SEC Company Response from Rimini Street, Inc. (RMNI) (CIK 0001635282) (RMNI) — Jul 28, 2016
Rimini Street, Inc. (RMNI) (CIK 0001635282)
Date: July 28, 2016 · CIK: 0001635282 · Accession: 0001104659-16-135136
AI Filing Summary & Sentiment
File numbers found in text: 333-211355
Referenced dates: July 11, 2016, June 10, 2016
Letter
VIA EDGAR Division of Corporation Finance Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549 Attn: Mara L. Ransom RE: GP Investments Acquisition Corp. Amendment No. 1 to Registration Statement on Form S-4 Filed June 22, 2016 (File No. 333-211355)
Dear Ms. Ransom:
We are writing on behalf of our client, GP Investments Acquisition Corp., a Cayman Islands exempted company limited by shares (the “Company”), to provide, on a supplemental basis, our response to the letter of the staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”), dated July 11, 2016 (the “Comment Letter”), relating to the above Amendment No. 1 to the Registration Statement on Form S-4 filed June 22, 2016 (the “Registration Statement”). Set forth below are the Company’s responses to the comments raised in the Comment Letter. For the convenience of the Staff, each comment in the Comment Letter is reprinted in bold, italicized text and is followed by the Company’s corresponding response.
The changes made to the Registration Statement in response to the Staff’s comments together with certain additional changes reflected therein will be set forth in Amendment No. 2 to the Registration Statement (“Revised Registration Statement”), which the Company intends to file with the Commission via EDGAR on or about the date hereof. Capitalized terms used and not otherwise defined herein have the respective meanings ascribed to such terms in the Revised Registration Statement. Page references set forth in a response to a comment are to the corresponding page in the Revised Registration Statement.
Prospectus Statement and Prospectus Cover Page
1. We note your disclosure throughout your document which states that you estimate, assuming a closing as of July 31, 2016, equityholders of World Kitchen will receive approximately $173,600,000 in cash and 6,119,956 in WDKN shares equating to approximately $61,200,000 and that there will a downward adjustment of approximately $255,200,000 to the purchase price. In an appropriate place in your document, please disclose the following:
(a) Explain how these amounts were calculated and include a reconciliation to the total purchase price of $500 million, similar to the one provided in response to comment 29 in our letter dated June 10, 2016.
In response to the Staff’s comment, the Company has revised the disclosure beginning on page 105 of the Revised Registration Statement.
(b) Disclose any significant assumptions made in your calculations.
In response to the Staff’s comment, the Company has revised the disclosure on the cover page and pages 106, 107 and 282 of the Revised Registration Statement. The ownership percentage calculations are now based on the 6,062,282 WDKN shares that the Company expects to issue assuming a closing date of August 31, 2016.
(c) Tell us why your estimated downward adjustment of $255,200,000, appears to adjust only for the indebtedness of World Kitchen as of July 31, 2016. Based on the reconciliation provided in response to comment 29, it appears that adjustments to the purchase price should also be made for cash equivalents held by World Kitchen as well as other adjustments. Please explain the inconsistency.
In response to the Staff’s comment, the Company has revised the disclosure on pages 9,43,105 and 106 of the Revised Registration Statement.
(d) Include a cross reference to your reconciliation where these amounts are presented.
In response to the Staff’s comment, the Company has revised the disclosure in the applicable sections of the Revised Registration Statement to include cross-references to the reconciliation beginning on page 105 of the Revised Registration Statement.
2. We note that all your ownership percentage calculations are based on the 6,119,956 WDKN shares you expect to issue at July 31, 2016. Please clarify that the percentages assume a closing date of July 31, 2016.
In response to the Staff’s comment, the Company has revised the disclosure on the cover page and other relevant sections of the Revised Registration Statement. The ownership percentage calculations are now based on the 6,062,282 WDKN shares that the Company expects to issue assuming a closing date of August 31, 2016.
Summary of the Proxy Statement/Prospectus
Voting Power; Record Date, page 34
3. At the bottom of page 34, you state that, of the 21,562,500 GPIA ordinary shares outstanding, 4,312,500 shares were public shares. The 4,312,500 shares represent shares held by the GPIA initial shareholders while public shareholders hold 17,250,000 shares. Please revise accordingly.
