meeting, we urge all Company stockholders to read this proxy statement, including the Annexes and the accompanying financial statements of the Company and Syniverse, carefully and in their entirety. In particular, we urge you to read carefully the section entitled “Risk Factors” beginning on page 68 of this proxy statement.

After careful consideration, our Board has unanimously approved the Merger Agreement and the transactions contemplated therein, and unanimously recommends that our stockholders vote “FOR” adoption of the Merger Agreement and approval of the transactions contemplated thereby, including the Business Combination, and “FOR” all other proposals presented to our stockholders in the accompanying proxy statement. When you consider the Board’s recommendation of these proposals, you should keep in mind that our directors and officers have interests in the Business Combination that may conflict with your interests as a stockholder. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—Interests of Certain Persons in the Business Combination” for additional information.

A majority of the issued and outstanding shares of the Company’s Common Stock entitled to vote as of the record date at the Special Meeting must be present, in person (which would include presence via the virtual meeting platform) or represented by proxy, at the Special Meeting to constitute a quorum and in order to conduct business at the Special Meeting. Approval of each of the Business Combination Proposal, the NYSE Proposal, the Governance Proposal (which is a non-binding advisory vote), the Incentive Award Plan Proposal and the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by holders of our outstanding shares of Common Stock represented in person (which would include presence via the virtual meeting platform) or by proxy and entitled to vote at the Special Meeting. Approval of the Charter Proposal requires the affirmative vote of holders of a majority of our outstanding shares of Common Stock entitled to vote thereon at the Special Meeting. Directors are elected by a plurality of the votes cast by holders of our outstanding shares of Common


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Stock represented in person (which would include presence via the virtual meeting platform) or by proxy and entitled to vote at the Special Meeting; this means that the 12 individuals nominated for election to the Board who receive the most “FOR” votes will be elected.

The Business Combination is conditioned on the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Proposal and the Director Election Proposal at the Special Meeting. Unless waived, if any of these conditions are not approved, we will not consummate the Business Combination.

Your vote is very important. Whether or not you plan to attend the Special Meeting, please vote as soon as possible by following the instructions in this proxy statement to make sure that your shares are represented at the Special Meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the Special Meeting.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of the proposals presented at the Special Meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the Special Meeting virtually via the virtual meeting platform, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting, and will have the same effect as a vote “AGAINST” the Charter Proposal. If you are a stockholder of record and you attend the Special Meeting and wish to vote virtually, you may withdraw your proxy and vote virtually via the virtual meeting platform.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND THAT THE COMPANY REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO THE COMPANY’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

On behalf of our Board, I would like to thank you for your support of M3-Brigade Acquisition II Corp. and look forward to a successful completion of the Business Combination.

By Order of the Board of Directors

Mohsin Y. Meghji

Chairman and Chief Executive Officer

New York, NY

[                ], 2021

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

This proxy statement is dated [                ], 2021 and is expected to be first mailed to Company stockholders on or about [                ], 2021.


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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION, DATED SEPTEMBER 27, 2021

NOTICE OF SPECIAL MEETING IN LIEU OF THE 2021 ANNUAL MEETING OF

STOCKHOLDERS OF M3-BRIGADE ACQUISITION II CORP.

TO BE HELD [                ], 2021

To the Stockholders of M3-Brigade Acquisition II Corp.:

NOTICE IS HEREBY GIVEN that a special meeting in lieu of the 2021 annual meeting of the stockholders of M3-Brigade Acquisition II Corp., a Delaware corporation (the “Company”), will be held virtually on [                ], 2021 at [    ] [a.m./p.m.] (the “Special Meeting”). The Special Meeting will be conducted virtually due to the public health concerns resulting from the COVID-19 pandemic and to support the health and well-being of our stockholders. You will be able to attend the Annual Meeting by visiting https://www.cstproxy.com/m3brigadeii/2021. You are cordially invited to attend the Special Meeting to conduct the following items of business:

 

  1.

Business Combination Proposal—To consider and vote upon a proposal to approve the transactions contemplated by the Agreement and Plan of Merger, dated as August 16, 2021 (as it may be amended from time to time in accordance with its terms, the “Merger Agreement”), by and among the Company, Blue Steel Merger Sub Inc. (“Merger Sub”) and Syniverse Corporation (“Syniverse”), including the business combination described in the accompanying proxy statement (the “Business Combination”) (Proposal No. 1);

 

  2.

NYSE Proposal—To consider and vote upon a proposal to approve, for purposes of complying with Section 312.03 of the NYSE’s Listed Company Manual (i) the issuance of more than 20% of the issued and outstanding shares of Class A common stock, par value $0.0001 per share, of the Company (the “Class A Stock”) and Class B common stock, par value $0.0001 per share, of the Company (the “Class B Stock” and, together with the Class A Stock, the “Common Stock”) in connection with the Business Combination, the PIPE Investment (as defined below) and the Twilio Investment (as defined below), and (ii) the issuance of more than one percent of the issued and outstanding shares of Common Stock to a “Related Party” (as defined in Section 312.03 of the NYSE’s Listed Company Manual) in connection with the Business Combination and the Sponsor Subscription Agreement (as defined below) (Proposal No. 2);

 

  3.

Charter Proposal—To consider and vote upon a proposal to adopt two separate proposed charters, proposed charter alternative A, substantially in the form attached to this proxy statement as Annex B-1 (“Charter Amendment Alternative A”), and proposed charter alternative B, substantially in the form attached to this proxy statement as Annex B-2 (“Charter Amendment Alternative B” and together with Charter Amendment Alternative A, the “Charter Amendments”) (Proposal No. 3);

 

  4.

Governance Proposal—To consider and vote upon, on a non-binding advisory basis, a separate proposal with respect to certain governance provisions in the Charter Amendments in accordance with the U.S. Securities and Exchange Commission requirements (Proposal No. 4);

 

  5.

Director Election Proposal—To consider and vote upon a proposal to elect 12 directors to serve on our Board for a term ending on the date of the next annual stockholder meeting or until their respective successor is duly elected and qualified (Proposal No. 5);

 

  6.

Incentive Award Plan Proposal—To consider and vote upon a proposal to adopt the Syniverse Technologies Corporation 2021 Omnibus Incentive Plan (the “Incentive Award Plan”), a copy of which is attached to the accompanying proxy statement as Annex J, including the authorization of the initial share reserve under the Incentive Award Plan (Proposal No. 6); and

 

  7.

Adjournment Proposal—To consider and vote upon a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Proposal, the Governance Proposal, the Director Election Proposal or the Incentive Award Plan Proposal. This proposal will only be presented at the Special Meeting if there are


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  not sufficient votes to approve the Business Combination Proposal, the NYSE Proposal, the Charter Proposal, the Governance Proposal, the Director Election Plan Proposal or the Incentive Award Plan Proposal (Proposal No. 7).

The above matters are more fully described in this proxy statement, which also includes, as Annex A, a copy of the Merger Agreement. We urge you to read carefully this proxy statement in its entirety, including the Annexes and accompanying financial statements of the Company and Syniverse.

The record date for the Special Meeting is [                ], 2021. Only stockholders of record at the close of business on that date may vote at the Special Meeting or any adjournment thereof. A complete list of our stockholders of record entitled to vote at the Special Meeting will be available for 10 days before the Special Meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the Special Meeting.

Our publicly traded Class A Stock, public units and public warrants are currently listed on the NYSE under the symbols “MBAC,” “MBAC.U” and “MBAC.WS,” respectively. We intend to apply to continue the listing of our publicly traded Class A Stock and public warrants on NYSE under the symbols “SYNV” and “SYNV.WS,” respectively, upon the closing of the Business Combination (the “Closing”). As a result, our public units will separate into the component securities upon the Closing and will no longer trade as a separate security.

To raise additional proceeds to fund the Business Combination, the Company has entered into (i) a subscription agreement with M3-Brigade Sponsor II LP, a Delaware limited partnership (our “Sponsor”), pursuant to which, among other things, our Sponsor will, at the Closing, purchase from the Company an aggregate of $15 million in shares of Class A Stock for a purchase price of $10.00 per share (the “Sponsor Subscription Agreement”), (ii) a subscription agreement with Brigade Capital Management, LP (“Brigade”), pursuant to which, among other things, Brigade (on behalf of its managed funds and accounts) will, at the Closing, purchase from the Company an aggregate of (x) $37.5 million in shares of Class A Stock for a purchase price of $10.00 per share and (y) $112.5 million in shares of a newly issued series of convertible preferred stock, par value $0.0001 per share, of the Company (the “Preferred Stock”), the terms of which shall be substantially as set forth in the form of Certificate of Designations attached as Annex C to this proxy statement, at a purchase price of $970.00 per share (the “Brigade Subscription Agreement”), and (iii) a subscription agreement with Oak Hill Advisors, L.P. (“Oak Hill” and, together with Brigade and the Sponsor, the “PIPE Investors”), pursuant to which, among other things, Oak Hill (on behalf of its managed funds and accounts) will, at the Closing, purchase from the Company an aggregate of (x) approximately $16.67 million in shares of Class A Stock for a purchase price of $10.00 per share and (y) approximately $83.33 million in shares of Preferred Stock, at a purchase price of $970.00 per share (the “Oak Hill Subscription Agreement” and, together with the Brigade Subscription Agreement and the Sponsor Subscription Agreement, the “PIPE Subscription Agreements” and the transactions contemplated by the PIPE Subscription Agreements, collectively, the “PIPE Investment”). The aggregate proceeds from the PIPE Investment are expected to be $265 million, which, together with the Twilio Investment, the funds in the Trust Account (as defined below) and the proceeds from the debt refinancing described in the accompanying proxy statement, will be used at the Closing to refinance the outstanding indebtedness and other obligations of Syniverse and its subsidiaries under Syniverse’s existing credit facilities, pay certain transaction expenses and fund the post-combination company’s balance sheet.

In addition to the PIPE Subscription Agreements, the Company has entered into a subscription agreement (the “Twilio Subscription Agreement”) with Twilio Inc., a Delaware corporation (“Twilio”), pursuant to which, among other things, Twilio will, at the Closing, purchase Class A Stock and, if applicable, shares of Class C common stock, par value $0.0001 per share, of the Company (“Class C Stock”), for an aggregate purchase price of up to $750 million. Under the Twilio Subscription Agreement, the size of Twilio’s investment will be reduced below $750 million only to the extent the total transaction proceeds in our Trust Account (net of redemptions) and the PIPE Investment exceed $375 million, with such reduction equal to the amount of such excess, subject to a minimum investment by Twilio of $500 million (the aggregate amount paid by Twilio reflecting such adjustment, if applicable, the “Twilio Investment”). For additional information regarding the PIPE Subscription Agreements, the Twilio Subscription Agreement and certain other related agreements that have been or will be


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entered into in connection with the Business Combination on or prior to the Closing, see “Proposal No. 1—The Business Combination Proposal—Related Agreements” in the accompanying proxy statement.

It is anticipated that, upon completion of the Business Combination and assuming no redemption of shares of Class A Stock by our public stockholders: (i) the Company’s public stockholders (other than the PIPE Investors and Twilio) will retain an ownership interest of approximately 20.9% in the post-combination company; (ii) Brigade and Oak Hill (two of the PIPE Investors) will own approximately 7.2% and 4.8%, respectively, of the post-combination company (including Class A Stock and Preferred Stock on an as-converted basis); (iii) Twilio will own approximately 23.6% of the post-combination company; (iv) Carlyle Partners V Holdings, L.P. (“Carlyle”) will own approximately 36.7% of the post-combination company; (v) our Sponsor will own approximately 6.0% of the post-combination company (inclusive of the shares of Class A Stock acquired by our Sponsor as part of the PIPE Investment); and (vi) the Syniverse Stockholders (other than Carlyle) will own approximately 0.8% of the post-combination company. Additionally, following the Closing, and subject to the approval of the Incentive Award Plan by our public stockholders and the approval of the applicable award agreements by the board of directors of the post-combination company, pursuant to the Incentive Award Plan, the post-combination company expects to grant awards under the Incentive Award Plan. The awards (or associated benefits or amounts) that will be made to particular individuals or groups of individuals are not currently determinable.

Pursuant to our current certificate of incorporation, we are providing our public stockholders with the opportunity to redeem, upon the Closing, shares of Class A Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the trust account (the “Trust Account”) that holds the proceeds of our IPO (including interest not previously released to the Company to pay its franchise and income taxes). The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commission totaling $14,000,000 that we will pay to the underwriters of our IPO or transaction expenses incurred in connection with the Business Combination. For illustrative purposes, based on the balance of the Trust Account of $[                ] as of [                ], 2021, the record date for the Special Meeting, the estimated per share redemption price would have been approximately $[                ]. Public stockholders may elect to redeem their shares whether or not they vote at the Special Meeting, and regardless of how they may vote. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of Class A Stock included in the public units sold in our IPO. We refer to this as the “15% threshold.” We have no specified maximum redemption threshold under our current certificate of incorporation, other than the aforementioned 15% threshold and the $5,000,001 minimum of net tangible assets described below. Each redemption of shares of Class A Stock by our public stockholders will reduce the amount in the Trust Account. The Merger Agreement provides that Syniverse’s obligation to consummate the Business Combination is conditioned on the sum of the amount in the Trust Account (net of redemptions) and the proceeds from the PIPE Investment equaling or exceeding $375 million. We refer to this as the “minimum cash condition.” The conditions to Closing in the Merger Agreement are for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of Class A Stock by our public stockholders, these conditions are not met (or waived), then Syniverse may elect not to consummate the Business Combination. In addition, in no event will we redeem shares of our Class A Stock in an amount that would result in the Company’s failure to have net tangible assets equaling or exceeding $5,000,001. Based on the amount of $[                ] as of [                ], 2021, the record date for the Special Meeting, and taking into account the anticipated gross proceeds of $265 million from the PIPE Investment and the up to $750 million proceeds from the Twilio Investment, approximately [                ] shares of Class A Stock may be redeemed and still enable us to have sufficient cash to satisfy the minimum cash Closing condition in the Merger Agreement. We refer to this as the “maximum redemptions scenario.” Holders of our outstanding public warrants do not have redemption rights in connection with the Business Combination. Holders of our outstanding public units must elect to separate their units into the underlying Class A Stock and public warrants prior to exercising their redemption rights with respect to their Class A Stock.


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The Sponsor Parties (as defined in the accompanying proxy statement) have agreed to waive any redemption rights they may have with respect to their shares of Common Stock in connection with the consummation of the Business Combination. Currently, the Sponsor Parties own 20% of our issued and outstanding shares of Common Stock. The Sponsor Paries have agreed to vote their shares of the Company’s Common Stock in favor of the Business Combination and the other proposals described in this proxy statement.

After careful consideration, our Board has unanimously approved the Merger Agreement and the transactions contemplated therein, and unanimously recommends that our stockholders vote “FOR” adoption of the Merger Agreement and approval of the transactions contemplated thereby, including the Business Combination, and “FOR” all other proposals presented to our stockholders in the accompanying proxy statement. When you consider the Board’s recommendation of these proposals, you should keep in mind that our directors and officers have interests in the Business Combination that may conflict with your interests as a stockholder. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—Interests of Certain Persons in the Business Combination” for additional information.

A majority of the issued and outstanding shares of the Company’s Common Stock entitled to vote as of the record date at the Special Meeting must be present, in person (which would include presence via the virtual meeting platform) or represented by proxy, at the Special Meeting to constitute a quorum and in order to conduct business at the Special Meeting. Approval of each of the Business Combination Proposal, the NYSE Proposal, the Governance Proposal (which is a non-binding advisory vote), the Incentive Award Plan Proposal and the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by holders of our outstanding shares of Common Stock represented via the virtual meeting platform or by proxy and entitled to vote at the Special Meeting. Approval of the Charter Proposal requires the affirmative vote of holders of a majority of our outstanding shares of Common Stock entitled to vote thereon at the Special Meeting. Directors are elected by a plurality of the votes cast by holders of our outstanding shares of Common Stock represented via the virtual meeting platform or by proxy and entitled to vote at the Special Meeting; this means that the 12 individuals nominated for election to the Board who receive the most “FOR” votes will be elected.

The Business Combination is conditioned on the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Proposal and the Director Election Proposal at the Special Meeting. Unless waived, if any of these conditions are not approved, we will not consummate the Business Combination.

Your vote is very important. Whether or not you plan to attend the Special Meeting, please vote as soon as possible by following the instructions in this proxy statement to make sure that your shares are represented at the Special Meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the Special Meeting.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of the proposals presented at the Special Meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the Special Meeting, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting, and will have the same effect as a vote “AGAINST” the Charter Proposal. If you are a stockholder of record and you attend the Special Meeting and wish to vote, you may withdraw your proxy and vote via the virtual meeting platform.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND THAT THE COMPANY REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO THE COMPANY’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE


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SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

On behalf of our Board, I would like to thank you for your support of M3-Brigade Acquisition II Corp. and look forward to a successful completion of the Business Combination.

 

By Order of the Board of Directors
Mohsin Y. Meghji
Chairman and Chief Executive Officer

New York, NY

[            ], 2021


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TABLE OF CONTENTS

 

SUMMARY TERM SHEET

     1  

FREQUENTLY USED TERMS

     7  

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR STOCKHOLDERS

     14  

SUMMARY OF THE PROXY STATEMENT

     32  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF THE COMPANY

     57  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF SYNIVERSE

     59  

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     61  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     64  

RISK FACTORS

     68  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     111  

SPECIAL MEETING OF COMPANY STOCKHOLDERS

     127  

PROPOSAL NO. 1—THE BUSINESS COMBINATION PROPOSAL

     136  

PROPOSAL NO. 2—THE NYSE PROPOSAL

     194  

PROPOSAL NO. 3—THE CHARTER PROPOSAL

     197  

PROPOSAL NO. 4—THE GOVERNANCE PROPOSAL

     202  

PROPOSAL NO. 5—THE DIRECTOR ELECTION PROPOSAL

     207  

PROPOSAL NO. 6—THE INCENTIVE AWARD PLAN PROPOSAL

     211  

PROPOSAL NO. 7—THE ADJOURNMENT PROPOSAL

     220  

INFORMATION ABOUT THE COMPANY

     221  

THE COMPANY’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     240  

INFORMATION ABOUT SYNIVERSE

     244  

SYNIVERSE’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     256  

EXECUTIVE COMPENSATION

     281  

MANAGEMENT AFTER THE BUSINESS COMBINATION

     289  

DESCRIPTION OF SECURITIES

     299  

DESCRIPTION OF CERTAIN INDEBTEDNESS OF SYNIVERSE AND THE REFINANCING

     312  

SECURITIES ACT RESTRICTIONS ON RESALE OF SECURITIES

     314  

BENEFICIAL OWNERSHIP OF SECURITIES

     317  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     321  

PRICE RANGE OF SECURITIES AND DIVIDENDS

     326  

APPRAISAL RIGHTS

     327  

HOUSEHOLDING INFORMATION

     328  

TRANSFER AGENT AND REGISTRAR

     329  

SUBMISSION OF STOCKHOLDER PROPOSALS

     330  

FUTURE STOCKHOLDER PROPOSALS

     331  

SERVICE MARKS, TRADEMARKS AND TRADE NAMES

     332  

WHERE YOU CAN FIND MORE INFORMATION

     333  

INDEX TO CONSOLIDATED FINANCIAL INFORMATION OF THE COMPANY

     F-1  

INDEX TO CONSOLIDATED FINANCIAL INFORMATION OF SYNIVERSE

     G-1  

Annex A: Merger Agreement

Annex B-1: Form of Amended and Restated Certificate of Incorporation—Alternative A

Annex B-2: Form of Amended and Restated Certificate of Incorporation—Alternative B

Annex C: Form of Certificate of Designations

Annex D: Form of Registration Rights Agreement

Annex E: Sponsor Agreement

Annex F: Form of Stockholders Agreement

Annex G: Form of Subscription Agreement

Annex H: Sponsor Subscription Agreement

Annex I: Twilio Subscription Agreement

Annex J: Incentive Award Plan

Annex K: Framework Agreement

 

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SUMMARY TERM SHEET

This summary term sheet, together with the sections entitled “Questions and Answers About the Proposals for Stockholders” and “Summary of the Proxy Statement,” summarizes certain information contained in this proxy statement, but does not contain all of the information that is important to you. You should read carefully this entire proxy statement, including the attached Annexes, for a more complete understanding of the matters to be considered at the Special Meeting. In addition, for definitions used commonly throughout this proxy statement, including this summary term sheet, please see the section entitled “Frequently Used Terms.”

 

   

M3-Brigade Acquisition II Corp., a Delaware corporation, which we refer to as “we,” “us,” “our,” or the “Company,” is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

 

   

There are currently 50,000,000 shares of Common Stock, par value $0.0001 per share, of the Company, issued and outstanding, consisting of (i) 40,000,000 shares of Class A Stock originally sold as part of the IPO and (ii) 10,000,000 shares of Class B Stock that were initially issued to our Sponsor prior to our IPO and, as of the date of this proxy statement, are held by our Sponsor (9,975,000 shares) and Mr. Roehm, one of our directors (25,000 shares). There are currently no shares of Company preferred stock issued and outstanding. In addition, we issued 13,333,333 public warrants to purchase Class A Stock (originally sold as part of the public units issued in our IPO) as part of our IPO along with 7,500,000 Private Placement Warrants issued to our Sponsor in a private placement on the IPO Closing Date. Each public warrant entitles its holder to purchase one share of our Class A Stock at an exercise price of $11.50 per share, to be exercised only for a whole number of shares of our Class A Stock. The public warrants will become exercisable on the later of 12 months from the IPO Closing Date or 30 days after the completion of the Business Combination, and they expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. Once the public warrants become exercisable, the Company may redeem the outstanding public warrants at a price of $0.01 per warrant, if the last sale price of the Company’s Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading-day period ending on the third business day before the Company sends the notice of redemption to the warrant holders. The Private Placement Warrants, however, are non-redeemable so long as they are held by our Sponsor or its permitted transferees. For more information regarding the public warrants, please see the section entitled “Description of Securities.”

 

   

Syniverse is a leading global provider of unified, mission-critical platforms enabling seamless interoperability across the mobile ecosystem. Syniverse makes global mobility work by enabling consumers and enterprises to connect, engage, and transact seamlessly and securely. Syniverse offers a premier communications platform that serves both enterprises and carriers globally and at scale. Syniverse’s proprietary software, protocols, orchestration capabilities, and network assets, have allowed Syniverse to address the changing needs of the mobile ecosystem for over 30 years. Syniverse continues to innovate by harnessing the potential of emerging technologies such as 5G, IoT, RCS and CPaaS for its customers. For more information about Syniverse, please see the sections entitled “Information About Syniverse,” “Syniverse’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Management After the Business Combination” and “Index to Consolidated Financial Information of Syniverse.”

 

   

Subject to the terms of the Merger Agreement, at the effective time of the Merger, each share of Syniverse Common Stock that is issued and outstanding immediately prior to the effective time of the Merger will be cancelled and converted into the right to receive a portion of the Aggregate Merger Consideration equal to (i) the Exchange Ratio multiplied by (ii) the number of shares of Syniverse Common Stock held by the applicable holder as of immediately prior to the effective time of the Merger, rounded to the nearest whole share.

 

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The Aggregate Merger Consideration to be paid to Syniverse’s stockholders at the Closing is the number of shares of Class A Stock equal to (i) $704,440,000, subject to adjustments for (a) the Twilio Investment, (b) certain leakage that has occurred after November 30, 2020 through immediately prior to the effective time of the Merger and (c) the aggregate exercise price of the outstanding in-the-money Syniverse Options as of immediately prior to the effective time of the Merger, multiplied by (ii) one minus the Investment Percentage, at a value of $10.00 per share.

 

   

The Exchange Ratio is equal to the Aggregate Merger Consideration divided by the aggregate fully diluted number of shares of Syniverse Common Stock.

 

   

The Investment Percentage is equal to (i) the Twilio Investment, divided by (ii) $973 million, subject to adjustments for (a) the Twilio Investment, (b) certain leakage that has occurred after November 30, 2020 through immediately prior to the effective time of the Merger and (c) the aggregate exercise price of Syniverse’s outstanding in-the-money options as of immediately prior to the effective time of the Merger, divided by (iii) 0.9.

 

   

At the effective time of the Merger, all share incentive plans or similar equity-based compensation plans maintained for employees of Syniverse will be assumed by the Company and all outstanding Syniverse Options and each Syniverse RSU will be assumed by the Company. See the section entitled “Proposal No. 1—The Business Combination Proposal—Merger Consideration.”

 

   

It is anticipated that, upon completion of the Business Combination and assuming no redemption of shares of Class A Stock by our public stockholders: (i) the Company’s public stockholders (other than the PIPE Investors and Twilio) will retain an ownership interest of approximately 20.9% in the post-combination company; (ii) Brigade and Oak Hill (two of the PIPE Investors) will own approximately 7.2% and 4.8%, respectively, of the post-combination company (including Class A Stock and Preferred Stock on an as-converted basis); (iii) Twilio will own approximately 23.6% of the post-combination company; (iv) Carlyle will own approximately 36.7% of the post-combination company; (v) our Sponsor will own approximately 6.0% of the post-combination company (inclusive of the shares of Class A Stock acquired by our Sponsor as part of the PIPE Investment); and (vi) the Syniverse Stockholders (other than Carlyle) will own approximately 0.8% of the post-combination company. Additionally, following the Closing, and subject to the approval of the Incentive Award Plan by the Company’s public stockholders and the approval of the applicable award agreements by the board of directors of the post-combination company, pursuant to the Incentive Award Plan the Company expects to grant awards under the Incentive Award Plan. The awards (or associated benefits or amounts) that will be made to particular individuals or groups of individuals are not currently determinable.

 

   

The PIPE Investors have agreed to purchase approximately 6,916,667 shares of Class A Stock in the aggregate in the PIPE Investment at a price of $10.00 per share and approximately 201,890 shares of Preferred Stock in the aggregate in the PIPE Investment at a price of $970.00 per share (subject to customary terms and conditions, including the Closing) for gross proceeds to the Company of $265 million pursuant to the PIPE Subscription Agreements entered into at the signing of the Merger Agreement. In addition, Twilio has agreed to purchase shares of Class A Stock and, if applicable, shares of Class C Stock, for an aggregate purchase price of up to $750 million, with the size of Twilio’s investment and the number of shares issued to Twilio determined based on the terms of the Twilio Subscription Agreement. For more information, please see the sections entitled “Summary of the Proxy Statement—Impact of the Business Combination on the Company’s Public Float,” “Selected Unaudited Pro Forma Condensed Combined Financial Information” and “Unaudited Pro Forma Condensed Combined Financial Information.”

 

   

Our management and Board considered various factors in determining whether to approve the Merger Agreement and the transactions contemplated thereby, including the Business Combination. These factors included Syniverse’s growth prospects, our Board’s and management’s knowledge of Syniverse’s industry, that Syniverse’s platform supports further growth initiatives, that the aggregate consideration payable represents an attractive valuation of Syniverse relative to publicly listed

 

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companies with certain characteristics comparable to Syniverse, the Company’s due diligence investigation of Syniverse and the reasonableness and fairness of the terms of the Merger Agreement and the transactions contemplated thereby to our stockholders. For more information about our decision-making process, see the section entitled “Proposal No. 1—The Business Combination Proposal—The Company’s Board of Directors’ Reasons for the Approval of the Business Combination.”

 

   

Pursuant to our current certificate of incorporation, in connection with the Business Combination, holders of our public shares may elect to have their Class A Stock redeemed for cash at the applicable redemption price per share calculated in accordance with our current certificate of incorporation. As of [                ], 2021, the record date for the Special Meeting, the redemption price would have been approximately $[                ] per share. If a holder exercises its redemption rights, then such holder will be exchanging its shares of our Class A Stock for cash and will no longer own shares of the post-combination company and will not participate in the future growth of the post-combination company, if any. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to our Transfer Agent, Continental Stock Transfer & Trust Company, at least two business days prior to the Special Meeting. Please see the section entitled “Special Meeting of Company Stockholders—Redemption Rights.”

 

   

In addition to voting on the proposal to approve the transactions contemplated by the Merger Agreement, including the Business Combination, at the Special Meeting, the stockholders of the Company will be asked to vote on:

 

   

a proposal to approve, for purposes of complying with Section 312.03 of the NYSE’s Listed Company Manual (i) the issuance of more than 20% of the issued and outstanding shares of Common Stock in connection with the Business Combination, the PIPE Investment and the Twilio Investment, and (ii) the issuance of more than one percent of the issued and outstanding shares of Common Stock to a “Related Party” (as defined in Section 312.03 of the NYSE’s Listed Company Manual) in connection with the Business Combination and the Sponsor Subscription Agreement (the “NYSE Proposal” or “Proposal No. 2”);

 

   

a proposal to adopt two separate proposed charters, proposed charter Alternative A, substantially in the form attached to this proxy statement as Annex B-1 (“Charter Amendment Alternative A”), and proposed charter alternative B, substantially in the form attached to this proxy statement as Annex B-2 (“Charter Amendment Alternative B” and together with Charter Amendment Alternative A, the “Charter Amendments”) (the “Charter Proposal” or “Proposal No. 3”);

 

   

a separate proposal with respect to certain governance provisions in the Charter Amendments, which are being separately presented in accordance with SEC requirements and which will be voted upon on a non-binding advisory basis (the “Governance Proposal” or “Proposal No. 4”);

 

   

a proposal to elect 12 directors to serve on our Board for a term ending on the date of the next annual stockholder meeting or until their respective successor is duly elected and qualified (the “Director Election Proposal” or “Proposal No. 5”);

 

   

a proposal to adopt the Incentive Award Plan, a copy of which is attached to this proxy statement as Annex J, including the authorization of the initial share reserve under the Incentive Award Plan (the “Incentive Award Plan Proposal” or “Proposal No. 6”); and

 

   

a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Proposal, the Governance Proposal, the Director Election Proposal or the Incentive Award Plan Proposal (the “Adjournment Proposal” or “Proposal No. 7”).

Please see the sections entitled “Proposal No. 1—The Business Combination Proposal,” “Proposal No. 2—The NYSE Proposal,” “Proposal No. 3—The Charter Proposal,” “Proposal No. 4—The Governance Proposal,”

 

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Proposal No. 5—The Director Election Proposal,” “Proposal No. 6—The Incentive Award Plan Proposal” and “Proposal No. 7—The Adjournment Proposal.” The Business Combination is conditioned on the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Proposal and the Director Election Proposal at the Special Meeting.

 

   

Upon consummation of the Business Combination, it is anticipated that the Board of the post-combination company will comprise 12 directors, with each director serving on the Board for a term ending on the date of the next annual stockholder meeting or until their respective successor is duly elected and qualified. Please see the sections entitled “Proposal No. 5—The Director Election Proposal” and “Management After the Business Combination” for additional information.

 

   

Unless waived by the parties to the Merger Agreement, and subject to applicable law, the Closing is subject to a number of conditions set forth in the Merger Agreement including, among others, expiration of the waiting period under the HSR Act, receipt of certain stockholder approvals contemplated by this proxy statement, refinancing of Syniverse outstanding indebtedness and the availability of minimum cash amounts at Closing. For more information about the Closing conditions to the Business Combination, please see the section entitled “Proposal No. 1—The Business Combination Proposal—The Merger Agreement—Conditions to Closing of the Business Combination.”

 

   

The Merger Agreement may be terminated at any time prior to the consummation of the Business Combination upon agreement of the parties thereto, or by the Company or Syniverse in specified circumstances. For more information about the termination rights under the Merger Agreement, please see the section entitled “Proposal No. 1—The Business Combination Proposal—The Merger Agreement—Termination.”

 

   

The proposed Business Combination involves numerous risks. For more information about these risks, please see the section entitled “Risk Factors.”

 

   

In considering the recommendation of our Board to vote for the proposals presented at the Special Meeting, including the Business Combination Proposal, you should be aware that aside from their interests as stockholders, our Sponsor and certain members of our Board and officers have interests in the Business Combination that are different from, or in addition to, the interests of our stockholders generally. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination and transaction agreements and in recommending to our stockholders that they vote in favor of the proposals presented at the Special Meeting, including the Business Combination Proposal. In addition, Mr. Vincent recused himself from certain discussions concerning the Business Combination on account of his relationship with Brigade. Stockholders should take these interests into account in deciding whether to approve the proposals presented at the Special Meeting, including the Business Combination Proposal. These interests include, among other things:

 

   

the fact that our Sponsor paid an aggregate of $25,000 for 9,975,000 Founder Shares, which will have a significantly higher value at the time of the Business Combination, and which, if unrestricted and freely tradable, would be valued at approximately $99,750,000 assuming a per share value of $10.00, but, given the restrictions on such shares (including the lock-up and vesting terms described elsewhere in this proxy statement), we believe such shares have less value;

 

   

the fact that 70% of the Sponsor Parties’ Founder Shares will vest at the Closing and the remaining 30% of such Founder Shares will vest on the first trading day that the closing price of the Class A Stock equals or exceeds $12.50 per share for any 20 trading days within any consecutive 30-trading-day period following the Closing, subject to earlier vesting in certain circumstances as described herein;

 

   

the fact that our Sponsor has agreed not to redeem any of the Founder Shares in connection with a stockholder vote to approve the Business Combination;

 

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the fact that our Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to its Founder Shares if we fail to complete an initial business combination by March 8, 2023;

 

   

the fact that our Sponsor paid an aggregate of approximately $11,250,000 for its 7,500,000 Private Placement Warrants to purchase shares of Class A Stock and that such Private Placement Warrants will expire worthless if a business combination is not consummated by March 8, 2023;

 

   

the fact that our Sponsor has entered into the Sponsor Subscription Agreement pursuant to which, at the Closing, Sponsor will purchase 1,500,000 shares of Class A Stock at a price of $10.00 per share in the PIPE Investment;

 

   

the continued right of our Sponsor to hold our Class A Stock and the shares of Class A Stock to be issued to our Sponsor upon exercise of its Private Placement Warrants following the Business Combination, subject to certain lock-up periods;

 

   

if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that all of our directors, other than Mr. Roehm, hold membership interests in our Sponsor, and Mr. Roehm holds 25,000 Founder Shares directly;

 

   

the fact that our Sponsor, officers and directors will lose their entire investment in us if an initial business combination is not consummated by March 8, 2023;

 

   

the fact that our Sponsor, officers and directors, and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on the Company’s behalf, such as identifying and investigating possible business targets and business combinations and with respect to the PIPE Investment. As of the date of this proxy statement, such reimbursement is estimated to be approximately $[                ] in the aggregate. However, if the Company fails to consummate a business combination within the completion window, they will not have any claim against the Trust Account for reimbursement. Accordingly, the Company may not be able to reimburse these expenses if the Business Combination or another business combination is not completed within the completion window;

 

   

the fact that, as described in the Charter Proposal and reflected in Annexes B-1 and B-2, each of our proposed Charter Amendments excludes the equity holders of our Sponsor and their respective successors, certain affiliates and each of their respective transferees as “interested parties” from the list of prohibited business combinations;

 

   

the fact that, as described in the Charter Proposal and reflected in Annexes B-1 and B-2, each of our proposed Charter Amendments provides that certain transactions are not “corporate opportunities” and that our Sponsor, its successors and affiliates (other than the post-combination company and its subsidiaries) and certain other persons are not subject to the doctrine of corporate opportunity;

 

   

the fact that, at the Closing, we will enter into the Stockholders Agreement, which entitles the Sponsor to appoint two directors to the Board following the Closing, subject to certain minimum

 

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ownership requirements and, as such, in the future such directors will receive any cash fees, stock options or stock awards that the post-combination company’s Board determines to pay to its nonexecutive directors;

 

   

the fact that, at the Closing, we will enter into the Registration Rights Agreement with the Restricted Stockholders, which provides for registration rights to Restricted Stockholders and their permitted transferees;

 

   

the fact that we were organized by executives from each of M-III Partners and Brigade, which is a participant in the PIPE Investment;

 

   

the fact that one of our directors, Mr. Vincent, is currently a Partner, Chief Operating Officer and Chief Legal Officer of Brigade;

 

   

the fact that certain employees of Brigade were seconded to us to, among other things, provide (i) introductions to key management of companies and investors with which Brigade has relationships and other potential sources of business combination targets, (ii) assistance with diligence of potential business combination targets and the negotiation of a business combination transaction, and (iii) support for our efforts to obtain replacement capital for tendering stockholders in the de-SPAC process, and that such employees of Brigade played an important role in conducting due diligence with respect to Syniverse, securing the funds from the PIPE Investors and facilitating the entry into the Merger Agreement;

 

   

the fact that Brigade is a participant in the PIPE Investment and will, at the Closing, purchase shares of both Class A Stock and Preferred Stock, which ranks senior to our other capital stock, including the Class A Stock, and will provide Brigade with certain benefits not available to our public stockholders;

 

   

the fact that Brigade is a significant lender to Syniverse and will receive proceeds in the transaction from the refinancing of Syniverse’s outstanding indebtedness upon consummation of the Business Combination; and

 

   

the fact that Brigade will be entitled to certain rights pursuant to the Brigade Subscription Agreement and the Registration Rights Agreement that are not available to our public stockholders, including certain information rights with respect to the post-combination company and preemptive and registration rights.

 

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FREQUENTLY USED TERMS

Unless otherwise stated or unless the context otherwise requires, the terms “we,” “us,” “our,” the “Company” and “MBAC” refer to M3-Brigade Acquisition II Corp. before or after the consummation of the Business Combination, depending on the context, and the term “post-combination company” refers to the Company following the consummation of the Business Combination. In this proxy statement:

10 DLC” means 10 Digit Long Code.

2011 Plan” means Syniverse’s 2011 Equity Incentive Plan.

2018 Plan” means Syniverse’s 2018 Restructuring Plan.

2020 Plan” means Syniverse’s 2020 Restructuring Plan.

2G” means Second Generation Mobile Technology.

3G” means Third Generation Mobile Technology.

4G” means Fourth Generation Mobile Technology.

5G” means Fifth Generation Mobile Technology.

A2P” means Application-to-Person Messaging.

Aggregate Merger Consideration” means the number of shares of Class A Stock to be issued to the Syniverse Stockholders in connection with the Business Combination, equal to (i) $704,440,000, subject to adjustments for, among other things, (a) the Twilio Investment, (b) certain leakage that has occurred after November 30, 2020 through immediately prior to the effective time of the Merger and (c) the aggregate exercise price of the outstanding in-the-money Syniverse Options as of immediately prior to the effective time of the Merger, multiplied by (ii) one minus the Investment Percentage, at a value of $10.00 per share.

Amended Agreement” means the Amended and Restated Consulting Services Agreement between Syniverse and The Carlyle Group.

Amended and Restated Bylaws” means the proposed amended and restated bylaws of the Company, in the form mutually agreed in good faith by the Company and Syniverse prior to the Closing, which will become the post-combination company’s bylaws, assuming the consummation of the Business Combination.

APAC” means Asia Pacific.

BEAT” means Base Erosion and Anti-Abuse Tax.

Board” or “Board of Directors” means the board of directors of the Company, including, following the Closing, the board of directors of the post-combination company.

