UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed by
the Registrant [X]
Filed by a
Party other than the Registrant [ ]
Check the
appropriate box:
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[X] Preliminary
Proxy Statement
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[ ] Confidential,
For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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[ ] Definitive
Proxy Statement
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[ ] Definitive
Additional Materials
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[ ] Soliciting
Material Pursuant to § 240.14a-12
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GHL
ACQUISITION 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.
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(1)
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Title
of each class of securities to which transaction applies:
Common
stock of GHL Acquisition Corp.
("GHQ")
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(2)
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Aggregate
number of securities to which transaction applies:
36,000,000
shares of GHQ common
stock
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(3)
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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):
$8.92 per share of GHQ common
stock based on the average of the high and low prices reported on the NYSE
Alternext U.S. on November
25, 2008
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(4)
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Proposed
maximum aggregate value of transaction:
$398,220,0001
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(5)
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Total
fee paid:
$15,650.052
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[X] 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.
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(1)
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Amount
previously paid:
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(2)
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Form,
Schedule or Registration Statement
No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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1 Estimated solely for the purposes of
calculating the filing fee based on the number of shares of GHQ common stock and
the cash consideration to be issued in the
acquisition.
GHL
ACQUISITION CORP.
300
Park Avenue, 23rd Floor
New
York, NY 10022
,
2009
Dear
Stockholder:
You are
cordially invited to attend a special meeting of the stockholders of GHL
Acquisition Corp. (“GHQ”) relating to our proposed acquisition of Iridium
Holdings LLC (“Iridium Holdings”). The special meeting will be held
at 10:00 a.m., Eastern Standard Time, on
, 2009, at the Waldorf-Astoria Hotel,
301 Park Avenue, New York, NY.
At the
special meeting, you will be asked to consider and vote upon the following
proposals:
1. to
approve our acquisition of Iridium Holdings (the “acquisition”) pursuant to the
Transaction Agreement dated as of September 22, 2008 among GHQ, Iridium Holdings
and the sellers listed on the signature pages thereof (the “transaction
agreement”) and the related transactions contemplated by the transaction
agreement (the “acquisition proposal”);
2. to
approve an amended and restated certificate of incorporation for GHQ (the
“proposed certificate”), to be effective upon completion of the acquisition (the
“certificate proposal”), to, among other things:
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change
our name to “Iridium Communications
Inc.”;
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permit
our continued existence after February 14,
2010;
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increase
the number of our authorized shares of common stock;
and
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eliminate
the different classes of our board of
directors;
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3. to
approve the issuance of shares of our common stock in the acquisition and
related transactions that would result in an increase in our outstanding common
stock by more than 20% (the “share issuance proposal”);
4. to
adopt a proposed stock incentive plan, to be effective upon completion of the
acquisition (the “stock incentive plan proposal”); and
5. to
adopt a proposal to authorize the adjournment of the special meeting to a later
date or dates, including, if necessary, to solicit additional proxies in favor
of the foregoing proposals if there are not sufficient votes in favor of any of
these proposals (the “adjournment proposal”).
The
approval of the acquisition proposal is conditioned upon the approval of the
certificate proposal, the share issuance proposal and the stock incentive plan
proposal, but not the adjournment proposal. The approval of the
certificate proposal, the share issuance proposal and the stock incentive plan
proposal, but not the adjournment proposal, is conditioned upon the approval of
the acquisition proposal. The adjournment proposal does not require
the approval of any other proposal to be effective.
Our board
of directors has fixed the close of business on
, 2009 as the record date for the
determination of stockholders entitled to notice of, and to vote at, the special
meeting and at any adjournments or postponements thereof. Record
holders of GHQ warrants do not have voting rights.
Stockholders
holding a majority of our issued and outstanding common stock (whether or not
held by public stockholders) at the close of business on the record date must be
present, in person or by proxy, to constitute a quorum, and a quorum is required
to approve our proposals. In addition, approval of the acquisition
proposal requires that holders of a majority of the common stock voted by all
holders of common stock issued in our initial public offering (such holders, the
“public stockholders”) must vote, in person or by proxy, in favor of the
acquisition proposal, but the acquisition proposal cannot be approved if public
stockholders owning 30% or more of the common stock issued in our initial public
offering (“IPO”) vote against the acquisition proposal and properly exercise
their conversion rights. In connection with the vote on the
acquisition proposal and the certificate proposal, Greenhill & Co., Inc.
(“Greenhill” or our “founding stockholder”) and GHQ’s directors to whom founding
stockholder’s units were transferred (collectively, our “initial stockholders”)
have agreed to vote their shares in accordance with the majority of common stock
voted by the public stockholders.
Assuming
the acquisition proposal is approved by the requisite vote of our stockholders,
the affirmative vote of the holders of a majority of the outstanding shares of
our common stock is required to approve our certificate proposal, and the
affirmative vote of the holders of a majority of the shares of our common stock
that are present in person or represented by proxy and entitled to vote at the
special meeting is required to approve the share issuance proposal, the stock
incentive plan proposal and the adjournment proposal.