In response to the Staff’s comment, the Company has revised the disclosure on page 37 of the Revised Registration Statement.
Sources and Uses of Funds for the Business Combination, page 40
4. We note that the table on page 40 presenting the sources and uses of funds for the business combination assumes a closing date of July 31, 2016. Please tell us the most recent historical date for which you have actual amounts for the estimates made in this table and what the amounts were as of that date. Please also explain and disclose any material differences between the actual amounts and the estimates provided. Additionally, please tell us of any potential intervening events through July 31, 2016 that could impact the accounting for the transaction. Finally, please disclose how each amount in this table was calculated and the assumptions made so your investors can understand the basis for your estimates.
The Company respectfully advises the Staff that the most recent historical date for which it has actual amounts for the estimates made in the sources and uses table is March 31, 2016. In response to the Staff’s comment, the Company has revised the disclosure beginning on page 42 of the Revised Registration Statement.
Comparative Per Share Data, page 52
5. We note your presentation of pro forma shareholders’ equity as of December 31, 2015. Under Rule 11-02(c) of Regulation S-X, it is only appropriate to present a pro forma balance sheet as of the end of the most recent period. Please tell us why you believe it is appropriate to provide pro forma shareholders’ equity as of December 31, 2015 in this section or remove it from the filing.
In response to the Staff’s comment, the Company has revised the disclosure on page 56 of the Revised Registration Statement. The balance sheet data is now presented only as at March 31, 2016.
The Merger Proposal
Background of the Merger, page 119
6. We note your revised disclosure in response to comment 12; however it remains unclear how you arrived at each of the proposed valuations of World Kitchen. In this regard, we note that although GPIA applied “a multiple to Adjusted EBITDA of World Kitchen” to arrive at the valuations proposed on both December 9, 2015 and January 20, 2016, the valuations proposed on those dates differ. Please enhance your disclosure to explain whether the multiple you applied to the Adjusted EBITDA of World Kitchen changed and, if so, why, or address any other factors that drove the change. Additionally, we note your statement that on January 27, 2016 representatives of World Kitchen communicated to representatives of GPIA “that World Kitchen would be prepared to proceed with a transaction at an enterprise value of $520 million,” to which GPIA later agreed. Subsequently, you state that GPIA reduced its proposed valuation to $500 million. Please enhance your disclosure to explain why the proposed valuations of World Kitchen changed on December 9, 2015, January 20, 2016, February 5, 2016, and March 11, 2016.
In response to the Staff’s comment, the Company has revised the disclosure in the section entitled “Background of the Merger” beginning on page 123 of the Revised Registration Statement.
7. We note your revised disclosure in response to comment 14. While you have identified various general roles played by certain third-party advisers, it is unclear whether the findings provided by those advisers performing business, accounting and financial due diligence conflicted or overlapped in any way, and more specifically how the advisers’ individual findings informed the company’s valuation process. Please specifically state whether any of these advisers provided a valuation analysis and, if so, please revise to provide this disclosure. Please advise or revise your disclosure accordingly.
In response to the Staff’s question, the Company respectfully advises the Staff that our third-party advisors conducted due diligence and advised the Company on their findings, in each case, based on each such advisor’s area of expertise and based on the scope of review established with the Company in connection with each such advisor’s engagement. Results of due diligence performed by our third-party advisors were among the wide variety of factors considered by the special transaction committee in recommending the business combination to the full board of directors, and the board of directors in recommending that shareholders vote in favor of adoption of the merger agreement. These due diligence findings and the results of the Company’s own extensive due diligence process informed, among other things, the enumerated factors set forth in the section entitled “GPIA’s Board of Directors’ and the Special Transaction Committee’s Reasons for Approval of the Merger” beginning on page 133 of the Revised Registration Statement.