Brigade” means Brigade Capital Management, LP, a Delaware limited partnership, on behalf of its managed funds and accounts.

Brigade Subscription Agreement” means the subscription agreement entered into on August 16, 2021, by and between the Company and Brigade, pursuant to which such Brigade has agreed to purchase an aggregate of

 

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(i) 3,750,000 shares of Class A Stock for $10.00 per share and (ii) 115,979 shares of Preferred Stock for $970.00 per share in the PIPE Investment, and substantially in the form attached hereto as Annex G.

Business Combination” means the transactions contemplated by the Merger Agreement, including, among other things, the Merger.

CARES” means Coronavirus Aid, Relief and Economic Security.

Carlyle” means Carlyle Partners V Holdings, L.P., a Delaware limited partnership.

CDMA” means Code Division Multiple Access.

Certificate of Designations” means the proposed certificate of designations of the Company, a form of which is attached hereto as Annex C, which will become the post-combination company’s certificate of designations assuming the consummation of the Business Combination.

Charter Amendment Alternative A” means the proposed alternate Second Amended and Restated Charter substantially in the form attached to this proxy statement as Annex B-1.

Charter Amendment Alternative B” means the proposed alternate Second Amended and Restated Charter substantially in the form attached to this proxy statement as Annex B-2.

Charter Amendments” means Charter Amendment Alternative A and Charter Amendment Alternative B.

Class A Stock” means the shares of Class A common stock, par value $0.0001 per share, of the Company.

Class B Stock” means the shares of Class B common stock, par value $0.0001 per share, of the Company.

Class C Stock” means the shares of Class C common stock, par value $0.0001 per share, of the Company, to be issued to Twilio in certain circumstances pursuant to the Twilio Subscription Agreement.

Closing” means the consummation of the Business Combination.

Code” means the Internal Revenue Code of 1986, as amended.

CODM” means Chief Operating Decision Maker.

Common Stock” means the shares of common stock, par value $0.0001 per share, of the Company, consisting of Class A Stock and Class B Stock.

Company” means M3-Brigade Acquisition II Corp., a Delaware corporation.

CPaaS” means Communications Platform as a Service.

current bylaws” means our amended and restated bylaws, in effect as of the date hereof.

current certificate of incorporation” means our amended and restated certificate of incorporation, in effect as of the date hereof.

current registration rights agreement” means our registration and stockholder rights agreement, in effect as of the date hereof.

 

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DCF” means Discounted Cash Flow Valuation Method.

DGCL” means the General Corporation Law of the State of Delaware.

Dissenting Shares” means the shares of Syniverse Common Stock issued and outstanding immediately prior to the Effective Time and held by a holder who has not voted in favor of adoption of the Merger Agreement or consented thereto in writing and who is entitled to demand and has properly exercised appraisal rights of such shares in accordance with Section 262 of the DGCL.

Dodd-Frank Act” means the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

EBITDA” means Earnings before Interest, Tax, Depreciation and Amortization.

End Date” means the Initial End Date, except that if on the Initial End Date any of the conditions relating to the HSR Act and other competition laws have not been satisfied but all other conditions to the consummation of the transactions contemplated by the Merger Agreement set forth in the Merger Agreement have been satisfied or waived or are then capable of being satisfied, then the Initial End Date shall be automatically extended to the Second End Date (references to the “End Date” means the Initial End Date, unless extended pursuant to the foregoing sentence, in which case the “End Date” means the Second End Date).

Exchange Act” means the Securities Exchange Act of 1934, as amended.

Exchange Ratio” means the Aggregate Merger Consideration divided by the aggregate fully diluted number of Syniverse Common Stock.

FASB” means Financial Accounting Standards Board.

FCC” means U.S. Federal Communications Commission.

FCPA” means Foreign Corrupt Practices Act.

First Lien Credit Facility” means the first lien credit facility (as amended, amended and restated, supplemented or otherwise modified from time to time), among Syniverse Holdings, as borrower, Buccaneer, Barclays Bank PLC, as administrative agent, swing line lender and letter of credit issuer, and the lenders and financial institutions from time to time party thereto.

Founder Shares” means, collectively, the 9,975,000 shares of Class B Stock that are currently owned by our Sponsor and the 25,000 shares of Class B Stock that are currently owned by Mr. Roehm, one of our directors.

Framework Agreement” means that certain Framework Agreement, dated as of February 26, 2021, by and among Carlyle, Twilio and Syniverse (as amended on August 16, 2021 and as it may be further amended from time to time in accordance with its terms), a copy of which is attached hereto as Annex K.

Framework Agreement End Date” means the Initial End Date, except that if on the Initial End Date any of the conditions relating to the HSR Act and other competition laws have not been satisfied but all other conditions to the consummation of the transactions contemplated by the Framework Agreement have been satisfied or waived or are then capable of being satisfied, then the Initial End Date shall be automatically extended to the Second End Date (references to the “Framework Agreement End Date” means the Initial End Date, unless extended pursuant to the foregoing sentence, in which case the “Framework Agreement End Date” means the Second End Date).

GILTI” means Global Intangible Low-Taxed Income.

 

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GMAC” means Guideline Merged and Acquired Company.

GPC” means Guideline Public Company.

GSM” means Global System for Mobiles.

GSMA” means Global System for Mobile Communications Association.

GST” means Goods and Services Tax.

HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

Incentive Award Plan” means the Syniverse Technologies Corporation 2021 Omnibus Incentive Plan, a copy of which is attached hereto as Annex J.

Initial End Date” means May 16, 2022.

Innisfree” means Innisfree M&A Incorporated, proxy solicitor to the Company.

Investment Company Act” means the Investment Company Act of 1940, as amended.

Investment Percentage” means (i) the Twilio Investment, divided by (ii) $973 million, subject to adjustments for (a) the Twilio Investment, (b) certain leakage that has occurred after November 30, 2020 through immediately prior to the effective time of the Merger and (c) the aggregate exercise price of Syniverse’s outstanding in-the-money options as of immediately prior to the effective time of the Merger, divided by (iii) 0.9.

IoT” means Internet of Things.

IP” means Internet Protocol.

IPO” means the Company’s initial public offering, consummated on March 8, 2021, through the sale of 40,000,000 public units at $10.00 per unit.

IPO Closing Date” means March 8, 2021.

IPX” means Internetwork Packet Exchange.

ISDA” means International Swaps and Derivatives Association.

JOBS Act” means the Jumpstart Our Business Startups Act of 2012.

LTE” means Long Term Evolution.

M-III Partners means M-III Partners, LP, a Delaware limited partnership.

MaaP” means Messaging as a Platform.

Marcum means Marcum LLP, independent registered public accounting firm to the Company.

Merger” means the merger of Merger Sub with and into Syniverse, with Syniverse continuing as the surviving corporation and a wholly owned subsidiary of the Company.

 

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Merger Agreement” means that certain Agreement and Plan of Merger, dated as of August 16, 2021, by and among the Company, Merger Sub and Syniverse, a copy of which is attached hereto as Annex A.

Merger Sub” means Blue Steel Merger Sub Inc., a Delaware corporation and a direct, wholly owned subsidiary of the Company.

Minimum Cash Condition” means that the amount of cash available in the Trust Account (net of redemptions) plus the aggregate proceeds from the PIPE Investment that has been funded to and remains with the Company as of immediately prior to the Closing equals or exceeds $375 million.

MMS” means Multimedia Messaging Service.

MNO” means Mobile Network Operator.

MVNO” means Mobile Virtual Network Operators.

New Credit Agreement” means the new cash flow credit agreement, by and between Buccaneer Holdings, LLC and Syniverse Holdings, Inc., as parent guarantor, to be entered into in connection with the Business Combination.

New Credit Facilities” means (i) a first lien term loan facility in an original aggregate principal amount of $1,000.0 million and (ii) the New Revolving Credit Facility.

New Revolving Credit Facility” means a first lien cash flow-based multi-currency revolving credit facility of up to $165.0 million.

NYSE” means The New York Stock Exchange.

Oak Hill” means Oak Hill Advisors, L.P., a Delaware limited partnership, on behalf of its managed funds and accounts.

Oak Hill Subscription Agreement” means the subscription agreement entered into on August 16, 2021, by and between the Company and Oak Hill, pursuant to which such Oak Hill has agreed to purchase an aggregate of (i) 1,666,667 shares of Class A Stock for $10.00 per share and (ii) 85,911 shares of Preferred Stock for $970.00 per share in the PIPE Investment, and substantially in the form attached hereto as Annex G.

OFAC” means The Office of Foreign Assets Control of the U.S. Department of the Treasury.

OTT” means Over-the-Top Provider.

P2P” means Person-to-Person Messaging.

PIPE Investment” means the private placement of (i) 6,916,667 shares of Class A Stock, at a purchase price of $10.00 per share, and (ii) 201,980 shares of Preferred Stock, at a purchase price of $970.00 per share, with our Sponsor, Brigade and Oak Hill, for gross proceeds to the Company in an aggregate amount of $265 million.

PIPE Investors” means our Sponsor, Brigade and Oak Hill.

PIPE Subscription Agreements” means, collectively, the Sponsor Subscription Agreement, the Brigade Subscription Agreement and the Oak Hill Subscription Agreement.

 

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Preferred Stock” means the shares of Series A Convertible Preferred Stock, par value $0.0001 per share, of the Company, having such rights, designations and preferences as set forth in the Certificate of Designations.

Private Placement Warrants” means the warrants held by our Sponsor that were issued to our Sponsor on the IPO Closing Date, each of which is exercisable for one share of Class A Stock, in accordance with its terms.

public shares” means shares of Class A Stock included in the public units issued in the Company’s IPO, whether they were purchases in the IPO or thereafter in the open market.

public stockholders” means the holders of our public shares.

public units” means one share of Class A Stock and one-third of one public warrant of the Company, whereby each whole public warrant entitles the holder thereof to purchase one share of Class A Stock at an exercise price of $11.50 per share of Class A Stock, sold in the IPO.

public warrants” means the warrants included in the public units issued in the Company’s IPO, each of which is exercisable for one share of Class A Stock, in accordance with its terms.

RCS” means Rich Communication Service.

Registration Rights Agreement” means that certain registration rights agreement to be entered into at the Closing, by and among the Company and the Restricted Stockholders, substantially in the form attached hereto as Annex D.

Related Agreements” means, collectively, the Registration Rights Agreement, the Stockholders Agreement, the Sponsor Agreement, the PIPE Subscription Agreements, the Twilio Subscription Agreement, the Certificate of Designations and the Framework Agreement.

Restricted Stockholders” means our Sponsor, Carlyle, Twilio, Brigade, Oak Hill and certain other individuals from time to time party to the Registration Rights Agreement (and each of their successors, assigns and transferees).

SEC” means the U.S. Securities and Exchange Commission.

Second End Date” means August 16, 2022.

Securities Act” means the Securities Act of 1933, as amended.

SMS” means Short Message Service.

SOX” means the Sarbanes-Oxley Act of 2002.

Special Meeting” means the special meeting in lieu of the 2021 annual meeting of the stockholders of the Company that is the subject of this proxy statement.

Sponsor” means M3-Brigade Sponsor II LP, a Delaware limited partnership.

Sponsor Agreement” means that certain Sponsor Agreement, dated as of August 16, 2021, by and among the Company, Syniverse and the Sponsor Parties, a copy of which is attached hereto as Annex E.

Sponsor Parties” means Sponsor and Mr. Roehm, one of our directors, who holds directly 25,000 shares of Class B Stock.

Sponsor Subscription Agreement” means the subscription agreement entered into on August 16, 2021, by and between the Company and our Sponsor, pursuant to which such Sponsor has agreed to purchase an aggregate

 

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of 1,500,000 shares of Class A Stock for $10.00 per share in the PIPE Investment, a copy of which is attached hereto as Annex H.

Stockholders Agreement” means the stockholders agreement to be entered into at the Closing, by and among the Company, Carlyle, Twilio and our Sponsor, and substantially in the form attached hereto as Annex F.

Surviving Company” means the surviving company of the Merger.

Syniverse” means prior to the Business Combination, Syniverse Corporation, a Delaware corporation, and, unless the context otherwise requires, together with its subsidiaries, and after the Business Combination, the Surviving Company and its subsidiaries.

Syniverse Awards” means a Syniverse Option or a Syniverse RSU Award.

Syniverse Common Stock” means the common stock, par value $0.01 per share, of Syniverse.

Syniverse Option” means an option to purchase shares of Syniverse Common Stock granted under Syniverse’s 2011 equity incentive plan.

Syniverse RSU Award” means an award of Syniverse restricted stock units constituting the right to be issued a share of Syniverse Common Stock upon vesting granted under Syniverse’s 2011 equity incentive plan.

Syniverse Stockholders” means the holders of Syniverse Common Stock.

TAP” means Transferred Account Procedures.

Transfer Agent” means Continental Stock Transfer & Trust Company.

Trust Account” means the trust account of the Company that holds the proceeds from the Company’s IPO.

Trustee” means Continental Stock Transfer & Trust Company.

Twilio” means Twilio Inc., a Delaware corporation.

Twilio Investment” means the private placement of shares of Class A Stock and, if applicable, shares of Class C Stock to Twilio for gross proceeds to the Company of not less than $500 million and not more than $750 million, as more specifically set forth in the Twilio Subscription Agreement.

Twilio Subscription Agreement” means the subscription agreement entered into on August 16, 2021, by and between the Company and Twilio, pursuant to which Twilio has agreed to purchase shares of Class A Stock and, if applicable, shares of Class C Stock in the Twilio Investment, a copy of which is attached hereto as Annex I.

U.S. GAAP” means Accounting Principles Generally Accepted in the United States.

UK Act” means United Kingdom Bribery Act.

Vibes” means Vibes Media LLC.

VIE” means Variable Interest Entity.

VoLTE” means Voice over Long-Term Evolution.

Voting Cap” means 49.9% of the aggregate voting rights for the election of directors of the Company.

Wholesale Agreement” means the wholesale agreement, to be entered into at the Closing by and between Twilio and Syniverse, pursuant to which Syniverse will continue to provide various SMS and MMS services to Twilio.

 

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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR STOCKHOLDERS

The questions and answers below highlight only selected information from this document and only briefly address some commonly asked questions about the proposals to be presented at the Special Meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to our stockholders. We urge stockholders to read carefully this entire proxy statement, including the Annexes and the other documents referred to herein, to fully understand the proposed Business Combination and the voting procedures for the Special Meeting.

 

Q:

Why am I receiving this proxy statement?

 

A:

Our stockholders are being asked to consider and vote upon a proposal to approve the transactions contemplated by the Merger Agreement, a copy of which is attached to this proxy statement as Annex A, including the Business Combination, among other proposals. We have entered into the Merger Agreement providing for, among other things, the Merger. You are being asked to vote on the Business Combination and related matters.

Subject to the terms of the Merger Agreement, at the effective time of the Merger, each share of Syniverse Common Stock that is issued and outstanding immediately prior to the effective time of the Merger will be cancelled and converted into the right to receive a portion of the Aggregate Merger Consideration equal to (i) the Exchange Ratio multiplied by (ii) the number of shares of Syniverse Common Stock held by the applicable holder as of immediately prior to the effective time of the Merger, rounded to the nearest whole share. The Aggregate Merger Consideration to be paid to Syniverse’s stockholders at the Closing is the number of shares of Class A Stock equal to (i) $704,440,000, subject to adjustments for (a) the Twilio Investment, (b) certain leakage that has occurred after November 30, 2020 through immediately prior to the effective time of the Merger and (c) the aggregate exercise price of the outstanding in-the-money Syniverse Options as of immediately prior to the effective time of the Merger, multiplied by (ii) one minus the Investment Percentage, at a value of $10.00 per share. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—The Merger Agreement—Merger Consideration.”

This proxy statement and its Annexes contain important information about the proposed Business Combination and the other matters to be acted upon at the Special Meeting. You should read this proxy statement and its Annexes carefully and in their entirety.

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement and its Annexes.

 

Q:

When and where is the Special Meeting?

 

A:

The Special Meeting will be held virtually on [                 ] at [                 ] [a.m./p.m.] at https://www.cstproxy.com/m3brigadeii/2021, or at such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals.

 

Q:

What are the specific proposals on which I am being asked to vote at the Special Meeting?

 

A:

The Company’s stockholders are being asked to consider and vote upon the following proposals:

 

  1.

Business Combination Proposal—a proposal to approve the transactions contemplated by the Merger Agreement, including the Business Combination (Proposal No. 1);

 

  2.

NYSE Proposal—a proposal to approve, for purposes of complying with Section 312.03 of the NYSE’s Listed Company Manual (i) the issuance of more than 20% of the Company’s issued and outstanding Common Stock in connection with the Business Combination, the PIPE Investment and the Twilio Investment and (ii) the issuance of more than one percent of the issued and outstanding shares of Common Stock to a “Related Party” (as defined in Section 312.03 of the NYSE’s Listed Company Manual) in connection with the Business Combination and the Sponsor Subscription Agreement (Proposal No. 2);

 

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  3.

Charter Proposal—a proposal to adopt Charter Amendment Alternative A and Charter Amendment Alternative B in the forms attached hereto as Annex B-1 and Annex B-2, respectively (Proposal No. 3);

 

  4.

Governance Proposal—a proposal to act upon, on a non-binding advisory basis, certain governance provisions in the Charter Amendments, which are being separately presented in accordance with SEC requirements (Proposal No. 4);

 

  5.

Director Election Proposal—a proposal to elect 12 directors to serve on our Board for a term ending on the date of the next annual stockholder meeting or until their respective successor is duly elected and qualified (Proposal No. 5);

 

  6.

Incentive Award Plan Proposal—a proposal to approve the Incentive Award Plan, a copy of which is attached to this proxy statement as Annex J, including the authorization of the initial share reserve under the Incentive Award Plan (Proposal No. 6); and

 

  7.

Adjournment Proposal—a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Proposal, the Governance Proposal, the Director Election Proposal or the Incentive Award Plan Proposal. This proposal will only be presented at the Special Meeting if there are not sufficient votes to approve the Business Combination Proposal, the NYSE Proposal, the Charter Proposal, the Governance Proposal, the Director Election Proposal or the Incentive Award Plan Proposal (Proposal No. 7).

 

Q:

Why is the Company proposing the Business Combination?

 

A:

MBAC was organized to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities.

On March 8, 2021, MBAC completed its initial public offering of units, with each unit consisting of one share of its Class A Stock and one-third of one warrant, each whole warrant to purchase one share of its Class A Stock at a price of $11.50, raising total gross proceeds of approximately $400,000,000. Since the Company’s IPO, the Company’s activity has been limited to the evaluation of business combination candidates.

Syniverse is a leading global provider of unified, mission-critical platforms enabling seamless interoperability across the mobile ecosystem. Syniverse’s capabilities are expected to become increasingly valuable to its mobile carrier and enterprise customers during the transition to 5G mobile networks, which will accelerate growth in devices, traffic volumes, speed and lower-latency communications. 5G networks and the messages and applications on them require seamless and ubiquitous connectivity and coordination. Syniverse is a leading global provider of services to bridge these technological and operational complexities. Syniverse is also at the center of the large and growing Communications Platform as a Service (CPaaS) sector, with both digital native companies and large global enterprises increasingly using Application to Person (A2P) messaging and omni-channel mobile engagement to successfully engage, inform and transact with their customers, partners, and employees. The current rapid growth in the CPaaS sector is expected to accelerate as 5G networks expand and become a significant driver of revenue growth for Syniverse.

Our Board conducted extensive due diligence on Syniverse’s business, financial condition, management team and future growth prospects in executing upon and achieving its business plan. Our Board considered the results of the due diligence review, including (i) extensive meetings and calls with Syniverse’s management team and representatives regarding operations, cybersecurity, regulatory compliance, key products, customer demographics, financial and audit matters and public company readiness, among other customary due diligence matters, (ii) research on industry and market trends, revenue projections and other industry factors, (iii) review of Syniverse’s material business contracts and certain other legal and

 

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commercial diligence and (iv) financial and accounting diligence. Our Board believes in the continuing expansion of the importance of the mobile communications industry and that Syniverse’s unique and integral role in this industry provides the Company and its investors with the opportunity to realize the investment potential from the Business Combination. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—The Company’s Board of Directors’ Reasons for the Approval of the Business Combination.”

 

Q:

Why is the Company providing stockholders with the opportunity to vote on the Business Combination?

 

A:

Under our current certificate of incorporation, we must provide all holders of public shares with the opportunity to have their public shares redeemed upon the consummation of our initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, we have elected to provide our stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote rather than a tender offer. Therefore, we are seeking to obtain the approval of our stockholders of the Business Combination Proposal in order to allow our public stockholders to effectuate redemptions of their public shares in connection with the Closing. Such approval is also a condition to the Closing under the Merger Agreement.

 

Q:

What will happen in the Business Combination?

 

A:

Pursuant to the Merger Agreement, and upon the terms and subject to the conditions set forth therein, the Company will acquire Syniverse in a series of transactions we collectively refer to as the Business Combination. At the Closing, among other things, Merger Sub will merge with and into Syniverse, with Syniverse continuing as the surviving corporation. As a result of the Merger, at the Closing, the Company will own 100% of the outstanding common stock of the successor company to Syniverse, and each share of common stock of Syniverse will be cancelled and converted into the right to receive a portion of the Aggregate Merger Consideration.

 

Q:

Following the Business Combination, will the Company’s securities continue to trade on a stock exchange?

 

A:

Yes. We intend to apply to continue the listing of the post-combination company’s Class A Stock and public warrants on the NYSE under the symbols “SYNV” and “SYNV.W,” respectively, upon the Closing. Our public units will separate into the component securities upon the Closing and will no longer trade as a separate security.

 

Q:

How has the announcement of the Business Combination affected the trading price of the Company’s Class A Stock?

 

A:

On August 16, 2021, the last full trading date before the public announcement of the Business Combination (which occurred following market close on August 16, 2021), the Company’s public units, Class A Stock and public warrants closed at $10.05, $9.73 and $0.98, respectively. On [                 ], 2021, the trading date immediately prior to the date of this proxy statement, the Company’s public units, Class A Stock and public warrants closed at $[                 ], $[                ] and $[                 ], respectively.

 

Q:

How will the Business Combination impact the shares of the Company outstanding after the Business Combination?

 

A:

As a result of the Business Combination and the consummation of the transactions contemplated thereby, including the PIPE Investment and the Twilio Investment, the amount of outstanding capital stock of the Company will increase from 50,000,000 shares of Common Stock, consisting of Class A Stock and Class B

 

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  Stock, to approximately 191,677,112 shares of capital stock, consisting of Class A Stock (inclusive of (i) all shares of Preferred Stock as converted into Class A Stock and (ii) all Founder Shares as converted into Class A Stock, although 3,000,000 of such Founder Shares are subject to certain contractual vesting requirements as described elsewhere in this proxy statement) and Class C Stock (if applicable), and assuming that no shares of Class A Stock are redeemed. If the actual facts are different than these assumptions (which they are likely to be), the outstanding share capital of the post-combination company will be different. Additional shares of capital stock of the Company may be issuable in the future as a result of the issuance of additional shares that are not currently outstanding, including issuance of shares of Class A Stock upon exercise of the public warrants and Private Placement Warrants after the Business Combination. The issuance and sale of such shares in the public market could adversely impact the market price of our Common Stock, even if our business is doing well. Pursuant to the Incentive Award Plan, a copy of which is attached to this proxy statement as Annex J, following the Closing and subject to the approval of the applicable award agreements by the board of the post-combination company, the Company expects to grant awards under the Incentive Award Plan. The awards (or associated benefits or amounts) that will be made to particular individuals or groups of individuals are not currently determinable.

 

Q:

Will the management of Syniverse change in the Business Combination?

 

A:

We anticipate that all of the executive officers of Syniverse will remain with the post-combination company. In addition, James Attwood, Kevin Beebe, Orisa Cherenfant, Andrew Davies, Tony Holcombe, Greg Kleiner, Dan Mead, Mohsin Meghji, Lauren Nemeth, Matthew Perkal, Raymond Ranelli and [                ], have each been nominated to serve as directors of the post-combination company upon completion of the Business Combination. In addition, Oak Hill is entitled to designate one individual to serve as an observer on the Board. Please see the sections entitled “Proposal No. 5—The Director Election Proposal” and “Management After the Business Combination” for additional information.

 

Q:

What equity stake will current stockholders of the Company, PIPE Investors, Twilio and the Syniverse Stockholders hold in the post-combination company after the Closing?

 

A:

It is anticipated that, upon completion of the Business Combination and assuming no redemption of shares of Class A Stock by our public stockholders: (i) the Company’s public stockholders (other than the PIPE Investors and Twilio) will retain an ownership interest of approximately 20.9% in the post-combination company; (ii) Brigade and Oak Hill (two of the PIPE Investors) will own approximately 7.2% and 4.8%, respectively, of the post-combination company (including Class A Stock and Preferred Stock on an as-converted basis); (iii) Twilio will own approximately 23.6% of the post-combination company; (iv) Carlyle will own approximately 36.7% of the post-combination company; (v) our Sponsor will own approximately 6.0% of the post-combination company (inclusive of the shares of Class A Stock acquired by our Sponsor as part of the PIPE Investment); and (vi) the Syniverse Stockholders (other than Carlyle) will own approximately 0.8% of the post-combination company. Additionally, following the Closing, and subject to the approval of the Incentive Award Plan by the Company’s public stockholders and the approval of the applicable award agreements by the Board of the post-combination company, pursuant to the Incentive Award Plan the Company expects to grant awards under the Incentive Award Plan. The awards (or associated benefits or amounts) that will be made to particular individuals or groups of individuals are not currently determinable.

These levels of ownership are based on several assumptions, which are described in further detail in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by the Company’s existing stockholders in the post-combination company will be different. For more information, please see the sections entitled “Summary of the Proxy Statement—Impact of the Business Combination on the Company’s Public Float,” “Selected Unaudited Pro Forma Condensed Combined Financial Information,” “Unaudited Pro Forma Condensed Combined Financial Information” and “Proposal No. 6—The Incentive Award Plan Proposal.”

 

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Q:

Will the Company obtain new debt financing in connection with the Business Combination?

 

A:

Yes. Concurrently with the execution of the Merger Agreement, Syniverse entered into a commitment letter with certain lenders (the “Debt Commitment Letter”) pursuant to which the lenders have committed, in accordance with the terms and subject to the conditions set forth therein, to provide to a subsidiary of Syniverse debt financing at the Closing (the “Refinancing”), in the form of a term loan with an aggregate amount of up to $1,000 million and a revolving credit facility, which is expected to be undrawn at the Closing, of up to $165 million. The Company will use the proceeds of the Refinancing (to the extent borrowed at the Closing), together with the proceeds from the PIPE Investment and the Twilio Investment and the funds in the Trust Account, to repay approximately $1,968 million of the existing indebtedness of Syniverse, pay certain transaction expenses and fund the post-combination company’s balance sheet. The PIPE Investment and Twilio Investment are subject only to conditions that generally align with the conditions to the Closing set forth in the Merger Agreement. Please see the sections of this proxy statement entitled “Description of Certain Indebtedness of Syniverse and the Refinancing” and “Proposal No. 1—The Business Combination Proposal—Related Agreements” for additional information.

 

Q:

What conditions must be satisfied to complete the Business Combination?

 

A:

There are a number of Closing conditions in the Merger Agreement, including the expiration of the applicable waiting period under the HSR Act and receipt of all other applicable regulatory approvals, the consummation of the Twilio Investment and the Refinancing, the Minimum Cash Condition and the approval by the stockholders of the Company of the Business Combination Proposal, the NYSE Proposal, the Charter Proposal and the Director Election Proposal. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, please see the section entitled “Proposal No. 1—The Business Combination Proposal—The Merger Agreement—Conditions to Closing of the Business Combination.”

It is important for you to consider that in the event that any of these proposals do not receive the requisite vote for approval, we will not consummate the Business Combination. If we do not consummate the Business Combination and fail to complete an initial business combination by March 8, 2023, we will be required to dissolve and liquidate our Trust Account by returning the then remaining funds in such account to the public stockholders.

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement and its Annexes.

 

Q:

Are there any arrangements to help ensure that the Company will have sufficient funds following the consummation of the Business Combination?

 

A:

The Merger Agreement provides that the respective obligations of the Company and Syniverse to consummate the Business Combination are conditioned on, among other things, the Company having at least $5,000,001 of net tangible assets as of the Closing. In addition, the obligation of Syniverse to consummate the Business Combination is conditioned on, among other things, the Minimum Cash Condition.

The PIPE Investors have agreed to purchase 6,916,667 shares of Class A Stock in the aggregate in the PIPE Investment at a price of $10.00 per share and 201,890 shares of Preferred Stock in the aggregate in the PIPE Investment at a price of $970.00 per share (subject to customary terms and conditions, including the Closing) for gross proceeds to the Company of $265 million pursuant to the PIPE Subscription Agreements entered into at the signing of the Merger Agreement. In addition, Twilio has agreed to purchase shares of Class A Stock and, if applicable, shares of Class C Stock, for an aggregate purchase price of up to $750 million, with the size of Twilio’s investment and the number of shares issued to Twilio determined based on the terms of the Twilio Subscription Agreement. The Company will use the proceeds of the PIPE

 

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Investment and the Twilio Investment, together with the funds in the Trust Account and the Refinancing (to the extent borrowed at the Closing), to fund the balance sheet of the post-combination company, refinance Syniverse’s existing indebtedness and pay certain transaction expenses.

 

Q:

Why is the Company proposing the NYSE Proposal?

 

A:

We are proposing the NYSE Proposal in order to comply with Section 312.03 of the NYSE’s Listed Company Manual, which requires stockholder approval of certain transactions that result in (i) the issuance of 20% or more of the outstanding voting power or shares of Common Stock outstanding before the issuance of stock or securities, and (ii) the issuance of more than one percent of the issued and outstanding shares of Common Stock to a “Related Party” (as defined in Section 312.03 of the NYSE’s Listed Company Manual).

In connection with the Business Combination, the PIPE Investment and the Twilio Investment, we expect to issue 20% or more of our outstanding Common Stock to Syniverse Stockholders, Twilio and the PIPE Investors and are accordingly required to obtain stockholder approval of such issuance pursuant to the NYSE listing rules. For more information, please see the section entitled “Proposal No. 2—The NYSE Proposal.”

 

Q:

Why is the Company proposing the Charter Proposal?

 

A:

Each of the Charter Amendments that we are asking our stockholders to adopt in connection with the Business Combination provides for certain amendments to our existing certificate of incorporation. Pursuant to Delaware law and the Merger Agreement, we are required to submit the Charter Proposal to the Company’s stockholders for adoption. For additional information please see the section entitled “Proposal No. 3—The Charter Proposal.”

 

Q:

Why is the Company proposing the Governance Proposal?

 

A:

As required by applicable SEC guidance, the Company is requesting that its stockholders vote upon, on a non-binding advisory basis, a proposal to approve certain governance provisions contained in the Charter Amendments that materially affect stockholder rights. This separate vote is not otherwise required by Delaware law separate and apart from the Charter Proposal, but pursuant to SEC guidance, the Company is required to submit these provisions to its stockholders separately for approval. However, the stockholder vote regarding this proposal is an advisory vote, and is not binding on the Company or its Board (separate and apart from the approval of the Charter Proposal). For additional information, please see the section entitled “Proposal No. 4—The Governance Proposal.”

 

Q:

Why is the Company proposing the Director Election Proposal?

 

A:

Upon consummation of the Business Combination, our Board anticipates increasing its initial size from six directors to 12 directors, with each director serving for a term ending on the date of the next annual stockholder meeting or until their successor is duly elected and qualified. The Company believes it is in the best interests of stockholders to allow stockholders to vote upon the election of newly appointed directors. Please see the section entitled “Proposal No. 5—The Director Election Proposal” for additional information.

 

Q:

Why is the Company proposing the Incentive Award Plan Proposal?

 

A:

The purpose of the Incentive Award Plan Proposal is to further align the interests of the eligible participants with those of stockholders by providing long-term incentive compensation opportunities tied to the performance of the Company. Please see the section entitled “Proposal No. 6—The Incentive Award Plan Proposal” for additional information.

 

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Q:

Why is the Company proposing the Adjournment Proposal?

 

A:

We are proposing the Adjournment Proposal to allow our Board to adjourn the Special Meeting to a later date or dates to permit further solicitation of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Proposal, the Governance Proposal, the Director Election Proposal or the Incentive Award Plan Proposal. Please see the section entitled “Proposal No. 7—The Adjournment Proposal” for additional information.

 

Q:

What happens if I sell my shares of Class A Stock before the Special Meeting?

 

A:

The record date for the Special Meeting is [                ], 2021, which is earlier than the date of the Special Meeting. If you transfer your shares of Class A Stock after the record date, but before the Special Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the Special Meeting. However, you will not be able to seek redemption of your shares of Class A Stock because you will no longer be able to deliver them for cancellation upon consummation of the Business Combination. If you transfer your shares of Class A Stock prior to the record date, you will have no right to vote those shares at the Special Meeting or redeem those shares for a pro rata portion of the proceeds held in our Trust Account.

 

Q:

What constitutes a quorum at the Special Meeting?

 

A:

A majority of the issued and outstanding shares of the Company’s Common Stock entitled to vote as of the record date at the Special Meeting must be present, in person (which would include presence via the virtual meeting platform) or represented by proxy, at the Special Meeting to constitute a quorum and in order to conduct business at the Special Meeting. Abstentions will be counted as present for the purpose of determining a quorum. The Sponsor Parties, which currently own 20% of our issued and outstanding shares of Common Stock, will count towards this quorum. In the absence of a quorum, the chairman of the Special Meeting has the power to adjourn the Special Meeting. As of [                ], 2021, the record date for the Special Meeting, [                 ] shares of our Common Stock would be required to achieve a quorum.

 

Q:

What vote is required to approve the proposals presented at the Special Meeting?

 

A:

The approval of each of the Business Combination Proposal, the NYSE Proposal, the Governance Proposal (which is a non-binding advisory vote), the Incentive Plan Proposal and the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by holders of our outstanding shares of Common Stock represented in person (which would include presence via the virtual meeting platform) or by proxy and entitled to vote at the Special Meeting. Accordingly, if a valid quorum is established, a Company stockholder’s failure to vote by proxy or to vote virtually via the virtual meeting platform at the Special Meeting, as well as an abstention from voting and a broker non-vote, with regard to the Business Combination Proposal, the NYSE Proposal, the Governance Proposal, the Incentive Plan Proposal and the Adjournment Proposal will have no effect on such proposals. The Sponsor Parties have agreed to vote their shares of Common Stock in favor of the Business Combination Proposal and the other proposals described in this proxy statement.

The approval of the Charter Proposal requires the affirmative vote of holders of a majority of our outstanding shares of Common Stock entitled to vote thereon at the Special Meeting. Accordingly, a Company stockholder’s failure to vote by proxy or to vote virtually via the virtual meeting platform at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Charter Proposal will have the same effect as a vote “AGAINST” such Charter Proposal.

Directors are elected by a plurality of all of the votes cast by holders of shares of our Common Stock represented in person (which would include presence via the virtual meeting platform) or by proxy and

 

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entitled to vote thereon at the Special Meeting. This means that the 12 director nominees who receive the most affirmative votes will be elected. Stockholders may not cumulate their votes with respect to the election of directors. Assuming a valid quorum is established, abstentions and broker non-votes will have no effect on the election of directors.

 

Q:

May the Company, its Sponsor or the Company’s directors or officers or their affiliates purchase shares in connection with the Business Combination?

 

A:

In connection with the stockholder vote to approve the proposed Business Combination, our Sponsor, directors or officers or their respective affiliates may privately negotiate transactions to purchase shares from stockholders who would have otherwise elected to have their shares redeemed in conjunction with a proxy solicitation pursuant to the proxy rules for a per share pro rata portion of the Trust Account. None of our directors or officers or their respective affiliates will make any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or during a restricted period under Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such selling stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights, and could include a contractual provision that directs such selling stockholder to vote such shares in a manner directed by the purchaser. In the event that our Sponsor, directors or officers or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that are below or in excess of the per share pro rata portion of the Trust Account.

 

Q:

How many votes do I have at the Special Meeting?

 

A:

Our stockholders are entitled to one vote on each proposal presented at the Special Meeting for each share of Common Stock held of record as of [                 ], 2021, the record date for the Special Meeting. As of the close of business on the record date, there were [                 ] outstanding shares of our Common Stock, including Class A Stock and Class B Stock.

 

Q:

How do I vote?

 

A:

If you were a holder of record of our Common Stock on [                 ], 2021, the record date for the Special Meeting, you may vote with respect to the proposals virtually via the virtual meeting platform at the Special Meeting, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

Voting by Mail. By signing the proxy card and returning it in the enclosed prepaid and addressed envelope, you are authorizing the individuals named on the proxy card to vote your shares at the Special Meeting in the manner you indicate. We encourage you to sign and return the proxy card even if you plan to attend the Special Meeting so that your shares will be voted if you are unable to attend the Special Meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted.

Voting “in Person” at the Meeting. If you attend the Special Meeting virtually via the virtual meeting platform, you may vote via the virtual meeting platform. If your shares are registered directly in your name, you are considered the stockholder of record and you have the right to vote in person at the Special Meeting. You can access the Special Meeting via the virtual meeting platform by visiting the website https://www.cstproxy.com/m3brigadeii/2021. You will need your control number for access. If you do not have a control number, please contact the Transfer Agent. Instructions on how to virtually attend and participate at the Special Meeting are available at https://www.cstproxy.com/m3brigadeii/2021.

 

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If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the Special Meeting and vote virtually via the virtual meeting platform, you will need to bring to the Special Meeting a legal proxy from your broker, bank or nominee authorizing you to vote these shares. For additional information, please see the section entitled “Special Meeting of Company Stockholders.”

 

Q:

What will happen if I abstain from voting or fail to vote at the Special Meeting?

 

A:

At the Special Meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, a failure to vote or an abstention will have no effect on the Business Combination Proposal, the NYSE Proposal, the Governance Proposal, the Director Election Proposal, the Incentive Award Plan Proposal and the Adjournment Proposal, and a failure to vote or abstention will have the same effect as a vote “AGAINST” the Charter Proposal.

 

Q:

What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

A:

Signed and dated proxies received by us without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders. The proxyholders may use their discretion to vote on any other matters which properly come before the Special Meeting.

 

Q:

If I am not going to virtually attend the Special Meeting, should I return my proxy card instead?

 

A:

Yes. Whether you plan to virtually attend the Special Meeting or not, please read the enclosed proxy statement carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A:

No. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-routine matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe the proposals presented to the stockholders at this Special Meeting will be considered non-routine and, therefore, your broker, bank, or nominee cannot vote your shares without your instruction on any of the proposals presented at the Special Meeting. If you do not provide instructions with your proxy, your broker, bank, or other nominee may deliver a proxy card expressly indicating that it is NOT voting your shares; this indication that a broker, bank, or nominee is not voting your shares is referred to as a “broker non-vote.” Broker non-votes will not be counted for the purposes of determining the existence of a quorum or for purposes of determining the number of votes cast at the Special Meeting. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

 

Q:

How will a broker non-vote impact the results of each proposal?