You have
the right, subject to the limitation described in the next sentence, to convert
any shares that you own that were sold in our IPO into cash if you vote against
the acquisition proposal and the acquisition proposal is approved and the
acquisition is completed. To the extent you, together with any of
your affiliates or any other person with whom you are acting in concert or as a
partnership, syndicate or other group for the purpose of acquiring, holding or
disposing of your GHQ securities, own collectively more than 10% of the shares
that were sold in our IPO, you and they will be limited to seeking conversion
rights for only up to 10% of the IPO shares. If you properly exercise
your conversion rights, you will be entitled to receive a conversion price per
share equal to the aggregate amount then on deposit in our trust account (before
payment of deferred underwriting discounts and commissions and including
interest earned on their pro rata portion of our trust account, net of income
taxes payable on such interest, net of franchise taxes and net of interest
income of up to $5.0 million, subject to certain adjustments, on the trust
account balance previously released to us to fund our working capital
requirements), calculated as of two business days prior to the proposed
completion of the acquisition, divided by the number of shares sold in our
IPO. As of September 30, 2008, the per-share conversion price would
have been approximately $10.02 without taking into account any interest or
expenses accrued after such date.
You may
request conversion of your shares at any time after the mailing of this proxy
statement by following the procedures described in this proxy statement, but the
request will not be granted unless you vote against the acquisition proposal and
the acquisition proposal is approved and the acquisition is
completed. Voting against the acquisition proposal alone will not
result in the conversion of your shares into a pro rata share of the trust
account; to convert your shares, you must also follow the specific procedures
for conversion set forth in this proxy statement. See “The Special
Meeting –– Conversion Rights” on page 123. Prior to exercising your
conversion rights, you should verify the market price of GHQ’s common stock, as
you may receive higher proceeds from the sale of your common stock in the public
market than from exercising your conversion rights if the market price per share
is higher than the conversion price.
GHQ units,
common shares and warrants are listed and traded on the NYSE Alternext US LLC
(“NYSE Alternext U.S.”) under the trading symbol GHQ.U, GHQ and GHQ.WS,
respectively. On January 12, 2009, the closing price of GHQ units,
common stock and warrants were, respectively, $9.30, $9.20 and
$0.25.
AFTER
CAREFUL CONSIDERATION OF THE TERMS AND CONDITIONS OF ALL OF THE PROPOSALS, OUR
BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED ALL OF THE PROPOSALS AND UNANIMOUSLY
RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE PROPOSALS.
YOUR
VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL
MEETING, PLEASE PROMPTLY VOTE YOUR SHARES AND SUBMIT YOUR PROXY BY COMPLETING,
SIGNING, DATING AND RETURNING YOUR PROXY FORM IN THE ENCLOSED
ii
ENVELOPE. IF
YOU RETURN A PROXY WITH YOUR SIGNATURE BUT WITHOUT AN INDICATION OF HOW YOU WISH
TO VOTE ON ANY PROPOSAL, YOUR PROXY WILL BE VOTED “FOR” EACH SUCH
PROPOSAL. EVEN IF YOU RETURN THE PROXY, YOU MAY ATTEND THE SPECIAL
MEETING AND VOTE YOUR SHARES IN PERSON.
The
accompanying proxy statement contains detailed information regarding the
acquisition and related transactions, including each of our
proposals. The proxy statement also provides detailed information
about Iridium Holdings because, upon completion of the acquisition, Iridium
Holdings will become a subsidiary of GHQ.
WE
ENCOURAGE YOU TO READ THIS ENTIRE PROXY STATEMENT CAREFULLY, INCLUDING THE
SECTION DISCUSSING “RISK FACTORS,” FOR A DISCUSSION OF VARIOUS FACTORS THAT YOU
SHOULD CONSIDER IN CONNECTION WITH OUR PROPOSED ACQUISITION.
Sincerely,
Scott L.
Bok
Chairman
and Chief Executive Officer
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY
AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY
STATEMENT OR ANY OF THE SECURITIES TO BE ISSUED IN THE ACQUISITION, PASSED UPON
THE MERITS OR FAIRNESS OF THE ACQUISITION 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 , 2009 and is first
being mailed to GHQ stockholders on or about
, 2009.
iii
GHL
ACQUISITION CORP.
300
Park Avenue, 23rd
Floor
New
York, NY 10022
__________________________________________________________
NOTICE
OF SPECIAL MEETING OF STOCKHOLDERS
TO
BE HELD ON
, 2009
___________________________________________________________
To the
Stockholders of GHL Acquisition Corp.:
You are
cordially invited to attend a special meeting of the stockholders of GHL
Acquisition Corp. (“GHQ”) relating to our proposed acquisition of Iridium
Holdings LLC (“Iridium Holdings”). The special meeting will be held
at 10:00 a.m., Eastern Standard Time, on
, 2009, at the Waldorf-Astoria Hotel,
301 Park Avenue, New York, NY.
At the
special meeting, you will be asked to consider and vote upon the following
proposals:
1. to
approve our acquisition of Iridium Holdings (the “acquisition”) pursuant to the
Transaction Agreement dated as of September 22, 2008 among GHQ, Iridium Holdings
and the sellers listed on the signature pages thereof (the “transaction
agreement”) and the related transactions contemplated by the transaction
agreement (the “acquisition proposal”);
2. to
approve an amended and restated certificate of incorporation for GHQ (the
“proposed certificate”), to be effective upon completion of the acquisition (the
“certificate proposal”), to, among other things:
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change
our name to “Iridium Communications
Inc.”;
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permit
our continued existence after February 14,
2010;
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increase
the number of our authorized shares of common stock;
and
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·
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eliminate
the different classes of our board of
directors;
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3. to
approve the issuance of shares of our common stock in the acquisition and
related transactions that would result in an increase in our outstanding common
stock by more than 20% (the “share issuance proposal”);
4. to
adopt a proposed stock incentive plan, to be effective upon completion of the
acquisition (the “stock incentive plan proposal”); and
5. to
adopt a proposal to authorize the adjournment of the special meeting to a later
date or dates, including, if necessary, to solicit additional proxies in favor
of the foregoing proposals if there are not sufficient votes in favor of any of
these proposals (the “adjournment proposal”).
The
approval of the acquisition proposal is conditioned upon the approval of the
certificate proposal, the share issuance proposal and the stock incentive plan
proposal, but not the adjournment proposal. The approval of the
certificate proposal, the share issuance proposal and the stock incentive plan
proposal, but not the adjournment proposal, is conditioned upon the approval of
the acquisition proposal. The adjournment proposal does not require
the approval of any other proposal to be effective.
Our board
of directors has fixed the close of business on
, 2009 as the record date for the
determination of stockholders entitled to notice of, and to vote at, the special
meeting and at any adjournments or postponements thereof. Record
holders of GHQ warrants do not have voting rights.
iv
Your vote
is important. Whether or not you plan to attend the special meeting,
please complete, sign, date and return your proxy card as soon as possible to
ensure that your shares are represented at the special meeting or, if you are a
stockholder of record of our common stock on the record date, you may cast your
vote in person at the special meeting. If your shares are held in an
account at a brokerage firm or bank, you must instruct your broker or bank on
how to vote your shares. If you do not vote or do not instruct your
broker or bank how to vote, it will have the same effect as voting against the
acquisition proposal and the certificate proposal.
Any proxy
may be revoked at any time prior to its exercise by delivery of a later dated
proxy, by notifying in writing
before the special meeting, or by voting in person at the special
meeting. By authorizing your proxy promptly, you can help us avoid
the expense of further proxy solicitations.
Your
attention is directed to the proxy statement accompanying this notice (including
the annexes thereto) for a more complete description of the proposed acquisition
and related transactions and each of our proposals. We encourage you
to read this proxy statement carefully. If you have any questions or
need assistance voting your shares, please call our proxy solicitor, MacKenzie
Partners, Inc. at (800) 322-2885 or by email at proxy@mackenziepartners.com.
By Order
of the Board of Directors,
Jodi B.
Ganz
Secretary
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LIST
OF ANNEXES
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Annex
A
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Annex
B
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Annex
C
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Annex
D
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Annex
E
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Annex
F
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This
Summary Term Sheet, together with the sections entitled “Questions and Answers
About the Acquisition” and “Summary of Proxy Statement,” summarize certain
information contained in this proxy statement, but do not contain all of the
information that is important to you. You should carefully read this
entire proxy statement, including the attached Annexes and the documents to
which we refer you, for a more complete understanding of the matters to be
considered at the special meeting of stockholders. In this proxy statement, the
terms “we”, “us”, “our” and “GHQ” refer to GHL Acquisition Corp., the term
“Iridium Holdings” refers to Iridium Holdings LLC and the term “transaction
agreement” refers to the Transaction Agreement dated as of September 22, 2008
among GHQ, Iridium Holdings and the sellers named therein (“Sellers” or
“sellers”).
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GHQ
is a special purpose acquisition company formed for the purpose of
acquiring one or more businesses or assets. For more
information about GHQ, see the section entitled “Information About GHQ”
and “GHQ Management’s Discussion and Analysis of Financial Condition and
Results of Operations” beginning on pages 126 and 128,
respectively.
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Iridium
Holdings, through its subsidiaries, is a provider of mobile voice and data
communications services via satellite. For more information
about Iridium Holdings, see the sections entitled “Information About
Iridium Holdings,” and “Iridium Holdings Management’s Discussion and
Analysis of Financial Condition and Results of Operations” beginning on
pages 132 and 153, respectively.
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Pursuant
to a transaction agreement signed on September 22, 2008 by approximately
99.5% of the equityholders of Iridium Holdings, GHQ proposes to acquire
Iridium Holdings from such equityholders on the terms and subject to the
conditions set forth therein. For more information about the
acquisition, see the sections entitled “Proposal I—Approval of the
Acquisition” beginning on page 63, “The Transaction Agreement” beginning
on page 104 and the Transaction Agreement that is attached as Annex A to
this proxy statement.