The Company supplementally advises the Staff that the due diligence findings of our third-party advisors as well as the findings resulting from the Company’s own extensive due diligence of World Kitchen informed the Company’s valuation process as all of such information, collectively and with no relative weight to any specific factor, informed the Company’s view of Adjusted EBITDA, the correct multiple to be applied thereto and opportunities and risks for the ongoing operations of World Kitchen, including, among other things, the Company’s management team’s assessment of the possibility of World Kitchen achieving projected 2016 EBITDA targets.
Additionally, the Company respectfully advises the Staff that except as disclosed under the headings “Description of Financial Analyses and Fairness Opinion of Duff and Phelps” and “Description of Discussion Materials of UBS” on pages 138 and 144, respectively, of the Revised Registration Statement, neither the Special Transaction Committee nor the Board of Directors received or obtained any financial analyses relating to World Kitchen. Additionally, we note that neither UBS nor Duff & Phelps provided any opinion, report or appraisal regarding the valuation of World Kitchen or the post-transaction company.
8. We note your revisions in response to comment 16. Please revise to explain why, once the role of the Special Transaction Committee was expanded to assess the fairness of the business combination as a whole to the Board of Directors, the role of Duff & Phelps was not also expanded to assess the fairness of the business combination as a whole. In addition, please expand the risk factor you provided in response to comment 9 to address the fact that the Special Transaction Committee also did not obtain a third-party valuation that the price you are paying for World Kitchen is fair to your company.
In response to the Staff’s comment, the Company has revised the disclosure in the section entitled “GPIA’s Board of Director’s and the Special Transaction Committee’s Reasons for Approval of the Merger” beginning on page 133 of the Revised Registration Statement and expanded the risk factor entitled “Neither the board of directors nor the special transaction committee obtained a third-party valuation in determining whether or not to pursue the business combination” on page 91.
9. Please elaborate upon your disclosure to explain how the Special Transaction Committee determined to recommend the transaction to the Board of Directors and, specifically, how they assessed the fairness of the consideration. In this regard, clarify whether the Special Transaction Committee had the benefit of participating in the UBS presentations and/or valuation materials and, if not, explain how they arrived at their recommendation.
In response to the Staff’s comment, the Company has revised the disclosure in the section entitled “GPIA’s Board of Directors’ and the Special Transaction Committee’s Reasons for Approval of the Merger” beginning on page 133
Projected Financial Information page 141
10. We note your response to comment 24 and your statement that GPIA management believed the “projections were stabilized as of 2020.” However, it is not clear that the foregoing statement sufficiently demonstrates that there is a reasonable basis for the Management Projections relied upon by Duff & Phelps which extend to 2022. Accordingly, in view of the range of the projections, please provide additional support and analysis as to how you determined that providing projections through 2022 was reasonable and appropriate pursuant to Item 10(b) of Regulation S-K.
The Company respectfully advises the Staff that in connection with the Company’s evaluation of the business combination, the Company’s management prepared a highly developed financial model of World Kitchen (the “World Kitchen Model”) based upon, among other things, audited financial information of World Kitchen provided to the Company, other data available to the Company and assumptions derived from the Company’s management team’s long experience in assessing, acquiring, operating and divesting portfolio companies across various industries and businesses, including retail industries and businesses. The World Kitchen Model contained projections through 2020 that were extrapolated through 2026. Those projections were made available, in their entirety, to both Duff & Phelps and UBS for use in their respective financial analyses of the business combination. The World Kitchen Model, in the business judgment of the Company’s management, demonstrated that, among other things, the growth, margins and cash flow profile for World Kitchen would stabilize by 2020. Accordingly, the Company’s management concluded that projections extending to 2020 properly depicted World Kitchen’s economic potential. The Company is not aware of why Duff & Phelps, in its judgment, chose to utilize the 2021 and 2022 projections from the World Kitchen Model in their analysis. The Company supplementally advises the Staff that based on, among other things, the Company’s management team’s experience in preparing projections across various industries and businesses, including those in retail, the Company believes that projections through 2020 (as presented in the Revised Registration Statement) represent the Company’s good faith assessment of WDKN’s projected future performance.
11.