 

A:

Broker non-votes will count as a vote “AGAINST” the Charter Proposal but will not have any effect on the outcome of any other proposals.

 

Q:

May I change my vote after I have mailed my signed proxy card?

 

A:

Yes. You may change your vote by sending a later-dated, signed proxy card to our Secretary at the address listed below so that it is received by our Secretary prior to the Special Meeting or attend the Special Meeting

 

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  virtually via the virtual meeting platform and vote. You also may revoke your proxy by sending a notice of revocation to our Secretary, which must be received by our Secretary prior to the Special Meeting.

M3-Brigade Acquisition II Corp.

1700 Broadway

19th Floor

New York, NY 10019

(212) 202-2200 Attention: Charles Garner

Email: proxyinfo@m3-partners.com

 

Q:

What should I do if I receive more than one set of voting materials?

 

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

 

Q:

How will the Company’s Sponsor, directors and officers vote?

 

A:

Prior to our IPO, we entered into agreements with our Sponsor and each of our directors and officers, pursuant to which each agreed to vote any shares of Common Stock owned by them in favor of the Business Combination Proposal. In addition, the Sponsor Parties have agreed, pursuant to the terms of the Sponsor Agreement, to vote their Founder Shares and any shares of Common Stock acquired following the date of the Merger Agreement in favor of the Business Combination and the other proposals described in this proxy statement and against any inconsistent proposals. Currently, the Sponsor Parties own 20% of our issued and outstanding shares of Common Stock and will be able to vote all such shares at the Special Meeting.

 

Q:

What interests do the Sponsor and the Company’s current officers and directors have in the Business Combination?

 

A:

Our Sponsor and certain members of our Board and officers have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interests. You should take these interests into account in deciding whether to approve the Business Combination. These interests include:

 

   

the fact that our Sponsor paid an aggregate of $25,000 for 9,975,000 Founder Shares, which will have a significantly higher value at the time of the Business Combination, and which, if unrestricted and freely tradable, would be valued at approximately $997,500,000 assuming a per share value of $10.00, but, given the restrictions on such shares (including the lock-up and vesting terms described elsewhere in this proxy statement), we believe such shares have less value;

 

   

the fact that 70% of our Sponsor’s Founder Shares will vest at the Closing and the remaining 30% of such Founder Shares will vest on the first trading day that the closing price of the Class A Stock equals or exceeds $12.50 per share for any 20 trading days within any consecutive 30-trading-day period following the Closing, subject to earlier vesting in certain circumstances as described therein;

 

   

the fact that our Sponsor has agreed not to redeem any of the Founder Shares in connection with a stockholder vote to approve the Business Combination;

 

   

the fact that our Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to its Founder Shares if we fail to complete an initial business combination by March 8, 2023;

 

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the fact that our Sponsor paid an aggregate of approximately $11,250,000 for its 7,500,000 Private Placement Warrants to purchase shares of Class A Stock and that such Private Placement Warrants will expire worthless if a business combination is not consummated by March 8, 2023;

 

   

the fact that our Sponsor has entered into the Sponsor Subscription Agreement pursuant to which, at the Closing, Sponsor will purchase 1,500,000 shares of Class A Stock at a price of $10.00 per share in the PIPE Investment;

 

   

the continued right of our Sponsor to hold our Class A Stock and the shares of Class A Stock to be issued to our Sponsor upon exercise of its Private Placement Warrants following the Business Combination, subject to certain lock-up periods;

 

   

if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that all of our directors, other than Mr. Roehm, hold membership interests in our Sponsor, and Mr. Roehm holds 25,000 Founder Shares directly;

 

   

the fact that our Sponsor, officers and directors will lose their entire investment in us if an initial business combination is not consummated by March 8, 2023;

 

   

the fact that our Sponsor, officers and directors, and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on the Company’s behalf, such as identifying and investigating possible business targets and business combinations and with respect to the PIPE Investment. As of the date of this proxy statement, such reimbursement is estimated to be approximately $[                ] in the aggregate. However, if the Company fails to consummate a business combination within the completion window, they will not have any claim against the Trust Account for reimbursement. Accordingly, the Company may not be able to reimburse these expenses if the Business Combination or another business combination is not completed within the completion window;

 

   

the fact that, as described in the Charter Proposal and reflected in Annexes B-1 and B-2, each of our proposed Charter Amendments excludes the equity holders of our Sponsor and their respective successors, certain affiliates and each of their respective transferees as “interested parties” from the list of prohibited business combinations;

 

   

the fact that, as described in the Charter Proposal and reflected in Annexes B-1 and B-2, each of our proposed Charter Amendments provides that certain transactions are not “corporate opportunities” and that our Sponsor, its successors and affiliates (other than the post-combination company and its subsidiaries) and certain other persons are not subject to the doctrine of corporate opportunity;

 

   

the fact that, at the Closing, we will enter into the Stockholders Agreement, which entitles the Sponsor to appoint two directors to the Board following the Closing, subject to certain minimum ownership requirements and, as such, in the future such directors will receive any cash fees, stock options or stock awards that the post-combination company’s Board determines to pay to its nonexecutive directors;

 

   

the fact that, at the Closing, we will enter into the Registration Rights Agreement with the Restricted Stockholders, which provides for registration rights to Restricted Stockholders and their permitted transferees;

 

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the fact that we were organized by executives from each of M-III Partners and Brigade, which is a participant in the PIPE Investment;

 

   

the fact that one of our directors, Mr. Vincent, is currently a Partner, Chief Operating Officer and Chief Legal Officer of Brigade;

 

   

the fact that certain employees of Brigade were seconded to us to, among other things, provide (i) introductions to key management of companies and investors with which Brigade has relationships and other potential sources of business combination targets, (ii) assistance with diligence of potential business combination targets and the negotiation of a business combination transaction, and (iii) support for our efforts to obtain replacement capital for tendering stockholders in the de-SPAC process, and that such employees of Brigade played an important role in conducting due diligence with respect to Syniverse, securing the funds from the PIPE Investors and facilitating the entry into the Merger Agreement;

 

   

the fact that Brigade is a participant in the PIPE Investment and will, at the Closing, purchase shares of both Class A Stock and Preferred Stock, which ranks senior to our capital stock, including the Class A Stock, and will provide Brigade with certain benefits not available to our public stockholders;

 

   

the fact that Brigade is a significant lender to Syniverse and will receive proceeds in the transaction from the refinancing of Syniverse’s outstanding indebtedness upon consummation of the Business Combination; and

 

   

the fact that Brigade will be entitled to certain rights pursuant to the Brigade Subscription Agreement and the Registration Rights Agreement that are not available to our public stockholders, including certain information rights with respect to the post-combination company and preemptive and registration rights.

These interests may influence our directors in making their recommendation that you vote in favor of the approval of the Business Combination.

 

Q:

Did the Company’s Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

 

A:

No. The Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. The Company’s officers and directors have substantial experience in evaluating the operating and financial merits of companies in Syniverse’s industry and concluded that their experience and backgrounds, together with the experience and expertise of the Company’s advisors and the Company’s due diligence investigation of Syniverse, enabled them to make the necessary analyses and determinations regarding the Business Combination.

 

Q:

What happens if I vote against the Business Combination Proposal?

 

A:

If you vote against the Business Combination Proposal but the Business Combination Proposal still receives the affirmative vote of a majority of the votes cast by holders of our outstanding shares of Common Stock represented in person (which would include presence via the virtual meeting platform) or by proxy and entitled to vote at the Special Meeting, then the Business Combination Proposal will be approved and, assuming the approval of the NYSE Proposal, the Charter Proposal and the Director Election Proposal and the satisfaction or waiver of the other conditions to Closing, the Business Combination will be consummated in accordance with the terms of the Merger Agreement.

If you vote against the Business Combination Proposal and the Business Combination Proposal does not receive the affirmative vote of a majority of the votes cast by holders of our outstanding shares of Common Stock represented in person (which would include presence via the virtual meeting platform) or by proxy and entitled to vote at the Special Meeting, then the Business Combination Proposal will fail and we will not

 

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consummate the Business Combination. If we do not consummate the Business Combination, we may continue to try to complete a business combination with a different target business until March 8, 2023. If we fail to complete an initial business combination by March 8, 2023, then we will be required to dissolve and liquidate the Trust Account by returning the then-remaining funds in such account to our public stockholders.

 

Q:

If am a holder of Company public shares, can I exercise redemption rights with respect to my public shares?

 

A:

Yes. If you are a holder of public shares, you may redeem your public shares for cash at the applicable redemption price per share equal to the quotient obtained by dividing (i) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest not previously released to the Company to pay its franchise and income taxes, by (ii) the total number of then-outstanding shares of Class A Stock; provided that the Company will not redeem any shares of Class A Stock issued in the IPO to the extent that such redemption would result in the Company’s failure to have net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of at least $5,000,001. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of Class A Stock included in the public units sold in our IPO. The Sponsor Parties have agreed to waive any redemption rights they may have with respect to their shares of Common Stock in connection with the consummation of the Business Combination.

For illustrative purposes, based on the balance of our Trust Account of $[                ] as of [                ], 2021, the record date for the Special Meeting, the estimated per share redemption price would have been approximately $[                ]. Additionally, shares properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the Trust Account (including interest not previously released to the Company to pay its franchise and income taxes) in connection with the liquidation of the Trust Account, unless we complete an alternative business combination prior to March 8, 2023.

 

Q:

If I am a Company warrant holder, can I exercise redemption rights with respect to my public warrants?

 

A:

No. The holders of our public warrants have no redemption rights with respect to our public warrants.

 

Q:

If I am a Company unit holder, can I exercise redemption rights with respect to my public units?

 

A:

No. The holders of our public units must elect to separate their units into the underlying Class A Stock and public warrants prior to exercising their redemption rights with respect to their Class A Stock.

 

Q:

Can the Sponsor redeem its Founder Shares or other Common Stock in connection with consummation of the Business Combination?

 

A:

No. The Sponsor Parties have agreed to waive any redemption rights they may have with respect to their shares of Common Stock in connection with the consummation of the Business Combination.

 

Q:

Is there a limit on the number of shares I may redeem?

 

A:

Yes. A public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), is restricted from exercising redemption rights with respect to more than an aggregate of 15% of the shares sold in our IPO.

 

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  Accordingly, all shares in excess of 15% owned by a holder or “group” of holders will not be redeemed for cash. On the other hand, a public stockholder who holds less than 15% of the public shares of Class A Stock and is not a member of a “group” may redeem all of the public shares held by such stockholder for cash. In no event is your ability to vote all of your shares (including those shares held by you or by a “group” in excess of 15% of the shares sold in our IPO) for or against our Business Combination restricted.

We have no specified maximum redemption threshold under our current certificate of incorporation, other than the aforementioned 15% threshold. In addition, in no event will we redeem shares of our Class A Stock in an amount that would result in the Company’s failure to have net tangible assets equaling or exceeding $5,000,001.

Each redemption of shares of Class A Stock by our public stockholders will reduce the amount in our Trust Account, which held cash and investment securities with a fair value of $[                ] as of [                ], 2021, the record date for the Special Meeting. The Merger Agreement provides that Syniverse’s obligation to consummate the Business Combination is conditioned on the Minimum Cash Condition. The conditions to Closing in the Merger Agreement are for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of Class A Stock by our public stockholders, these conditions are not met (or waived), then Syniverse may elect not to consummate the Business Combination. Based on the amount of $[                ] in our Trust Account as of [                ], 2021, the record date for the Special Meeting, and taking into account the anticipated gross proceeds of $265 million from the PIPE Investment and up to $750 million from the Twilio Investment (which will be reduced only to the extent the total transaction proceeds in our Trust Account (net of redemptions) and the PIPE Investment exceed $375 million, with such reduction equal to the amount of such excess, subject to a minimum investment by Twilio of $500 million), approximately [                ] shares of Class A Stock may be redeemed and still enable us to have sufficient cash to satisfy the cash Closing conditions in the Merger Agreement. We refer to this as the maximum redemptions scenario.

 

Q:

How will the absence of a maximum redemption threshold affect the Business Combination?

 

A:

The Merger Agreement provides that Syniverse’s obligation to consummate the Business Combination is conditioned on the Minimum Cash Condition. As a result, we may be able to complete our Business Combination even though a substantial portion of our public stockholders have redeemed their shares. As of the date of this proxy statement, no agreements with respect to the private purchase of public shares by the Company or the persons described above have been entered into with any such investor or holder. We will file a Current Report on Form 8-K with the SEC to disclose private arrangements entered into or significant private purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or other proposals (as described in this proxy statement) at the Special Meeting.

 

Q:

Will how I vote affect my ability to exercise redemption rights?

 

A:

No. You may exercise your redemption rights whether you vote your shares of Common Stock for or against, or whether you abstain from voting on the Business Combination Proposal or any other proposal described by this proxy statement. As a result, the Merger Agreement can be approved by stockholders who will redeem their shares and no longer remain stockholders, leaving stockholders who choose not to redeem their shares holding shares in a company with a potentially less-liquid trading market, fewer stockholders, potentially less cash and the potential inability to meet the listing standards of the NYSE.

 

Q:

How do I exercise my redemption rights?

 

A:

In order to exercise your redemption rights, you must (i) if you hold public units, separate the underlying public shares and public warrants, and (ii) prior to [                 ] on [                 ] (two business days before the Special Meeting), tender your shares physically or electronically and submit a request in writing that we

 

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  redeem your public shares for cash to Continental Stock Transfer & Trust Company, our Transfer Agent, at the following address:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004

Attention: Mark Tumulty

Email: mtumulty@continentalstock.com

Please check the box on the enclosed proxy card marked “Stockholder Certification” if you are not acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other stockholder with respect to shares of Common Stock. Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of him or any other person with whom he is acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) will be restricted from exercising redemption rights with respect to more than an aggregate of 15% of the shares of Class A Stock included in the public units sold in our IPO. Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public stockholder or group will not be redeemed for cash.

Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect delivery. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, we do not have any control over this process and it may take longer than two weeks. Stockholders who hold their shares in “street name” will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

Stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name” are required to either tender their certificates to our Transfer Agent prior to the date set forth in these proxy materials, or up to two business days prior to the vote on the proposal to approve the Business Combination at the Special Meeting, or to deliver their shares to the Transfer Agent electronically using The Depository Trust Company’s (“DTC”) Deposit/Withdrawal At Custodian (“DWAC”) system, at such stockholder’s option. The requirement for physical or electronic delivery prior to the Special Meeting ensures that a redeeming stockholder’s election to redeem is irrevocable once the Business Combination is approved.

There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge a tendering broker a fee and it is in the broker’s discretion whether or not to pass this cost on to the redeeming stockholder. However, this fee would be incurred regardless of whether or not we require stockholders seeking to exercise redemption rights to tender their shares, as the need to deliver shares is a requirement to exercising redemption rights, regardless of the timing of when such delivery must be effectuated.

 

Q:

What are the U.S. federal income tax consequences of exercising my redemption rights?

 

A:

The U.S. federal income tax consequences of the redemption depend on your particular facts and circumstances. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—Material U.S. Federal Income Tax Considerations for Stockholders Exercising Redemption Rights.” We urge you to consult your tax advisors regarding the tax consequences of exercising your redemption rights.

 

Q:

Do I have appraisal rights if I object to the proposed Business Combination?

 

A:

No. Appraisal rights are not available to holders of our Common Stock in connection with the Business Combination.

 

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Q:

What happens to the funds held in the Trust Account upon consummation of the Business Combination?

 

A:

The funds held in the Trust Account (together with the proceeds from the PIPE Investment, the Twilio Investment and the Refinancing) will be used to: (i) pay Company stockholders who properly exercise their redemption rights; (ii) pay $14,000,000 in deferred underwriting commissions to the underwriters of our IPO, in connection with the Business Combination; (iii) pay certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees and other professional fees) that were incurred by the Company and other parties to the Merger Agreement in connection with the transactions contemplated by the Merger Agreement, including the Business Combination, and pursuant to the terms of the Merger Agreement; and (iv) repay approximately $1,968 million of Syniverse’s existing indebtedness.

 

Q:

What happens if the Business Combination is not consummated?

 

A:

There are certain circumstances under which the Merger Agreement may be terminated. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—The Merger Agreement” for information regarding the parties’ specific termination rights.

If we do not consummate the Business Combination, we may continue to try to complete a business combination with a different target business until March 8, 2023. Unless we amend our current certificate of incorporation (which requires the affirmative vote of 65% of all then-outstanding shares of Class A Stock) and amend certain other agreements into which we have entered to extend the life of the Company, if we fail to complete an initial business combination by March 8, 2023, then we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem our public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest not previously released to the Company to pay its franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then-outstanding shares of Class A Stock, which redemption will completely extinguish our public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject, in the cases of clauses (ii) and (iii), to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per unit in the IPO. Please see the section entitled “Risk Factors—Risks Related to the Company and the Business Combination.”

Holders of our Founder Shares have waived any right to any liquidation distribution with respect to such shares. In addition, if we fail to complete a business combination by March 8, 2023, there will be no redemption rights or liquidating distributions with respect to our outstanding warrants, which will expire worthless.

 

Q:

When is the Business Combination expected to be completed?

 

A:

The Closing is expected to take place on the third business day following the satisfaction or waiver of the conditions described below in the subsection entitled “Proposal No. 1—The Business Combination Proposal—The Merger Agreement—Conditions to Closing of the Business Combination.” The Closing is expected to occur in the fourth quarter of 2021. The Merger Agreement may be terminated by the Company or Syniverse if the Closing has not occurred by May 16, 2022, which date will be automatically extended to August 16, 2022 if all conditions other than the receipt of regulatory approvals have been satisfied or waived.

 

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Q:

What do I need to do now?

 

A:

You are urged to read carefully and consider the information contained in this proxy statement, including the Annexes, and to consider how the Business Combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

 

Q:

Who will solicit and pay the cost of soliciting proxies for the Special Meeting?

 

A:

The Company is soliciting proxies on behalf of its Board. The Company will pay the cost of soliciting proxies for the Special Meeting. The Company has engaged Innisfree to assist in the solicitation of proxies for the Special Meeting. The Company has agreed to pay Innisfree a fee of up to $40,000, plus disbursements, and will reimburse Innisfree for certain fees and expenses and indemnify Innisfree and its subsidiaries and their respective directors, officers, employees and agents against certain claims, liabilities, losses, damages and expenses. The Company will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of the Company’s Common Stock for their expenses in forwarding soliciting materials to beneficial owners of the Company’s Common Stock and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

Q:

Who can help answer my questions?

 

A:

If you have questions about the proposals or if you need additional copies of this proxy statement or the enclosed proxy card you should contact:

M3-Brigade Acquisition II Corp.

1700 Broadway

19th Floor

New York, NY 10019

(212) 202-2200

Attention: Charles Garner

Email: proxyinfo@m3-partners.com

You may also contact our proxy solicitor at:

Innisfree M&A Incorporated

501 Madison Avenue

New York, NY 10022

Stockholders may call toll free: (877) 800-5182

Banks and Brokers may call collect: (212) 750-5833

To obtain timely delivery, our stockholders must request the materials no later than five business days prior to the Special Meeting. You may also obtain additional information about us from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”

 

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If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to our Transfer Agent prior to the Special Meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your stock, please contact our Transfer Agent:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004

Attention: Mark Tumulty

Email: mtumulty@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT

This summary highlights selected information contained in this proxy statement and does not contain all of the information that may be important to you. You should read carefully this entire proxy statement, including the Annexes and accompanying financial statements of the Company and Syniverse, to fully understand the proposed Business Combination (as described below) before voting on the proposals to be considered at the Special Meeting (as described below). Please see the section entitled “Where You Can Find More Information” beginning on page [    ] of this proxy statement.

Parties to the Business Combination

The Company

The Company is a blank check company incorporated on December 16, 2020 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

On March 8, 2021, the Company closed its IPO of 40,000,000 units, with each unit consisting of one share of its Class A Stock and one-third of one warrant, each whole warrant to purchase one share of its Class A Stock at a purchase price of $11.50 per share, subject to adjustment as provided in the Company’s final prospectus filed with the SEC on March 5, 2021 (File No. 333-253132). The units from the Company’s IPO were sold at an offering price of $10.00 per unit, generating total gross proceeds of $400,000,000. The underwriters in the IPO had a 45-day option from the effectiveness date of the IPO (i.e., March 3, 2021) to purchase up to an additional 6,000,000 units to cover over-allotments, if any. On April 17, 2021, the underwriters’ over-allotment option expired unexercised.

Simultaneously with the consummation of the IPO, the Company consummated the private sale of 7,500,000 Private Placement Warrants at $1.50 per warrant for an aggregate purchase price of $11,250,000. A total of $400,000,000, was deposited into the Trust Account. The IPO was conducted pursuant to a registration statement on Form S-1 that became effective on March 3, 2021. As of [                ], 2021, the record date for the special meeting, there was approximately $[                ] held in the Trust Account.

The Company’s securities are traded on the NYSE under the ticker symbols “MBAC,” “MBAC.U” and “MBAC.WS.” The Company intends to apply to continue the listing of its Class A Stock and public warrants on the NYSE under the symbols “SYNV” and “SYNV.WS,” respectively, upon the Closing. As a result, our public units will separate into the component securities upon the Closing and will no longer trade as a separate security.

The mailing address of the Company’s principal executive office is 1700 Broadway, 19th Floor, New York, NY 10019. Its telephone number is (212) 202-2200. After the consummation of the Business Combination, its principal executive office will be that of Syniverse.

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, it is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of SOX, reduced disclosure obligations regarding executive compensation in their periodic reports and proxy statement, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

If some investors find the Company’s securities less attractive as a result, there may be a less active trading market for the Company’s securities and the prices of its securities may be more volatile. The Company will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary of the

 

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completion of the IPO, (b) in which the Company has total annual gross revenue of at least $1.07 billion, or (c) in which the Company is deemed to be a large accelerated filer, which means the market value of the Company’s common stock that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (ii) the date on which the Company has issued more than $1 billion in non-convertible debt during the prior three-year period. Therefore, we expect to remain an emerging growth company following the Closing.

Merger Sub

Merger Sub, a Delaware corporation, is a wholly owned subsidiary of the Company, formed by the Company on August 11, 2021, to consummate the Business Combination. In the Business Combination, Merger Sub will merge with and into Syniverse, with Syniverse continuing as the surviving corporation in the Merger.

The mailing address of Merger Sub’s principal executive office is c/o M3-Brigade Acquisition II Corp., 1700 Broadway, 19th Floor, New York, NY 10019. Its telephone number is (212) 202-2200.

Syniverse

Syniverse is a leading global provider of unified, mission-critical platforms enabling seamless interoperability across the mobile ecosystem. Syniverse makes global mobility work by enabling consumers and enterprises to connect, engage, and transact seamlessly and securely. Syniverse offers a premier communications platform that serves both enterprises and carriers globally and at scale. Syniverse’s proprietary software, protocols, orchestration capabilities, and network assets, have allowed Syniverse to address the changing needs of the mobile ecosystem for over 30 years. Syniverse continues to innovate by harnessing the potential of emerging technologies such as 5G, IoT, RCS and CPaaS for its customers.

For more information about Syniverse, please see the sections entitled “Syniverse’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Information About Syniverse” and “Management After the Business Combination.”

The Business Combination Proposal

Merger Agreement

As discussed in this proxy statement, the Company is asking its stockholders to approve the transactions contemplated by the Merger Agreement, including the Business Combination. A copy of the Merger Agreement is attached to this proxy statement as Annex A. The Merger Agreement provides for, among other things, the Merger, with Syniverse surviving the Merger as a wholly owned subsidiary of the Company and the Company changing its name to Syniverse Technologies Corporation, in each case, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement. After consideration of the factors identified and discussed in the section entitled “Proposal No. 1—The Business Combination Proposal—The Company’s Board of Directors’ Reasons for the Approval of the Business Combination” our Board concluded that the Business Combination met all of the requirements disclosed in the prospectus for the Company’s IPO, including that the business of Syniverse and its subsidiaries had a fair market value equal to at least 80% of the net assets held in trust (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount held in trust). For more information about the transactions contemplated by the Merger Agreement, see “Proposal No. 1—The Business Combination Proposal—Merger Agreement.”

Aggregate Merger Consideration

Subject to the terms of the Merger Agreement, at the effective time of the Merger, each share of Syniverse Common Stock that is issued and outstanding immediately prior to the effective time of the Merger (other than (i) any shares of Syniverse Common Stock held in the treasury of Syniverse, which treasury shares shall be cancelled as part

 

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of the Merger and (ii) any Dissenting Shares) will be cancelled and converted into the right to receive a portion of the Aggregate Merger Consideration (defined below) equal to (i) the Exchange Ratio multiplied by (ii) the number of shares of Syniverse Common Stock held by the applicable holder as of immediately prior to the effective time of the Merger, rounded to the nearest whole share. Aggregate Merger Consideration means the number of shares of Class A Stock equal to (i) $704,440,000, subject to adjustments for (a) the Twilio Investment, (b) certain leakage that has occurred after November 30, 2020 through immediately prior to the effective time of the Merger and (c) the aggregate exercise price of the outstanding in-the-money Syniverse Options as of immediately prior to the effective time of the Merger, multiplied by (ii) one minus the Investment Percentage, at a value of $10.00 per share. Exchange Ratio means the Aggregate Merger Consideration divided by the aggregate fully diluted number of shares of Syniverse Common Stock. Please refer to the section entitled “Proposal No. 1—The Business Combination Proposal—The Merger Agreement—Consideration” for additional information.

The components of the Aggregate Merger Consideration, and consequently the number of shares of Class A Stock issued to the Syniverse Stockholders, are impacted by, among other things, the level of redemptions of shares of Class A Stock by our public stockholders. Please refer to the sections entitled “Summary—Impact of the Business Combination on the Company’s Public Float,” “Summary Unaudited Condensed Combined Financial Information,” and “Unaudited Condensed Combined Financial Information” for additional information.

Conditions

The consummation of the transactions contemplated by the Merger Agreement are subject to the satisfaction or waiver of certain customary Closing conditions, including, among others, (i) the approval by the Company’s stockholders of the Business Combination and related agreements and the transactions contemplated thereby, (ii) the consummation of the Twilio Investment prior to the Merger, (iii) the consummation of the Refinancing as contemplated by the Merger Agreement prior to or substantially concurrent with the Merger, (iv) the receipt of certain regulatory approvals (including, but not limited to, expiration or early termination of the waiting period or periods under the HSR Act), (v) no governmental order enjoining or prohibiting the consummation of the Merger or any law making the consummation of the Merger illegal or otherwise prohibited, (vi) the shares of Common Stock contemplated to be listed pursuant to the Merger Agreement having been listed on the NYSE and being eligible for continued listing on the NYSE immediately following the Closing and (vii) the Company having at least $5,000,001 of net tangible assets after giving effect to the payment of the amount required to satisfy the Company’s obligations to its stockholders (if any) that exercise their rights to redeem their shares in accordance with the Company’s current certificate of incorporation.

Other conditions to Syniverse’s obligations to consummate the Merger include, among others, that as of the Closing, (i) the representations and warranties of the Company and Merger Sub are true and correct subject to the materiality limitations set forth in the Merger Agreement, (ii) the Company and Merger Sub shall in all material respects have performed and complied with all covenants required by the Merger Agreement to be performed or complied with by the Company or Merger Sub at or prior to the Closing, (iii) no Company Material Adverse Effect, as defined in the Merger Agreement, shall have occurred and be continuing since the date of the Merger Agreement, (iv) the Minimum Cash Condition is satisfied and (v) all of the directors of the Company (other than those persons identified as the initial directors of the Company after the effective time of the Merger, in accordance with the Merger Agreement shall have resigned or otherwise been removed effective as of or prior to the effective time of the Merger.

The Minimum Cash Condition is for the sole benefit of Syniverse and provides that the obligation of Syniverse to consummate the transactions contemplated by the Merger Agreement is conditioned on, among other things, that as of the Closing, the amount of cash available in the trust account, after deducting the amount required to satisfy the Company’s obligations to its stockholders (if any) that exercise their rights to redeem their shares in accordance with the Company’s current certificate of incorporation, plus the amount actually received by the Company as part of the PIPE Investment, is equal to or exceeds $375 million.

Other conditions to the Company’s obligations to consummate the Merger include, among others, that as of the Closing, (i) the representations and warranties of Syniverse are true and correct subject to the materiality

 

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limitations set forth in the Merger Agreement, (ii) Syniverse shall in all material respects have performed and complied with all covenants required by the Merger Agreement to be performed or complied with by Syniverse at or prior to the Closing and (iii) no Syniverse Material Adverse Effect, as defined in the Merger Agreement, shall have occurred and be continuing since the date of the Merger Agreement.

For further details, see “Proposal No. 1—The Business Combination Proposal—Merger Agreement.”

Organizational Structure

The following diagram illustrates a simplified structure chart of the anticipated ownership structure of the post-combination company immediately following the Closing:

 

 

LOGO

Related Agreements

This section describes the material provisions of certain additional agreements to be entered into pursuant to the Merger Agreement, which we refer to as the “Related Agreements,” but does not purport to describe all of the terms thereof. The following summary is qualified in its entirety by reference to the complete text of each of the Related

 

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Agreements. Forms of the Stockholders Agreement, Registration Rights Agreement and Certificate of Designations are attached hereto as Annexes F, D and C, respectively. Copies of the Sponsor Agreement, Sponsor Subscription Agreement, Twilio Subscription Agreement and Framework Agreement are attached hereto as Annexes E, H, I and K, respectively, and the Brigade Subscription Agreement and the OHA Subscription Agreement are substantially in the form attached hereto as Annex G. Stockholders and other interested parties are urged to read such Related Agreements in their entirety prior to voting on the proposals presented at the Special Meeting.

Stockholders Agreement

Concurrently with the Closing, the Company, Carlyle, Twilio and the Sponsor will enter into the Stockholders Agreement, the form of which is attached hereto as Annex F. The Stockholders Agreement will provide for, among other things, certain designation rights and approval rights, subject, in certain cases, to the continued ownership by Carlyle, Twilio and the Sponsor of a minimum amount of the Company’s equity securities and the other conditions set forth therein.

Among other things, pursuant to the Stockholders Agreement, effective as of the Closing, it is anticipated that the Board will be comprised of 12 directors as follows: (i) two directors nominated by the Sponsor, (ii) five directors nominated by Carlyle, (iii) four directors nominated by Twilio and (iv) the Company’s CEO. Subject to owning a minimum of 5% of the voting equity securities in the Company (on a fully diluted basis), (a) Carlyle will have an ongoing right to nominate individuals to serve on the Board equal to the lesser of (x) five and (y) the product of five and a value representing Carlyle’s ownership of voting equity securities relative to its holding of such securities as of the Closing and (b) Twilio will have an ongoing right to nominate individuals to serve on the Board equal to the lesser of (x) four and (y) the product of four and a value representing Twilio’s ownership of voting equity securities relative to its holding of such securities as of the Closing. Twilio, at its option from time to time, may elect to replace up to two of its director nominees with non-voting Board observers. For so long as the Sponsor and its permitted affiliate transferees hold equity securities representing at least 50% or more of the shares held by them at the Closing, the Sponsor and such permitted affiliate transferees will be entitled to nominate two directors to the Board, which number will fall to one director when the Sponsor and its permitted affiliate transferees hold between 33% and 50% of the shares it held at the Closing and no director nomination rights below 33%.

Further, pursuant to the Stockholders Agreement, following the Closing, for so long as Carlyle (together with its permitted affiliate transferees) holds either (i) more than 25% of the total voting equity securities in the Company (on a fully diluted basis) or (ii) at least 75% of the equity securities Carlyle held as of immediately following the Closing, the Company will not take, and will not permit its subsidiaries to take, certain actions without the prior written consent of Carlyle. Similarly, pursuant to the Stockholders Agreement, following the Closing, for so long as Twilio (together with its permitted affiliate transferees) holds either (i) more than 25% of the total voting equity securities in the Company (on a fully diluted basis) or (ii) at least 75% of the equity securities Twilio held as of immediately following the Closing, the Company will not take, and will not permit its subsidiaries to take, certain actions without the prior written consent of Twilio.

The Stockholders Agreement also provides for approval rights, information rights, transfer restrictions, right of first offer, and other rights and obligations. The foregoing summary of the Stockholders Agreement is qualified by reference to the complete text of the Stockholders Agreement.

Registration Rights Agreement

At the Closing, the Company will enter into the Registration Rights Agreement, substantially in the form attached as Annex D to this proxy statement, with the Restricted Stockholders. Concurrently with the Closing and the entry into the Registration Rights Agreement, the Company anticipates that it will terminate the current registration rights agreement, which will be superseded by the Registration Rights Agreement.

Pursuant to the terms of the Registration Rights Agreement, and subject to the Lock-Up Period (as defined in the Registration Rights Agreement) applicable to certain Restricted Stockholders, the following securities of the Company will be entitled to registration rights: (i) the Private Placement Warrants (as defined in the Registration Rights Agreement) (including any shares of Class A Stock issued or issuable upon the exercise of

 

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the Private Placement Warrants), (ii) any issued and outstanding shares of Class A Stock (including any shares of Class A Stock distributed pursuant to the Merger Agreement, shares of Class A Stock issued pursuant to the PIPE Investment, shares of Class A Stock issued pursuant to the Twilio Investment and any shares of Class A Stock issued or issuable upon the exercise or conversion of any other security, including, for the avoidance of doubt, the Preferred Stock and any shares of Class A Stock issued or issuable upon the transfer of Class C Stock held by Twilio to a holder other than Twilio or its affiliates), and (iii) any shares of Class A Stock that may be issued or distributed or that may be issuable, in any such case, in respect of any securities of the Company or any subsidiary of the Company by way of conversion, exchange, exercise, dividend, stock split or other distribution, merger, consolidation, amalgamation, exchange, recapitalization or reclassification or similar transaction, in each case directly or indirectly beneficially owned (as defined in Rule 13d-3 under the Exchange Act) by a Restricted Stockholder as of immediately following the Closing (or, in the case of the Sponsor, Carlyle or Twilio (collectively, the “Stockholders Agreement Parties”), acquired from another Stockholders Agreement Party in accordance with the Stockholders Agreement), other than any security received pursuant to an incentive plan adopted by the Company on or after the Closing (the “Registrable Securities”). As to any particular Registrable Securities, once issued such securities shall cease to be Registrable Securities (i) when they are sold, transferred, disposed of or exchanged pursuant to an effective registration statement under the Securities Act, (ii) the earliest of such time that such holder has disposed of such securities pursuant to Rule 144 under the Securities Act (“Rule 144”), (iii) when they shall have ceased to be outstanding, or (iv) when they have been sold in a private transaction in which the transferor’s rights under the Registration Rights Agreement are not assigned to the transferee of the securities.

Pursuant to the Registration Rights Agreement (as modified by the applicable PIPE Subscription Agreements), the Company has agreed that the Company will, within 30 calendar days after the Closing, file with the SEC a shelf registration statement registering the resale of the shares of Registrable Securities held by Oak Hill and Brigade and will use its commercially reasonable efforts to have such registration statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) 60 calendar days following the filing deadline (or 90 calendar days after the filing deadline if the SEC notifies the Company that it will “review” the registration statement) and (ii) the 10th business day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that the registration statement will not be “reviewed” or will not be subject to further comments from the SEC. Further, upon the written request of a Restricted Stockholder, the Company shall as promptly as practicable file a registration statement providing for the registration of, and the sale on a continuous or delayed basis of, the Registrable Securities on Form S-3 (or, if the Company is ineligible to use that form, Form S-1).

The Registration Rights Agreement provides that (i) Carlyle is entitled to make up to three demands for registration that the Company register shares of its Registrable Securities, (ii) Twilio is entitled to make up to two demands for registration that the Company register shares of its Registrable Securities, (iii) Oak Hill and Brigade are each entitled to make up to two demands for registration that the Company register shares of its Registrable Securities, and (iv) the Sponsor is entitled to make up to one demand for registration that the Company register shares of its Registrable Securities. The Restricted Stockholders may demand an unlimited number of underwritten shelf takedowns. In addition, the Restricted Stockholders have certain customary “piggy-back” registration rights with respect to registrations of Common Stock by the Company for its own account or registrations by other holders of Common Stock subject to customary exceptions, customary cutback provisions and other customary restrictions and applicable procedures set forth in the Registration Rights Agreement.

The registration rights granted in the Registration Rights Agreement and described above are subject to customary minimum thresholds, restrictions including Holdback Periods (as defined in the Registration Rights Agreement) and, if a registration is underwritten, any limitations on the number of shares to be included in the underwritten offering as reasonably advised by the managing underwriter or underwriters. The Company will bear the expenses incurred in connection with the filing of any registration statements filed pursuant to the terms of the Registration Rights Agreement. The Company and the Restricted Stockholders agree in the Registration

 

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Rights Agreement to provide customary indemnification in connection with any offerings of Registrable Securities effected pursuant to the terms of the Registration Rights Agreement.

The foregoing summary of the Registration Rights Agreement is not complete and is qualified in its entirety by reference to the complete text of the Registration Rights Agreement as set forth in Annex D.

Sponsor Agreement

Concurrently with the execution of the Merger Agreement, the Company, the Sponsor Parties and Syniverse entered into the Sponsor Agreement, pursuant to which, among other things, in accordance with the terms and subject to the conditions set forth therein, the Sponsor Parties have agreed to (i) vote their Founder Shares and any shares of Common Stock the Sponsor Parties subsequently acquire to approve the transactions contemplated by the Merger Agreement and against any inconsistent proposals during the term of the Sponsor Agreement, (ii) not elect to cause the Company to redeem such shares in connection with the Business Combination, (iii) waive the anti-dilution provisions applicable to such Founder Shares under our current certificate of incorporation, which would otherwise be triggered in connection with the Business Combination, the PIPE Investment and the Twilio Investment, and (iv) not transfer their shares prior to the Closing or the vesting thereof as described below.

The Sponsor Agreement also provides that 70% of the Founder Shares will vest and be available to the Sponsor Parties at the Closing, and the remaining 30% of the Founder Shares will vest on the first trading day that the closing price of Class A Stock equals or exceeds $12.50 per share for any 20 trading days within any consecutive 30-trading-day period following the Closing, subject to earlier vesting in certain circumstances described in further detail therein. The Sponsor Agreement will terminate upon the earlier of the termination of the Merger Agreement or written agreement by the parties.

The foregoing summary of the Sponsor Agreement is qualified by reference to the complete text of the Sponsor Agreement, a copy of which is attached as Annex E to this proxy statement.

Subscription Agreements

Sponsor Subscription Agreement

Concurrently with the execution of the Merger Agreement, the Company entered into the Sponsor Subscription Agreement, a copy of which is attached as Annex H to this proxy statement, with the Sponsor, pursuant to which the Sponsor has agreed to purchase from the Company, at the Closing, an aggregate of 1,500,000 shares of Class A Stock for a purchase price of $10.00 per share in the PIPE Investment for aggregate proceeds of $15 million.