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Under
the terms of the transaction agreement, GHQ agreed to pay for the purchase
of 100% of Iridium Holdings’ equity, $77.1 million in cash, subject to
certain adjustments, issue to the sellers 36.0 million shares of GHQ
common stock (valued at $333.28 million based on a price per share of
$9.23 on September 22, 2008, the last trading day before the acquisition
was announced and at $331.2 million based on a price per share of $9.20 on
January 12, 2009 on the NYSE Alternext U.S.) and assume approximately $131
million net debt of Iridium Holdings. In addition, 90 days
following the closing of the acquisition, if Iridium Holdings has in
effect a valid election under Section 754 of the Internal Revenue Code of
1986, as amended (the “Code”) with respect to the taxable year in which
the closing of the acquisition occurs, GHQ will make a tax benefit payment
of up to $30 million in aggregate to sellers (other than the sellers of
the equity of Baralonco and Syncom) to compensate them for the tax basis
step-up. For more information about the transaction agreement
and the other transaction agreements, see the sections entitled “The
Transaction Agreement” and “Other Transaction Agreements” beginning on
page 104 and 118 respectively.
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Following
the acquisition, the current stockholders of GHQ are expected to own
approximately 55.1% of the outstanding shares of common stock of
GHQ. The current owners of Iridium Holdings are expected to own
approximately 42.2% of the outstanding common stock of GHQ and Greenhill
& Co. Europe Holdings Limited (“Greenhill Europe”) is expected to own
approximately 2.7% as a result of a $22.9 million convertible subordinated
promissory note of Iridium Holdings (the “note”) convertible into 2.29
million shares of common stock of GHQ. The single-largest
stockholder of GHQ, following the acquisition, is expected to be Baralonco
Limited with approximately 13% ownership and the second-largest
stockholder of GHQ is expected to be Greenhill with approximately 10.8%
ownership, including Greenhill Europe’s 2.7% ownership. These
ownership percentages are calculated on an outstanding basis and assume
that (i) no holders of shares of our common stock issued in our IPO (“IPO
shares”) vote against the acquisition proposal and properly exercise their
rights to convert their shares into cash, (ii) without regard to the
results of the tender offer (iii) no holders of warrants exercise their
rights to acquire GHQ shares, and (iv) the conversion of the note by
Greenhill Europe into 2.29 million shares of common stock, in accordance
with its terms. Assuming the maximum number of GHQ stockholders
holding IPO shares (30% minus one
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share)
vote against the acquisition proposal and properly exercise their rights to
convert their shares into cash, the current stockholders of GHQ are expected to
own approximately 47.8% of the outstanding shares of common stock of GHQ, the
current owners of Iridium Holdings are expected to own approximately 49.1% of
the outstanding common stock of GHQ and Greenhill Europe is expected to own
approximately 3.1% of the outstanding common stock of GHQ. For more
information, see section entitled “Proposal I – Approval of the Acquisition”
beginning on page 63.
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GHQ’s
management and board of directors considered various factors in
determining whether to acquire Iridium Holdings and to approve the
transaction agreement, including, without limitation, an opinion prepared
by Duff & Phelps, LLC, an independent financial advisor, regarding
whether (i) the consideration to be paid by GHQ in the acquisition is
fair, from a financial point of view, to the holders of GHQ's common stock
(other than Greenhill) and (ii) Iridium Holdings has a fair market value
equal to at least 80% of the balance in GHQ's trust account (excluding
deferred underwriting discounts and commissions). For more
information about our decision-making process, see the section entitled
“Proposal I—Approval of the Acquisition—Factors Considered by the GHQ
Board in Approving the Acquisition” beginning on page
70.
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Each
holder of IPO shares has a right to convert its IPO shares into cash if
such holder votes against the acquisition proposal, the acquisition is
completed and the holder properly exercises its conversion rights as
described below. Such IPO shares would then be converted into cash at a
per-share conversion price on the closing date of the
acquisition. To exercise conversion rights, a holder of IPO
shares, whether being a record holder or holding the IPO shares in “street
name,” must tender its IPO shares to our transfer agent, American Stock
Transfer & Trust Company, and deliver written instructions to our
transfer agent: (i) stating that the holder wishes to convert the IPO
shares into a pro rata share of the trust account and (ii) confirming that
the holder has held the IPO shares since the record date and will continue
to hold them through the special meeting and the completion of the
acquisition.
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In
addition to voting on the acquisition proposal at the special meeting, the
stockholders of GHQ will vote on proposals to approve a second amended and
restated certificate of incorporation for GHQ, a share issuance proposal,
a stock incentive plan proposal and a proposal to adjourn the special
meeting, if necessary to permit further solicitation of proxies in the
event that there are insufficient votes for, or otherwise in connection
with, the approval of the acquisition proposal and the transactions
contemplated thereby. See the sections entitled “Proposal
II—Approval of the Amended and Restarted Certificate of Incorporation,”
“Proposal III—Approval of the Share Issuance Proposal,” “Proposal IV—
Adoption of the Stock Incentive Plan,” “Proposal V—Adoption of the
Adjournment Proposal” and the “The Special Meeting” on pages 90, 92, 93,
99 and 120, respectively.