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CORRESP 1 filename1.htm SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP FOUR TIMES SQUARE NEW YORK 10036-6522 FIRM/AFFILIATE OFFICES TEL: (212) 735-3000 BOSTON FAX: (212) 735-2000 CHICAGO www.skadden.com HOUSTON LOS ANGELES PALO ALTO DIRECT DIAL WASHINGTON, D.C. (212) 735-2854 WILMINGTON DIRECT FAX (917) 777-2854 BEIJING EMAIL ADDRESS BRUSSELS TIMOTHY.FESENMYER@SKADDEN.COM FRANKFURT HONG KONG LONDON MOSCOW MUNICH PARIS SÃO PAULO SEOUL SHANGHAI SINGAPORE TOKYO TORONTO July 28, 2016 VIA EDGAR Division of Corporation Finance Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549 Attn: Mara L. Ransom RE: GP Investments Acquisition Corp. Amendment No. 1 to Registration Statement on Form S-4 Filed June 22, 2016 (File No. 333-211355) Dear Ms. Ransom: We are writing on behalf of our client, GP Investments Acquisition Corp., a Cayman Islands exempted company limited by shares (the “Company”), to provide, on a supplemental basis, our response to the letter of the staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”), dated July 11, 2016 (the “Comment Letter”), relating to the above Amendment No. 1 to the Registration Statement on Form S-4 filed June 22, 2016 (the “Registration Statement”). Set forth below are the Company’s responses to the comments raised in the Comment Letter. For the convenience of the Staff, each comment in the Comment Letter is reprinted in bold, italicized text and is followed by the Company’s corresponding response. The changes made to the Registration Statement in response to the Staff’s comments together with certain additional changes reflected therein will be set forth in Amendment No. 2 to the Registration Statement (“Revised Registration Statement”), which the Company intends to file with the Commission via EDGAR on or about the date hereof. Capitalized terms used and not otherwise defined herein have the respective meanings ascribed to such terms in the Revised Registration Statement. Page references set forth in a response to a comment are to the corresponding page in the Revised Registration Statement. Prospectus Statement and Prospectus Cover Page 1. We note your disclosure throughout your document which states that you estimate, assuming a closing as of July 31, 2016, equityholders of World Kitchen will receive approximately $173,600,000 in cash and 6,119,956 in WDKN shares equating to approximately $61,200,000 and that there will a downward adjustment of approximately $255,200,000 to the purchase price. In an appropriate place in your document, please disclose the following: (a) Explain how these amounts were calculated and include a reconciliation to the total purchase price of $500 million, similar to the one provided in response to comment 29 in our letter dated June 10, 2016. In response to the Staff’s comment, the Company has revised the disclosure beginning on page 105 of the Revised Registration Statement. (b) Disclose any significant assumptions made in your calculations. In response to the Staff’s comment, the Company has revised the disclosure on the cover page and pages 106, 107 and 282 of the Revised Registration Statement. The ownership percentage calculations are now based on the 6,062,282 WDKN shares that the Company expects to issue assuming a closing date of August 31, 2016. (c) Tell us why your estimated downward adjustment of $255,200,000, appears to adjust only for the indebtedness of World Kitchen as of July 31, 2016. Based on the reconciliation provided in response to comment 29, it appears that adjustments to the purchase price should also be made for cash equivalents held by World Kitchen as well as other adjustments. Please explain the inconsistency. In response to the Staff’s comment, the Company has revised the disclosure on pages 9,43,105 and 106 of the Revised Registration Statement. (d) Include a cross reference to your reconciliation where these amounts are presented. In response to the Staff’s comment, the Company has revised the disclosure in the applicable sections of the Revised Registration Statement to include cross-references to the reconciliation beginning on page 105 of the Revised Registration Statement. 2. We note that all your ownership percentage calculations are based on the 6,119,956 WDKN shares you expect to issue at July 31, 2016. Please clarify that the percentages assume a closing date of July 31, 2016. In response to the Staff’s comment, the Company has revised the disclosure on the cover page and other relevant sections of the Revised Registration Statement. The ownership percentage calculations are now based on the 6,062,282 WDKN shares that the Company expects to issue assuming a closing date of August 31, 2016. 