The Sponsor Subscription Agreement is subject to certain conditions, including (i) the Closing, (ii) that the transactions contemplated are not illegal or otherwise prohibited, (iii) the accuracy of the representations and warranties in the Sponsor Subscription Agreement, (iv) the other party’s performance, satisfaction and compliance with the covenants, agreements and conditions of the Sponsor Subscription Agreement, (v) no amendment to the Merger Agreement occurring that would reasonably be expected to materially and adversely affect the economic benefits of the Sponsor, and (vi) that, subject to certain exceptions, the Company has not entered into any other subscription agreement that offers Class A Stock at a price lower than $10.00 per share or that is substantially more favorable to any other investor.

Brigade Subscription Agreement and Oak Hill Subscription Agreement

Concurrently with the execution of the Merger Agreement, the Company entered into (i) the Brigade Subscription Agreement, substantially in the form attached as Annex G to this proxy statement, with Brigade,

 

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pursuant to which Brigade has agreed to purchase from the Company, at the Closing, (x) 3,750,000 shares of Class A Stock for a purchase price of $10.00 per share and (y) 115,979 shares of Preferred Stock at a purchase price of $970.00 per share for aggregate proceeds of $150 million, and (ii) the Oak Hill Subscription Agreement, substantially in the form attached as Annex G to this proxy statement, with Oak Hill, pursuant to which Oak Hill has agreed to purchase from the Company, at the Closing, (x) 1,666,667 shares of Class A Stock for a purchase price of $10.00 per share and (y) 85,911 shares of Preferred Stock at a purchase price of $970.00 per share for aggregate proceeds of $100 million.

The Brigade Subscription Agreement and the Oak Hill Subscription Agreement are subject to certain conditions, including (i) the Closing, (ii) that the transactions contemplated are not illegal or otherwise prohibited, (iii) the accuracy of the representations and warranties in the applicable subscription agreement, (iv) the other party’s performance, satisfaction and compliance with the covenants, agreements and conditions of the applicable subscription agreement, (v) no amendment to the Merger Agreement occurring that would reasonably be expected to adversely affect the benefits to Brigade or Oak Hill, and (vi) that, subject to certain exceptions, the Company has not entered into any other subscription agreement that provides for the issuance of Class A Stock and Preferred Stock or terms and conditions that are economically or otherwise more favorable for the applicable other subscriber than Brigade or Oak Hill, and that the other agreements contemplated by the Merger Agreement have not been amended or modified in any respect following the date of the Brigade Subscription Agreement or Oak Subscription Agreement that would reasonably be expected to adversely affect the economic benefits that Brigade or Oak Hill would reasonably expect to receive under their respective subscription agreement, unless Brigade or Oak Hill, as applicable, has previously consented in writing to such amendment or modification.

The shares of Class A Stock, including shares of Class A Stock underlying the Preferred Stock, and Preferred Stock to be issued in connection with the PIPE Subscription Agreements have not been registered under the Securities Act, and will be issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. Sponsor, Brigade and Oak Hill will enter into the Registration Rights Agreement at the Closing, which will provide such parties with certain customary registration rights with respect to their shares of Class A Stock and the shares of Class A Stock underlying the Preferred Stock on the terms and subject to the conditions described therein.

The Brigade Subscription Agreement and Oak Hill Subscription Agreement also provide Brigade and Oak Hill with certain information rights relating to the post-combination company as well as preemptive rights with respect to new issuances of Class A Stock, Preferred Stock or any other equity-linked security in the proportion that Brigade or Oak Hill owns of the then-outstanding Class A Stock or Preferred Stock, as applicable. The Oak Hill Subscription Agreement further provides that Oak Hill will be entitled, at Oak Hill’s request, to designate one individual to serve as an observer on our Board post-Closing.

Each of the PIPE Investors has further agreed that, subject to limited exceptions, until the earlier of (i) the closing of the PIPE Investment or (ii) the termination of the applicable subscription agreement, none of the PIPE Investors nor any person acting on their behalf will engage in any short sales with respect to securities of the Company. The foregoing restriction is expressly agreed to preclude the PIPE Investors from engaging in any hedging or other transactions which is designed to or could reasonably be expected to lead to or result in a sale or disposition of the shares acquired by such PIPE Investors even if such acquired shares would be disposed by someone other than the PIPE Investors. Such prohibited hedging or other transactions include any purchase, sale or grant of any right (including any put or call option) with respect to any of the securities of the Company.

Each PIPE Subscription Agreement will terminate with no further force and effect (i) upon mutual written agreement of the parties to terminate the PIPE Subscription Agreement, (ii) upon the valid termination of the Merger Agreement in accordance with its terms, (iii) if the Merger has not been consummated by the End Date or (iv) if at the Closing, any conditions to the closing of the PIPE Investment have not been satisfied or otherwise validly waived.

 

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Twilio Subscription Agreement

Concurrently with the execution of the Merger Agreement, the Company entered into the Twilio Subscription Agreement with Twilio, a copy of which is attached as Annex I to this proxy statement, pursuant to which Twilio has agreed to purchase from the Company, at the Closing, shares of Class A Stock for an aggregate purchase price of up to $750 million, with the size of the Twilio Investment and the number of shares issued to Twilio determined based on the terms of the Twilio Subscription Agreement. Under the Twilio SubscriptionAgreement, the size of the Twilio Investment will be reduced below $750 million only to the extent the total transaction proceeds in our Trust Account (net of redemptions) and the PIPE Investment exceed $375 million, with such reduction equal to the amount of such excess, subject to a minimum investment by Twilio of $500 million. The number of shares of Class A Stock, and if applicable, shares of Class C Stock, to be received by Twilio in connection with the Twilio Investment will be equal to (x) the number of shares of Class A Stock constituting the Aggregate Merger Consideration multiplied by (y) the Investment Percentage. The Twilio Subscription Agreement provides that if the shares of Class A Stock to be issued to Twilio thereunder have a right to vote in the election of directors of the Company that, as measured immediately subsequent to the closing of the subscription by Twilio (but prior to the effective time of the Merger), exceeds the Voting Cap, then the shares of the Company to be issued to Twilio will consist of (a) shares of Class A Stock which represent a right to vote in the election of directors up to, but not in excess of, the Voting Cap, and (b) in lieu of the shares of Class A Stock which would have been issued to Twilio but for the Voting Cap, an equal number of shares of Class C Stock. The terms of the Class C Stock are described in the section of this proxy statement entitled “Description of Securities.”

The Twilio Subscription Agreement is subject to certain conditions, including (i) the Closing, (ii) that the transactions contemplated are not illegal or otherwise prohibited, (iii) the accuracy of the representations and warranties in the Twilio Subscription Agreement, (iv) the other party’s performance, satisfaction and compliance with the covenants, agreements and conditions of the Twilio Subscription Agreement, (v) that, subject to certain exceptions, the Company has not entered into any other subscription agreement that offers Class A Stock at a price lower than $10.00 per share or that is substantially more favorable to any other investor, and (vi) the satisfaction or waiver of the conditions precedent in the Framework Agreement (including the Minimum Cash Condition).

The shares of Class A Stock and, if applicable, Class C Stock, to be issued in connection with the Twilio Subscription Agreement have not been registered under the Securities Act, and will be issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. Twilio will enter into the Registration Rights Agreement at the Closing, which will provide Twilio with certain registration rights with respect to its shares of Class A Stock and, if applicable, Class C Stock, on the terms and subject to the conditions described therein.

Twilio has further agreed (i) not to amend, modify or waive any provision or remedy under the Framework Agreement without the Company’s prior written consent, (ii) to notify the Company at least five business days prior to taking any steps to terminate the Framework Agreement, (iii) not to mutually agree to terminate the Framework Agreement, (iv) to keep the Company reasonably informed of, and allow the Company and its representatives to participate in, any discussions with respect to, any attempted termination of, or proposed modifications to, the Framework Agreement by Twilio or Syniverse, (v) to use its reasonable best efforts to take, or to cause to be taken, all actions required, necessary or that it otherwise deems to be proper or advisable to consummate the transactions contemplated by the Twilio Subscription Agreement and the Framework Agreement, including, in the event that all conditions in the Twilio Subscription Agreement and the Framework Agreement have been satisfied, using its reasonable best efforts to enforce its rights under the Framework Agreement, and (vi) to use its reasonable best efforts to not take, or fail to take, any action that would reasonably be expected to give rise to a failure of the conditions to closing under the Framework Agreement to occur or any right of termination thereunder, and to notify the Company as promptly as practicable (and in any event within 48 hours) of learning of any change or event related thereto.

 

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The Twilio Subscription Agreement will terminate with no further force and effect (i) upon mutual written agreement of the parties and Syniverse, (ii) upon the termination of the Merger Agreement, (iii) if the Merger has not been consummated by the End Date, or (iv) automatically upon termination of the Framework Agreement.

Certificate of Designations

The material terms of the Preferred Stock, as set forth in the Certificate of Designations, are as follows:

Each share of Preferred Stock has an initial liquidation preference of $1,000 and is convertible, at the holder’s option at any time, into 86.95652 shares of Class A Stock (which is equivalent to a conversion price of approximately $11.50 per share of Class A Stock), subject to specified adjustments and limitations set forth in the Certificate of Designations (the “Conversion Rate”). The Conversion Rate will increase upon a “fundamental change,” as described in the Certificate of Designations, which includes, without limitation, certain change-of-control transactions and a sale of substantially all of the Company’s assets.

Holders of the Preferred Stock will be entitled to receive, when, as and if declared by the Board out of funds legally available for such dividend, cumulative dividends at an initial annual rate of 7.50% (the “Dividend Rate”) of the then-current liquidation preference per share, plus the amount of any accrued and unpaid dividends on such share, accumulating on a daily basis and payable quarterly on each March 31, June 30, September 30 and December 31. The Dividend Rate will automatically increase by 1.00% on the fourth anniversary of the Closing; by an additional 1.00% on the fifth anniversary of the Closing; and by a further additional 1.00% on the sixth anniversary of the Closing. The Dividend Rate will increase by 2.00% for so long as an Event of Default (as defined in the Certificate of Designations) has occurred and is continuing. Any dividends not paid in cash will be added to the liquidation preference of the Preferred Stock, at a rate equal to the then-current Dividend Rate plus 1.00%.

Holders of Preferred Stock will also be entitled to dividends and distributions paid to holders of Common Stock to the same extent as if such holders of Preferred Stock had converted their Preferred Stock into Class A Stock and had held such shares of Class A Stock on the record date for such dividends and distributions. Such payments will be made concurrently with the dividend or distribution to the holders of Common Stock.    

Subject to certain exceptions set forth in the Certificate of Designations, at any time after the third anniversary of the Closing, the Company may, at its option, give notice of its election to cause all, or any portion that is a whole number, of the outstanding shares of Preferred Stock to convert into shares of Class A Stock at the Conversion Rate, if the dollar volume weighted average trading price per share of Class A Stock exceeds 140% of the Conversion Price (as defined in the Certificate of Designations) for at least 20 consecutive trading days ending on, and including, the trading day immediately prior to the issuance of such notice.

At any time following the fifth anniversary of the Closing, until the seventh anniversary of the Closing, the Company will have the option to redeem any or all of the Preferred Stock for a price per share equal to 120% of (i) the then-current liquidation preference of each share of Preferred Stock plus (ii) the amount of any accrued and unpaid dividends on each such share up until the date immediately prior to the applicable redemption date for any Company redemption to the extent such dividends have not been added to the liquidation preference. At any time following the seventh anniversary of the Closing, the Company will have the option to redeem any or all of the Preferred Stock for a price per share equal to 115% of (a) the then-current liquidation preference of each share of Preferred Stock plus (b) the amount of any accrued and unpaid dividends on each such share up until the date immediately prior to the applicable redemption date for any Company redemption to the extent such dividends have not been added to the liquidation preference (the “Year 7 Redemption Price”).

At any time following 91 days after the seventh anniversary of the Closing, each holder of Preferred Stock will have the option to cause the Company to redeem all, but not less than all, of the shares of Preferred Stock held by such holder, at the Year 7 Redemption Price. Each holder of Preferred Stock will also have the right to

 

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require the Company to redeem any or all of its Preferred Stock upon a fundamental change, with the redemption price to equal the price at which a redemption at the Company’s option would be calculated, as described above (with the price for redemptions prior to the fifth anniversary of the Closing subject to the same calculation as redemptions at the Company’s option following the fifth anniversary, until the seventh anniversary, as described above).

Holders of Preferred Stock will be entitled to vote together as a single class with the holders of Common Stock, with each such holder entitled to cast the number of votes equal to the number of votes such holder would have been entitled to cast if such holder were the holder of a number of shares of Class A Stock equal to the whole number of shares of Class A Stock that would be issuable upon conversion of such holder’s Preferred Stock.

While any shares of Preferred Stock are outstanding, the consent of holders of at least two-thirds of the outstanding Preferred Stock will be required for the Company to take certain material actions, including, among other things, (i) declaring dividends on the Common Stock, subject to certain exceptions, (ii) incurring indebtedness above certain levels, subject to certain exceptions, (iii) issuing any equity securities that would rank senior or pari passu with the Preferred Stock with respect to dividends or liquidation, (iv) making amendments to the Certificate of Incorporation (including the Certificate of Designations) adversely affecting the rights of the Preferred Stock and (v) entering into certain asset sales and similar transactions, unless the transaction would constitute a fundamental change.

Upon liquidation, the Preferred Stock will rank senior to the Common Stock, and will have the right to be paid, out of the assets of the Company legally available for distribution to its stockholders, an amount equal to the then-current liquidation preference per share of Preferred Stock.

The foregoing summary of the Certificate of Designations is not complete and is qualified in its entirety by reference to the complete text of the Certificate of Designations as set forth in Annex C.

Framework Agreement

On February 26, 2021, Carlyle, Twilio and Syniverse entered into the Framework Agreement (as amended on August 16, 2021 concurrently with the execution of the Merger Agreement), pursuant to which, among other things, in accordance with the terms and subject to the conditions set forth therein, concurrently with the Closing, (i) Twilio agreed to make a $500 million to $750 million investment directly or indirectly into Syniverse and (ii) Twilio and Syniverse will enter into the Wholesale Agreement.

Twilio Investment

At the Closing, pursuant to the Twilio Subscription Agreement, Twilio will invest into the Company an amount equal to $750 million, less the amount that the total transaction proceeds in our Trust Account (net of redemptions) and the PIPE Investment exceed $375 million (but in any event the Twilio Investment shall not be less than $500 million). Subject to the terms of the Twilio Subscription Agreement, in exchange for the Twilio Investment, the Company will issue Twilio an aggregate number of shares of Class A Stock and, if applicable, Class C Stock equal to (i) the Aggregate Merger Consideration, multiplied by (ii) the Investment Percentage.

Closing

In accordance with the terms and subject to the conditions of the Twilio Subscription Agreement, the closing of the Twilio Investment will take place substantially concurrent with the Closing, but prior to the effective time of the Merger.

 

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Closing Conditions

The Framework Agreement is subject to certain conditions, including (i) the satisfaction of the conditions to Closing and the Refinancing and the substantially concurrent Closing and the Refinancing, (ii) that the transactions contemplated thereby are not illegal or otherwise prohibited, (iii) the waiting period under the HSR Act will have expired or been terminated, (iv) the accuracy of the representations and warranties in the Framework Agreement of Carlyle and Syniverse, on the one hand, or Twilio, on the other hand, (v) Carlyle’s or Syniverse’s, on the one hand, or Twilio’s, on the other hand, performance, satisfaction and compliance with the covenants, agreements and conditions of the Framework Agreement, (vi) the absence of any material adverse effect on Syniverse and (vii) the Minimum Cash Condition.

For further details, see “Proposal No. 1—The Business Combination Proposal—Related Agreements—Framework Agreement.”

Incentive Award Plan

Prior to the Closing, our Board is expected to approve the Incentive Award Plan, subject to receipt of stockholder approval. Subject to these approvals, the Incentive Award Plan will become effective upon the Closing. The purpose of the Incentive Award Plan is to promote the success and enhance the value of the post-combination company by attracting, retaining and motivating the post-combination company’s key service providers by providing and offering them an opportunity to become owners of stock of the post-combination company through the granting of stock-based compensation awards. Awards under the Incentive Award Plan will include non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units, deferred share units, dividend equivalent units and cash-based or other stock-based performance awards. Based on the expected initial capitalization of the post-combination company, a maximum of 33.8 million shares will be reserved for issuance under the Incentive Award Plan. Upon its effectiveness, no further awards will be made under the predecessor equity plan of Syniverse.

The foregoing summary of the Incentive Award Plan is not complete and is qualified in its entirety by reference to the complete text of the Incentive Award Plan as set forth in Annex J.

Redemption Rights

Pursuant to our current certificate of incorporation, holders of public shares may elect to have their shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (i) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest not previously released to the Company to pay its franchise and income taxes, by (ii) the total number of then-outstanding public shares; provided that the Company will not redeem any shares of Class A Stock issued in the IPO to the extent that such redemption would result in the Company’s failure to have net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of at least $5,000,001. As of [                ], 2021, the record date for the Special Meeting, the redemption price would have been approximately $[                ] per share. Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of him or her or any other person with whom he or she is acting in concert or as a “group” (as defined in Section 13(d)-(3) of the Exchange Act) will be restricted from exercising redemption rights with respect to more than an aggregate of 15% of the shares of Class A Stock included in the public units sold in our IPO.

If a holder exercises its redemption rights, then such holder will be exchanging its shares of our Class A Stock for cash and will no longer own shares of the post-combination company. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to our Transfer Agent in accordance with the procedures described herein. Holders of our public warrants have no redemption rights with respect to our public warrants, and holders of our public units must elect to separate their units into the underlying Class A Stock and public warrants prior to exercising their redemption rights with respect to their Class A Stock.

 

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Please see the section entitled “Special Meeting of Company Stockholders—Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.

Impact of the Business Combination on the Company’s Public Float

The PIPE Investors have agreed to purchase in the aggregate approximately 6,916,667 shares of Class A Stock and 201,980 shares of Preferred Stock for $265 million of gross proceeds in the PIPE Investment. In addition, Twilio has agreed to purchase such number of shares of Class A Stock and, if applicable, Class C Stock, as determined in accordance with the Framework Agreement, for aggregate gross proceeds of between $500 million and $750 million in the Twilio Investment. In this proxy statement, we assume that the proceeds from the PIPE Investment and Twilio Investment, in addition to funds from the Trust Account (net of redemptions) and the proceeds from the Refinancing (to the extent borrowed at the Closing) will be used to repay approximately $1,968 million of Syniverse’s existing indebtedness, pay certain transaction expenses and fund the post-combination company’s balance sheet.

It is anticipated that, upon completion of the Business Combination and assuming no redemption of shares of Class A Stock by our public stockholders: (i) the Company’s public stockholders (other than the PIPE Investors and Twilio) will retain an ownership interest of approximately 20.9% in the post-combination company; (ii) Brigade and Oak Hill (two of the PIPE Investors) will own approximately 7.2% and 4.8%, respectively, of the post-combination company (including Class A Stock and Preferred Stock on an as-converted basis); (iii) Twilio will own approximately 23.6% of the post-combination company; (iv) Carlyle will own approximately 36.7% of the post-combination company; (v) our Sponsor will own approximately 6.0% of the post-combination company (inclusive of the shares of Class A Stock acquired by our Sponsor as part of the PIPE Investment); and (vi) the Syniverse Stockholders (other than Carlyle) will own approximately 0.8% of the post-combination company. Additionally, following the Closing, and subject to the approval of the Incentive Award Plan by the Company’s public stockholders and the approval of the applicable award agreements by the board of directors of the post-combination company, pursuant to the Incentive Award Plan the Company expects to grant awards under the Incentive Award Plan. The awards (or associated benefits or amounts) that will be made to particular individuals or groups of individuals are not currently determinable.

The following table illustrates varying ownership levels in the Company, assuming no redemptions by our public stockholders and the maximum redemptions by our public stockholders:

 

     Assuming No
Redemptions
    Assuming Maximum
Redemptions(2)
 

Equity Capitalization Summary(1)

   Shares      %     Shares      %  

Class A Stock

          

MBAC Public Shareholders

     40,000,000        20.9     10,997,934        5.9

MBAC Founders(3)

     11,500,000        6.0     11,500,000        6.1

Total MBAC

     51,500,000        26.9     22,497,934        12.0

Carlyle

     70,340,332        36.7     70,431,804        37.5

Other Syniverse Corporation stockholders

     1,575,553        0.8     1,577,602        0.8

Total Syniverse Corporation stockholders(4)

     71,915,885        37.5     72,009,406        38.4

Brigade(5)

     13,835,130        7.2     13,835,130        7.4

Oak Hill(6)

     9,137,189        4.8     9,137,189        4.9

Twilio(7).

     45,288,908        23.6     45,288,735        24.1

Total Class A

     191,677,112        100.0     162,768,393        86.7

Class C Stock

          

Twilio

     —          0.0     24,905,008        13.3

Total Class A and Class C

     191,677,112        100.0     187,673,402        100.0

 

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(1)

The equity capitalization summary excludes 2,906,635 unvested Syniverse RSU Awards that will convert into unvested Company RSU Awards (at the Exchange Ratio) upon Closing, in accordance with the terms of the Merger Agreement.

(2)

Assumes that 29,002,067 of shares of Class A Stock (the maximum number of Class A Stock that could be redeemed in connection with the Business Combination based on an assumed per share redemption price of $10.00 per share) are redeemed in connection with the Business Combination under the terms of the Merger Agreement. Under the maximum redemptions scenario, the economic ownership and voting power of the existing Syniverse Corporation stockholders increases from 37.5% to 38.4%.

(3)

Consists of (i) 9,975,000 Founder Shares held by our Sponsor and 25,000 Founder Shares held by Mr. Roehm, one of our directors and (ii) 1,500,000 shares of Class A Stock that the Sponsor is purchasing pursuant to the Sponsor Subscription Agreement. Each Founder Share will be converted at the Closing into one share of Class A Stock. The Founder Shares include 3,000,000 shares of Class A Stock that will not vest at the Closing and will be subject to certain contractual vesting requirements as described under the section entitled “Proposal No. 1—Business Combination Proposal—Related Agreements—Sponsor Agreement.”

(4)

Represents existing Syniverse Corporation stockholders’ (including Carlyle’s) interest in shares of MBAC Class A Stock following the Closing and the exchange of shares of Syniverse common stock into MBAC Class A Stock pursuant to the terms of the Merger Agreement.

(5)

Represents Brigade’s portion of the PIPE Investment. Pursuant to the Brigade Subscription Agreements, Brigade has agreed to purchase an aggregate of (i) 3,750,000 shares of MBAC Class A Stock for $10.00 per share and (ii) 115,979 shares of MBAC Preferred Stock (shown on as-converted into Class A Stock basis) for $970.00 per share.

(6)

Represents Oak Hill’s portion of the PIPE Investment. Pursuant to the Oak Hill Subscription Agreement, Oak Hill has agreed to purchase an aggregate of (i) 1,666,667 shares of MBAC Class A Stock for $10.00 per share and (ii) 85,911 shares of MBAC Preferred Stock (shown on as-converted into Class A Stock basis) for $970.00 per share.

(7)

A portion of Twilio’s Class A Stock will be replaced by Class C Stock in the maximum redemptions scenario in accordance with the Framework Agreement and the Twilio Subscription Agreement. Twilio’s combined number of shares of Class A Stock and Class C Stock, if applicable, will increase in the maximum redemptions scenario in accordance with the Framework Agreement and the Twilio Subscription Agreement. For additional detail on the terms of the Class C Stock, the Twilio Subscription Agreement and the Framework Agreement, see “Proposal No. 1—The Business Combination Proposal—Related Agreements—Framework Agreement” and “Proposal No. 1—The Business Combination Proposal—Related Agreements—Subscription Agreement—Twilio Subscription Agreement.”

If the actual facts are different than the above assumptions (which they are likely to be), the percentage ownership retained by the Company’s existing stockholders in the post-combination company will be different. For more information, please see the sections entitled “Selected Unaudited Pro Forma Condensed Combined Financial Information,” “Unaudited Pro Forma Condensed Combined Financial Information” and “Proposal No. 6—The Incentive Award Plan Proposal.”

The Director Election Proposal

James Attwood, Kevin Beebe, Orisa Cherenfant, Andrew Davies, Tony Holcombe, Greg Kleiner, Dan Mead, Mohsin Meghji, Lauren Nemeth, Matthew Perkal, Raymond Ranelli and [                ] have each been nominated to serve as directors of the post-combination company upon completion of the Business Combination. Please see the sections entitled “Proposal No. 5—The Director Election Proposal” and “Management After the Business Combination” for additional information.

 

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The Charter Proposal

Upon the Closing, our current certificate of incorporation will be amended prior to the effective time of the Merger to reflect the Charter Proposal to:

 

   

Change the Company’s name to Syniverse Technologies Corporation;

 

   

If we are not required to issue shares of Class C Stock to Twilio pursuant to the Twilio Subscription Agreement, increase our total number of authorized shares of all classes of Common Stock from 500,000,000 shares to 1,100,000,000 shares, which would consist of (i) increasing the authorized Class A Stock from 450,000,000 shares to 1,100,000,000 shares and (ii) decreasing the authorized Class B Stock from 50,000,000 shares to zero shares;

 

   

If we are required to issue shares of Class C Stock to Twilio pursuant to the Twilio Subscription Agreement, increase our total number of authorized shares of all classes of Common Stock from 500,000,000 shares to 1,137,000,000 shares, which would consist of (i) increasing authorized Class A Stock from 450,000,000 shares to 1,100,000,000 shares and (ii) decreasing the authorized Class B Stock from 50,000,000 shares to zero shares and (iii) creating a new class of Common Stock designated as Class C Common Stock of which 37,000,000 shares would be authorized;

 

   

Cause the conversion of our outstanding shares of Class B Stock into Class A Stock and make certain conforming changes;

 

   

Increase our total number of authorized shares of preferred stock from 1,000,000 shares to 110,000,000 shares;

 

   

Provide that certain provisions are subject to the terms of the Stockholders Agreement;

 

   

Declassify the Board;

 

   

Provide that for as long as any director nominated by Carlyle and its affiliates pursuant to the Stockholders Agreement is on the Board, at least one Carlyle nominee will be required to be present for a quorum to exist and for as long as any director nominated by Twilio and its affiliates pursuant to the Stockholders Agreement is on the Board, at least one Twilio nominee will be required to be present for a quorum to exist. However, in the event that a meeting of the Board is duly called and no Carlyle nominee or no Twilio nominee is in attendance, then a Carlyle nominee or a Twilio nominee, as the case may be, shall not be required to constitute a quorum at the next meeting of the Board duly called with notice provided to the Carlyle nominees and the Twilio nominees as long as at least five days’ notice of such meeting is given and the matters to be considered at the successive duly called meeting are limited to those set forth in the notice for the original Board meeting;

 

   

Provide that:

 

   

To the extent the number of Carlyle nominees present at a meeting of the Board at the time of any vote of the Board is less than the total number of directors Carlyle is entitled to nominate at such time pursuant to the Stockholders Agreement, each Carlyle nominee present at the meeting at such time shall be entitled to cast a number of votes equal to (i) the total number of directors Carlyle is entitled to nominate at such time pursuant to the Stockholders Agreement divided by (ii) the actual number of Carlyle nominees present at the meeting at such time; and

 

   

To the extent the number of Twilio nominees present at a meeting of the Board at the time of any vote of the Board is less than the total number of directors Twilio is entitled to nominate at such time pursuant to the Stockholders Agreement, each Twilio nominee present at the meeting at such time shall be entitled to cast a number of votes equal to (i) the total number of directors Twilio is entitled to nominate at such time pursuant to the Stockholders Agreement divided by (ii) the actual number of Twilio nominees present at the meeting at such time;

 

   

Provide that special meetings can only be called by the Board (or an officer of the Company at the direction of the Board) and no longer individually by the Company’s Chief Executive Officer or the Chairman of the Board;

 

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Expand the limitation of director liability to the fullest extent permitted under the DGCL, as amended from time to time;

 

   

Delete the provisions relating to our status as a blank check company;

 

   

Update the provisions regarding corporate opportunities to, among other things, expressly exempt Carlyle Investment Management L.L.C. (an affiliate of Carlyle), Twilio and the Sponsor and their respective direct or indirect stockholders, members, managers, partners officers, directors, employees or agents or any of their respective affiliates, including any non-employee director of the Company, from the doctrine of corporate opportunity with respect to certain transactions;

 

   

Provide that the affirmative vote of the holders of at least sixty-six and two-thirds percent of the voting power of the outstanding shares of capital stock of the Company entitled to vote thereon, voting together as a single class, will be required to alter, amend or repeal any part of the amendment provision and the super majority vote provision described below;

 

   

Add a super majority vote provision requiring that the prior affirmative vote of holders of at least sixty-six and two-thirds percent of the voting power of the outstanding shares of Common Stock, voting as a single class will be required before the Company:

 

   

adopts or enters into, or otherwise approves or effects, any plan of liquidation, dissolution or winding-up of the Company or files any voluntary petition for bankruptcy, receivership or similar proceeding or adopts or enters into, or otherwise approves or effects, a plan of reorganization; or

 

   

enters into, agrees to, adopts or otherwise effects any transaction or series of related transactions that would result in a change of control of the Company;

 

   

Make certain changes to the provisions that are substantially similar to Section 203 of the DGCL (the Company has previously opted out of Section 203 of the DGCL and the Company will remain opted out as a result of the proposed amendment to the current certificate of incorporation) to, among other things, add Carlyle and Twilio and their respective affiliates as “Exempted Persons” and expand the definition of “business combination” to include any receipt of the benefit, directly or indirectly (except proportionately as a stockholder of the Company), of certain loans, advances, guarantees, pledges, or other financial benefits provided by or through the Company or any direct or indirect majority-owned subsidiary;

 

   

If we are required to issue shares of Class C Stock to Twilio pursuant to the Twilio Subscription Agreement:

 

   

Provide that the Class A Stock will have the exclusive right to vote for the election and removal of directors and the Class C Stock shall have no right to vote for the election or removal of directors, but that the Class A Stock and Class C Stock will otherwise vote together as a single class;

 

   

Providing that upon the transfer of shares of Class C Stock by Twilio and its affiliates to a non-affiliate of Twilio, those shares of Class C Stock will automatically be converted on a share-for-share basis to shares of Class A Stock, and the shares of Class C Stock so converted will be retired and will not be subject to reissue;

 

   

Add certain anti-dilution protections providing that shares of Class A Stock and shares of Class C Stock shall be treated equally and identically, subject to certain specified exceptions; and

 

   

Make certain conforming changes to reflect the dual-class Common Stock capital structure.

The Charter Amendments were negotiated as part of the Business Combination and in the judgment of the Board, the proposed changes to the current certificate of incorporate are necessary and advisable to facilitate the Business Combination and the needs of the post-combination company.

Please see the section entitled “Proposal No. 3—The Charter Proposal” for more information.

 

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Other Proposals

In addition, the stockholders of the Company will be asked to vote on:

 

   

a proposal to approve, for purposes of complying with Section 312.03 of the NYSE’s Listed Company Manual (i) the issuance of more than 20% of the Company’s issued and outstanding Common Stock pursuant to the Business Combination, the PIPE Investment and the Twilio Investment, and (ii) the issuance of more than one percent of the issued and outstanding shares of Common Stock to a “Related Party” (as defined in Section 312.03 of the NYSE’s Listed Company Manual) in connection with the Business Combination and the Sponsor Subscription Agreement (Proposal No. 2);

 

   

a separate proposal to approve, on a non-binding advisory basis, certain governance provisions in the Charter Amendments in accordance with SEC requirements (Proposal No. 4);

 

   

a proposal to approve and adopt the Incentive Award Plan, a copy of which is attached to this proxy statement as Annex J, including the authorization of the initial share reserve under the Incentive Award Plan (Proposal No. 6); and

 

   

a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Proposal, the Governance Proposal, the Director Election Proposal or the Incentive Award Plan Proposal (Proposal No. 7).

Please see the sections entitled “Proposal No. 2—The NYSE Proposal,” “Proposal No. 4—The Governance Proposal,” “Proposal No. 6—The Incentive Award Plan Proposal” and “Proposal No. 7—The Adjournment Proposal for more information.

Date, Time and Place of Special Meeting

The Special Meeting will be held virtually on [                ] at [                ] [a.m./p.m.] at https://www.cstproxy.com/m3brigadeii/2021, or at such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals.

Voting Power; Record Date

Only Company stockholders of record at the close of business on [                ], 2021, the record date for the Special Meeting, will be entitled to vote at the Special Meeting. You are entitled to one vote for each share of Common Stock that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On [                ], 2021, there were [                ] shares of Common Stock outstanding and entitled to vote, of which [                ] are shares of Class A Stock and 10,000,000 are Founder Shares held by the Sponsor Parties.

Quorum and Required Vote for Proposals for the Special Meeting

A quorum of Company stockholders is necessary to hold a valid meeting. A quorum will be present at the Special Meeting if a majority of the Company’s Common Stock outstanding on the record date and entitled to vote at the Special Meeting is represented in person (which would include presence via the virtual meeting platform) or by proxy. Abstentions will count as present for the purposes of establishing a quorum. The Sponsor Parties own of record and are entitled to vote 20% of the outstanding shares of Common Stock as of the record date. Such shares, as well as any shares of Common Stock acquired in the aftermarket by the Sponsor Parties, will count towards establishing a quorum at the Special Meeting and will be voted in favor of the proposals presented at the Special Meeting.

 

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The approval of the Business Combination Proposal, the NYSE Proposal, the Governance Proposal, which is a non-binding advisory vote, the Incentive Award Plan Proposal and the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by holders of our outstanding shares of Common Stock represented in person (which would include presence via the virtual meeting platform) or by proxy and entitled to vote at the Special Meeting. Accordingly, if a valid quorum is established, a Company stockholder’s failure to vote by proxy or to vote in person (which would include presence via the virtual meeting platform) at the Special Meeting, as well as an abstention from voting and a broker non-vote will have no effect on the Business Combination Proposal, the NYSE Proposal, the Governance Proposal, the Incentive Award Plan Proposal or the Adjournment Proposal.

The approval of the Charter Proposal requires the affirmative vote of holders of a majority of our outstanding shares of Common Stock entitled to vote thereon at the Special Meeting. Accordingly, if a valid quorum is established, a Company stockholder’s failure to vote by proxy or to vote in person (which would include presence via the virtual meeting platform) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Charter Proposal will have the same effect as a vote “AGAINST” such Charter Proposal.

Directors are elected by a plurality of all of the votes cast by holders of shares of our Common Stock represented in person (which would include presence via the virtual meeting platform) or by proxy and entitled to vote thereon at the Special Meeting. This means that the 12 director nominees who receive the most affirmative votes will be elected. Stockholders may not cumulate their votes with respect to the election of directors. Assuming a valid quorum is established, abstentions and broker non-votes will have no effect on the election of directors.

The Business Combination is conditioned on the approval of the Business Combination Proposal, the NYSE Proposal, the Charter Proposal and the Director Election Proposal at the Special Meeting.

It is important for you to note that in the event that the Business Combination Proposal, the NYSE Proposal, the Charter Proposal or the Director Election Proposal do not receive the requisite vote for approval, we will not consummate the Business Combination. If we do not consummate the Business Combination and fail to complete an initial business combination by March 8, 2023, we will be required to dissolve and liquidate our Trust Account by returning the then remaining funds in such account to our public stockholders.

Emerging Growth Company

We currently qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, we take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including: (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of SOX; (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements; and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. As a result, our stockholders may not have access to certain information they deem important.

We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year: (a) following the fifth anniversary of the completion of the IPO; (b) in which we have total annual gross revenue of at least $1.07 billion; or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A Stock that is held by non-affiliates equals or exceeds $700 million as of the last business day of our prior second fiscal quarter, and (ii) the date on which we have issued more than $1 billion in non-convertible debt during the prior three-year period. Therefore, we expect to remain an emerging growth company following the Closing.

 

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Controlled Company Exemption

Upon the consummation of the Business Combination, Carlyle, Twilio and the Sponsor will enter into the Stockholders Agreement and will collectively control a majority of the voting power of our outstanding common stock. Accordingly, we expect to qualify as a “controlled company” within the meaning of NYSE corporate governance standards. Under NYSE rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain NYSE corporate governance standards. Following the Business Combination, we intend to utilize many of these exemptions. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance rules and requirements. Please see the sections entitled “Management After the Business Combination—Controlled Company Exemption.”

Accounting Treatment

For accounting purposes, we expect the Business Combination to be accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, MBAC will be treated as the “acquired” company for accounting purposes and the Business Combination will be treated as the equivalent of Syniverse issuing stock for the net assets of MBAC, accompanied by a recapitalization. The net assets of MBAC will be stated at historical cost, with no goodwill or other intangible assets recorded. The determination of Syniverse as the accounting acquirer considered various factors, including that Syniverse’s existing stockholders are expected to have the greatest voting interest in the post-combination company, Syniverse’s existing stockholders are expected to designate the greatest number of directors of the post-combination company, Syniverse will comprise the ongoing operations of the post-combination company, Syniverse’s relevant measures, such as assets, revenues, cash flows and earnings, are higher than MBAC’s, and Syniverse’s existing senior management will be the senior management of the post-combination company. Subsequent to the completion of these series of transactions, Syniverse will be the reporting entity with its historical and future financial information being the financial information of the public registrant. See the section entitled “Proposal No. 1—The Business Combination Proposal—Accounting Treatment.”

Tax Consequences

The U.S. federal income tax consequences of the redemption depend on your particular facts and circumstances. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—Material U.S. Federal Income Tax Considerations for Stockholders Exercising Redemption Rights.” We urge you to consult your tax advisors regarding the tax consequences of exercising your redemption rights.

Appraisal Rights

Appraisal rights are not available to our stockholders in connection with the Business Combination.

Proxy Solicitation

The Company is soliciting proxies on behalf of its Board. Proxies may be solicited by mail. The Company has engaged Innisfree to assist in the solicitation of proxies.

If a stockholder grants a proxy, it may still vote its shares in person (which would include presence via the virtual meeting platform) if it revokes its proxy before the Special Meeting. A stockholder may also change its vote by submitting a later-dated proxy, as described in the section entitled “Special Meeting of Company Stockholders—Revoking Your Proxy.”

Independent Director Oversight

Our Board is composed of a majority of independent directors who are not affiliated with our Sponsor and its affiliates. In connection with the Business Combination, our independent directors, Messrs. Gerard, Garrison,

 

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Roehm and Yeary, took an active role in evaluating the proposed terms of the Business Combination, including the Merger Agreement, the Related Agreements and the amendments to our current certificate of incorporation to take effect upon the completion of the Business Combination. As part of their evaluation of the Business Combination, our independent directors were aware of the potential conflicts of interest with our Sponsor and its affiliates that could arise with regard to the proposed terms of the: (i) Merger Agreement; (ii) Sponsor Subscription Agreement; (iii) Brigade Subscription Agreement; (iv) Sponsor Agreement; (v) Stockholders Agreement; (vi) Registration Rights Agreement; and (vii) amendments to our current certificate of incorporation to take effect upon the completion of the Business Combination. They were also aware of and considered the existing relationship of Brigade with Syniverse and the potential conflicts of interest that could exist for Brigade and the staff seconded to the Company. Our independent directors also own shares of Common Stock, the value of which may be affected by the Business Combination. Our independent directors reviewed and considered these interests during the negotiation of the Business Combination and in evaluating and unanimously approving, as members of the Board, the Merger Agreement and the transactions contemplated therein, including the Business Combination. Although Mr. Vincent qualifies as an independent director under the applicable NYSE rules, he recused himself from certain discussions concerning the Business Combination on account of his relationship with Brigade.