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Upon
the closing of the acquisition, our board of directors will be expanded to
ten directors and six new individuals will be appointed to our board of
directors. All of our existing board members, with the exception of Kevin
P. Clarke, will remain members of our board of directors. See
the sections entitled “Proposal I—Approval of the Acquisition” and
“Management Following the Acquisition” on pages 63 and 184,
respectively.
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The
closing of the acquisition is subject to a number of conditions set forth
in the transaction agreement. For more information about the
closing conditions to the acquisition, see the section entitled “The
Transaction Agreement—Conditions to the Closing of the Acquisition”
beginning on page 113.
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Our
acquisition of Iridium Holdings involves numerous risks. For
more information about these risks, see the section entitled “Risk
Factors” beginning on page 40.
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In
considering the recommendation of GHQ’s board of directors to vote for our
proposals, you should be aware that our executive officers and members of
our board of directors have interests in the acquisition that are
different from, or in addition to, the interests of GHQ’s stockholders
generally. The members of our board of directors were aware of these
differing interests and considered them, among other matters, in
evaluating and negotiating the transaction agreement and in recommending
to our stockholders that they vote in favor of the acquisition proposal
and other proposals. These interests include, among other
things:
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All
of our directors, Messrs. Bok, Niehaus, Rush, Canfield and Clarke, and our
founding stockholder own 200,000, 200,000, 43,479, 43,479, 43,479 and
8,369,563 units of GHQ, respectively. Each of Messrs. Rush, Canfield and
Clarke purchased his units prior to our IPO for an aggregate price of
$128.00 and had an aggregate market value of approximately $404,355, based
upon the last sale price of $9.30 on the NYSE Alternext U.S. on January
12, 2009. If our proposals are not approved and GHQ is unable
to complete another business combination by February 14, 2010, GHQ will be
required to liquidate. In such event, the 8.5 million units held by
Messrs. Rush, Canfield and Clark and our founding stockholder will be
worthless because Messrs. Rush, Canfield and Clarke and our founding
stockholder have agreed that they will not receive any liquidation
proceeds with respect to such shares. Accordingly, Messrs. Rush, Canfield
and Clarke and our founding stockholder have a financial interest in the
completion of the acquisition. The 400,000 shares purchased by
Messrs. Bok and Niehaus in the IPO would receive liquidation
proceeds. Messrs. Bok and Niehaus each purchased 200,000 units
in the IPO.
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In
addition to the shares of GHQ common stock, our founding stockholder
purchased for $8.0 million warrants to purchase up to 8.0 million shares
of GHQ common stock at $1.00 per share. These warrants have an
exercise price of $7.00 per share. If GHQ is unable to complete
a business combination by February 14, 2010 and liquidates its assets,
there will be no distribution with respect to these warrants, and the
warrants will expire worthless.
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Two
of our directors, Messrs. Bok and Niehaus purchased units in our
IPO. In addition, Messrs. Bok and Niehaus own shares in our
founding stockholder that give them indirect ownership interests in GHQ.
Because of their indirect ownership interests, each of Messrs. Bok and
Niehaus has financial interests in the completion of the acquisition in
addition to their interests as holders of our
units.
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If
the acquisition is completed, certain of our current directors will
continue as directors of GHQ. These non-executive directors will be
entitled to receive any cash fees, stock options, stock awards or other
compensation arrangements that our board of directors determines to
provide to our non-executive
directors.
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Q: Why
am I receiving this proxy statement?
A: GHQ
has agreed to acquire Iridium Holdings under the terms of the transaction
agreement that is described in this proxy statement. A copy of the
transaction agreement is attached to this proxy statement as Annex A, which GHQ
and Iridium Holdings encourage you to read.
You are
receiving this proxy statement because we are soliciting your vote to approve
the acquisition and related matters at a special meeting of our
stockholders. This proxy statement contains important information
about the acquisition and related matters. You should read it
carefully.
Your vote
is important. We encourage you to vote as soon as possible after
carefully reviewing this proxy statement.
Q: When
and where is the stockholder meeting?
A: GHQ’s
special meeting will be held at 10:00 a.m., Eastern Standard Time, on
, 2009 at the Waldorf-Astoria Hotel,
301 Park Avenue, New York, NY.
Q: Why
is GHQ proposing the acquisition?
A: GHQ
is a blank check company formed for the purpose of effecting an acquisition,
through a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or other similar business combination with one or more businesses
or assets.
GHQ
completed its IPO on February 21, 2008, generating net proceeds of approximately
$400 million. As of September 30, 2008, the balance in the trust
account was approximately $402.3 million. GHQ holds these funds in
the trust account pending completion of the acquisition of Iridium Holdings and
the payment of the deferred underwriting commissions and discounts.