2 Summary of the Proxy Statement/Prospectus Voting Power; Record Date, page 34 3. At the bottom of page 34, you state that, of the 21,562,500 GPIA ordinary shares outstanding, 4,312,500 shares were public shares. The 4,312,500 shares represent shares held by the GPIA initial shareholders while public shareholders hold 17,250,000 shares. Please revise accordingly. In response to the Staff’s comment, the Company has revised the disclosure on page 37 of the Revised Registration Statement. Sources and Uses of Funds for the Business Combination, page 40 4. We note that the table on page 40 presenting the sources and uses of funds for the business combination assumes a closing date of July 31, 2016. Please tell us the most recent historical date for which you have actual amounts for the estimates made in this table and what the amounts were as of that date. Please also explain and disclose any material differences between the actual amounts and the estimates provided. Additionally, please tell us of any potential intervening events through July 31, 2016 that could impact the accounting for the transaction. Finally, please disclose how each amount in this table was calculated and the assumptions made so your investors can understand the basis for your estimates. The Company respectfully advises the Staff that the most recent historical date for which it has actual amounts for the estimates made in the sources and uses table is March 31, 2016. In response to the Staff’s comment, the Company has revised the disclosure beginning on page 42 of the Revised Registration Statement. Comparative Per Share Data, page 52 5. We note your presentation of pro forma shareholders’ equity as of December 31, 2015. Under Rule 11-02(c) of Regulation S-X, it is only appropriate to present a pro forma balance sheet as of the end of the most recent period. Please tell us why you believe it is appropriate to provide pro forma shareholders’ equity as of December 31, 2015 in this section or remove it from the filing. In response to the Staff’s comment, the Company has revised the disclosure on page 56 of the Revised Registration Statement. The balance sheet data is now presented only as at March 31, 2016. 3 The Merger Proposal Background of the Merger, page 119 6. We note your revised disclosure in response to comment 12; however it remains unclear how you arrived at each of the proposed valuations of World Kitchen. In this regard, we note that although GPIA applied “a multiple to Adjusted EBITDA of World Kitchen” to arrive at the valuations proposed on both December 9, 2015 and January 20, 2016, the valuations proposed on those dates differ. Please enhance your disclosure to explain whether the multiple you applied to the Adjusted EBITDA of World Kitchen changed and, if so, why, or address any other factors that drove the change. Additionally, we note your statement that on January 27, 2016 representatives of World Kitchen communicated to representatives of GPIA “that World Kitchen would be prepared to proceed with a transaction at an enterprise value of $520 million,” to which GPIA later agreed. Subsequently, you state that GPIA reduced its proposed valuation to $500 million. Please enhance your disclosure to explain why the proposed valuations of World Kitchen changed on December 9, 2015, January 20, 2016, February 5, 2016, and March 11, 2016. In response to the Staff’s comment, the Company has revised the disclosure in the section entitled “Background of the Merger” beginning on page 123 of the Revised Registration Statement. 7. We note your revised disclosure in response to comment 14. While you have identified various general roles played by certain third-party advisers, it is unclear whether the findings provided by those advisers performing business, accounting and financial due diligence conflicted or overlapped in any way, and more specifically how the advisers’ individual findings informed the company’s valuation process. Please specifically state whether any of these advisers provided a valuation analysis and, if so, please revise to provide this disclosure. Please advise or revise your disclosure accordingly. In response to the Staff’s question, the Company respectfully advises the Staff that our third-party advisors conducted due diligence and advised the Company on their findings, in each case, based on each such advisor’s area of expertise and based on the scope of review established with the Company in connection with each such advisor’s engagement. Results of due diligence performed by our third-party advisors were among the wide variety of factors considered by the special transaction committee in recommending the business combination to the full board of directors, and the board of directors in recommending that shareholders vote in favor of adoption of the merger agreement. These due diligence findings and the results of the Company’s own extensive due diligence process informed, among other things, the enumerated factors set forth in the section entitled “GPIA’s Board of Directors’ and the Special Transaction Committee’s Reasons for Approval of the Merger” beginning on page 133 of the Revised Registration Statement. The Company supplementally advises the Staff that the due diligence findings of our third-party advisors as well as the findings resulting from the Company’s own extensive due diligence of World Kitchen informed the Company’s valuation process as all of such information, collectively and