Please see the sections entitled “Proposal No. 1—The Business Combination Proposal—Independent Director Oversight” and “Beneficial Ownership of Securities.”

Recommendation to Company Stockholders

Our Board believes that each of the Business Combination Proposal, the NYSE Proposal, the Charter Proposal, the Governance Proposal, the Director Election Proposal, the Incentive Award Plan Proposal and the Adjournment Proposal to be presented at the Special Meeting is in the best interests of the Company and our stockholders and unanimously recommends that its stockholders vote “FOR” each of the proposals. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—The Company’s Board of Directors’ Reasons for the Approval of the Business Combination” for additional detail regarding the reasons for the Board’s recommendation.

When you consider the recommendation of our Board in favor of approval of the Business Combination Proposal, you should keep in mind that our Sponsor and certain members of our Board and officers have interests in the Business Combination that are different from or in addition to (or which may conflict with) your interests as a stockholder. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination, and in recommending to stockholders that they approve the Business Combination. In addition, Mr. Vincent recused himself from certain discussions concerning the Business Combination on account of his relationship with Brigade. Stockholders should take these interests into account in deciding whether to approve the proposals presented at the Special Meeting, including the Business Combination Proposal. Please see “Special Meeting of Company Stockholders—Recommendation to Company Stockholders.”

Interests of Certain Persons in the Business Combination

In considering the recommendation of our Board to vote in favor of the Business Combination, stockholders should be aware that aside from their interests as stockholders, our Sponsor and certain members of our Board and officers have interests in the Business Combination that are different from, or in addition to, those of other stockholders generally. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination, and in recommending to stockholders that they approve the Business Combination. In addition, Mr. Vincent recused himself from certain discussions concerning the Business Combination on account of his relationship with Brigade. Stockholders should take these interests into account in deciding whether to approve the Business Combination.

 

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These interests include, among other things:

 

   

the fact that our Sponsor paid an aggregate of $25,000 for 9,975,000 Founder Shares, which will have a significantly higher value at the time of the Business Combination, and which, if unrestricted and freely tradable, would be valued at approximately $99,750,000 assuming a per share value of $10.00, but, given the restrictions on such shares (including the lock-up and vesting terms described elsewhere in this proxy statement), we believe such shares have less value;

 

   

the fact that 70% of our Sponsor’s Founder Shares will vest at the Closing and the remaining 30% of such Founder Shares will vest on the first trading day that the closing price of the Class A Stock equals or exceeds $12.50 per share for any 20 trading days within any consecutive 30-trading-day period following the Closing, subject to earlier vesting in certain circumstances as described therein;

 

   

the fact that our Sponsor has agreed not to redeem any of the Founder Shares in connection with a stockholder vote to approve the Business Combination;

 

   

the fact that our Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to its Founder Shares if we fail to complete an initial business combination by March 8, 2023;

 

   

the fact that our Sponsor paid an aggregate of approximately $11,250,000 for its 7,500,000 Private Placement Warrants to purchase shares of Class A Stock and that such Private Placement Warrants will expire worthless if a business combination is not consummated by March 8, 2023;

 

   

the fact that our Sponsor has entered into the Sponsor Subscription Agreement pursuant to which, at the Closing, Sponsor will purchase 1,500,000 shares of Class A Stock at a price of $10.00 per share in the PIPE Investment;

 

   

the continued right of our Sponsor to hold our Class A Stock and the shares of Class A Stock to be issued to our Sponsor upon exercise of its Private Placement Warrants following the Business Combination, subject to certain lock-up periods;

 

   

if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that all of our directors, other than Mr. Roehm, hold membership interests in our Sponsor, and Mr. Roehm holds 25,000 Founder Shares directly;

 

   

the fact that our Sponsor, officers and directors will lose their entire investment in us if an initial business combination is not consummated by March 8, 2023;

 

   

that our Sponsor, officers and directors, and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on the Company’s behalf, such as identifying and investigating possible business targets and business combinations and with respect to the PIPE Investment. As of the date of this proxy statement, such reimbursement is estimated to be approximately $[                ] in the aggregate. However, if the Company fails to consummate a business combination within the completion window, they will not have any claim against the Trust Account for reimbursement. Accordingly, the Company may not be able to reimburse these expenses if the Business Combination or another business combination is not completed within the completion window;

 

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that, as described in the Charter Proposal and reflected in Annexes B-1 and B-2, each of our proposed Charter Amendments excludes the equity holders of our Sponsor and their respective successors, certain affiliates and each of their respective transferees as “interested parties” from the list of prohibited business combinations;

 

   

that, as described in the Charter Proposal and reflected in Annexes B-1 and B-2, each of our proposed Charter Amendments provides that certain transactions are not “corporate opportunities” and that our Sponsor, its successors and affiliates (other than the post-combination company and its subsidiaries) and certain other persons are not subject to the doctrine of corporate opportunity;

 

   

that, at the Closing, we will enter into the Stockholders Agreement, which entitles the Sponsor to appoint two directors to the Board following the Closing, subject to certain minimum ownership requirements and, as such, in the future such directors will receive any cash fees, stock options or stock awards that the post-combination company’s Board determines to pay to its nonexecutive directors;

 

   

that, at the Closing, we will enter into the Registration Rights Agreement with the Restricted Stockholders, which provides for registration rights to Restricted Stockholders and their permitted transferees;

 

   

the fact that we were organized by executives from each of M-III Partners and Brigade, which is a participant in the PIPE Investment;

 

   

that one of our directors, Mr. Vincent, is currently a Partner, Chief Operating Officer and Chief Legal Officer of Brigade;

 

   

that certain employees of Brigade were seconded to us to, among other things, provide (i) introductions to key management of companies and investors with which Brigade has relationships and other potential sources of business combination targets, (ii) assistance with diligence of potential business combination targets and the negotiation of a business combination transaction, and (iii) support for our efforts to obtain replacement capital for tendering stockholders in the de-SPAC process, and that such employees of Brigade played an important role in conducting due diligence with respect to Syniverse, securing the funds from the PIPE Investors and facilitating the entry into the Merger Agreement;

 

   

that Brigade is a participant in the PIPE Investment and will, at the Closing, purchase shares of both Class A Stock and Preferred Stock, which ranks senior to our other capital stock, including the Class A Stock, and will provide Brigade with certain benefits not available to our public stockholders; and

 

   

that Brigade is a lender to Syniverse and will receive proceeds in the transaction from the refinancing of Syniverse’s outstanding indebtedness upon consummation of the Business Combination.

Risk Factors

In evaluating the Business Combination and the proposals to be considered and voted on at the Special Meeting, you should carefully review and consider the risk factors set forth under the section entitled “Risk Factors” beginning on page [    ] of this proxy statement. The occurrence of one or more of the events or circumstances described in that section, alone or in combination with other events or circumstances, may have a material adverse effect on (i) the ability of the Company and Syniverse to complete the Business Combination, and (ii) the business, cash flows, financial condition and results of operations of Syniverse prior to the consummation of the Business Combination and the post-combination company following consummation of the Business Combination.

Below is a summary of some of the principal risks Syniverse faces:

 

   

System failures, delays and other problems could harm Syniverse’s reputation and business, cause Syniverse to lose customers and expose Syniverse to customer liability;

 

   

Syniverse does not control the networks over which many of its services are transmitted, and a failure in the operations of such networks could adversely affect Syniverse’s business;

 

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Breaches in data security and lapses in data privacy as well as disruptions and other damages to Syniverse’s information technology or “IT” operations and system networks may adversely impact Syniverse’s business operations, its reputation, the satisfaction of its customers, suppliers and vendors and may lead to reputational damage and significant liabilities;

 

   

Syniverse’s reliance on third-party vendors for communications software, hardware and other infrastructure components exposes Syniverse to a variety of risks it cannot control;

 

   

If Syniverse does not successfully complete its digital transformation, it could fail to meet market expectations with respect to the performance of its products and services and its business, financial condition and results of operations could be adversely impacted;

 

   

Syniverse’s success depends on its ability to attract and maintain talented employees;

 

   

Syniverse depends on a small number of customers for a significant portion of its revenues and the loss of any of its major customers would harm it;

 

   

COVID-19 could continue to negatively impact Syniverse’s financial performance;

 

   

The market for Syniverse’s services is intensely competitive, and many of its competitors have significant financial, technical, marketing and other resources;

 

   

Future consolidation among Syniverse’s customer base and decisions by its customers to develop in-house alternatives to its services would negatively impact its financial performance;

 

   

Syniverse’s relationship with Twilio may not prove to be accretive and any loss of Twilio as a customer or commercial partner could harm Syniverse’s business;

 

   

Syniverse’s failure to achieve or sustain desired pricing levels or to offset price reductions with increased transaction volumes, could impact its ability to maintain profitability or positive cash flow;

 

   

If Syniverse does not adapt to rapid technological change in the industries it serves and successfully develop, introduce and market new products and services, or such products and services are not widely adopted by its current or targeted customers, its prospects, financial condition and results of operation could be materially adversely affected;

 

   

Most of Syniverse’s customer contracts do not provide for minimum payments at or near its historical levels of revenues from these customers;

 

   

Syniverse’s international operations are subject to uncertainties that could adversely affect its operating results;

 

   

Political instability in certain countries in which Syniverse operates could have an adverse impact on its business and operations;

 

   

Syniverse’s international operations require it to comply with anti-corruption laws and regulations of the U.S. government and various international jurisdictions;

 

   

Syniverse currently conducts limited business operations and expects to continue such operations in countries targeted by United States and European Union economic sanctions;

 

   

Syniverse may not be able to receive or retain licenses or authorizations that may be required for it to sell its services internationally;

 

   

Fluctuations in currency exchange rates may adversely affect Syniverse’s results of operations;

 

   

Syniverse may be unsuccessful in achieving its growth strategies or its transformation initiatives, which could limit its profitability;

 

   

Syniverse conducts business in both domestic and international markets with complex and evolving tax rules, which subjects it to taxation-related risks;

 

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Regulations affecting Syniverse’s customers and Syniverse and future regulations to which they or Syniverse may become subject may harm Syniverse’s business;

 

   

Because some of Syniverse’s services are used to collect and store personal information of its customers’ employees or customers, privacy concerns could result in additional costs and liability to Syniverse or inhibit sales of its services;

 

   

Failure to protect Syniverse’s intellectual property rights adequately may have a material adverse effect on its results of operations or its ability to compete;

 

   

If third parties claim that Syniverse is in violation of their intellectual property rights, it could have a negative impact on Syniverse’s results of operations and ability to compete;

 

   

If third parties claim that Syniverse’s products or services infringe on their intellectual property rights, Syniverse may be required to indemnify its customers for any damages or costs they incur in connection with such claims;

 

   

Syniverse is party to a number of lawsuits that arise in the ordinary course of business and may become party to others in the future;

 

   

The costs and difficulties of acquiring and integrating complementary businesses and technologies could impede Syniverse’s future growth, diminish its competitiveness, and harm its operations;

 

   

Unfavorable general economic conditions in the United States or in other major global markets could negatively impact Syniverse’s financial performance;

 

   

Syniverse projections provided to the MBAC Board and included in this proxy statement are subject to significant risks, assumptions, estimates and uncertainties and were prepared more than six months prior to the date of this proxy statement. As a result, Syniverse’s projected revenues, market share, expenses and profitability may differ materially from its expectations;

 

   

Syniverse incurs variable termination fees on behalf of its enterprise messaging customers when it terminates A2P messages into a mobile operator’s network. Syniverse bears the payment risks associated with these fees if its enterprise messaging customers do not reimburse these fees to it in a timely manner, or at all;

 

   

Syniverse’s financial results may be adversely affected if its intangible assets or goodwill are impaired;

 

   

If Syniverse fails to maintain effective internal controls over financial reporting at a reasonable assurance level, Syniverse may not be able to accurately report its financial results and may be required to restate previously published financial information;

 

   

Fulfilling Syniverse’s obligations incident to being a public company, including compliance with the Exchange Act and the requirements of the NYSE, SOX and the Dodd-Frank Act, will be expensive and time-consuming, and any delays or difficulties in satisfying these obligations could have a material adverse effect on its future results of operations and its stock price; and

 

   

At the conclusion of the transaction, the post-combination company will have five large shareholders, Carlyle, Twilio, Sponsor, Brigade and Oak Hill, whose interests in the post-combination company’s business may be different than yours.

Below is a summary of some of the principal risks related to Syniverse’s indebtedness and the Refinancing:

 

   

Syniverse has substantial debt and may incur substantial additional debt, which could adversely affect the post-combination company’s financial health, reduce its profitability, limit its ability to obtain financing in the future and pursue certain business opportunities and make payments on its indebtedness;

 

   

The New Credit Agreement will contain restrictions and limitations that could significantly impact the post-combination company’s ability and the ability of most of its subsidiaries to engage in certain business and financial transactions;

 

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Any amounts that we use to service or redeem our Preferred Stock will not be available for distributions to our common stockholders and, if converted, would have a dilutive impact on our Class A Stock;

 

   

The post-combination company may have future capital needs and may not be able to obtain additional financing on acceptable terms or at all; and

 

   

An increase in interest rates would increase the cost of servicing the post-combination company’s debt and could reduce its profitability, decrease its liquidity and impact its solvency.

Below is a summary of some of the principal risks related to the Company and the Business Combination:

 

   

The ability to complete the Business Combination or any delay in the Closing;

 

   

The occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement or the termination of any PIPE Subscription Agreement or the Twilio Subscripton Agreement;

 

   

The ability to maintain the listing of the Company’s securities on a national securities exchange following the Business Combination;

 

   

The potential liquidity and trading of the Company’s public securities;

 

   

The inability to recognize the anticipated benefits of the proposed Business Combination, which may be affected by, among other things, the amount of cash available following any redemption of public shares by the Company’s stockholders;

 

   

Any potential litigation involving the Company or Syniverse;

 

   

Costs related to the Business Combination;

 

   

Expectations regarding the Company’s status as a “controlled company” within the meaning of the NYSE corporate governance requirements;

 

   

The fact that after the Business Combination, we will have limited ability to influence the post-combination company as the post-combination company will be controlled by Carlyle and Twilio; and

 

   

Other risks and uncertainties indicated in this proxy statement, including those set forth under the section entitled “Risk Factors.”

 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF THE COMPANY

The following table contains selected historical consolidated financial data for the Company as of June 30, 2021 and December 31, 2020, for the six months ended June 30, 2021 and for the period from December 16, 2020 (inception) through December 31, 2020. The data as of June 30, 2021 and for the six-month period ended June 30, 2021 have been derived from the unaudited financial statements of the Company included elsewhere in this proxy statement, and the data as of December 31, 2020 and for the period from December 16, 2020 (inception) through December 31, 2020 have been derived from the audited financial statements of the Company included elsewhere in this proxy statement. Results from interim periods are not necessarily indicative of results that may be expected for the entire year.

The Company’s historical results are not necessarily indicative of the results that may be expected for any other period in the future and the Company’s results for the six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2021 or any other period. The information below is only a summary and should be read in conjunction with the sections entitled “The Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Information About the Company” and in our condensed financial statements, and the notes and schedules related thereto, which are included elsewhere in this proxy statement. The Company is providing the following selected historical consolidated financial information to assist you in your analysis of the financial aspects of the Business Combination.

Statement of Operations Data:

 

     Six months
ended
June 30, 2021
     For the Period
from December 16,
2020 (inception)
through
December 31, 2020
 

Formation and operating costs

   $ 242,325      $ —    
  

 

 

    

 

 

 

Loss from operations

     (242,325      —    

Other income/(expense):

     

Change in fair value of derivative liability

     3,820,577     

Excess fair value of private placement warrants over consideration paid

     (529,653   

Transaction costs

     (1,182,124   

Interest income

     20,665     
  

 

 

    

 

 

 

Total other income/(expense)

     2,129,465     
  

 

 

    

 

 

 

Net income

   $ 1,887,140     
  

 

 

    

 

 

 

Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption

     22,156,990        10,000,000  
  

 

 

    

 

 

 

Basic and diluted net income per share, Class A common stock subject to possible redemption

   $ 0.00     
  

 

 

    

 

 

 

Basic and diluted weighted average shares outstanding, non-redeemable common stock

     13,964,557     
  

 

 

    

 

 

 

Basic and diluted net income per share, non-redeemable common stock

   $ 0.14      $ 0.00  
  

 

 

    

 

 

 

 

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Balance Sheet Data:

 

     As of
June 30,
2021
     As of
December 31,
2020
 

ASSETS

     

Current Assets

     

Cash

   $ 1,511,407      $ —    

Prepaid expenses

     853,573        —    
  

 

 

    

 

 

 

Total Current Assets

     2,364,980        —    

Marketable securities held in Trust Account

     400,020,665        —    
  

 

 

    

 

 

 

Deferred offering costs

     —          25,000  
  

 

 

    

 

 

 

TOTAL ASSETS

   $ 402,385,645      $ 25,000  
  

 

 

    

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

     

Current Liabilities

     

Accounts payable and accrued expenses

   $ 20,759        —    

Taxes payable

     2,250        —    
  

 

 

    

 

 

 

Total current liabilities

     23,009        —    

Warrant liability

     28,513,040        —    

Deferred underwriters’ discount

     14,000,000        —    
  

 

 

    

 

 

 

Total Liabilities

     42,536,049        —    
  

 

 

    

 

 

 

Commitments

        —    

Class A common stock subject to possible redemption, 35,484,597 shares at redemption value

     354,849,594        —    

Stockholders’ Equity

     

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding

     —          —    

Class A common stock, $0.0001 par value; 450,000,000 shares authorized; 4,515,403 issued and outstanding (excluding 35,484,597 shares subject to possible redemption)

     451        —    

Class B common stock, $0.0001 par value; 50,000,000 shares authorized; 10,000,000 shares issued and outstanding

     1,000        1,150  

Additional paid-in capital

     3,111,411        23,850  

Retained Earnings

     1,887,140        —    
  

 

 

    

 

 

 

Total Stockholders’ Equity

     5,000,002        25,000  
  

 

 

    

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 402,385,645      $ 25,000  
  

 

 

    

 

 

 

 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF SYNIVERSE

The following table contains selected historical consolidated financial data for Syniverse as of May 31, 2021 and for the six months ended May 31, 2021 and May 31, 2020. Such data have been derived from the unaudited consolidated financial statements of Syniverse included elsewhere in this proxy statement.

Also presented below is selected historical consolidated financial data for Syniverse as of and for the eleven months ended November 30, 2020 and for the twelve months ended December 31, 2019. Such data have been derived from the audited financial statements of Syniverse included elsewhere in this proxy statement.

Syniverse’s historical results are not necessarily indicative of the results that may be expected for any other period in the future and Syniverse’s results for the six months ended May 31, 2021 are not necessarily indicative of the results that may be expected for the full year ending November 30, 2021 or any other period. The information below is only a summary and should be read in conjunction with the section entitled “Syniverse’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Syniverse’s financial statements, and the notes and schedules related thereto, which are included elsewhere in this proxy statement. Syniverse is providing the following selected historical consolidated financial information to assist you in your analysis of the financial aspects of the Business Combination.

 

    Six Months Ended
May 31,
    Eleven Months
Ended

November 30,
2020
    Twelve Months
Ended

December 31,
2019
 
(in thousands, except per share amounts)   2021     2020  

Revenues

  $ 332,103     $ 325,396     $ 589,581     $ 743,847  

Costs and expenses:

       

Cost of operations (excluding depreciation and amortization shown separately below)

    184,540       162,076       299,150       352,643  

Sales and marketing

    25,158       31,967       55,950       71,475  

General and administrative

    46,829       45,231       86,938       96,356  

Depreciation and amortization

    42,490       55,203     98,964       127,223  

Employee termination benefits(1)

    —         —         —         (189

Restructuring expense(2)

    2,358       2,684       23,686       8,704  
 

 

 

   

 

 

   

 

 

   

 

 

 
    301,375       297,161       564,688       656,212  
 

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

    30,728       28,235       24,893       87,635  

Other expense, net:

       

Interest expense

    (80,935     (85,996     (154,516     (167,361

Equity loss in investees

    (1,192     (384     (1,633     (1,813

Other, net

    (3,669     1,618       (3,464     (1,989
 

 

 

   

 

 

   

 

 

   

 

 

 
    (85,796     (84,762     (159,613     (171,163
 

 

 

   

 

 

   

 

 

   

 

 

 

Loss before (benefit from) provision for income taxes

    (55,068     (56,527     (134,720     (83,528

(Benefit from) provision for income taxes

    2,581       6,415       8,633       16,086  
 

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

    (57,649     (62,942     (143,353     (99,614

Net income (loss) attributable to noncontrolling interest

    550       (55     981       2,700  
 

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to Syniverse
Corporation

  $ (58,199   $ (62,887   $ (144,334   $ (102,314
 

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share attributable to Syniverse Corporation, basic and diluted

  $ (0.47   $ (0.51   $ (1.18   $ (0.84

Weighted average shares outstanding, basic and diluted

    122,657       122,660       122,767       122,120  

 

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     May 31,
2021
     November 30,
2020
     December 31,
2019
 

Total Assets

   $ 2,826,739      $ 2,854,394      $ 2,865,468  

Total Debt

   $ 1,938,189      $ 1,942,293      $ 1,862,411  

 

(1)

Employee termination benefits represents costs related to severance and other employee related costs that are unrelated to a restructuring plan.

(2)

Restructuring represents costs related to certain exit activities such as involuntary termination costs and contract termination costs. Refer to Note 12—“Restructuring” to “Syniverse Corporation Notes to Consolidated Financial Statements” in Syniverse’s financial statements included elsewhere in this proxy statement for additional information regarding restructuring activities.

 

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information presents the combination of the financial information of the Company and Syniverse adjusted to give effect to the Business Combination described in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” The Business Combination will be accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, MBAC will be treated as the “acquired” company for accounting purposes and the Business Combination will be treated as the equivalent of Syniverse issuing stock for the net assets of MBAC, accompanied by a recapitalization. The net assets of MBAC will be stated at historical cost, with no goodwill or other intangible assets recorded.

The selected pro forma information has been derived from, and should be read in conjunction with, the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” and the historical financial statements of the Company and Syniverse and related notes included elsewhere in this proxy statement. The selected pro forma information is not necessarily indicative of what the post-combination company’s financial position or result of operations actually would have been had the Business Combination been completed as of the dates indicated. In addition, the selected pro forma information does not purport to project the future financial position or operating results of the post-combination company.

The selected unaudited pro forma condensed combined balance sheet data combines the Syniverse unaudited condensed consolidated balance sheet as of May 31, 2021 and the MBAC unaudited condensed consolidated balance sheet as of June 30, 2021, giving effect to the Business Combination and related transactions as if such transactions had been consummated on May 31, 2021.

The selected unaudited pro forma condensed combined statements of operations data combines the Syniverse unaudited condensed consolidated statement of operations for the six months ended May 31, 2021 with the MBAC unaudited consolidated statement of operations for the six months ended June 30, 2021 and the Syniverse audited consolidated statement of operations for the eleven months ended November 30, 2020 with MBAC’s audited consolidated statement of operations for the period from December 16, 2020 (inception) through December 31, 2020, giving effect to the Business Combination and related transactions as if such transactions had been consummated on January 1, 2020.

The following table presents selected pro forma information after giving effect to the Business Combination, presented under two scenarios:

 

   

Assuming No Redemptions: This presentation assumes that no public stockholders exercise their right to have their Class A Stock converted into their pro rata share of the Trust Account; and

 

   

Assuming Maximum Redemptions: This presentation assumes (i) an additional $250.0 million cash investment from Twilio and (ii) that 29,002,067 shares of Class A Stock are redeemed for an aggregate payment of $290.0 million, which is derived from the number of shares that could be redeemed in connection with the Business Combination at an assumed redemption price of $10.00 per share based on the Trust Account balance as of June 30, 2021 and still satisfy the Minimum Cash Condition required to consummate the Business Combination, after giving effect to the PIPE Investment, but before giving effect to the Twilio Investment of $750.0 million, the Refinancing and estimated transaction costs incurred in connection with the Business Combination.

 

 

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     Assuming No
Redemptions
    Assuming Maximum
Redemptions(2)
 

Equity Capitalization Summary(1)

   Shares      %     Shares      %  

Class A Stock

          

MBAC Public Shareholders

     40,000,000        20.9     10,997,934        5.9

MBAC Founders(3)

     11,500,000        6.0     11,500,000        6.1

Total MBAC

     51,500,000        26.9     22,497,934        12.0

Carlyle

     70,340,332        36.7     70,431,804        37.5

Other Syniverse Corporation stockholders

     1,575,553        0.8     1,577,602        0.8

Total Syniverse Corporation stockholders(4)

     71,915,885        37.5     72,009,406        38.4

Brigade(5)

     13,835,130        7.2     13,835,130        7.4

Oak Hill(6)

     9,137,189        4.8     9,137,189        4.9

Twilio(7).

     45,288,908        23.6     45,288,735        24.1

Total Class A

     191,677,112        100.0     162,768,393        86.7

Class C Stock

          

Twilio

     —          0.0     24,905,008        13.3

Total Class A and Class C

     191,677,112        100.0     187,673,402        100.0

 

(1)

The equity capitalization summary excludes 2,906,635 unvested Syniverse RSU Awards that will convert into unvested Company RSU Awards (at the Exchange Ratio) upon Closing, in accordance with the terms of the Merger Agreement.

(2)

Assumes that 29,002,067 of shares of Class A Stock (the maximum number of Class A Stock that could be redeemed in connection with the Business Combination based on an assumed per share redemption price of $10.00 per share) are redeemed in connection with the Business Combination under the terms of the Merger Agreement. Under the maximum redemptions scenario, the economic ownership and voting power of the existing Syniverse Corporation stockholders increases from 37.5% to 38.4%.

(3)

Consists of (i) 9,975,000 Founder Shares held by our Sponsor and 25,000 Founder Shares held by Mr. Roehm, one of our directors and (ii) 1,500,000 shares of Class A Stock that the Sponsor is purchasing pursuant to the Sponsor Subscription Agreement. Each Founder Share will be converted at the Closing into one share of Class A Stock. The Founder Shares include 3,000,000 shares of Class A Stock that will not vest at the Closing and will be subject to certain contractual vesting requirements as described under the section entitled “Proposal No. 1—Business Combination Proposal—Related Agreements—Sponsor Agreement.”

(4)

Represents existing Syniverse Corporation stockholders’ (including Carlyle’s) interest in shares of MBAC Class A Stock following the Closing and the exchange of shares of Syniverse common stock into MBAC Class A Stock pursuant to the terms of the Merger Agreement.

(5)

Represents Brigade’s portion of the PIPE Investment. Pursuant to the Brigade Subscription Agreements, Brigade has agreed to purchase an aggregate of (i) 3,750,000 shares of MBAC Class A Stock for $10.00 per share and (ii) 115,979 shares of MBAC Preferred Stock (shown on as-converted into Class A Stock basis) for $970.00 per share.

(6)

Represents Oak Hill’s portion of the PIPE Investment. Pursuant to the Oak Hill Subscription Agreement, Oak Hill has agreed to purchase an aggregate of (i) 1,666,667 shares of MBAC Class A Stock for $10.00 per share and (ii) 85,911 shares of MBAC Preferred Stock (shown on as-converted into Class A Stock basis) for $970.00 per share.

(7)

A portion of Twilio’s Class A Stock will be replaced by Class C Stock in the maximum redemptions scenario in accordance with the Framework Agreement and the Twilio Subscription Agreement. Twilio’s combined number of shares of Class A Stock and Class C Stock, if applicable, will increase in the maximum redemptions scenario in accordance with the Framework Agreement and the Twilio Subscription Agreement. For additional detail on the terms of the Class C Stock, the Twilio Subscription Agreement and the Framework Agreement, see “Proposal No. 1—The Business Combination Proposal—Related Agreements—Framework Agreement” and “Proposal No. 1—The Business Combination Proposal—Related Agreements—Subscription Agreement—Twilio Subscription Agreement.”

 

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(in thousands, except per share amounts)    Pro Forma
Combined
(Assuming No
Redemptions)
     Pro Forma
Combined
(Assuming
Maximum
Redemptions)
 

Selected Unaudited Pro Forma Balance Sheet Data as of May 31, 2021

     

Total assets

   $ 2,878,072      $ 2,838,051  

Total liabilities

   $ 1,315,939      $ 1,315,939  

Total stockholders’ equity

   $ 1,360,070      $ 1,320,049  

Noncontrolling interest

   $ 9,629      $ 9,629  

Total liabilities, temporary equity and stockholders’ equity

   $ 2,878,072      $ 2,838,051  

Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data

     

Six Months Ended May 31, 2021

     

Revenues

   $ 332,103      $ 332,103  

Operating income

   $ 30,486      $ 30,486  

Net (loss)

   $ (24,031    $ (24,031

Total comprehensive (loss) attributable to common stockholders

   $ (4,406    $ (4,406

Net loss per share of Class A common stock—basic and diluted

   $ (0.19    $ (0.19

Net loss per share of Class C common stock—basic and diluted

   $ 0.00      $ (0.19

Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data

     

Eleven Months Ended November 30, 2021

     

Revenues

   $ 589,581      $ 589,581  

Operating income

   $ (11,612    $ (11,612

Net (loss)

   $ (119,562    $ (119,562

Total comprehensive (loss) attributable to common stockholders

   $ (99,790    $ (99,790

Net loss per share of Class A common stock—basic and diluted

   $ (0.79    $ (0.80

Net loss per share of Class C common stock—basic and diluted

   $ 0.00      $ (0.80

If the facts or preliminary conclusions are different than these assumptions, then the amounts and shares outstanding in the unaudited pro forma condensed combined financial information will be different, and those differences could be material.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The statements contained in this proxy statement and in any document incorporated by reference herein that are not purely historical are forward-looking statements. The information included in this proxy statement in relation to Syniverse and the Company has been provided by Syniverse and the Company and their respective management teams. Forward-looking statements include statements relating to Syniverse’s and the Company’s management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that are or refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement and in any document incorporated by reference herein may include, for example, statements about the Business Combination, the benefits of the Business Combination, results of operations, financial condition, liquidity, prospects, growth, strategies and the markets in which Syniverse operates, including estimates and forecasts of financial and operational metrics, projections of market opportunity, market share and product sales, expectations and timing related to commercial product launches, future sales channels and strategies, and future market launches and expansion.

Factors that may cause actual results to differ materially from current expectations include, among other things:

 

   

our inability to complete the transactions contemplated by the Merger Agreement, including due to failure to obtain approval of the stockholders of the Company or other conditions to Closing in the Merger Agreement;

 

   

our inability to satisfy or waive certain Closing conditions to the Business Combination, including, among others, (i) approval of the Business Combination, the NYSE Proposal, the Charter Proposal and the Director Election Proposal by the stockholders of the Company, (ii) the expiration of the applicable waiting period under the HSR Act and (iii) the Minimum Cash Condition;

 

   

the outcome of any legal proceedings that may be instituted against the parties following announcement of the Merger Agreement and the proposed transactions contemplated thereby;

 

   

the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, the ability of the post-combination company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees;

 

   

the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement and the proposed transactions contemplated thereby;

 

   

risks related to the uncertainty of the projected financial information with respect to Syniverse;

 

   

the inability to obtain or maintain the listing of the post-acquisition company’s Class A Stock and public warrants on the NYSE following the Business Combination;

 

   

risks related to the post-combination company’s ability to raise financing in the future;

 

   

the post-combination company’s success in retaining or recruiting, or changes required in, our officers, key employees or directors following the Business Combination;

 

   

our directors and officers potentially having conflicts of interest with our business or in approving the Business Combination;

 

   

intense competition and competitive pressures from other companies in the industry in which the post-combination company will operate;

 

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the business, operations and financial performance of Syniverse, including market conditions and global and economic factors beyond Syniverse’s control;

 

   

the effect of legal, tax and regulatory changes;

 

   

the receipt by the Company or Syniverse of an unsolicited offer from another party for an alternative business transaction that could interfere with the proposed Business Combination;

 

   

the risk that the proposed Business Combination disrupts current plans and operations of the Company as a result of the announcement and consummation of the transactions described herein;

 

   

costs related to the Business Combination;

 

   

changes in applicable laws or regulations;

 

   

the possibility that Syniverse may be adversely affected by other economic, business, and/or competitive factors;

 

   

the amount of redemption requests made by the Company’s public stockholders;

 

   

the impact of the continuing COVID-19 pandemic on the Company, Syniverse’s business and the projected results of operations, financial performance or other financial metrics or on any of the foregoing risks; and

 

   

other risks and uncertainties disclosed in this proxy statement, including those under “Risk Factors,” and other documents filed or to be filed with the SEC by the Company.

In addition, Syniverse is subject to the following risk factors, among other things:

 

   

System failures, delays and other problems could harm Syniverse’s reputation and business, cause Syniverse to lose customers and expose Syniverse to customer liability;

 

   

Syniverse does not control the networks over which many of its services are transmitted, and a failure in the operations of such networks could adversely affect Syniverse’s business;

 

   

Breaches in data security and lapses in data privacy as well as disruptions and other damages to Syniverse’s information technology or “IT” operations and system networks may adversely impact Syniverse’s business operations, its reputation, the satisfaction of its customers, suppliers and vendors and may lead to reputational damage and significant liabilities;

 

   

Syniverse’s reliance on third-party vendors for communications software, hardware and other infrastructure components exposes Syniverse to a variety of risks it cannot control;

 

   

If Syniverse does not successfully complete its digital transformation, it could fail to meet market expectations with respect to the performance of its products and services and its business, financial condition and results of operations could be adversely impacted;

 

   

Syniverse’s success depends on its ability to attract and maintain talented employees;

 

   

Syniverse depends on a small number of customers for a significant portion of its revenues and the loss of any of its major customers would harm it;

 

   

COVID-19 could continue to negatively impact Syniverse’s financial performance;

 

   

The market for Syniverse’s services is intensely competitive, and many of its competitors have significant financial, technical, marketing and other resources;

 

   

Future consolidation among Syniverse’s customer base and decisions by its customers to develop in-house alternatives to its services would negatively impact its financial performance;

 

   

Syniverse’s relationship with Twilio may not prove to be accretive and any loss of Twilio as a customer or commercial partner could harm Syniverse’s business;

 

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Syniverse’s failure to achieve or sustain desired pricing levels or to offset price reductions with increased transaction volumes, could impact its ability to maintain profitability or positive cash flow;

 

   

If Syniverse does not adapt to rapid technological change in the industries it serves and successfully develop, introduce and market new products and services, or such products and services are not widely adopted by its current or targeted customers, its prospects, financial condition and results of operation could be materially adversely affected;

 

   

Most of Syniverse’s customer contracts do not provide for minimum payments at or near its historical levels of revenues from these customers;

 

   

Syniverse’s international operations are subject to uncertainties that could adversely affect its operating results;

 

   

Political instability in certain countries in which Syniverse operates could have an adverse impact on its business and operations;

 

   

Syniverse’s international operations require it to comply with anti-corruption laws and regulations of the U.S. government and various international jurisdictions;

 

   

Syniverse currently conducts limited business operations and expects to continue such operations in countries targeted by United States and European Union economic sanctions;

 

   

Syniverse may not be able to receive or retain licenses or authorizations that may be required for it to sell its services internationally;

 

   

Fluctuations in currency exchange rates may adversely affect Syniverse’s results of operations;

 

   

Syniverse may be unsuccessful in achieving its growth strategies or its transformation initiatives, which could limit its profitability;

 

   

Syniverse conducts business in both domestic and international markets with complex and evolving tax rules, which subjects it to taxation-related risks;

 

   

Regulations affecting Syniverse’s customers and Syniverse and future regulations to which they or Syniverse may become subject may harm Syniverse’s business;

 

   

Because some of Syniverse’s services are used to collect and store personal information of its customers’ employees or customers, privacy concerns could result in additional costs and liability to Syniverse or inhibit sales of its services;

 

   

Failure to protect Syniverse’s intellectual property rights adequately may have a material adverse effect on its results of operations or its ability to compete;

 

   

If third parties claim that Syniverse is in violation of their intellectual property rights, it could have a negative impact on Syniverse’s results of operations and ability to compete;

 

   

If third parties claim that Syniverse’s products or services infringe on their intellectual property rights, Syniverse may be required to indemnify its customers for any damages or costs they incur in connection with such claims;

 

   

Syniverse is party to a number of lawsuits that arise in the ordinary course of business and may become party to others in the future;

 

   

The costs and difficulties of acquiring and integrating complementary businesses and technologies could impede Syniverse’s future growth, diminish its competitiveness, and harm its operations;

 

   

Unfavorable general economic conditions in the United States or in other major global markets could negatively impact Syniverse’s financial performance;

 

   

Syniverse projections provided to the MBAC Board and included in this proxy statement are subject to significant risks, assumptions, estimates and uncertainties and were prepared more than six months

 

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prior to the date of this proxy statement. As a result, Syniverse’s projected revenues, market share, expenses and profitability may differ materially from its expectations;

 

   

Syniverse incurs variable termination fees on behalf of its enterprise messaging customers when it terminates A2P messages into a mobile operator’s network. Syniverse bears the payment risks associated with these fees if its enterprise messaging customers do not reimburse these fees to it in a timely manner, or at all;

 

   

Syniverse’s financial results may be adversely affected if its intangible assets or goodwill are impaired;

 

   

If Syniverse fails to maintain effective internal controls over financial reporting at a reasonable assurance level, Syniverse may not be able to accurately report its financial results and may be required to restate previously published financial information;

 

   

Fulfilling Syniverse’s obligations incident to being a public company, including compliance with the Exchange Act and the requirements of the NYSE, SOX and the Dodd-Frank Act, will be expensive and time-consuming, and any delays or difficulties in satisfying these obligations could have a material adverse effect on its future results of operations and its stock price;

 

   

At the conclusion of the transaction, the post-combination company will have five large shareholders, Carlyle, Twilio, Sponsor, Brigade and Oak Hill, whose interests in the post-combination company’s business may be different than yours;

 

   

Syniverse has substantial debt and may incur substantial additional debt, which could adversely affect the post-combination company’s financial health, reduce its profitability, limit its ability to obtain financing in the future and pursue certain business opportunities and make payments on its indebtedness;

 

   

The New Credit Agreement will contain restrictions and limitations that could significantly impact the post-combination company’s ability and the ability of most of its subsidiaries to engage in certain business and financial transactions;

 

   

Any amounts that we use to service or redeem our Preferred Stock will not be available for distributions to our common stockholders and, if converted, would have a dilutive impact on our Class A Stock;

 

   

The post-combination company may have future capital needs and may not be able to obtain additional financing on acceptable terms or at all; and

 

   

An increase in interest rates would increase the cost of servicing the post-combination company’s debt and could reduce its profitability, decrease its liquidity and impact its solvency.