GHQ is now
proposing to acquire Iridium Holdings pursuant to the transaction
agreement. If the acquisition proposal and related proposals are
approved by our stockholders and the other conditions to completion of the
acquisition are satisfied, GHQ will acquire substantially all the units of
Iridium Holdings. Upon the closing of the acquisition, Iridium
Holdings will become a subsidiary of GHQ, and GHQ will be renamed “Iridium
Communications Inc.” and will apply for listing on the New York Stock Exchange
(“NYSE”).
Iridium
Holdings is a leading provider of mobile voice and data communications services
via satellite, and the only provider in the world offering 100% global
coverage. Based on information provided by Raymond James, Iridium
Holdings is the second largest provider of mobile satellite services and related
equipment with an estimated 23% market share of the principal industry players
in 2007, based on revenues. Iridium Holdings’ mobile satellite
services address the increasing demand from customers for connectivity and
reliability at all times and in all locations. Iridium Holdings
offers voice and data communications services to U.S. and international
government agencies, businesses and other customers on a global basis using 66
in-orbit constellation satellites, eight in-orbit spares and related ground
infrastructure, including a primary commercial gateway. The U.S.
government, which owns and operates a dedicated gateway, is Iridium Holdings’
largest customer, providing 22% of its 2007 revenue.
As part of
the acquisition, we would acquire two entities, Syncom-Iridium Holdings Corp.
(“Syncom”) and Baralonco N.V. (“Baralonco”), which are holders of a
significant number of Iridium Holdings units. We will execute a
pledge agreement with the sellers of the equity of each entity in connection
with the closing of the acquisition under which the sellers of the equity of
each entity would pledge certain of the shares of GHQ common stock they receive
in the transaction to cover certain of their indemnification obligations under
the transaction agreement. The sellers of the equity of Syncom would
pledge 300,000 GHQ shares and the sellers of the equity of Baralonco would
pledge 1.5 million GHQ shares received in the transaction.
If the
acquisition and related transactions are approved by our stockholders, the
warrants issued in our IPO will become exercisable in accordance with their
terms since such warrants become exercisable at any time commencing on the later
of the completion of our initial business combination or February 14,
2009.
If the
acquisition and related transactions are not approved, and GHQ is unable to
complete another business combination by February 14, 2010, GHQ will be required
to liquidate.
Q: What
will the owners of Iridium Holdings receive in the proposed
transactions?
A: Upon
completion of the acquisition, the owners of Iridium Holdings are expected to
receive, an aggregate of 35.8 million shares of GHQ common stock and $76.7
million of cash, subject to certain adjustments (based on a consideration of
36.0 million shares of common stock of GHQ and $77.1 million of cash, subject to
certain adjustments, for 100% of the equity of Iridium Holdings). In
addition, 90 days following the closing of the acquisition, if Iridium Holdings
has in effect a valid election under Section 754 of the Code with respect to the
taxable year in which the closing of the acquisition occurs, GHQ will make a tax
benefit payment of up to $30 million in aggregate to sellers (other than the
sellers of the equity of Baralonco and Syncom).
Concurrently
with the signing of the transaction agreement, Iridium Holdings and Greenhill
Europe a subsidiary of Greenhill, entered into an agreement with Iridium
Holdings to purchase a $22.9 million convertible subordinated promissory note of
Iridium Holdings. The closing of the purchase of the note occurred on
October 24, 2008, following the receipt by Iridium Holdings of the consent of
its lenders to the issuance of the note. Greenhill Europe has the
option to convert the note into Iridium Holdings units upon the later to occur
of (i) October 24, 2009 (“first anniversary”) and (ii) the closing of the
acquisition or the termination of the transaction agreement. If the
closing of the acquisition occurs after the first anniversary, upon the exercise
of its conversion rights, Greenhill Europe will be entitled to receive 2.29
million shares of GHQ common stock. If the closing occurs prior to
September 22, 2009, GHQ and Greenhill Europe will enter into an agreement which
will entitle Greenhill Europe to exchange, upon the first anniversary of the
issuance of the note, each Iridium Holding unit into which the note is
convertible for 27.2866 shares of GHQ common stock, subject to
adjustments.
Q: Will
GHQ stockholders receive anything in the proposed transactions?
A: If
the acquisition is completed and you do not properly elect to convert your GHQ
common stock into cash, you will continue to hold GHQ common stock and warrants
that you currently own and do not sell. If the acquisition is
completed but you vote your shares against the acquisition proposal and properly
elect to convert your shares into cash, your GHQ common stock will be canceled
and you will receive cash as described below, but you will continue to hold any
warrants that you currently own and do not sell.
Q: Who
will own GHQ after the proposed acquisition?