with no relative weight to any specific factor, informed the Company’s view of Adjusted EBITDA, the correct multiple to be applied thereto and opportunities and risks for the ongoing operations of World Kitchen, including, among other things, the Company’s management team’s assessment of the possibility of World Kitchen achieving projected 2016 EBITDA targets. Additionally, the Company respectfully advises the Staff that except as disclosed under the headings “Description of Financial Analyses and Fairness Opinion of Duff and Phelps” and “Description of Discussion Materials of UBS” on pages 138 and 144, respectively, of the Revised Registration Statement, neither the Special Transaction Committee nor the Board of Directors received or obtained any financial analyses relating to World Kitchen. Additionally, we note that neither UBS nor Duff & Phelps provided any opinion, report or appraisal regarding the valuation of World Kitchen or the post-transaction company. 8. We note your revisions in response to comment 16. Please revise to explain why, once the role of the Special Transaction Committee was expanded to assess the fairness of the business combination as a whole to the Board of Directors, the role of Duff & Phelps was not also expanded to assess the fairness of the business combination as a whole. In addition, please expand the risk factor you provided in response to comment 9 to address the fact that the Special Transaction Committee also did not obtain a third-party valuation that the price you are paying for World Kitchen is fair to your company. In response to the Staff’s comment, the Company has revised the disclosure in the section entitled “GPIA’s Board of Director’s and the Special Transaction Committee’s Reasons for Approval of the Merger” beginning on page 133 of the Revised Registration Statement and expanded the risk factor entitled “Neither the board of directors nor the special transaction committee obtained a third-party valuation in determining whether or not to pursue the business combination” on page 91. 4 9. Please elaborate upon your disclosure to explain how the Special Transaction Committee determined to recommend the transaction to the Board of Directors and, specifically, how they assessed the fairness of the consideration. In this regard, clarify whether the Special Transaction Committee had the benefit of participating in the UBS presentations and/or valuation materials and, if not, explain how they arrived at their recommendation. In response to the Staff’s comment, the Company has revised the disclosure in the section entitled “GPIA’s Board of Directors’ and the Special Transaction Committee’s Reasons for Approval of the Merger” beginning on page 133 Projected Financial Information page 141 10. We note your response to comment 24 and your statement that GPIA management believed the “projections were stabilized as of 2020.” However, it is not clear that the foregoing statement sufficiently demonstrates that there is a reasonable basis for the Management Projections relied upon by Duff & Phelps which extend to 2022. Accordingly, in view of the range of the projections, please provide additional support and analysis as to how you determined that providing projections through 2022 was reasonable and appropriate pursuant to Item 10(b) of Regulation S-K. The Company respectfully advises the Staff that in connection with the Company’s evaluation of the business combination, the Company’s management prepared a highly developed financial model of World Kitchen (the “World Kitchen Model”) based upon, among other things, audited financial information of World Kitchen provided to the Company, other data available to the Company and assumptions derived from the Company’s management team’s long experience in assessing, acquiring, operating and divesting portfolio companies across various industries and businesses, including retail industries and businesses. The World Kitchen Model contained projections through 2020 that were extrapolated through 2026. Those projections were made available, in their entirety, to both Duff & Phelps and UBS for use in their respective financial analyses of the business combination. The World Kitchen Model, in the business judgment of the Company’s management, demonstrated that, among other things, the growth, margins and cash flow profile for World Kitchen would stabilize by 2020. Accordingly, the Company’s management concluded that projections extending to 2020 properly depicted World Kitchen’s economic potential. The Company is not aware of why Duff & Phelps, in its judgment, chose to utilize the 2021 and 2022 projections from the World Kitchen Model in their analysis. The Company supplementally advises the Staff that based on, among other things, the Company’s management team’s experience in preparing projections across various industries and businesses, including those in retail, the Company believes that projections through 2020 (as presented in the Revised Registration Statement) represent the Company’s good faith assessment of WDKN’s projected future performance. 5 11.