Stockholders are urged to consider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only as of the date of this proxy statement. We undertake no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future, except as may be required under applicable securities laws. You should not place undue reliance on these forward-looking statements in deciding how to grant your proxy or instruct how your vote should be cast or vote your shares on the proposals set forth in this proxy statement. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements.

 

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RISK FACTORS

You should carefully review and consider the following risk factors and the other information contained in this proxy statement, including the financial statements and notes to the financial statements included herein, in evaluating the Business Combination and the proposals to be voted on at the Special Meeting. The following risk factors apply to the business and operations of Syniverse and will also apply to the business and operations of the post-combination company following the completion of the Business Combination. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the Business Combination, and may have an adverse effect on the business, cash flows, financial condition and results of operations of the post-combination company. You should also carefully consider the following risk factors in addition to the other information included in this proxy statement, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” We or Syniverse may face additional risks and uncertainties that are not presently known to us or Syniverse, or that we or Syniverse currently deem immaterial, which may also impair our or Syniverse’s business or financial condition. The following discussion should be read in conjunction with the financial statements and notes to the financial statements included herein.

Risk Related to Syniverse’s Business

System failures, delays and other problems could harm Syniverse’s reputation and business, cause Syniverse to lose customers and expose Syniverse to customer liability.

Syniverse’s success depends on its ability to provide reliable services to its customers. Syniverse’s operations could be interrupted or degraded by any damage to or failure of:

 

   

its computer software or hardware, or its customers’ or suppliers’ computer software or hardware;

 

   

its networks, its customers’ networks or its suppliers’ networks; and

 

   

its connections and outsourced service arrangements with third parties.

Syniverse’s systems and operations are also vulnerable to damage or interruption from:

 

   

power loss, transmission cable cuts and other telecommunications and utility failures;

 

   

hurricanes, fires, earthquakes, floods and other natural disasters;

 

   

a terrorist attack in the United States or in another country in which Syniverse operates;

 

   

interruption of service arising from facility migrations, resulting from changes in business operations including acquisitions and data center migrations;

 

   

computer viruses, software defects and the impacts of malware and hackers;

 

   

loss or misuse of proprietary information or customer data that compromises security, confidentiality or integrity; and

 

   

errors by Syniverse’s employees or third-party service providers.

From time to time in the ordinary course of Syniverse’s business, Syniverse’s network nodes and other systems experience temporary outages. As a means of ensuring continuity in the services Syniverse provides to customers, Syniverse has invested in system redundancies, proactive alarm monitoring and other back-up infrastructure, though Syniverse cannot assure you that it will be able to re-route its services over its back-up facilities and provide continuous service to customers in all circumstances without material degradation. Because many of Syniverse’s services play a mission-critical role for its customers, any damage to or failure of the infrastructure it relies on, including that of its customers and vendors, could disrupt or degrade the operation of its network and the provision of its services, result in the loss of current and potential customers and expose Syniverse to potential liability under its customer contracts.

 

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Syniverse does not control the networks over which many of its services are transmitted, and a failure in the operations of such networks could adversely affect Syniverse’s business.

Syniverse’s business depends upon the capacity, reliability and security of the networks and infrastructure owned and managed by third parties, including its vendors and customers that are used to deliver its services. These networks could fail for a variety of reasons, including new technology incapability, the degradation of network performance under the strain of too many mobile customers using the network, a general failure from natural disaster or a political or regulatory situation. Syniverse has no control over the operation, quality or maintenance of a significant portion of these networks and infrastructure or whether the third parties who own and operate these networks will upgrade or improve the software, equipment and services incorporated into these networks. If one or more of these companies is unable or unwilling to supply or expand its levels of service to Syniverse in the future, Syniverse’s operations could be severely impacted. In addition, rapid changes in the telecommunications industry have led to industry consolidation. This consolidation may cause the availability, pricing and quality of the services Syniverse uses to vary and could lengthen the amount of time it takes to deliver the services that Syniverse uses, in particular for those services for which Syniverse needs access to mobile operators’ networks in order to deliver.

Breaches in data security and lapses in data privacy, as well as disruptions and other damages to Syniverse’s information technology or “IT” operations and system networks, may adversely impact Syniverse’s business operations, its reputation, the satisfaction of its customers, suppliers and vendors and may lead to reputational damage and significant liabilities.

Syniverse’s IT systems are subject to security risks that could seriously harm Syniverse’s business and Syniverse may incur increasing costs in an effort to minimize those risks. Syniverse’s services require that it electronically receive, process, store and transmit customer information, which includes certain sensitive consumer and end-user data. These risks are likely to increase as Syniverse expands its technology and network footprint. Cybersecurity incidents can result from human error, equipment failure, fraud, deliberate attacks or unintentional events. These incidents can include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption. Cybersecurity attacks are becoming more sophisticated and include, but are not limited to, malicious software, ransomware that encrypts critical data as part of a scheme to extort payment, attempts to gain unauthorized access to data (either directly or through Syniverse’s vendors and customers), extortionate threats to disclose compromised or stolen data to the public, and other electronic or cybersecurity breaches.

Syniverse has experienced, and may in the future face, hackers, cybercriminals or others gaining unauthorized access to, or otherwise misusing, its systems to misappropriate its proprietary information and technology, interrupt its business, and/or gain unauthorized access to its or its customers’ confidential information.

For example, in May 2021, Syniverse became aware of unauthorized access to its operational and information technology systems by an unknown individual or organization (the “May 2021 Incident”). Promptly upon Syniverse’s detection of the unauthorized access, Syniverse launched an internal investigation, notified law enforcement, commenced remedial actions and engaged the services of specialized legal counsel and other incident response professionals. Syniverse has conducted a thorough investigation of the incident.

The results of the investigation revealed that the unauthorized access began in May 2016. Syniverse’s investigation revealed that the individual or organization gained unauthorized access to databases within its network on several occasions, and that login information allowing access to or from its Electronic Data Transfer (“EDT”) environment was compromised for approximately 235 of its customers. All EDT customers have been notified and have had their credentials reset or inactivated, even if their credentials were not impacted by the incident. All customers whose credentials were impacted have been notified of that circumstance.

 

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Syniverse has notified all affected customers of this unauthorized access where contractually required, and Syniverse has concluded that no additional action, including any customer notification, is required at this time.

Syniverse did not observe any evidence of intent to disrupt its operations or those of its customers and there was no attempt to monetize the unauthorized activity. Syniverse did not experience and does not anticipate that these events will have any material impact on its day-to-day operations or services or its ability to access or process data. Syniverse has maintained, and currently maintains, cyber insurance that it anticipates will cover a substantial portion of its expenditures in investigating and responding to this incident.

While Syniverse believes it has identified and adequately remediated the vulnerabilities that led to the incidents described above, there can be no guarantee that Syniverse will not uncover evidence of exfiltration or misuse of its data or IT systems from the May 2021 Incident, or that it will not experience a future cyber-attack leading to such consequences. Any such exfiltration could lead to the public disclosure or misappropriation of customer data, Syniverse’s trade secrets or other intellectual property, personal information of its employees, sensitive information of its customers, suppliers and vendors, or material financial and other information related to its business. The release of any of this information could have a material adverse effect on Syniverse’s business, reputation, financial condition and results of operations.

Syniverse expends significant resources to protect against such threats and may be required to further expend resources to alleviate problems caused by physical, electronic, and cybersecurity breaches. Regardless of Syniverse’s expenditures and protective efforts, Syniverse may not be able to implement security measures in a sufficiently timely manner or, if implemented, these measures could be circumvented and Syniverse may fail to detect and/or respond to security breaches in a timely manner. Despite Syniverse’s security measures, its IT systems and infrastructure or those of third parties on which it relies may still be vulnerable to such cyber incidents. The results of these incidents could include, but are not limited to, disrupted operations, increased risks of lawsuits, misstated or misappropriated financial data, theft of Syniverse’s intellectual property or other confidential information (including of Syniverse’s customers, suppliers, vendors and employees), liability for stolen assets or information, increased cybersecurity protection costs, including costs related to maintaining cyber insurance, and reputational damage adversely affecting customer or investor confidence. In addition, if any information about Syniverse’s customers, including payment information or personal data, were the subject of or misappropriated in a successful cybersecurity attack against Syniverse, Syniverse could be subject to investigations and litigation or other claims by the affected customers and data protection regulators in multiple jurisdictions. Furthermore, if a high-profile security breach or cyberattack occurs affecting another provider of mission-critical mobile communications services, Syniverse’s customers, suppliers, vendors and prospective customers, suppliers and vendors may lose confidence in the security of these business models generally, which could harm Syniverse’s reputation and brand image. If Syniverse’s services are perceived as not being secure, Syniverse’s overall strategy to be a leading provider of technology solutions to the wireless ecosystem may be adversely impacted.

Syniverse’s reliance on third-party vendors for communications software, hardware and other infrastructure components exposes Syniverse to a variety of risks it cannot control.

The success of Syniverse’s business depends on the capability, reliability and security of its networks and platforms, many of which contain software, hardware and other infrastructure components supplied to Syniverse by its vendors. Syniverse cannot assure you that it will be able to continue to purchase the necessary software, hardware and other infrastructure components from these vendors on acceptable terms or at all. If Syniverse is unable to maintain current purchasing terms with these vendors, or if these vendors are unable to maintain the availability of their products, Syniverse may experience an increase in costs of purchasing these products or it may incur costs related to seeking alternative supplier services and migrating its services to different software and hardware vendors. In addition, Syniverse could experience disruption or degradation in its services which could impact its customers, its reputation and its revenues.

 

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If Syniverse does not successfully complete its digital transformation, it could fail to meet market expectations with respect to the performance of its products and services and its business, financial condition and results of operations could be adversely impacted.

Technology is constantly and rapidly changing and Syniverse must continually strive to update its legacy IT infrastructure and existing operations. As part of its digital transformation, Syniverse endeavors to address its “technical debt,” which it defines as the dated legacy technologies and associated processes in which it has invested over time to support existing products, applications and services, and that must be continuously evolved and refreshed to adjust to business needs and new opportunities. If Syniverse does not sufficiently execute on its digital transformation, it may not meet market performance expectations related to quality, time to market, cost and innovation of its products and services. Some of Syniverse’s products, networks and systems are difficult and expensive to upgrade, and Syniverse may not be able to efficiently upgrade or change these to meet new demands without incurring significant costs that it may not be able to pass on to its customers, which could adversely impact its business, financial condition and results of operations. New system architectures to deliver services or the development of new technology that could be run less expensively on a different platform could accelerate obsolescence of Syniverse’s infrastructure or commodification of its products. In addition, the infrastructure that connects Syniverse’s networks to the internet and other external networks may become insufficient, including with respect to latency, capacity, reliability and connectivity. If Syniverse is not able to adapt to changing technologies or meet customer demands for new processes or technologies in a timely and cost-effective manner, or if Syniverse’s existing IT infrastructure is perceived as being outdated or less sophisticated than its competitors’, Syniverse will not be able to retain existing customers and attract new customers necessary to sustain and grow its business.

Syniverse’s success depends on its ability to attract and maintain talented employees.

Competition for talented and skilled employees in high-technology industries such as Syniverse’s is highly intense. Syniverse must be able to retain its tenured employee base that has acquired specialized knowledge, skills and industry relationships that are important to its business and operations, while at the same time attracting new employees with different skill sets to address the rapidly changing technology in its industry. Syniverse must understand the skills necessary to support its evolving business and provide the right training to its employees to ensure they have the proper skills necessary for it to compete. In addition, COVID-19 has accelerated a number of changes related to employee work patterns and Syniverse needs to be flexible when it thinks about employee compensation, benefits, work locations and other factors if it wants to continue to attract and maintain talented employees. The costs associated with attracting and retaining key technical and other personnel can be significant. If Syniverse is unable to attract, integrate, train, retain and motivate a skilled employee base, it may not be able to meet its strategic and financial objectives.

Syniverse depends on a small number of customers for a significant portion of its revenues and the loss of any of its major customers would harm it.

AT&T Mobility generated 11.4% and 13.5% of Syniverse’s total revenues for the six months ended May 31, 2021 and the eleven months ended November 30, 2020, respectively. A significant amount of Syniverse’s remaining revenues were generated by a small number of additional customers, including Twilio. For the six months ended May 31, 2021, Syniverse’s top 10 carrier customers accounted for approximately 45% of its carrier revenue, and its top 10 enterprise customers accounted for approximately 53% of its enterprise revenue. For the eleven months ended November 30, 2020, Syniverse’s top 10 carrier customers accounted for approximately 50% of its carrier revenue and its top 10 enterprise customers accounted for approximately 51% of its enterprise revenue. Syniverse expects to continue to depend upon a small number of customers, including Twilio, for a significant percentage of its revenues going forward. Since Syniverse’s major customers represent such a large part of its business, the loss of any of its major customers or any services provided to these customers would negatively impact its business. Any non-renewal of contracts with these customers could materially reduce Syniverse’s revenues.

 

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COVID-19 could continue to negatively impact Syniverse’s financial performance.

COVID-19 was identified in China in late 2019 and has since spread throughout the world. Public and private sector policies and initiatives to reduce the transmission of COVID-19 have varied significantly across the globe but in most cases have included restrictions on travel, especially international travel, which has decreased mobile roaming and negatively impacted the revenue Syniverse receives from its services that support mobile roaming such as DCH, FCH, IPX and MPCC. Syniverse estimates that the decline in its revenues attributable to roaming volume caused by COVID-19 was approximately $11.4 million and $28.7 million for the six months ended May 31, 2021 and the eleven months ended November 30, 2020, respectively. Syniverse’s estimate of the COVID-19 impact on revenue was determined from volume declines on its variable revenue services, relative to prior trends and expectations, which occurred after lockdowns were announced. It excludes other revenues from the impacts on pricing, project deferrals and implementation or contract execution delays that are harder to quantify. In addition, Syniverse believes that COVID-19 pandemic and ongoing restrictions to address its effects have the potential to continue to impact its operations. Syniverse has significant operations in numerous international locations and the resurgence of COVID-19 in some parts of the world could temporarily debilitate its work force and impede its hiring and retention of new employees necessary to complete its Transformation Program (as defined below).

Syniverse believes it will continue to see a negative impact on its revenues and a potential impact to its operations due to COVID-19. However, it is impossible to estimate the timing and amount of the continued impact of COVID-19 with certainty at this time as it will depend upon future developments which are highly uncertain and cannot be predicted with confidence, including the scope, severity, duration and potential cyclicality of the pandemic, the length and severity of the global economic slowdown, the willingness of people to travel even after restrictions are lifted, and the impact of COVID-19 on Syniverse’s customers over the longer term. Even though several successful vaccines have been developed, it will take time for the world’s population to be immunized. Deviants of the original COVID-19 virus, including the Delta variant, as well as loosened restrictions have resulted in resurgence of COVID-19 cases in numerous jurisdictions in which Syniverse operates. Because Syniverse has significant operations outside of the United States, and because it derives a significant amount of its revenue from countries outside of the United States or from travel to and from international destinations, Syniverse believes full recovery of its revenues from the COVID-19 pandemic may not occur until 2023.

To ensure it would have adequate liquidity during the pandemic, Syniverse fully drew on its revolving credit facility in March 2020. Pursuant to the terms of its revolving credit facility, Syniverse must meet certain financial covenant requirements during any period in which it has amounts outstanding under its revolving credit facility. In part to ensure it continued to meet these covenant requirements, Syniverse accelerated its pre-existing transformation program and executed on numerous cost control initiatives, such as reducing headcount, consolidating or closing office locations, limiting discretionary spending such as travel and marketing expenses, and limiting discretionary bonuses, merit increases and benefits payable to its employees. It is unclear whether or not these cost control measures will have a long-term impact on Syniverse’s business and its ability to develop new products and services, attract talent and meet its customers’ needs. In addition, if COVID-19 continues to negatively impact its revenues and Syniverse is unable to offset this impact with additional cost control measures, Syniverse may not be able to meet its covenant requirements which could negatively impact its liquidity.

The market for Syniverse’s services is intensely competitive, and many of its competitors have significant financial, technical, marketing and other resources.

Syniverse competes in markets that are intensely competitive and rapidly changing. Increased competition could result in fewer customer orders, reduced pricing, reduced gross and operating margins and loss of market share, any of which could harm its business and results of operations. Syniverse faces competition from large, well-funded providers of similar services, including existing communications, billing and technology companies.

 

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Syniverse also faces competition from major internet service providers, software developers and smaller entrepreneurial companies that are focusing significant resources on developing and marketing services that compete with one or more of the services Syniverse offers.

Syniverse expects that competition for its services will remain intense in the near term and that its primary long-term competitors may not yet have entered the market. Certain of Syniverse’s current and potential competitors have significant financial, technical, marketing and other resources. Syniverse’s competitors may be able to respond more quickly to new or emerging technologies and changes in end-user requirements than Syniverse can.

Future consolidation among Syniverse’s customer base and decisions by its customers to develop in-house alternatives to its services would negatively impact its financial performance.

In the past, consolidation among Syniverse’s customers has at times caused Syniverse to lose transaction volume and to reduce prices. In the future, Syniverse’s transaction volume and pricing may decline for similar reasons. Such consolidation activities may take the form of business combinations, strategic partnerships, or other business arrangements between the operators. In addition, Syniverse believes that certain of its customers may choose to internally develop and deploy certain functionality currently provided by its services. In recent years Syniverse has experienced a loss of revenue due to customer decisions to meet their needs for its services by developing in-house solutions.

Syniverse may not be able to expand its customer base to make up for any revenue declines if it loses customers or if its transaction volumes decline as a result of consolidation activities or in-house alternative solutions. Syniverse’s attempts to diversify its customer base and reduce its reliance on particular customers may not be successful.

Syniverse’s relationship with Twilio may not prove to be accretive and any loss of Twilio as a customer or commercial partner could harm Syniverse’s business.

In connection with the Closing, Syniverse and Twilio expect to enter into the Wholesale Agreement pursuant to which, among other things, Syniverse will continue to provide various SMS and MMS services to Twilio and Twilio will use its commercially reasonable efforts to route portions of certain traffic to Syniverse, subject to Syniverse having sufficient capacity. However, there can be no assurance that the terms of the Wholesale Agreement will be favorable to Syniverse compared to other alternatives when the Wholesale Agreement is entered into or that Syniverse’s business will achieve the expected benefits of the Wholesale Agreement and/or the relationship with Twilio. Although Twilio will be a significant investor in the post-combination company following the Closing and its investment in Syniverse pursuant to the Twilio Subscription Agreement, there can be no assurance that Twilio will maintain or expand its commercial relationship with Syniverse or that the Wholesale Agreement will ultimately be accretive to the results of operations or business of Syniverse. Subject to the terms of the Wholesale Agreement, Twilio may decrease its commercial partnership with Syniverse, pursue direct connections with carriers or acquire or internally develop certain functionality currently provided by Syniverse. If any of the foregoing occurs, Syniverse may experience less growth than expected, a loss of revenues or other adverse effect to its prospects, financial condition and results of operation.

Syniverse’s failure to achieve or sustain desired pricing levels or to offset price reductions with increased transaction volumes, could impact its ability to maintain profitability or positive cash flow.

Competition and industry consolidation have resulted in pricing pressure in certain circumstances. In addition, regulatory or other market forces have lowered the retail prices Syniverse’s customers can charge for roaming services which has increased pricing pressure for its services that support roaming. Syniverse expects pricing pressure to continue in the future. This pricing pressure could negatively impact the selling price of Syniverse’s services at the time of contract renewal or cause its customers to otherwise request pricing reductions or other concessions. For example, consolidation in the wireless services industry in the United States over the

 

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past several years has given some of its customers increased leverage in pricing negotiations. Syniverse’s competitors may also provide services at a lower cost, significantly increasing pricing pressures on Syniverse. While lower retail prices may lead to increased volumes as end users are more willing to use international roaming services, Syniverse may not be able to offset the effects of price reductions with volume increases or the introduction of new services.

If Syniverse does not adapt to rapid technological change in the industries it serves and successfully develop, introduce and market new products and services, or such products and services are not widely adopted by its current or targeted customers, its prospects, financial condition and results of operation could be materially adversely affected.

Syniverse’s industry is characterized by rapid technological change and changing customer demands, such as the evolution of LTE and 5G networks, the replacement of legacy technology and the evolution of the OTT ecosystem that may bypass or compete with mobile network operators (“MNO”) for certain services, such as messaging. Significant technological changes or changes in the needs of Syniverse’s customers have in the past, and are likely to continue to in the future, make certain services obsolete. Syniverse’s success depends on its ability to adapt to its rapidly changing market by continually improving the features, functionality, reliability and responsiveness of its existing services and by successfully developing, introducing and marketing new features, services and applications to meet changing customer needs. In particular, Syniverse is expanding its offerings of data analytics use cases, IoT and 5G related products, private network services, RCS messaging services and universal clearing solutions. Syniverse’s ability to realize the benefits of these and other new services depends, in part, on the adoption and utilization of such services and solutions by its customers, and Syniverse cannot be certain that existing or targeted customers will adopt such offerings in the near term or at all. If Syniverse is not successful in its efforts to develop and monetize new services its prospects, financial condition and results of operation could be materially adversely affected.

Most of Syniverse’s customer contracts do not provide for minimum payments at or near its historical levels of revenues from these customers.

Although some of Syniverse’s customer contracts, including Twilio, require such customers to make minimum payments to Syniverse, these minimum payments are substantially less than the revenues that Syniverse has historically earned from these customers. While Syniverse’s contracts are generally subject to a multi-year term (typically of two or three years), the amount of revenue produced by the contract is not guaranteed. If Syniverse’s customers decide for any reason not to continue to purchase services from it at current levels or at current prices, or not to renew their contracts with it, Syniverse’s revenues could decline.

Syniverse’s international operations are subject to uncertainties that could adversely affect its operating results.

Syniverse provides services in nearly 200 countries worldwide. As of May 31, 2021, Syniverse had 1,447 full time equivalent employees, with approximately 67% located outside of the United States. For the six months ended May 31, 2021, approximately 46.4% of Syniverse’s total revenue was generated outside of the United States. Syniverse’s international operations are subject to numerous risks, including:

 

   

the difficulty of enforcing agreements and collecting receivables through certain foreign legal systems;

 

   

fluctuations in currency exchange rates;

 

   

foreign customers may have longer payment cycles than customers in the United States, including in order to comply with local currency laws;

 

   

U.S. and foreign import, export and related regulatory controls on trade;

 

   

tax rates in some foreign countries may exceed those of the United States and foreign earnings may be subject to withholding requirements or the imposition of tariffs, exchange controls, taxes upon repatriation or other restrictions;

 

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reputational harm or other adverse consequences due to Syniverse’s operations in jurisdictions subject to the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) laws and regulations;

 

   

general economic and political conditions in the countries where Syniverse operates may have an adverse effect on its operations in those countries or not be favorable to its growth strategy;

 

   

unexpected changes in regulatory requirements;

 

   

the difficulties associated with managing a large organization spread throughout various countries, including recruiting and hiring adequate and competent personnel and maintaining its standards, controls, information systems and procedures;

 

   

compliance with various employment and benefit laws and regulations in countries outside of the United States that may be more favorable for employees than similar laws in the United States;

 

   

the risk that foreign governments may adopt regulations or take other actions that would have a direct or indirect adverse impact on its business and market opportunities; and

 

   

the potential difficulty in enforcing intellectual property rights in certain foreign countries.

The success of Syniverse’s international operations will depend, in large part, on its ability to anticipate and effectively manage these and other risks associated with its international operations.

Political instability in certain countries in which Syniverse operates could have an adverse impact on its business and operations.

Syniverse operates in countries and regions across the globe that are subject to political unrest and instability. Internal unrest, acts of violence or strained relations between a foreign government and the U.S. government or Syniverse may adversely affect Syniverse’s operations. Such instability must be carefully considered by management when evaluating the level of current and future activity in such countries. These risks are beyond Syniverse’s control and could have a material adverse effect on its business.

Syniverse’s international operations require it to comply with anti-corruption laws and regulations of the U.S. government and various international jurisdictions.

Doing business on a worldwide basis requires Syniverse and its subsidiaries to comply with the anti-corruption laws and regulations of the U.S. government and various international jurisdictions, and Syniverse’s failure to successfully comply with these rules and regulations may expose it to liabilities. These laws and regulations apply to companies, individual directors, officers, employees and agents, and may restrict Syniverse’s operations, trade practices, investment decisions and partnering activities. In particular, Syniverse’s international operations are subject to U.S. and foreign anti-corruption laws and regulations, such as the Foreign Corrupt Practices Act (“FCPA”) and the UK Bribery Act (the “UK Act”). The FCPA prohibits Syniverse from providing anything of value to foreign officials for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment and requires companies to maintain adequate record-keeping and internal accounting practices to accurately reflect the transactions of the company. As part of its business, Syniverse deals with state-owned business enterprises, the employees and representatives of which may be considered foreign officials for purposes of the FCPA. The UK Act prohibits Syniverse from making payments to private citizens as well as government officials. In addition, some of the international locations in which Syniverse operates lack a developed legal system and have elevated levels of corruption. As a result of the above activities, Syniverse is exposed to the risk of violating anti-corruption laws. Violations of these legal requirements are punishable by criminal fines and imprisonment, civil penalties, disgorgement of profits, injunctions, debarment from government contracts as well as other remedial measures. Syniverse has established policies and procedures designed to assist it and its personnel to comply with applicable U.S. and international laws and regulations. However, there can be no assurance that Syniverse’s policies and procedures will effectively prevent it from violating these regulations in every transaction in which it may engage, and such a violation could adversely affect its reputation, business, financial condition and results of operations.

 

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Syniverse currently conducts limited business operations and expects to continue such operations in countries targeted by United States and European Union economic sanctions.

OFAC enforces certain laws and regulations (“OFAC Sanctions”) that impose restrictions upon U.S. nationals, U.S. permanent residents, persons located in the United States, or entities organized under the laws of a U.S. jurisdiction (collectively, “U.S. Persons”), upon business conducted in whole or in part in the United States, and, in some instances, upon foreign entities owned or controlled by U.S. Persons, with respect to activities or transactions with certain countries, governments, entities and individuals that are the subject of OFAC Sanctions (“U.S. Sanctions Targets”). U.S. Persons are also prohibited from facilitating such activities or transactions conducted by others. Similarly, the European Union and its member nations enforce certain laws and regulations (“E.U. Sanctions”) that impose restrictions upon nationals of E.U. member states, persons located within E.U. member states, entities incorporated or constituted under the law of an E.U. member state, or business conducted in whole or in part in E.U. member states with respect to activities or transactions with certain countries, governments, entities and individuals that are the subject of E.U. Sanctions (“E.U. Sanctions Targets” and together with U.S. Sanctions Targets, “Sanctions Targets”). E.U. persons are also generally prohibited from activities that promote such activities or transactions conducted by others.

Additionally, U.S. law authorizes the imposition of various disabilities (“U.S. Secondary Sanctions”) on non-U.S. companies that engage in certain specified types of business involving Iran or Cuba. Syniverse engages in limited business activities in countries that are Sanctions Targets, including Iran, Sudan and Cuba. Syniverse’s activities and investments in Iran, Sudan and Cuba in the aggregate accounted for less than 1% of its consolidated revenues during the six months ended May 31, 2021 and the eleven months ended November 30, 2020. Syniverse expects to continue to engage in these limited business activities in countries that are deemed Sanctions Targets over the foreseeable future. Although Syniverse believes that OFAC and E.U. Sanctions under their current terms do not prohibit its current activities, and that its current activities will not cause it to be subject to potential U.S. Secondary Sanctions under current U.S. law, its reputation may be adversely affected and investors may divest their investments in Syniverse as a result of internal investment policies or may decide for reputational reasons to divest such investments. In addition, the sanctions laws and regulations could be changed in ways that would require Syniverse to discontinue or limit its current activities involving Iran, Sudan or Cuba, or involving other countries, individuals or entities that are not currently designated as Sanctions Targets. Syniverse cannot assure you that the foregoing will not occur or that such occurrence will not have a material adverse effect on the value of its securities.

Syniverse may not be able to receive or retain licenses or authorizations that may be required for it to sell its services internationally.

The sales and marketing of Syniverse’s services internationally are subject to the U.S. Export Control regime and similar regulations in other countries. In the United States, items of a commercial nature are generally subject to regulatory control by the U.S. Department of Commerce’s Bureau of Industry and Security and to Export Administration Regulations, and other international trade regulations may apply as well. In the future, regulatory authorities may require Syniverse to obtain export licenses or other authorizations to export its services abroad, depending upon the nature of items being exported, as well as the country to which the export is to be made. Syniverse cannot assure you that any of its applications for export licenses or other authorizations will be granted or approved. Furthermore, the export license/export authorization process is often time consuming. Violations of export control regulations could subject Syniverse to fines and other penalties, such as losing the ability to export for a period of years, which would limit its revenue growth opportunities and significantly hinder its attempts to expand its business internationally.

Fluctuations in currency exchange rates may adversely affect Syniverse’s results of operations.

A significant part of Syniverse’s business consists of sales made to customers outside the United States. During each of the six months ended May 31, 2021 and eleven months ended November 30, 2020, approximately

 

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19% and 18% of Syniverse’s revenues were denominated in currencies other than the U.S. dollar, respectively. Additionally, portions of Syniverse’s operating expenses are incurred by its international operations and denominated in local currencies. Syniverse cannot assure you that adverse currency exchange rate fluctuations will not have a material impact in the future. In addition, Syniverse’s balance sheet reflects non U.S. dollar denominated assets and liabilities, including inter-company balances eliminated in consolidation, which can be adversely affected by fluctuations in currency exchange rates.

Syniverse may be unsuccessful in achieving its growth strategies or its transformation initiatives, which could limit its profitability.

Syniverse’s ability to generate growth will be affected by, among other factors, its ability to:

 

   

expand the range of services it offers to customers to address their evolving network needs;

 

   

attract new customers;

 

   

manage pricing pressure when existing customer contracts are renewed;

 

   

increase the number of services performed for existing customers; and

 

   

achieve expected revenue from new customer contracts.

Syniverse’s ability to achieve its transformational initiative targets will be affected by, among other factors, its ability to:

 

   

hire, train and retain qualified employees in lower cost jurisdictions;

 

   

successfully automate manual operational processes in a timely manner;

 

   

successfully re-design its internal processes to eliminate inefficiencies; and

 

   

successfully complete its digital transformation.

Many of the factors affecting Syniverse’s ability to generate growth and achieve its transformational initiative targets may be beyond its control, and Syniverse cannot be certain that its strategies will be successful. If Syniverse is unable to grow its revenues and control its costs, Syniverse will be less profitable. Syniverse may also be unable to generate sufficient free cash flow to invest in its business and compete effectively.

Syniverse conducts business in both domestic and international markets with complex and evolving tax rules, which subjects it to taxation-related risks.

Syniverse conducts business in many tax jurisdictions throughout the United States and internationally that have complex, subjective and evolving tax rules that require significant judgments and estimates in determining its provision for both income taxes and non-income-based taxes and fees such as sales, VAT, GST and telecommunications taxes assessed on its operations or its sales to customers. These estimates include several key assumptions, including, but not limited to, Syniverse’s determinations as to income and expenses attributable to specific jurisdictions, the taxability of its products and the jurisdictions in which Syniverse believes it has nexus or permanent establishment.

Syniverse’s tax expense may be impacted if tax authorities successfully challenge the tax positions that it takes, such as positions relating to the arm’s-length pricing standards for its intercompany transactions and positions regarding taxability of specific revenue sources or transactions, or if tax laws change or are clarified to its detriment. In such cases, Syniverse may be required to surrender tax attributes or pay additional taxes, interest or penalties should the taxing authority assert different interpretations, allocations or valuations of its services. There is a risk, if one or more taxing authorities significantly disagrees with Syniverse’s positions, or that if there are significant changes or clarifications to applicable tax laws, that any additional taxes, interest or penalties that may result could be material and could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of Syniverse’s operations.

 

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On December 22, 2017, the U.S. government enacted tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made broad and complex changes in the U.S. tax code that have impacted us, including changes to the uses and limitations of domestic net operating losses and interest deductions. In addition, it created the Base Erosion and Anti-Abuse Tax (“BEAT”), which applies a minimum tax calculated by reference to intercompany payments to foreign affiliates. Syniverse’s ability to utilize net operating loss carry forwards and interest carry forwards depends on existence of sufficient taxable income of the appropriate character within the relevant period. However, utilization of existing net operating loss carry forwards and interest deductions also causes Syniverse to be subject to BEAT until those losses are at least substantially exhausted.

Certain government agencies in jurisdictions where Syniverse and its affiliates do business have had an extended focus on issues related to the taxation of multinational companies. In addition, the Organization for Economic Co-operation and Development is conducting a project focused on base erosion and profit shifting in international structures, which seeks to establish certain international standards for taxing the worldwide income of multinational companies. As a result of these developments, the tax laws of certain countries in which Syniverse and its affiliates do business could change on a prospective or retroactive basis, and any such changes could increase its liabilities for taxes, interest and penalties, and therefore could harm its business, cash flows, results of operations and financial condition. Changes to U.S. tax laws that may be enacted in the future could impact the tax treatment of Syniverse’s foreign earnings. Due to the volume of Syniverse’s international business activities, any changes in the U.S. taxation of such activities may increase Syniverse’s worldwide effective tax rate and adversely affect its business, results of operations and financial condition.

Regulations affecting Syniverse’s customers and Syniverse and future regulations to which they or Syniverse may become subject may harm Syniverse’s business.

Although Syniverse’s services have not been heavily regulated in the past, Syniverse is authorized by the U.S. Federal Communications Commission (“FCC”) to offer certain of its services on an interstate and international basis. Syniverse operates its number portability operations in Singapore and India pursuant to licenses granted by these governments and Syniverse is registered as a money service business in the United Kingdom in connection with its financial clearing business. Each of these authorizations subjects Syniverse to certain regulatory obligations.

In addition, the majority of Syniverse’s customers are MNOs and subject to significant government regulation by various regulatory bodies, such as the FCC and European Commission. Any change in current or future laws or regulations that negatively impact Syniverse’s customers could harm Syniverse’s business and results of operations. Several services that Syniverse offers also may be indirectly affected by regulations imposed upon the customers and end-users of those services. These regulations may increase Syniverse’s costs of operations and affect whether and in what form Syniverse is able to provide a given service at all.

Syniverse cannot predict when, or upon what terms and conditions, further regulation, or deregulation, might occur or the effects, adverse or otherwise, that such regulation may have on its business.

Because some of Syniverse’s services are used to collect and store personal information of its customers’ employees or customers, privacy concerns could result in additional costs and liability to Syniverse or inhibit sales of its services.

Personal privacy has become a significant issue in the United States, European nations and in other countries where Syniverse offers its services. The regulatory framework for privacy issues worldwide is currently complex and evolving, and Syniverse believes it is likely to remain uncertain for the foreseeable future. Many federal, state and foreign government bodies and agencies have adopted, are in the process of adopting or are considering adopting laws and regulations regarding the collection, use and disclosure of personal information. In the United States, these include rules and regulations promulgated under the authority of the Federal Trade

 

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Commission and state legislatures. For example, California has adopted the California Consumer Privacy Act which provides consumers, employees, and others with rights concerning their personal information, and strict response requirements for data subject access requests. Virginia and Colorado have recently adopted the Virginia Consumer Data Protection Act and the Colorado Privacy Act, respectively, which similarly provide for data subject rights and require certain entities that collect data to put in place procedures to protect those rights. Internationally, many of the jurisdictions in which Syniverse operates have established their own data security and protection laws with which Syniverse or its customers must comply. For example, the European Union issued the General Data Protection Regulation (“GDPR”), which became effective May 25, 2018 and applies to entities doing business in Europe and Brazil adopted Lei Geral de Proteção de Dados Pessoais of Brazil, which became effective August 27, 2020 and applies to entities doing business in Brazil. In many instances the international regulations set a higher bar for privacy compliance than the U.S. regulations. In particular, the GDPR includes new data subject rights (such as the right to be forgotten, the right to portability and the right to restriction of data), new mandatory security breach notification requirements, requirements to conduct data protection impact assessments and extensive record keeping requirements. Other foreign jurisdictions have established their own laws and regulations, and regional forums have begun to set standards for the transfer of data across international borders. For example, the Asia-Pacific Economic Cooperation forum has implemented Cross Border Privacy Rules System with which Syniverse must comply if it wants to do business with global companies in Asia.

Syniverse’s services require that it electronically receive, process, store and transmit customer information, which includes certain sensitive end-user data. Syniverse has expended significant resources and may be required to expend additional resources to comply with existing and new rules and regulations. If Syniverse is unable to comply with any of these national or international rules and regulations protecting end user data, it could incur significant fines or be served with legal orders to cease processing of personal data within certain jurisdictions. Any inability to adequately address privacy concerns, even if unfounded, or comply with applicable privacy or data protection laws, regulations and policies, could result in additional cost and liability to Syniverse, damage its reputation, inhibit sales and harm its business.

Failure to protect Syniverse’s intellectual property rights adequately may have a material adverse effect on its results of operations or its ability to compete.

Syniverse attempts to protect its intellectual property rights in the United States and in foreign countries through a combination of patent, trademark, copyright and trade secret laws, as well as licensing agreements and agreements preventing the unauthorized disclosure and use of its intellectual property. Syniverse cannot assure you that these protections will be adequate to prevent competitors from copying or reverse engineering its services, or independently developing and marketing services that are substantially equivalent to or superior to its own. In addition, third parties may be able to successfully challenge, oppose, invalidate, render unenforceable or circumvent Syniverse’s patents, trademarks, copyrights and other intellectual property rights. Syniverse cannot provide assurance that any pending patent application filed by it will result in an issued patent or if patents are issued to us, that those patents will provide meaningful protection against competitors or against competitive technologies. Syniverse may fail or be unable to obtain or maintain adequate protections for certain of its intellectual property in the United States or certain foreign countries. Further, Syniverse’s intellectual property rights may not receive the same degree of protection in foreign countries as they would in the United States because of the differences in foreign trademark, patent and other laws concerning proprietary rights. Such failure or inability to obtain or maintain adequate protection of Syniverse’s intellectual property rights for any reason could have a material adverse effect on its business, results of operations and financial condition.

Monitoring and protecting Syniverse’s intellectual property rights can be challenging and costly. From time to time, Syniverse may be required to initiate litigation or other action to enforce its intellectual property rights or to establish their validity and enforceability. Such action could result in substantial cost and diversion of resources and management attention, and Syniverse cannot assure you that any such action will be successful.

 

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If third parties claim that Syniverse is in violation of their intellectual property rights, it could have a negative impact on Syniverse’s results of operations and ability to compete.