A: If
the proposed acquisition is completed, the current stockholders of GHQ are
expected to own approximately 55.1% of the outstanding shares of common stock of
GHQ. The current owners of Iridium Holdings are expected to own
approximately 42.2% of the outstanding common stock of GHQ and Greenhill Europe
is expected to own approximately 2.7% as a result of the conversion of the
note. The single-largest stockholder of GHQ, following the
acquisition, is expected to be Baralonco Limited with approximately 13%
ownership and the second-largest stockholder of GHQ is expected to be Greenhill
with approximately 10.8% ownership, including Greenhill Europe’s 2.7%
ownership. These ownership percentages are calculated on an
outstanding basis and assume that (i) no holders of IPO shares vote against the
acquisition proposal and properly exercise their rights to convert their shares
into cash, (ii) without regard to the results of the tender offer (iii) no
holders of warrants exercise their rights to acquire GHQ shares, and (iv) the
conversion of the note by Greenhill Europe into 2.29 million shares of common
stock, in accordance with its terms. Assuming the maximum number of
GHQ stockholders holding IPO shares (30% minus one share) vote against the
acquisition proposal and properly exercise their rights to convert their shares
into cash, the current stockholders of GHQ are expected to own approximately
47.8% of the outstanding shares of common stock of GHQ, the current owners of
Iridium Holdings are expected to own approximately 49.1% of the outstanding
common stock of GHQ and Greenhill Europe is expected to own approximately 3.1%
of the outstanding common stock of GHQ.
Q: What
is being voted on at the meeting?
A: You
are being asked to vote on five proposals:
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a
proposal to approve the acquisition of Iridium Holdings pursuant to the
transaction agreement, the acquisition and the other transactions
contemplated by the transaction
agreement;
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a
proposal to adopt a second amended and restated certificate of
incorporation for GHQ, to be effective upon completion of the acquisition,
to, among other things, change our name
to
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“Iridium
Communications Inc.” and permit our continued existence after February 14,
2010;
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a
proposal to approve the issuance of shares of our common stock in the
acquisition and related transactions that would result in an increase in
our outstanding common stock by more than
20%;
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a
proposal to adopt a stock incentive plan, to be effective upon completion
of the acquisition; and
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a
proposal to authorize the adjournment of the special meeting to a later
date or dates, including if necessary, to solicit additional proxies in
favor of the foregoing proposals if there are not sufficient votes in
favor of any of these proposals.
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This proxy
statement provides you with detailed information about each of these
proposals. We encourage you to carefully read this entire proxy
statement, including the attached annexes. YOU SHOULD ALSO CAREFULLY CONSIDER
THOSE FACTORS DESCRIBED UNDER THE HEADING “RISK FACTORS.”
Q: What
is the record date for the special meeting? Who is entitled to
vote?
A: The
record date for the special meeting is
, 2009. Record holders of
GHQ common stock at the close of business on the record date are entitled to
vote or have their votes cast at the special meeting. On the record
date, there were outstanding shares
of our common stock, which includes
IPO shares and shares owned by our
founding stockholder, officers and directors.
Each share
of GHQ common stock is entitled to one vote per share at the special
meeting. GHQ’s outstanding warrants do not have voting
rights.
Q: How
do the founding stockholder, our officers and directors intend to vote their
shares?
A: With
respect to the acquisition proposal, our founding stockholder, officers and
directors, to the extent they own GHQ common stock, have agreed to vote their
shares of GHQ common stock, in accordance with the majority of the votes cast by
the public stockholders. Our founding stockholder, officers and
directors, to the extent they own GHQ common stock, have also informed GHQ that
they intend to vote all of their shares “FOR” the other
proposals. The directors and officers of GHQ who purchased units in
our IPO are Messrs. Bok, Niehaus and Harold J. Rodriguez. Mr. Bok has
informed GHQ that he intends to vote the 200,000 shares of common stock
purchased as part of the units in our IPO “FOR” the proposals detailed in this
proxy statement. Mr. Niehaus has informed GHQ that he intends to vote
the 200,000 shares of common stock purchased as part of the units in our IPO
“FOR” the proposals detailed in this proxy statement. Mr. Rodriguez
has informed GHQ that he intends to vote the 15,000 shares of common stock
purchased as part of the units in our IPO “FOR” the proposals detailed in this
proxy statement.
Q: What
vote is required to approve the acquisition proposal?
A: The
affirmative vote of stockholders owning a majority of the IPO shares voted at
the special meeting represented in person or by proxy is required to approve the
acquisition proposal. However, the acquisition proposal will not be
approved if the holders of 30% or more of the IPO shares vote against the
acquisition proposal and properly exercise their rights to convert such IPO
shares into cash. Because the approval of the acquisition proposal is
a condition to the approval of the other proposals (other than the adjournment
proposal), if the acquisition proposal is not approved, the other approvals will
not take effect (other than the adjournment proposal). No vote of the
Iridium Holdings’ unitholders is required.
Q: What
vote is required to approve the certificate proposal?
A: The
affirmative vote of holders of a majority of the outstanding shares of our
common stock is required to approve the certificate proposal, and approval is
conditioned upon approval of the acquisition proposal. No vote of the
Iridium Holdings’ unitholders is required.
Q: What
vote is required to approve the share issuance proposal?
A: The
affirmative vote of holders of a majority of the shares represented in person or
by proxy and entitled to vote thereon at the special meeting is required to
approve the share issuance proposal, and approval is conditioned upon approval
of the acquisition proposal. No vote of the Iridium Holdings’
unitholders is required.