Syniverse faces the risk of claims that it has infringed or misappropriated the intellectual property rights of third parties. For example, significant litigation regarding patent rights exists in Syniverse’s industry. Syniverse’s competitors in both the United States and foreign countries, many of which have substantially greater resources than Syniverse has and have made substantial investments in competing software and technologies, may have applied for or obtained, or may in the future apply for and obtain, patents or registered copyrights that will prevent, limit or otherwise interfere with its ability to make and sell its services. Syniverse has not conducted an independent review of patents or registered copyrights owned by third parties. The large number of patents, the rapid rate of new patent issuances, the complexities of the technology involved, and uncertainty of litigation increase the risk of business assets and management’s attention being diverted to patent or other intellectual property litigation.

It is possible that third parties will make claims of infringement against Syniverse, or against its licensees or other customers, in connection with their use of its technology. Any claims, even those without merit, could:

 

   

be expensive and time-consuming to defend;

 

   

adversely affect its relationships with its current or future customers;

 

   

cause it to cease making, licensing, using or selling equipment, services or products that incorporate the challenged intellectual property;

 

   

require it to redesign its equipment or services, if feasible;

 

   

divert management’s attention and resources; and

 

   

require it to enter into royalty or licensing agreements in order to obtain the right to use necessary intellectual property.

Any royalty or licensing agreements, if required, may not be available to Syniverse on acceptable terms or at all. A successful claim of infringement or misappropriation against Syniverse or one of its licensees or customers in connection with the use of its services could result in its being required to pay significant damages, enter into costly license or royalty agreements or stop the sale of certain services, any of which could have a negative impact on its business, results of operations and financial condition and harm its future prospects.

If third parties claim that Syniverse’s products or services infringe on their intellectual property rights, Syniverse may be required to indemnify its customers for any damages or costs they incur in connection with such claims.

Syniverse generally indemnifies its customers with respect to claims that its services infringe upon the proprietary rights of third parties. Third parties may assert infringement claims against Syniverse’s customers. These claims may require Syniverse to initiate or defend protracted and costly litigation on behalf of its customers, regardless of the merits of these claims. If any of these claims succeed, Syniverse may be forced to pay damages on behalf of its customers or may be required to obtain licenses for the services they use. If Syniverse cannot obtain all necessary licenses on commercially reasonable terms, its customers may be forced to stop using its services. A successful claim or inability to obtain necessary licenses could have a negative impact on Syniverse’s business, results of operations and financial condition and harm its future prospects.

Syniverse is party to a number of lawsuits that arise in the ordinary course of business and may become party to others in the future.

Syniverse is party to a number of lawsuits that arise in the ordinary course of business and may become a party to others in the future. The possibility of such litigation, and its timing, is in large part outside Syniverse’s

 

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control. While none of the current lawsuits in which Syniverse is involved are reasonably estimated to be material as of the date hereof, it is possible that future litigation could arise, or developments could occur in existing litigation, that could have material adverse effects on us.

The costs and difficulties of acquiring and integrating complementary businesses and technologies could impede Syniverse’s future growth, diminish its competitiveness, and harm its operations.

From time to time, Syniverse may consider selective acquisitions of complementary businesses. Future acquisitions could result in the incurrence of debt and contingent liabilities, which could harm Syniverse’s business, financial condition and results of operations. Risks Syniverse could face with respect to future acquisitions include:

 

   

greater than expected costs, management time and effort involved in identifying, completing and integrating acquisitions;

 

   

potential disruption of Syniverse’s ongoing business and difficulty in maintaining its standards, controls, information systems and procedures;

 

   

diversion of management’s attention from other business concerns;

 

   

entering into markets and acquiring technologies in areas in which Syniverse has little experience;

 

   

acquiring intellectual property which may be subject to various challenges from others;

 

   

the inability to successfully integrate the services and personnel of any acquisition into Syniverse’s operations;

 

   

the inability to achieve expected synergies, business growth opportunities, cost savings and other benefits Syniverse anticipates;

 

   

a need to incur debt, which may reduce Syniverse’s cash available for operations and other uses;

 

   

incurrence of liabilities and claims arising out of acquired businesses; and

 

   

unforeseen integration difficulties that may cause service disruptions.

Unfavorable general economic conditions in the United States or in other major global markets could negatively impact Syniverse’s financial performance.

Unfavorable general economic conditions may exist globally, or in one or more regions, due to a number of factors, including, but not limited to, the decreased availability of credit resulting from slower economic activity, concerns about inflation and deflation, volatility in energy costs, decreased consumer confidence, reduced corporate profits and capital spending. Currency fluctuations and adverse business conditions in some emerging markets have impacted profitability and credit availability for certain of Syniverse’s customers. These conditions make it difficult for Syniverse’s customers, its vendors and Syniverse to accurately forecast and plan future business activities, and they could cause further slow spending on Syniverse’s services. Furthermore, during challenging economic times such as recession or economic slowdown, Syniverse’s customers or vendors may face issues gaining timely access to sufficient credit, which could impair their ability to make timely payments or provide services to us. If that were to occur, Syniverse may be required to increase its allowance for doubtful accounts and its cash collections could be negatively impacted. Any future economic downturn may reduce Syniverse’s revenues or its percentage of revenue growth on a quarter-to-quarter basis. Syniverse cannot predict the timing, strength or duration of any economic slowdown or subsequent economic recovery, world-wide, or in the telecommunications industry. If the economy or the markets in which Syniverse operates do not improve from their current condition or if they deteriorate, its customers or potential customers could reduce or further delay their use of its services, which would adversely impact its revenues and ultimately its profitability.

Demand for Syniverse’s services is driven primarily by wireless data traffic. Changes in end-user usage patterns could be affected in any recession or economic downturn in the United States or any other country where

 

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Syniverse does business and could negatively impact the number of transactions processed and adversely affect its revenues and earnings.

Syniverse projections provided to the MBAC Board and included in this proxy statement are subject to significant risks, assumptions, estimates and uncertainties and were prepared more than six months prior to the date of this proxy statement. As a result, Syniverse’s projected revenues, market share, expenses and profitability may differ materially from its expectations.

Syniverse operates in a rapidly changing and competitive industry and the projections were based upon assumptions made at the time the projections were prepared, speak as of the time such projections were prepared and are subject to the risks and assumptions made by management with respect to its industry and other factors. Operating results are difficult to forecast because they generally depend on a number of factors, including the competition Syniverse faces and its ability to attract and retain customers and respond to evolving technologies and consumer preferences. Additionally, Syniverse’s business may from time to time be affected by third-party vendor behavior and the operations of the networks upon which Syniverse relies, as well as a number of additional factors which may be difficult to predict. This may result in decreased revenue levels, and Syniverse may be unable to adopt measures in a timely manner to compensate for any unexpected shortfall in revenues or operating income. This inability could cause Syniverse’s operating results to be higher or lower than expected. These factors make creating accurate forecasts and budgets challenging and, as a result, Syniverse may fall materially short of the forecasts and expectations provided to the MBAC Board and included in this proxy statement. The projections provided to the MBAC Board and included in this proxy statement were subjective in many respects. As a result, there can be no assurance that the projections provided to the MBAC Board and included in this proxy statement will be realized or that actual results will not be significantly different than estimated. Since the projections provided to the MBAC Board and included in this proxy statement cover multiple years, that information by its nature becomes less predictive and reliable with each successive year.

Syniverse incurs variable termination fees on behalf of its enterprise messaging customers when it terminates A2P messages into a mobile operator’s network. Syniverse bears the payment risks associated with these fees if its enterprise messaging customers do not reimburse these fees to it in a timely manner, or at all.

Many mobile operators charge termination fees when A2P messages are delivered into their networks. The fees are usually charged on a per message basis and thereby increase as the amount of traffic increases. These fees are incurred under connection agreements that Syniverse has entered into with these mobile operators and therefore, Syniverse is responsible for the payment obligation regardless of whether Syniverse’s enterprise customers ultimately pay Syniverse for delivery of this traffic. In addition, since these fees are variable and can only be invoiced to Syniverse’s customers in arrears, Syniverse often owes these fees before it collects them from its customers. As its message volumes grow, the amount of fees Syniverse has advanced on behalf of its enterprise customers has continued to increase. If a substantial number of its enterprise customers do not pay Syniverse in a timely fashion or at all Syniverse could incur significant expenses which could have a negative impact on its business, results of operations and financial condition.

Syniverse’s financial results may be adversely affected if its intangible assets or goodwill are impaired.

As a result of Syniverse’s historical acquisitions, a significant portion of Syniverse’s total assets consists of intangible assets, including goodwill. Syniverse may not realize the full fair value of its intangible assets and goodwill. Syniverse may engage in additional acquisitions, which could result in its recognition of additional intangible assets and goodwill. Under current accounting standards, Syniverse is able to amortize certain intangible assets over the useful life of the asset, while goodwill is not amortized. Syniverse currently evaluates, and will continue to evaluate, on a regular basis whether all or a portion of its goodwill or other intangible assets may be impaired. Under current accounting standards, any determination that impairment has occurred would require Syniverse to write-off the impaired portion of goodwill and such intangible assets, resulting in a charge to its earnings. Such a write-off could adversely affect Syniverse’s results of operations.

 

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If Syniverse fails to maintain effective internal controls over financial reporting at a reasonable assurance level, Syniverse may not be able to accurately report its financial results and may be required to restate previously published financial information.

Effective internal controls over financial reporting is necessary for Syniverse to provide reliable financial reports. Syniverse’s ability to successfully implement its business plan requires it to be able to prepare timely and accurate financial statements. Syniverse has incurred substantial expense in connection with the design, implementation and testing of its internal controls. However, Syniverse will need to continue to implement new and enhanced systems, procedures and controls as its business grows and changes. Any delay in the implementation of, or disruption in the transition, to new or enhanced systems, procedures or controls, may cause Syniverse’s operations to suffer and impair its ability to maintain effective internal control over financing reporting. Moreover, Syniverse cannot be certain that the measures it has implemented and will continue to implement in the future are sufficient to ensure that its financial statements accurately reflect its financial condition. Due to its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements.

Fulfilling the post-combination company’s obligations incident to being a public company, including compliance with the Exchange Act and the requirements of the NYSE, SOX and the Dodd-Frank Act, will be expensive and time-consuming, and any delays or difficulties in satisfying these obligations could have a material adverse effect on its future results of operations and the post-combination company’s stock price.

As a public company, the post-combination company will be subject to the reporting, accounting and corporate governance requirements of the NYSE, the Exchange Act, SOX and Section 619 of the Dodd-Frank Act that apply to issuers of listed equity, which impose certain significant compliance requirements, costs and obligations upon it. The changes necessitated by being a publicly listed company require a significant commitment of additional resources and management oversight which will increase the post-combination company’s operating costs. Further, to comply with the requirements of being a public company, the post-combination company may need to undertake various actions, such as implementing new internal controls and procedures and hiring additional accounting or internal audit staff. These laws and regulations also could make it more difficult or costly for the post-combination company to obtain certain types of insurance, including director and officer liability insurance, and the post-combination company may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for the post-combination company to attract and retain qualified persons to serve on its board of directors, its board committees or as its executive officers.

The expenses associated with being a public company include increases in auditing, accounting and legal fees and expenses, investor relations expenses, increased directors’ fees and director and officer liability insurance costs, registrar and transfer agent fees and listing fees, as well as other expenses. As a public company, the post-combination company is required, among other things, to define and expand the roles and the duties of its board of directors and its committees and institute more comprehensive compliance and investor relations functions. Failure to comply with the requirements of being a public company could potentially subject the post-combination company to sanctions or investigations by the SEC, the NYSE or other regulatory authorities, delisting of the common stock of the post-combination company, and potentially civil litigation.

At the conclusion of the transaction, the post-combination company will have five large shareholders, Carlyle, Twilio, Sponsor, Brigade and Oak Hill, whose interests in the post-combination company’s business may be different than yours.

When the transaction is completed, Carlyle, Twilio, Sponsor, Brigade and Oak Hill will own a substantial portion of the post-combination company’s common stock and each will have significant influence over its business. Each of Carlyle, Twilio and Sponsor has the right to nominate directors to the post-combination company’s board, and can influence the appointment of management, the entry into mergers or similar corporate

 

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transactions, the sale of substantially all the post-combination company’s assets and other extraordinary transactions, and Oak Hill has the right to nominate one observer to the post-combination company’s board. The directors so elected have authority, subject to the terms of the post-combination company’s debt and the Preferred Stock, to issue additional stock, implement stock repurchase programs, declare dividends and make other decisions. Carlyle’s, Twilio’s, Sponsor’s, Brigade’s and Oak Hill’s interests could conflict with the post-combination company’s interests. For example, Carlyle, Brigade and Oak Hill are in the business of making investments in companies and may, from time to time, acquire interests in businesses that directly or indirectly compete with the post-combination company’s business, as well as businesses that are significant existing or potential customers. Similarly, Twilio is currently a customer of the post-combination company’s enterprise messaging services. Also, concurrent with the completion of the transaction, Twilio and the post-combination company will be entering into the Wholesale Agreement, and there can be no assurance that such Wholesale Agreement will be accretive to Syniverse’s business or results of operations. As a result of these potential conflicts of interest, we cannot assure you that these investors will not make decisions as commercial partners that are not in line with the expectations of stockholders. Furthermore, each of Carlyle, Twilio, Brigade and Oak Hill may acquire or seek to acquire assets that the post-combination company seeks to acquire and as a result, those acquisition opportunities may not be available to the post-combination company or may be more expensive for the post-combination company to pursue.

Risks Related to Syniverse’s Indebtedness and the Refinancing

Syniverse has substantial debt and may incur substantial additional debt, which could adversely affect the post-combination company’s financial health, reduce its profitability, limit its ability to obtain financing in the future and pursue certain business opportunities and make payments on its indebtedness.

Syniverse has historically maintained a significant amount of debt. As of May 31, 2021, the aggregate principal amount of Syniverse’s indebtedness was $1,956.5 million all of which was secured. This amount includes $85.6 million of debt outstanding under Syniverse’s revolving credit facility, which Syniverse fully drew in March 2020 to ensure Syniverse would have adequate liquidity during the COVID-19 pandemic. While a portion of the proceeds of the Business Combination will be used to refinance and reduce its indebtedness, the combined company following the Business Combination will still have substantial indebtedness. Following the Business Combination and associated refinancing, the post-combination company expects to have an aggregate principal amount of indebtedness of approximately $1,165 million, in the form of a $1,000 term loan and a revolving credit facility, which is expected to be undrawn at the Closing, of up to $165 million. See the section entitled “Description of Certain Indebtedness of Syniverse and the Refinancing.”

Syniverse’s indebtedness could have important consequences to you. For example, it could:

 

   

require the post-combination company to dedicate a substantial portion of its cash flow from operations to payments on its indebtedness, thereby reducing the availability of its cash flow to fund working capital, capital expenditures, acquisitions, research and development efforts and other purposes;

 

   

increase the post-combination company’s vulnerability to and limit its flexibility in planning for, or reacting to, potential downturn in general economic conditions, including from the continuing impact of COVID-19;

 

   

restrict the post-combination company from making strategic acquisitions or cause it to make non-strategic divestitures;

 

   

expose the post-combination company to the risk of increased interest rates as the New Credit Agreement is expected to bear interest at variable rates; and

 

   

expose the post-combination company to additional risks related to currency exchange rates and repatriation of funds.

In addition, the agreements governing Syniverse’s indebtedness and the Certificate of Designations governing the Preferred Stock will contain affirmative and negative covenants that limit Syniverse’s ability to

 

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engage in activities that may be in its long-term best interests. Syniverse’s failure to comply with those covenants could result in an event of default under its debt agreements which, if not cured or waived, could result in the acceleration of substantially all of its indebtedness and trigger an Event of Default (as defined in the Certificate of Designations) under the Certificate of Designations which would result in a 2% increase to the Dividend Rate for the Preferred Stock for so long as such Event of Default is continuing.

If Syniverse cannot service its debt, Syniverse will be forced to take actions such as reducing or delaying acquisitions and/or capital expenditures, selling assets, restructuring or refinancing its debt or seeking additional equity capital. Syniverse can give you no assurance that it can do any of these things on satisfactory terms or at all.

Further, the terms of the New Credit Agreement will provide the post-combination company and its subsidiaries with the flexibility to incur a substantial amount of additional secured or unsecured indebtedness in the future if the post-combination company or its subsidiaries are in compliance with certain incurrence ratios set forth therein. Any such incurrence of additional indebtedness may increase the risks created by Syniverse’s current substantial indebtedness.

The New Credit Agreement will contain restrictions and limitations that could significantly impact the post-combination company’s ability and the ability of most of its subsidiaries to engage in certain business and financial transactions.

The New Credit Agreement will contain restrictive covenants that, among other things, limit the post-combination company’s ability and the ability of its restricted subsidiaries to:

 

   

incur additional indebtedness or issue certain preferred shares;

 

   

pay dividends, redeem or repurchase stock or make other distributions in respect of capital stock;

 

   

repurchase subordinated indebtedness;

 

   

make investments;

 

   

incur additional liens;

 

   

transfer or sell assets;

 

   

create restrictions on the ability of the post-combination company’s restricted subsidiaries to pay dividends to it or make other intercompany transfers;

 

   

make negative pledges;

 

   

consolidate, merge, sell or otherwise dispose of all or substantially all of the post-combination company’s assets;

 

   

enter into certain transactions with the post-combination company’s affiliates; and

 

   

designate subsidiaries as unrestricted subsidiaries.

In addition, the post-combination company will be required to make mandatory prepayments under the New Credit Agreement upon the occurrence of certain events, including the sale of assets and the issuance of debt, in each case subject to certain limitations and conditions set forth in the New Credit Agreement. In addition, under certain circumstances and subject to the limitations set forth in the New Credit Agreement, the New Term Loan Facility may require the post-combination company to make prepayments of the term loans to the extent it generates excess positive cash flow each year.

Any future financing arrangements entered into by the post-combination company may also contain similar covenants and restrictions. As a result of these covenants and restrictions, the post-combination company may be

 

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limited in its ability to plan for or react to market conditions or to meet extraordinary capital needs or otherwise restricted in its activities. These covenants and restrictions could also adversely affect the post-combination company’s ability to finance its future operations or capital needs or to engage in other business activities that would be in its interest.

The post-combination company’s failure to comply with obligations under the New Credit Agreement, as well as others contained in any future debt instruments from time to time, may result in an event of default under the New Credit Agreement. A default, if not cured or waived, may permit acceleration of the post-combination company’s indebtedness. If the post-combination company’s indebtedness is accelerated, it cannot be certain that it will have sufficient funds available to pay the accelerated indebtedness or that it will have the ability to refinance the accelerated indebtedness on terms favorable to the post-combination company or at all. If the post-combination company is forced to refinance these borrowings on less favorable terms or cannot refinance these borrowings, its business, results of operations, financial condition and cash flows could be adversely affected and the value of the Class A stock could be negatively impacted.

Any amounts that we use to service or redeem our Preferred Stock will not be available for distributions to our common stockholders and, if converted, would have a dilutive impact on our Class A Stock.

Pursuant to the PIPE Subscription Agreements entered into at the signing of the Merger Agreement, Brigade and Oak Hill have agreed to purchase approximately 115,979 and 85,911 shares of Preferred Stock, respectively, at a price of $970.00 per share (subject to customary terms and conditions, including the Closing) for gross proceeds to the Company of $265 million. The Preferred stock ranks senior to the Company’s other capital stock and provides Brigade and Oak Hill with certain benefits not available to the Company’s public stockholders. Each share of Preferred Stock has an initial liquidation preference of $1,000 and is convertible, at the holder’s option at any time, into shares of Class A Stock at an initial conversion rate of 86.95652 shares per share of Preferred Stock, subject to adjustment. Such conversion will have a dilutive effect on the Company’s public stockholders. Holders of Preferred Stock will be entitled to receive, when, as and if declared by the Board out of funds legally available for such dividend, cumulative dividends at an initial annual rate of 7.50%. Holders of Preferred Stock will also be entitled to dividends and distributions paid to holders of Common Stock to the same extent as if such holders of Preferred Stock had converted their Preferred Stock into Class A Stock and had held such shares of Class A Stock on the record date for such dividends and distributions. Additionally, at any time following 91 days after the seventh anniversary of the Closing Date, each holder of Preferred Stock will have the option to cause the Company to redeem all, but not less than all, of the shares of Preferred Stock held by such holder, at the Year 7 Redemption Price.

The post-combination company may have future capital needs and may not be able to obtain additional financing on acceptable terms or at all.

The post-combination company may need to raise additional funds in the future from debt financing, which may not be available on terms favorable to the post-combination company or at all. The final maturity date of the New Term Loan Facility is the seven year anniversary of the closing date and the New Revolving Facility is the five year anniversary of the closing date. The post-combination company may be unable to refinance any of its indebtedness or obtain additional financing, particularly because of its substantial indebtedness. Market disruptions, such as those experienced in 2008, 2009 and March 2020, as well as the post-combination company’s indebtedness levels, may increase its cost of borrowing or adversely affect its ability to refinance its obligations as they become due. The post-combination company may be unable to refinance its indebtedness, at maturity or otherwise, on terms acceptable to it or at all. If the post-combination company is unable to refinance its indebtedness, or if short-term or long-term borrowing costs dramatically increase, its ability to finance current operations and meet its short-term and long-term obligations could be adversely affected. In addition, the agreements governing the post-combination company’s indebtedness will contain financial and other restrictive covenants that limit its ability to incur indebtedness or obtain financing. If adequate funds are not available on acceptable terms, or at all, the post-combination company may be forced to reduce its operations or abandon

 

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expansion opportunities. Moreover, even if the post-combination company is able to continue its operations, its failure to obtain additional financing could reduce its competitiveness as its competitors may provide better-maintained networks or offer an expanded range of services.

If the post-combination company needs additional capital and cannot raise it on acceptable terms, or at all, it may not be able to:

 

   

adequately fund its operations;

 

   

enhance and expand the range of services it offers;

 

   

maintain and expand its network;

 

   

respond to competitive pressures and potential strategic opportunities, such as investments, acquisitions and international expansion;

 

   

acquire or invest in complementary businesses, services or technologies;

 

   

hire, train and retain key employees; or

 

   

respond to unanticipated capital requirements.

The post-combination company’s failure to do any of these things could adversely affect its business, results of operations and financial condition.

The post-combination company’s credit ratings are important to its cost of capital. The major debt rating agencies will routinely evaluate the post-combination company’s debt based on a number of factors, which include financial strength and business risk as well as transparency with rating agencies and timeliness of financial reporting. A lower than expected debt rating could result in increased interest and other expenses on the post-combination company’s variable interest rate debt, and could result in increased interest and other financing expenses on future borrowings.

An increase in interest rates would increase the cost of servicing the post-combination company’s debt and could reduce its profitability, decrease its liquidity and impact its solvency.

To the extent LIBOR exceeds 0.00% and, in the event the post-combination company borrows revolving credit loans denominated in Euros or Sterling, to the extent EURIBOR or SONIA, as applicable, exceeds 0.00%, the post-combination company’s indebtedness under the New Credit Facilities will bear interest at variable rates, and Syniverse’s future indebtedness may bear interest at variable rates. As a result, increases in interest rates could increase the cost of servicing such debt and materially reduce Syniverse’s profitability and cash flows. Assuming all New Revolving Credit Facility loans were fully drawn and LIBOR, EURIBOR and/or SONIA exceeded 0.00%, as applicable, each one percent change in interest rates would result in approximately a $11.65 million change in annual interest expense on the New Credit Facilities (excluding the impact of any hedging arrangements). The impact of such an increase would be more significant for the post-combination company than it would be for some other companies because of its substantial debt.

In addition, a transition away from LIBOR as a benchmark for establishing the applicable interest rate may affect the cost of servicing the post-combination company’s debt under the New Credit Facilities. The potential consequences from discontinuation, modification, or reform of LIBOR, implementation of alternative reference rates, and any interest rate transition process cannot be fully predicted and may have an adverse impact on values of LIBOR-linked securities and other financial obligations or extensions of credit and may involve among other things, increased volatility in markets for instruments that rely on LIBOR, reductions in effectiveness of related transactions such as hedges, increased borrowing costs, uncertainty under applicable documentation, or difficult and costly consent processes. For example, if any alternative base rate or means of calculating interest with respect to the New Credit Facilities leads to an increase in the interest rates charged, it could result in an increase

 

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in the cost of such indebtedness, impact the post-combination company’s ability to refinance some or all of its existing indebtedness or otherwise have a material adverse impact on the post-combination company’s business, results of operations, financial condition and cash flows.

Risks Related to the Company and the Business Combination

The Sponsor Parties have agreed to vote in favor of the Business Combination and the other proposals described in this proxy statement, regardless of how our public stockholders vote.

Unlike many other blank check companies in which the founders agree to vote their founder shares in accordance with the majority of the votes cast by the holders of public stock in connection with an initial business combination, the Sponsor Parties have agreed to vote any shares of Common Stock owned by them in favor of the Business Combination Proposal and the other proposals described in this proxy statement. As of the date hereof, the Sponsor Parties own 20% of our issued and outstanding shares of Common Stock. Accordingly, it is more likely that the necessary stockholder approval will be received for the Business Combination than would be the case if the Sponsor Parties agreed to vote any shares of Common Stock owned by them in accordance with the majority of the votes cast by our public stockholders.

Our Sponsor, certain members of our Board and our officers have interests in the Business Combination that are different from or are in addition to other stockholders in recommending that stockholders vote in favor of approval of the Business Combination Proposal and approval of the other proposals described in this proxy statement.

When you consider the recommendation of our Board in favor of approval of the Business Combination Proposal, you should keep in mind that our Sponsor and certain members of our Board and officers have interests in the Business Combination that are different from or in addition to (or which may conflict with) your interests as a stockholder. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination, and in recommending to stockholders that they approve the Business Combination. In addition, Mr. Vincent recused himself from certain discussions concerning the Business Combination on account of his relationship with Brigade. Stockholders should take these interests into account in deciding whether to approve the proposals presented at the Special Meeting, including the Business Combination Proposal. These interests include, among other things:

 

   

the fact that our Sponsor paid an aggregate of $25,000 for 9,975,000 Founder Shares, which will have a significantly higher value at the time of the Business Combination, and which, if unrestricted and freely tradable, would be valued at approximately $99,750,000 assuming a per share value of $10.00, but, given the restrictions on such shares (including the lock-up and vesting terms described elsewhere in this proxy statement), we believe such shares have less value;

 

   

the fact that 70% of our Sponsor’s Founder Shares will vest at the Closing and the remaining 30% of such Founder Shares will vest on the first trading day that the closing price of the Class A Stock equals or exceeds $12.50 per share for any 20 trading days within any consecutive 30-trading-day period following the Closing, subject to earlier vesting in certain circumstances as described therein;

 

   

the fact that our Sponsor has agreed not to redeem any of the Founder Shares in connection with a stockholder vote to approve the Business Combination;

 

   

the fact that our Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to its Founder Shares if we fail to complete an initial business combination by March 8, 2023;

 

   

the fact that our Sponsor paid an aggregate of approximately $11,250,000 for its 7,500,000 Private Placement Warrants to purchase shares of Class A Stock and that such Private Placement Warrants will expire worthless if a business combination is not consummated by March 8, 2023;

 

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the fact that our Sponsor has entered into the Sponsor Subscription Agreement pursuant to which, at the Closing, Sponsor will purchase 1,500,000 shares of Class A Stock at a price of $10.00 per share in the PIPE Investment;

 

   

the continued right of our Sponsor to hold our Class A Stock and the shares of Class A Stock to be issued to our Sponsor upon exercise of its Private Placement Warrants following the Business Combination, subject to certain lock-up periods;

 

   

if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that all of our directors, other than Mr. Roehm, hold membership interests in our Sponsor, and Mr. Roehm holds 25,000 Founder Shares directly;

 

   

the fact that our Sponsor, officers and directors will lose their entire investment in us if an initial business combination is not consummated by March 8, 2023;

 

   

the fact that our Sponsor, officers and directors, and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on the Company’s behalf, such as identifying and investigating possible business targets and business combinations and with respect to the PIPE Investment. As of the date of this proxy statement, such reimbursement is estimated to be approximately $[                ] in the aggregate. However, if the Company fails to consummate a business combination within the completion window, they will not have any claim against the Trust Account for reimbursement. Accordingly, the Company may not be able to reimburse these expenses if the Business Combination or another business combination is not completed within the completion window;

 

   

the fact that, as described in the Charter Proposal and reflected in Annexes B-1 and B-2, each of our proposed Charter Amendments excludes the equity holders of our Sponsor and their respective successors, certain affiliates and each of their respective transferees as “interested parties” from the list of prohibited business combinations;

 

   

the fact that, as described in the Charter Proposal and reflected in Annexes B-1 and B-2, each of our proposed Charter Amendments provides that certain transactions are not “corporate opportunities” and that our Sponsor, its successors and affiliates (other than the post-combination company and its subsidiaries) and certain other persons are not subject to the doctrine of corporate opportunity;

 

   

the fact that, at the Closing, we will enter into the Stockholders Agreement, which entitles the Sponsor to appoint two directors to the Board following the Closing, subject to certain minimum ownership requirements and, as such, in the future such directors will receive any cash fees, stock options or stock awards that the post-combination company’s Board determines to pay to its nonexecutive directors;

 

   

the fact that, at the Closing, we will enter into the Registration Rights Agreement with the Restricted Stockholders, which provides for registration rights to Restricted Stockholders and their permitted transferees;

 

   

the fact that we were organized by executives from each of M-III Partners and Brigade, which is a participant in the PIPE Investment;

 

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the fact that one of our directors, Mr. Vincent, is currently a Partner, Chief Operating Officer and Chief Legal Officer of Brigade;

 

   

the fact that certain employees of Brigade were seconded to us to, among other things, provide (i) introductions to key management of companies and investors with which Brigade has relationships and other potential sources of business combination targets, (ii) assistance with diligence of potential business combination targets and the negotiation of a business combination transaction, and (iii) support for our efforts to obtain replacement capital for tendering stockholders in the de-SPAC process, and that such employees of Brigade played an important role in conducting due diligence with respect to Syniverse, securing the funds from the PIPE Investors and facilitating the entry into the Merger Agreement;

 

   

the fact that Brigade is a participant in the PIPE Investment and will, at the Closing, purchase shares of both Class A Stock and Preferred Stock, which ranks senior to our other capital stock, including the Class A Stock, and will provide Brigade with certain benefits not available to our public stockholders;

 

   

the fact that Brigade is a significant lender to Syniverse and will receive proceeds in the transaction from the refinancing of Syniverse’s outstanding indebtedness upon consummation of the Business Combination; and

 

   

the fact that Brigade will be entitled to certain rights pursuant to the Brigade Subscription Agreement and the Registration Rights Agreement that are not available to our public stockholders, including certain information rights with respect to the post-combination company as well as certain preemptive and registration rights.

Our Sponsor, directors or officers or their affiliates may elect to purchase shares or public warrants from public stockholders, which may influence a vote on a proposed Business Combination and the other proposals described in this proxy statement and reduce the public “float” of our Class A Stock.

Our Sponsor, directors or officers or their affiliates may purchase shares of Class A Stock or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our Business Combination, although they are under no obligation to do so. However, other than as expressly stated herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the Trust Account will be used to purchase shares or public warrants in such transactions. Such a purchase of Class A Stock may include a contractual acknowledgment that such stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our Sponsor, directors, officers or their affiliates purchase shares of Class A Stock in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining stockholder approval of the Business Combination or to satisfy Closing conditions in the Merger Agreement regarding required amounts in the Trust Account and the proceeds from the PIPE Investment and the Twilio Investment equaling or exceeding certain thresholds where it appears that such requirements would otherwise not be met. This may result in the completion of our Business Combination that may not otherwise have been possible. Any such purchases of shares of Class A Stock or public warrants will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchases are subject to such reporting requirements.

In addition, if such purchases are made, the public “float” of our Class A Stock or public warrants and the number of beneficial holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on NYSE or another national securities exchange or reducing the liquidity of the trading market for our Class A Stock or public warrants.

 

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Our public stockholders will experience dilution as a consequence of, among other transactions, the issuance of Class A Stock, Preferred Stock (including Class A Stock convertible therefrom) and, if applicable, Class C Stock as consideration in the Business Combination, the PIPE Investment and the Twilio Investment. Having a minority share position may reduce the influence that our current stockholders have on the management of the post-combination company.

The issuance of the Class A Stock, Preferred Stock (including Class A Stock convertible therefrom) and, if applicable, Class C Stock in the Business Combination, the PIPE Investment and the Twilio Investment will dilute the equity interest of our existing stockholders and may adversely affect prevailing market prices for our public shares and/or public warrants.

It is anticipated that, upon completion of the Business Combination and assuming no redemption of shares of Class A Stock by our public stockholders: (i) the Company’s public stockholders (other than the PIPE Investors and Twilio) will retain an ownership interest of approximately 20.9% in the post-combination company; (ii) Brigade and Oak Hill (two of the PIPE Investors) will own approximately 7.2% and 4.8%, respectively, of the post-combination company (including Class A Stock and Preferred Stock on an as-converted basis); (iii) Twilio will own approximately 23.6% of the post-combination company; (iv) Carlyle will own approximately 36.7% of the post-combination company; (v) our Sponsor will own approximately 6.0% of the post-combination company (inclusive of the shares of Class A Stock acquired by our Sponsor as part of the PIPE Investment); and (vi) the Syniverse Stockholders (other than Carlyle) will own approximately 0.8% of the post-combination company. Additionally, following the Closing, and subject to the approval of the Incentive Award Plan by the Company’s public stockholders and the approval of the applicable award agreements by the Board of the post-combination company, pursuant to the Incentive Award Plan the Company expects to grant awards under the Incentive Award Plan. The awards (or associated benefits or amounts) that will be made to particular individuals or groups of individuals are not currently determinable.

The PIPE Investors have agreed to purchase in the aggregate approximately 6,916,667 shares of Class A Stock at a price of $10.00 per share and 201,890 shares of Preferred Stock for approximately $970.00 per share for gross proceeds to the Company of $265 million pursuant to the PIPE Subscription Agreements entered into at the signing of the Merger Agreement. Twilio has agreed to purchase shares of Class A Stock and, if applicable, shares of Class C Stock, for an aggregate purchase price of up to $750 million, with the size of Twilio’s investment and the number of shares issued to Twilio determined based on the terms of the Twilio Subscription Agreement. Under the Twilio Subscription Agreement, the size of Twilio’s investment will be reduced below $750 million only to the extent the total transaction proceeds from the Trust Account (net of redemptions) and the PIPE Investment exceed $375 million, with such reduction equal to the amount of such excess, subject to a minimum investment by Twilio of $500 million. The number of shares of Class A Stock, and if applicable, shares of Class C Stock, to be received by Twilio in connection with the Twilio Investment will be equal to (x) the number of shares of Class A Stock constituting the Aggregate Merger Consideration multiplied by (y) the Investment Percentage. In this proxy statement, we assume that the proceeds from the PIPE Investment and the Twilio Investment, in addition to funds from the Trust Account (net of redemptions) and the proceeds from the Refinancing (to the extent borrowed at the Closing), will be used to repay approximately $1,968 million of the existing indebtedness of Syniverse, pay certain transaction expenses and fund the post-combination company’s balance sheet. The ownership percentage with respect to the post-combination company (i) does not take into account warrants to purchase Class A Stock that will remain outstanding immediately following the Business Combination, but (ii) does include Founder Shares, which will be converted into shares of Class A Stock at the Closing on a one-for-one basis (even though such shares of Class A Stock will be subject to transfer and vesting restrictions). If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by the Company’s existing stockholders in the post-combination company will be different. For more information, please see the sections entitled “Summary of the Proxy Statement—Impact of the Business Combination on the Company’s Public Float,” “Selected Unaudited Pro Forma Condensed Combined Financial Information and “Unaudited Pro Forma Condensed Combined Financial Information.

 

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There can be no assurance that our Class A Stock, including Class A Stock underlying the Preferred Stock, that will be issued in connection with the Business Combination, the PIPE Investment and the Twilio Investment will be approved for listing on NYSE or, if approved, will continue to be so listed following the Closing, or that we will be able to comply with the continued listing standards of the NYSE.

Our Class A Stock, public units and public warrants are currently listed on NYSE. Our continued eligibility for listing may depend on, among other things, the number of our shares that are redeemed. We intend to apply to continue the listing of our publicly traded common stock and warrants on NYSE.

If, after the Business Combination, NYSE delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

 

   

a limited availability of market quotations for our securities;

 

   

reduced liquidity for our securities;

 

   

a determination that our Class A Stock is a “penny stock,” which will require brokers trading in our Class A Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

 

   

a limited amount of news and analyst coverage; and

 

   

a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our Class A Stock, public units and public warrants are listed on NYSE, they are covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state, other than the State of Idaho, having used these powers to prohibit or restrict the sale of securities issued by blank check companies, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on NYSE, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities.

We have not obtained an opinion from an independent investment banking firm, and consequently, there is no assurance from an independent source that the merger consideration is fair to our stockholders from a financial point of view.

We are not required to, and we have not, obtained an opinion from an independent investment banking firm that the merger consideration we are paying for Syniverse is fair to our stockholders from a financial point of view. The fair market value of Syniverse has been determined by our Board based upon standards generally accepted by the financial community, such as potential sales and the price for which comparable businesses or assets have been valued. Our Board believes because of the financial skills and background of its directors, it was qualified to conclude that the Business Combination was fair from a financial perspective to our stockholders. The Company’s stockholders will be relying on the judgment of our Board with respect to such matters.

The Merger Agreement contains provisions that may discourage us from seeking an alternative business combination.

The Merger Agreement contains provisions that prohibit us from seeking alternative business combinations during the pendency of the Business Combination. Further, if we are unable to obtain the requisite approval of our stockholders, either party may terminate the Merger Agreement. Please refer to “Proposal No. 1—The Business Combination Proposal—The Merger Agreement—Termination” for additional information.

 

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Resales of the shares of Class A Stock included in the Merger Consideration could depress the market price of our Class A Stock.

We will have approximately 191,677,112 shares of capital stock, consisting of Class A Stock (inclusive of (i) all shares of Preferred Stock as converted into Class A Stock and (ii) all Founder Shares as converted into Class A Stock, although 3,000,000 of such Founder Shares are subject to certain contractual vesting requirements as described elsewhere in this proxy statement) and Class C Stock (if applicable), and assuming that no shares of Class A Stock are redeemed, and there may be a large number of shares of Class A Stock sold in the market following the completion of the Business Combination or shortly thereafter. The shares held by the Company’s public stockholders are freely tradable, and the shares of Class A Stock held by the Restricted Stockholders will be freely tradable following effectiveness of the registration statement that we have agreed to file within 30 days after the completion of the Business Combination covering the resales of such shares, subject to the lock-up periods applicable to certain of the Restricted Stockholders. Also, following the Closing, the Restricted Stockholders will also be able to make a demand request, subject to certain conditions and the lock-up periods applicable to certain of the Restricted Stockholders, that a registration statement be filed covering the resales of shares of Class A Stock (including the shares of Class A Stock underlying the Preferred Stock) and/or Class C Stock held by such Restricted Stockholders. We also expect that the Restricted Stockholders will be able to resell shares of Class A Stock held by them under Rule 144 once one year has elapsed from the date that we file the Current Report on Form 8-K following the Closing that includes the required Form 10 information reflecting that we are no longer a shell company. Such sales of shares of Class A Stock or the perception of such sales may depress the market price of our Class A Stock.

We have no operating history and are subject to a mandatory liquidation and subsequent dissolution requirement. As such, there is a risk that we will be unable to continue as a going concern if we do not consummate an initial business combination by March 8, 2023. If we are unable to effect an initial business combination by May 8, 2023, we will be forced to liquidate and our warrants will expire worthless.

We are a blank check company, and as we have no operating history and are subject to a mandatory liquidation and subsequent dissolution requirement, there is a risk that we will be unable to continue as a going concern if we do not consummate an initial business combination by March 8, 2023. Unless we amend our current certificate of incorporation to extend the life of the Company and certain other agreements into which we have entered, if we do not complete an initial business combination by March 8, 2023, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than 10 business days thereafter, subject to lawfully available funds therefor, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest not previously released to the Company to pay its franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then-outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject, in the cases of clauses (ii) and (iii), to our obligations under the DGCL to provide for claims of creditors and the requirements of other applicable law. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per public unit in the IPO. In addition, if we fail to complete an initial business combination by March 8, 2023, there will be no redemption rights or liquidating distributions with respect to our public warrants or the Private Placement Warrants, which will expire worthless. We expect to consummate the Business Combination and, as of the date of this proxy statement, we do not intend to take any action to extend the life of the Company beyond March 8, 2023 if we are unable to effect an initial business combination by that date.

 

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Even if we consummate the Business Combination, there is no guarantee that the public warrants will ever be in the money, and they may expire worthless and the terms of our public warrants may be amended.

The exercise price for the public warrants is $11.50 per share of Class A Stock. There is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the public warrants may expire worthless.

Our ability to successfully effect the Business Combination and to be successful thereafter will be dependent upon the efforts of our key personnel, including the key personnel of Syniverse whom we expect to stay with the post-combination business following the Business Combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business, and its financial condition could suffer as a result.

Our ability to successfully effect our Business Combination is dependent upon the efforts of our key personnel, including the key personnel of Syniverse. Although some of our key personnel may remain with the post-combination business in senior management or advisory positions following our Business Combination, it is possible that we will lose some key personnel, the loss of whom could negatively impact the operations and profitability of our post-combination business. We anticipate that some or all of the management of Syniverse will remain in place.

Syniverse’s success depends to a significant degree upon the continued contributions of senior management, certain of whom would be difficult to replace. Departure by certain of Syniverse’s officers could have a material adverse effect on Syniverse’s business, financial condition or operating results. Syniverse does not maintain key-man life insurance on any of its officers. The services of such personnel may not continue to be available to the post-combination business.

The Company and Syniverse will be subject to business uncertainties and contractual restrictions while the Business Combination is pending.

Uncertainty about the effect of the Business Combination on employees and third parties may have an adverse effect on the Company and Syniverse. These uncertainties may impair our or Syniverse’s ability to retain and motivate key personnel and could cause third parties that deal with any of us or them to defer entering into contracts or making other decisions or seek to change existing business relationships. If key employees depart because of uncertainty about their future roles and the potential complexities of the Business Combination, our or Syniverse’s business could be harmed.

We may waive one or more of the conditions to the Business Combination.

We may agree to waive, in whole or in part, one or more of the conditions to our obligations to complete the Business Combination, to the extent permitted by our current certificate of incorporation and current bylaws and applicable laws. For example, it is a condition to our obligations to close the Business Combination that the Company have at least $5,000,001 of net tangible assets (determined in accordance with the Exchange Act) remaining after the consummation of the Business Combination. However, if our Board and the board of directors of Syniverse determine that a failure to satisfy the condition is not material, then the parties may elect to waive that condition and close the Business Combination, provided that Syniverse’s waiver of any condition is subject to Twilio’s consent to such waiver. We may not waive the condition that our stockholders approve the Business Combination. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—The Merger Agreement—Conditions to Closing of the Business Combination” for additional information.

 

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The exercise of discretion by our directors and officers in agreeing to changes to the terms of or waivers of Closing conditions in the Merger Agreement may result in a conflict of interest when determining whether such changes to the terms of the Merger Agreement or waivers of conditions are appropriate and in the best interests of our stockholders.

In the period leading up to the Closing, other events may occur that, pursuant to the Merger Agreement, would require the Company to agree to amend the Merger Agreement, to consent to certain actions or to waive rights that we are entitled to under those agreements. Such events could arise because of changes in the course of Syniverse’s business, a request by Syniverse to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on Syniverse’s business and would entitle the Company to terminate the Merger Agreement. In any of such circumstances, it would be in the discretion of the Company, acting through the Board, to grant its consent or waive its rights. The existence of the financial and personal interests of the directors described elsewhere in this proxy statement may result in a conflict of interest on the part of one or more of the directors between what he or she may believe is best for the Company and our stockholders and what he or she may believe is best for himself or herself or his or her affiliates in determining whether or not to take the requested action. As of the date of this proxy statement, we do not believe there will be any changes or waivers that our directors and officers would be likely to make after stockholder approval of the Business Combination has been obtained. While certain changes could be made without further stockholder approval, if there is a change to the terms of the Business Combination that would have a material impact on the stockholders, we will be required to circulate a new or amended proxy statement or supplement thereto and resolicit the vote of our stockholders with respect to the Business Combination Proposal.

We and Syniverse will incur significant transaction and transition costs in connection with the Business Combination.

We and Syniverse have both incurred and expect to incur significant, non-recurring costs in connection with consummating the Business Combination and operating as a public company following the consummation of the Business Combination. We and Syniverse may also incur additional costs to retain key employees. All expenses incurred in connection with the Merger Agreement and the transactions contemplated thereby (including the Business Combination), including all legal, accounting, consulting, investment banking and other fees, expenses and costs, will be for the account of the party incurring such fees, expenses and costs or paid by the Company following the Closing.

The Company’s transaction expenses as a result of the Business Combination are currently estimated at approximately $[                ], including $14,000,000 in deferred underwriting commissions to the underwriters of our IPO. The amount of the deferred underwriting commissions will not be adjusted for any shares that are redeemed in connection with an initial business combination. The per share amount we will distribute to stockholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commissions, and after such redemptions, the per share value of shares held by non-redeeming stockholders will reflect our obligation to pay the deferred underwriting commissions.

If we are unable to complete an initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of the Trust Account (or less than $10.00 per share in certain circumstances where a third party brings a claim against us that our Sponsor is unable to indemnify), and our warrants will expire worthless.

If we are unable to complete an initial business combination by March 8, 2023, our public stockholders may receive only approximately $10.00 per share on the liquidation of the Trust Account (or less than $10.00 per share in certain circumstances where a third party brings a claim against us that our Sponsor is unable to indemnify (as described herein)), and our warrants will expire worthless.

 

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If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share.

Our placing of funds in the Trust Account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any funds held in the Trust Account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the funds held in the Trust Account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason.

Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per share redemption amount received by public stockholders could be less than the $10.00 per public share initially held in the Trust Account, due to claims of such creditors.

Our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent public accountants) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, if any, provided that such liability will not apply to any claims by a third party that executed a waiver of any and all rights to seek access to the Trust Account, nor will it apply to any claims under indemnity of the underwriter of our IPO against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our Sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and believe that our Sponsor’s only assets are securities of our Company. We have not asked our Sponsor to reserve for such indemnification obligations. Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for our business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

 

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Our directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our public stockholders.

In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per public share or (ii) the actual amount per share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes, if any, and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in our Trust Account available for distribution to our public stockholders may be reduced below $10.00 per share.

If, before distributing the proceeds in the Trust Account to our public stockholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the Trust Account to our public stockholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the Trust Account, the per share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

Upon consummation of the Business Combination, our only significant asset will be our ownership interest in Syniverse, and such ownership may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our Common Stock or satisfy our other financial obligations.

Following the consummation of the Business Combination, we will have no direct operations and no significant assets other than our ownership of Syniverse. We will depend on Syniverse for distributions, loans and other payments to generate the funds necessary to meet our financial obligations, including our expenses as a publicly traded company and to pay any dividends with respect to our Common Stock. The financial condition and operating requirements of Syniverse may limit our ability to obtain cash from Syniverse. The earnings from, or other available assets of, Syniverse may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our Common Stock or satisfy our other financial obligations.

Subsequent to our completion of our Business Combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment.

Although we have conducted due diligence on Syniverse, we cannot assure you that this diligence will surface all material issues that may be present in Syniverse’s business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of Syniverse’s business and outside of our and Syniverse’s control will not later arise. As a result of these factors, we may be forced to later write down or write off assets, restructure operations, or incur impairment or other charges that could result in losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these

 

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charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about the post-combination company or its securities. Accordingly, any of our stockholders who choose to remain stockholders following our Business Combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.

We have no operating or financial history, and our results of operations and those of the post-combination company may differ significantly from the unaudited pro forma financial data included in this proxy statement.

We are a blank check company, and we have no operating history and no revenues. This proxy statement includes unaudited pro forma condensed combined financial statements for the post-combination company. The unaudited pro forma condensed combined statements of operations combines the Syniverse unaudited condensed consolidated statement of operations for the six months ended May 31, 2021 with the MBAC unaudited consolidated statement of operations for the six months ended June 30, 2021 and the Syniverse audited consolidated statement of operations for the eleven months ended November 30, 2020 with MBAC’s audited consolidated statement of operations for the period from December 16, 2020 (inception) through December 31, 2020, giving effect to the Business Combination and related transactions as if such transactions had been consummated on January 1, 2020. The unaudited pro forma condensed combined balance sheet combines the Syniverse unaudited condensed consolidated balance sheet as of May 31, 2021 and the MBAC unaudited condensed consolidated balance sheet as of June 30, 2021, giving effect to the Business Combination and related transactions as if such transactions had been consummated on May 31, 2021.

The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only, are based on certain assumptions, address a hypothetical situation and reflect limited historical financial data. Therefore, the unaudited pro forma condensed combined financial statements are not necessarily indicative of the results of operations and financial position that would have been achieved had the Business Combination and the acquisitions by Syniverse been consummated on the dates indicated above, or the future consolidated results of operations or financial position of the post-combination company. Accordingly, the post-combination company’s business, assets, cash flows, results of operations and financial condition may differ significantly from those indicated by the unaudited pro forma condensed combined financial statements included in this document. For more information, please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”

A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.

Following the Business Combination, the price of our securities may fluctuate significantly due to the market’s reaction to the Business Combination and general market and economic conditions. An active trading market for our securities following the Business Combination may never develop, or, if developed, it may not be sustained. In addition, the price of our securities after the Business Combination can vary due to general economic conditions and forecasts, our general business condition and the release of our financial reports. You may be unable to sell your securities unless a market can be established or sustained.

We may be subject to securities litigation following Closing, which is expensive and could divert management attention.

The market price of our Class A Stock may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation and investigations. Securities litigation against us could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm its business.

 

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Following the completion of the Business Combination, we will be a “controlled company” within the meaning of the applicable rules of the NYSE and, as a result, qualify for exemptions from certain corporate governance requirements. If we elect to rely on these exemptions, our stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements.

Pursuant to the Stockholders Agreement, Carlyle will be entitled to designate five directors, Twilio will be entitled to designate four directors and our Sponsor will be entitled to designate two directors to our Board; and Carlyle, Twilio and our Sponsor have agreed to vote for such designees. Based on these provisions in the Stockholders Agreement, we will qualify as a “controlled company” within the meaning of the NYSE corporate governance requirements. Under these rules, a “controlled company” may elect not to comply with certain corporate governance requirements. As a result, if we make such an election, you may not have the same protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance requirements.

The board designation rights of Carlyle, Twilio and our Sponsor will have the effect of concentrating voting power with Carlyle, Twilio and our Sponsor, which will limit an investor’s ability to influence the outcome of important transactions, including a change in control. Further, these agreements, and other agreements with stockholders may be perceived to create conflicts of interest which, if other investors perceive that such stockholders will not act in the best interests of all of our stockholders, may affect the price of our common shares and have other effects on our company.

Pursuant to the Stockholders Agreement, Carlyle will be entitled to designate five directors, Twilio will be entitled to designate four directors and our Sponsor will be entitled to designate two directors to our Board; and Carlyle, Twilio and our Sponsor have agreed to vote for such designees. This concentrated control may have the effect of delaying, preventing or deterring a change in control of the Company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of the Company, and might ultimately affect the market price of shares of Class A Stock.

In addition to the rights described in the preceding paragraph, pursuant to the Oak Hill Subscription Agreement, we have granted Oak Hill the right to designate a Board observer. In addition, pursuant to the Stockholders Agreement and the PIPE Subscription Agreements, we have agreed to provide the Carlyle Holder, Twilio, our Sponsor and the PIPE Investors with certain information and give them access to certain of our records. For more information on potential conflicts of interest, refer to the section entitled “Proposal No. 1—The Business Combination Proposal—Interests of Certain Persons in the Business Combination.” Our agreements with stockholders may result in unanticipated risks or other unintended consequences on our business and on investor perception that could have a significant impact on the market price of our Class A Stock.

Following the completion of the Business Combination, Carlyle and Twilio will each control a significant percentage of our voting power and will be able to exert significant control over the direction of our business.

Immediately following the Business Combination, Carlyle is expected to own 36.7% of the post-combination company and Twilio is expected to own approximately 23.6% of the post-combination company, subject to certain assumptions described in further detail in the section entitled “Selected Unaudited Pro Forma Consdensed Combined Financial Information.” In addition, Carlyle will be entitled to designate five directors to our Board, Twilio will be entitled to designate four directors to our Board and each of Carlyle and Twilio will have other rights with respect to the Company that are different from other stockholders pursuant to the Stockholders Agreement and the Registration Rights Agreement. Among other things, pursuant to the Stockholders Agreement, following the Closing, for so long as Carlyle (together with its permitted affiliate transferees) holds either (i) more than 25% of the total voting equity securities in the Company (on a fully diluted basis) or (ii) at least 75% of the equity securities Carlyle held as of immediately following the Closing, the Company will be restricted from taking certain actions without the prior written consent of Carlyle. Similarly, pursuant to the Stockholders Agreement, following the Closing, for so long as Twilio (together with its permitted

 

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affiliate transferees) holds either (i) more than 25% of the total voting equity securities in the Company (on a fully diluted basis) or (ii) at least 75% of the equity securities Twilio held as of immediately following the Closing, the Company will not take, and will not permit its subsidiaries to take, certain actions without the prior written consent of Twilio. Accordingly, Carlyle and Twilio will be able to, individually or together, significantly influence the composition of our Board and management and the approval of actions requiring stockholder approval. The concentration of ownership could also deprive you of an opportunity to receive a premium for your shares of Class A Stock as port of a sale of us and ultimately might affect the market price of our Class A Stock.

If the Business Combination’s benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of our securities may decline.

If the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of the Company’s securities prior to the Closing may decline. The market values of our securities at the time of the Business Combination may vary significantly from their prices on the date the Merger Agreement was executed, the date of this proxy statement, or the date on which our stockholders vote on the Business Combination.

In addition, following the Business Combination, fluctuations in the price of our securities could contribute to the loss of all or part of your investment. Immediately prior to the Business Combination, there has not been a public market for Syniverse’s stock and trading in the shares of our Class A Stock has not been consistently active. Accordingly, the valuation ascribed to Syniverse and our Class A Stock in the Business Combination may not be indicative of the price of the post-combination company that will prevail in the trading market following the Business Combination. If an active market for our securities develops and continues, the trading price of our securities following the Business Combination could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our securities, and our securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of our securities may not recover and may experience a further decline.

Factors affecting the trading price of the post-combination company’s securities following the Business Combination may include:

 

   

actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

 

   

changes in the market’s expectations about our operating results;

 

   

the public’s reaction to our press releases, our other public announcements and our filings with the SEC;

 

   

speculation in the press or investment community;

 

   

success of competitors;

 

   

our operating results failing to meet the expectation of securities analysts or investors in a particular period;

 

   

changes in financial estimates and recommendations by securities analysts concerning the post-combination company or the market in general;

 

   

operating and stock price performance of other companies that investors deem comparable to the post-combination company;

 

   

our ability to market new and enhanced products on a timely basis;

 

   

changes in laws and regulations affecting our business;

 

   

commencement of, or involvement in, litigation involving the post-combination company;

 

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changes in the post-combination company’s capital structure, such as future issuances of securities or the incurrence of additional debt;

 

   

the volume of shares of our Class A Stock available for public sale;

 

   

any major change in our Board or management;

 

   

sales of substantial amounts of Class A Stock by our directors, officers or significant stockholders (including Carlyle, Twilio, Brigade, Oak Hill and the Sponsor) or the perception that such sales could occur;

 

   

the realization of any of the risk factors presented in this proxy statement;

 

   

additions or departures of key personnel;

 

   

failure to comply with the requirements of the NYSE;

 

   

failure to comply with SOX or other laws or regulations;

 

   

actual, potential or perceived control, accounting or reporting problems;

 

   

changes in accounting principles, policies and guidelines; and

 

   

general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The stock market in general and NYSE have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for the stocks of other companies which investors perceive to be similar to the post-combination company could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

In the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources, and could also require us to make substantial payments to satisfy judgments or to settle litigation.

A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our Class A Stock to drop significantly, even if our business is doing well.

Sales of a substantial number of shares of Class A Stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Class A Stock. After the Business Combination, our Sponsor will hold approximately 5.2% of our Class A Stock, assuming no redemptions by our public stockholders. In addition, at the Closing, the Company will enter into the Registration Rights Agreement, substantially in the form attached as Annex D to this proxy statement, with the Restricted Stockholders. Pursuant to the terms of the Registration Rights Agreement, (i) any outstanding share of Class A Stock or any other equity security (including the Private Placement Warrants and shares of Class A Stock issued or issuable upon the exercise of any other equity security, including shares issued pursuant to the PIPE Investment, the Twilio Investment and the Class A Stock underlying the Preferred Stock) of the Company held by a Restricted Stockholder as of the date of the Registration Rights Agreement or thereafter acquired by a Restricted Stockholder and (ii) any other equity security of the Company issued or issuable with respect to any such share of Common Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or

 

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other reorganization or otherwise will be entitled to registration rights. In addition, our Sponsor entered into the Stockholders Agreement pursuant to which it agreed that, with certain limited exceptions, that its Founder Shares (which will be converted into shares of Class A Stock at the Closing), Private Placement Warrants and the shares of Class A Stock issuable upon conversion of such warrants may not be transferred until one year after the Closing. Given that such lock-up period is potentially shorter than that of most other blank check companies, these securities may become registered and available for sale sooner than shares held by sponsors in such other companies.

Our quarterly operating results may fluctuate significantly and could fall below the expectations of securities analysts and investors due to seasonality and other factors, some of which are beyond our control, resulting in a decline in our stock price.

Our quarterly operating results may fluctuate significantly because of several factors, including:

 

   

profitability of our business;

 

   

changes in interest rates;

 

   

impairment of long-lived assets;

 

   

macroeconomic conditions, both nationally and locally;

 

   

changes in market and competitive conditions; and

 

   

expansion to new markets.

If, following the Business Combination, securities or industry analysts do not publish or cease publishing research or reports about the post-combination company, its business, or its market, or if they change their recommendations regarding our Class A Stock adversely, then the price and trading volume of our Class A Stock could decline.

The trading market for our Class A Stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market, or our competitors. Securities and industry analysts do not currently, and may never, publish research on the Company or the post-combination company. If no securities or industry analysts commence coverage of the post-combination company, our stock price and trading volume would likely be negatively impacted. If any of the analysts who may cover the post-combination company change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, the price of our Class A Stock would likely decline. If any analyst who may cover the Company were to cease coverage of the post-combination company or fail to regularly publish reports on it, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business, investments and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time-consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time, and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results of operations.

 

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We have not registered the shares of Class A Stock issuable upon exercise of the public warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise public warrants, thus precluding such investor from being able to exercise its public warrants except on a cashless basis and potentially causing such public warrants to expire worthless.

We have not registered the shares of Class A Stock issuable upon exercise of the public warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we have agreed to, as soon as practicable, but in no event later than 30 days after the closing of our initial business combination, use commercially reasonable efforts to file a registration statement under the Securities Act covering such shares and maintain a current prospectus relating to the Class A Stock issuable upon exercise of the public warrants, until the expiration of the public warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in such registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order.

If the shares of Class A Stock issuable upon exercise of the public warrants are not registered under the Securities Act, we will be required to permit holders to exercise their public warrants on a cashless basis.

However, no public warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their public warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder or an exemption from registration is available.

Notwithstanding the above, if our Class A Stock is at the time of any exercise of a public warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their public warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act, and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will be required to use commercially reasonable efforts to register the shares under applicable blue sky laws to the extent an exemption is not available.

In no event will we be required to net cash settle any public warrant, or issue securities or other compensation in exchange for the public warrants in the event that we are unable to register or qualify the shares underlying the public warrants under the Securities Act or applicable state securities laws and there is no exemption available. If the issuance of the shares upon exercise of the public warrants is not so registered or qualified or exempt from registration or qualification, the holder of such public warrant shall not be entitled to exercise such public warrant, and such public warrant may have no value and expire worthless. In such event, holders who acquired their public warrants as part of a purchase of public units will have paid the full unit purchase price solely for the shares of Class A Stock included in the public units. There may be a circumstance where an exemption from registration exists for holders of our Private Placement Warrants to exercise their warrants while a corresponding exemption does not exist for holders of the public warrants. In such an instance, our Sponsor and its transferees (which may include our directors and executive officers) would be able to sell the shares of our Common Stock underlying their warrants while holders of our public warrants would not be able to exercise their warrants and sell the underlying Common Stock.

If and when the public warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying shares of Class A Stock for sale under all applicable state securities laws.

 

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We may amend the terms of the public warrants in a manner that may be adverse to holders with the approval by the holders of at least 50% of the then-outstanding public warrants. As a result, the exercise price of a holder’s public warrants could be increased, the exercise period could be shortened, and the number of shares of our Common Stock purchasable upon exercise of a public warrant could be decreased, all without the approval of that warrant holder.

Our public warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the public warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least a majority of the then-outstanding public warrants to make any change that adversely affects the interests of the registered holders. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least a majority of the then-outstanding public warrants approve of such amendment. Our ability to amend the terms of the public warrants with the consent of at least a majority of the then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the public warrants, shorten the exercise period or decrease the number of shares of Class A Stock purchasable upon exercise of a public warrant.

We may redeem unexpired public warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making their public warrants worthless.

We have the ability to redeem outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per public warrant; provided that the last reported sales price of our Class A Stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading-day period ending three business days before we send the notice of redemption to the warrant holders and provided certain other conditions are met. If and when the public warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding public warrants could force the warrant holders: (i) to exercise their public warrants and pay the exercise price therefor at a time when it may be disadvantageous for them to do so; (ii) to sell their public warrants at the then-current market price when they might otherwise wish to hold their public warrants; or (iii) to accept the nominal redemption price which, at the time the outstanding public warrants are called for redemption, we expect would be substantially less than the market value of their public warrants. None of the Private Placement Warrants will be redeemable by us so long as they are held by our Sponsor or its permitted transferees.

Because each public unit contains one-third of one public warrant and only a whole public warrant may be exercised, the public units may be worth less than public units of other blank check companies.

Each unit contains one-third of one warrant. Pursuant to the warrant agreement, if, upon exercise of the public warrants, a holder would be entitled to receive a fractional interest in a public share, we will, upon exercise, round down to the nearest whole number the number of shares of our Class A Stock to be issued to the warrant holder. This is different from other blank check companies similar to ours whose public units include one public share and one public warrant to purchase one whole common share. We have established the components of the public units in this way in order to reduce the dilutive effect of the public warrants upon completion of a business combination since the public warrants will be exercisable in the aggregate for one-third of the number of public shares compared to public units that each contain a whole warrant to purchase one public share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this public unit structure may cause our public units to be worth less than if such units included a public warrant to purchase one whole public share.

 

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Warrants will become exercisable for our Class A Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

We issued public warrants to purchase 13,333,333 shares of Class A Stock as part of our IPO, and, on the IPO Closing Date, we issued Private Placement Warrants to our Sponsor to purchase 7,500,000 shares of our Class A Stock, in each case at $11.50 per share. The Private Placement Warrants are identical to the public warrants sold as part of the public units issued in our IPO except that, so long as they are held by our Sponsor or its permitted transferees: (i) they will not be redeemable by us; (ii) they (including the Class A Stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our Sponsor until 30 days after the completion of an initial business combination; (iii) they may be exercised by the holders on a cashless basis; and (iv) they are subject to registration rights.

Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of the Trust Account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete an initial business combination by March 8, 2023 may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following March 8, 2023 in the event we do not complete an initial business combination, and, therefore, we do not intend to comply with the foregoing procedures.

Because we will not be complying with Section 280 of the DGCL, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations are limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more), and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our Trust Account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete an initial business combination by March 8, 2023 is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.

 

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If, after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our Board may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our Board and us to claims of punitive damages.

If, after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover some or all amounts received by our stockholders. In addition, our Board may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors.

Anti-takeover provisions contained in our Charter Amendments and the Amended and Restated Bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

Assuming the passage of Proposal No. 3 of this proxy statement, the post-combination company’s certificate of incorporation and the Amended and Restated Bylaws will contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together, these provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. These provisions will include:

 

   

no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

 

   

the requirement that directors may only be removed from the Board for cause and by a vote of the majority of the voting power of all then-outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class;

 

   

the right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death or removal of a director in certain circumstances (subject to the rights set forth in the Stockholders Agreement), which prevents stockholders from being able to fill vacancies on our Board;

 

   

a prohibition on stockholders calling a special meeting and the requirement that a meeting of stockholders may only be called by members of our Board, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;

 

   

the requirement that changes or amendments to certain provisions of our certificate of incorporation or current bylaws as well as a change of control transaction and certain liquidation and bankruptcy related actions must be approved by holders of at least two-thirds of the Common Stock of the post-combination company; and

 

   

advance notice procedures that stockholders must comply with in order to nominate candidates to our Board or to propose matters to be acted upon at a meeting of stockholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.

 

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The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies. Following the completion of the Business Combination, we expect to continue to qualify as an “emerging growth company.”

We currently qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, we take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including: (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of SOX; (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements; and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. As a result, our stockholders may not have access to certain information they deem important. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year: (a) following the fifth anniversary of the completion of the IPO; (b) in which we have total annual gross revenue of at least $1.07 billion; or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A Stock that is held by non-affiliates equals or exceeds $700 million as of the last business day of our prior second fiscal quarter, and (ii) the date on which we have issued more than $1 billion in non-convertible debt during the prior three-year period. Therefore, we expect to remain an emerging growth company following the Closing.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock that is held by non-affiliates exceeds $250 million as of the last business day of the prior fiscal quarter, or (ii) our annual revenues equaled or exceeded $100 million during such completed fiscal year, and the market value of our common stock that is held by non-affiliates equals or exceeds $700 million as of the last business day of the prior second fiscal quarter. Therefore, we expect to remain a “smaller reporting company” until the Closing.

We cannot predict if investors will find our Class A Stock less attractive because we rely on these exemptions. If some investors find our Class A Stock less attractive as a result, there may be a less active trading market for our Class A Stock, and our stock price may be more volatile.

Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.

As a public company, we are required to comply with the SEC’s rules implementing Sections 302 and 404 of SOX, which require management to certify financial and other information in our quarterly and annual reports

 

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and provide an annual management report on the effectiveness of internal control over financial reporting. As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2021. Based upon their evaluation, and in light of the material weakness in internal controls described below, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective for all periods of financial reporting reflected in our financial statements as of June 30, 2021. Our internal control over financial reporting did not result in the proper accounting classification of certain of the warrants we issued in March 2021 which, due to its impact on our financial statements, we determined to be a material weakness. This mistake in classification was brought to our attention only when the SEC issued a Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies, dated April 12, 2021. The SEC’s Statement addresses certain accounting and reporting considerations related to warrants of a kind similar to those we issued at the time of our IPO.

To comply with the requirements of being a public company, management of the post-combination company will be required to provide attestation on internal controls commencing with the annual report for fiscal year ended November 30, 2022, and we may need to undertake various actions, such as implementing additional internal controls and procedures and hiring additional accounting or internal audit staff. The standards required for a public company under Section 404 of SOX are significantly more stringent than those required of Syniverse as a privately held company. Once we cease being an emerging growth company, our independent registered public accounting firm may issue a report that is adverse in the event that it is not satisfied with the level at which the controls of the post-combination company are documented, designed or operating.

Testing and maintaining these controls can divert our management’s attention from other matters that are important to the operation of our business. If we identify material weaknesses in the internal control over financial reporting of the post-combination company or are unable to comply with the requirements of Section 404 or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal controls over financial reporting when we no longer qualify as an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports, and the market price of our common stock could be negatively affected, and we could become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources.

Risk Related to the Redemption

We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete a Business Combination with which a substantial majority of our stockholders do not agree.

Our current certificate of incorporation does not provide a specified maximum redemption threshold, except that we will not redeem our public shares in an amount that would result in the Company’s failure to have net tangible assets of at least $5,000,001 (such that we are not subject to the SEC’s “penny stock” rules). However, the Merger Agreement provides that Syniverse’s obligation to consummate the Business Combination is conditioned on the Minimum Cash Condition. As a result, we may be able to complete our Business Combination even though a substantial portion of our public stockholders have redeemed their shares. As of the date of this proxy statement, no agreements with respect to the private purchase of public shares by the Company or the persons described above have been entered into with any such investor or holder. We will file a Current Report on Form 8-K with the SEC to disclose private arrangements entered into or significant private purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or other proposals (as described in this proxy statement) at the Special Meeting.

In the event the aggregate cash consideration we would be required to pay for all shares of Class A Stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the

 

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terms of the Merger Agreement exceeds the aggregate amount of cash available to us, we may not complete the Business Combination or redeem any shares, all shares of Class A Stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

If you or a “group” of stockholders of which you are a part are deemed to hold an aggregate of more than 15% of our Class A Stock issued in the IPO, you (or, if a member of such a group, all of the members of such group in the aggregate) will lose the ability to redeem all such shares in excess of 15% of our Class A Stock issued in the IPO.

A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of Class A Stock included in the public units sold in our IPO. In order to determine whether a stockholder is acting in concert or as a group with another stockholder, the Company will require each public stockholder seeking to exercise redemption rights to certify to the Company whether such stockholder is acting in concert or as a group with any other stockholder. Such certifications, together with other public information relating to stock ownership available to the Company at that time, such as Section 13D, Section 13G and Section 16 filings under the Exchange Act, will be the sole basis on which the Company makes the above-referenced determination. Your inability to redeem any such excess shares will reduce your influence over our ability to consummate the Business Combination, and you could suffer a material loss on your investment in us if you sell such excess shares in open market transactions. Additionally, you will not receive redemption distributions with respect to such excess shares if we consummate the Business Combination. As a result, you will continue to hold that number of shares aggregating to more than 15% of the shares sold in our IPO and, in order to dispose of such excess shares, would be required to sell your stock in open market transactions, potentially at a loss. We cannot assure you that the value of such excess shares will appreciate over time following the Business Combination or that the market price of our Class A Stock will exceed the per share redemption price. Notwithstanding the foregoing, stockholders may challenge the Company’s determination as to whether a stockholder is acting in concert or as a group with another stockholder in a court of competent jurisdiction.

Our stockholders’ ability to vote all of their shares (including such excess shares) for or against the Business Combination is not restricted by this limitation on redemption.

There is no guarantee that a stockholder’s decision whether to redeem its shares for a pro rata portion of the Trust Account will put the stockholder in a better future economic position.

We can give no assurance as to the price at which a stockholder may be able to sell its public shares in the future following the completion of the Business Combination or any alternative business combination. Certain events following the consummation of any initial business combination, including the Business Combination, may cause an increase in our share price, and may result in a lower value realized now than a stockholder of the Company might realize in the future had the stockholder not redeemed its shares. Similarly, if a stockholder does not redeem its shares, the stockholder will bear the risk of ownership of the public shares after the consummation of any initial business combination, and there can be no assurance that a stockholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement. A stockholder should consult the stockholder’s own tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.

 

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Stockholders of the Company who wish to redeem their shares for a pro rata portion of the Trust Account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline. If stockholders fail to comply with the redemption requirements specified in this proxy statement, they will not be entitled to redeem their shares of our Class A Stock for a pro rata portion of the funds held in our Trust Account.

Public stockholders who wish to redeem their shares for a pro rata portion of the Trust Account must, among other things (i) submit a request in writing and (ii) tender their certificates to our Transfer Agent or deliver their shares to the Transfer Agent electronically through the DWAC system at least two business days prior to the Special Meeting. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and our Transfer Agent will need to act to facilitate this request. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, because we do not have any control over this process or over the brokers, which we refer to as “DTC,” it may take significantly longer than two weeks to obtain a physical stock certificate. If it takes longer than anticipated to obtain a physical certificate, stockholders who wish to redeem their shares may be unable to obtain physical certificates by the deadline for exercising their redemption rights and thus will be unable to redeem their shares.

Stockholders electing to redeem their shares will receive their pro rata portion of the Trust Account less franchise and income taxes payable, calculated as of two business days prior to the anticipated consummation of the Business Combination. Holders of our public units must separate their units into the component securities in order to exercise their redemption rights with respect to the underlying shares of Class A Stock. Please see the section entitled “Special Meeting of Company Stockholders—Redemption Rights” for additional information on how to exercise your redemption rights.

If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

If, despite our compliance with the proxy rules, a stockholder fails to receive our proxy materials, such stockholder may not become aware of the opportunity to redeem its shares. In addition, this proxy statement that we are furnishing to holders of our public shares in connection with our Business Combination describes the various procedures that must be complied with in order to validly redeem public shares. In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed. Please see the section entitled “Special Meeting of Company Stockholders—Redemption Rights” for additional information on how to exercise your redemption rights.

Risks if the Adjournment Proposal Is Not Approved

If the Adjournment Proposal is not approved, and an insufficient number of votes have been obtained to authorize the consummation of the Business Combination, the Board will not have the ability to adjourn the Special Meeting to a later date in order to solicit further votes, and, therefore, the Business Combination will not be approved, and, therefore, the Business Combination may not be consummated.

The Board is seeking approval to adjourn the Special Meeting to a later date or dates if, at the Special Meeting, based upon the tabulated votes, there are insufficient votes to approve the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, the Governance Proposal, the Director Election Proposal or the Incentive Award Plan Proposal. If the Adjournment Proposal is not approved, the Board will not have the ability to adjourn the Special Meeting to a later date and, therefore, will not have more time to solicit votes to approve the Business Combination Proposal, the NYSE Proposal, the Charter Approval Proposal, the Governance Proposal the Director Election Proposal and the Incentive Award Plan Proposal. In such events, other than failure to approve the Governance Proposal or Incentive Award Plan Proposal, the Business Combination would not be completed.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Defined terms included below have the same meaning as terms defined and included elsewhere in this proxy statement.

Introduction

The unaudited pro forma condensed combined financial information of MBAC has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses” to depict the accounting for the Business Combination (“Transaction Accounting Adjustments”) and should be read in conjunction with the accompanying notes. The adjustments presented in the unaudited pro forma condensed combined financial information have been identified and presented to provide relevant information necessary for an understanding of the post-combination company upon the Closing and related transactions contemplated by the Merger Agreement and described in this proxy statement. The following unaudited pro forma condensed combined financial statements are provided to aid you in your analysis of the financial aspects of the Business Combination, Refinancing, Twilio Investment and PIPE Investment.

The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the historical financial statements and related notes of MBAC and Syniverse for the applicable periods included in this proxy statement. The unaudited pro forma condensed combined financial statements should be read together with the sections entitled “Selected Historical Consolidated Financial Information of the Company,” “Selected Historical Consolidated Financial Information of Syniverse,” “The Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Syniverse’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Syniverse and MBAC have different fiscal year ends and the unaudited pro forma condensed combined financial information combines the accounting periods of Syniverse and MBAC where Syniverse is the accounting acquirer in the Business Combination. The unaudited pro forma condensed combined financial information has been prepared utilizing fiscal periods that differ by less than one fiscal quarter, as permitted by SEC rules and regulations. As such, Syniverse’s historical results in the unaudited pro forma condensed combined financial information is derived from Syniverse’s unaudited condensed consolidated balance sheet as of May 31, 2021, unaudited condensed consolidated statement of operations for the six months ended May 31, 2021 and audited consolidated statement of operations for the eleven months ended November 30, 2020. MBAC’s historical results are derived from MBAC’s unaudited condensed consolidated balance sheet as of June 30, 2021, MBAC’s unaudited consolidated statement of operations for the six months ended June 30, 2021 and audited consolidated statement of operations for the period from December 16, 2020 (inception) through December 31, 2020.

MBAC is a blank check company incorporated on December 16, 2020 (inception) as a Delaware corporation for the purpose of effecting a merger, stock purchase or similar Business Combination with one or more businesses. See the section entitled “Information About the Company.”

Some of the world’s largest companies and many mobile carriers rely on Syniverse’s global network to seamlessly bridge mobile ecosystems and securely transmit data, enabling billions of transactions, conversations and connections daily. See the section entitled “Information About Syniverse.”

The unaudited pro forma condensed combined balance sheet combines the Syniverse unaudited condensed consolidated balance sheet as of May 31, 2021 and the MBAC unaudited condensed consolidated balance sheet as of June 30, 2021, giving effect to the Business Combination and related transactions as if such transactions had been consummated on May 31, 2021.

 

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The unaudited pro forma condensed combined statements of operations combines the Syniverse unaudited condensed consolidated statement of operations for the six months ended May 31, 2021 with the MBAC unaudited consolidated statement of operations for the six months ended June 30, 2021 and the Syniverse audited consolidated statement of operations for the eleven months ended November 30, 2020 with MBAC’s audited consolidated statement of operations for the period from December 16, 2020 (inception) through December 31, 2020, giving effect to the Business Combination and related transactions as if such transactions had been consummated on January 1, 2020.

We refer to the unaudited pro forma condensed combined balance sheet and the unaudited pro forma condensed combined statements of operations as the pro forma financial statements.

The unaudited pro forma financial statements have been presented for informational purposes only and are not necessarily indicative of what MBAC’s balance sheet, statements of operations, financial condition or operating results actually would have been had the Business Combination been completed as of the dates indicated, nor do they purport to project the future balance sheet, statements of operations, financial condition or operating results of the post-combination company following the Closing. The pro forma adjustments are based on the information currently available and reflect assumptions and methodologies that MBAC believes are reasonable under the circumstances. The unaudited condensed pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Additionally, the unaudited pro forma condensed combined financial information is based on preliminary accounting conclusions, which are subject to change. As the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates and accounting conclusions, it is likely that the actual adjustments will differ from the information presented and it is possible the difference may be material. The pro forma financial information is presented for illustrative purposes only and does not reflect the costs of any integration activities or cost savings or synergies that may be achieved as a result of the Business Combination.