Q: What
vote is required to adopt the stock incentive plan proposal?
A: The
affirmative vote of holders of a majority of the shares represented in person or
by proxy and entitled to vote thereon at the special meeting is required to
adopt the proposed stock incentive plan of GHQ, and approval is conditioned upon
approval of the acquisition proposal. No vote of the Iridium
Holdings’ unitholders is required.
Q: What
vote is required to adopt the adjournment proposal?
A: The
affirmative vote of holders of a majority of the shares represented in person or
by proxy and entitled to vote thereon at the special meeting is required to
adopt the adjournment proposal. The approval of the adjournment
proposal is not conditioned on the approval of the acquisition proposal or any
of the other proposals. No vote of the Iridium Holdings’ unitholders
is required.
Q: Did
GHQ’s board of directors obtain an opinion from a financial advisor in
connection with the approval of the transaction agreement?
A: Yes. The
board of directors of GHQ engaged Duff & Phelps, LLC (“Duff & Phelps”),
an independent financial advisor. On September 22, 2008, Duff &
Phelps provided to GHQ’s board of directors an opinion dated September 22, 2008,
subject to the assumptions, qualifications and limitations set forth therein,
that as of that date (i) the consideration to be paid by GHQ in the acquisition
is fair, from a financial point of view, to the holders of GHQ’s common stock
(other than Greenhill) and (ii) Iridium Holdings has a fair market value equal
to at least 80% of the balance in GHQ’s trust account (excluding deferred
underwriting discounts and commissions).
Q: Do
I have appraisal or dissenters’ rights?
A: No
appraisal or dissenters’ rights are available under the Delaware General
Corporation Law (“Delaware law”) for holders of GHQ common stock or warrants in
connection with the proposals described in this proxy statement.
Q: Do
I have conversion or redemption rights?
A: Yes. Each
holder of IPO shares has a right to convert his or her IPO shares into a pro
rata share of the cash on deposit in our trust account (before payment of
deferred underwriting discounts and commissions and including interest earned on
their pro rata portion of the trust account, net of income taxes payable on such
interest, net of franchise taxes and net of interest income of up to $5.0
million, subject to certain adjustments, on the trust account balance previously
released to us to fund our working capital requirements) if such holder votes
against the acquisition proposal, properly exercises the conversion rights and
the acquisition is completed. Such IPO shares would then be converted
into cash at the per-share conversion price on the completion date of the
acquisition. It is anticipated that the funds to be distributed to
each holder who properly elects to convert any IPO shares will be distributed
promptly after completion of the acquisition.
Notwithstanding
the foregoing, a stockholder, together with any affiliate of his, her or it or
any person with whom he, she or it is acting in concert or as a partnership,
syndicate or other group for the purpose of acquiring, holding, disposing, or
voting of GHQ’s securities, will be restricted from seeking conversion rights
with respect to more than 10% of the IPO shares.
The actual
per-share conversion price will be equal to the quotient determined by dividing
(i) the amount then on deposit in the trust account (before payment of deferred
underwriting discounts and commissions and including accrued interest net of
income taxes on such interest and net of franchise taxes, after distribution of
interest income on the trust account balance to us as described above), that has
not been distributed to GHQ to cover its working capital expenses as set forth
in GHQ’s certificate of incorporation (“certificate”), calculated as of two
business days prior to the closing by (ii) the total number of IPO
shares. As of September 30, 2008, the per-share conversion price
would have been approximately $10.02, without taking into account any interest
or expenses accrued after such date.
Voting
against the acquisition proposal alone will not result in the conversion of your
IPO shares into a pro rata share of the trust account. To convert
your IPO shares, you must also exercise your conversion rights and follow the
specific procedures for conversion summarized below and set forth under “The
Special Meeting—Conversion Rights.”
Holders of
IPO shares who convert their IPO shares into cash would still have the right to
exercise any warrants that they continue to hold and do not sell.
Prior to
exercising your conversion rights, you should verify the market price of GHQ
shares because you may receive higher proceeds from the sale of your IPO shares
in the public market than from exercising
your
conversion rights if the market price per IPO share is higher than the
conversion price.
Q: How
do I exercise my conversion rights?
A: To
exercise conversion rights, a holder of IPO shares, whether being a record
holder or holding the IPO shares in “street name,” must tender the IPO shares to
our transfer agent, American Stock Transfer & Trust Company, and deliver
written instructions to our transfer agent: (i) stating that the
holder wishes to convert the IPO shares into a pro rata share of the trust
account and (ii) confirming that the holder has held the IPO shares since the
record date and will continue to hold them through the special meeting and the
completion of the acquisition.
To tender
IPO shares to our transfer agent, the holder must deliver the IPO shares either
(i) at any time before the start of the special meeting (or any adjournment or
postponement thereof), electronically using the Depository Trust Company’s DWAC
(Deposit/Withdrawal At Custodian) system or (ii) at any time before the day of
the special meeting (or any adjournment or postponement thereof), physically by
delivering a share certificate. Any holder who holds IPO shares in
street name will have to coordinate with his or her bank or broker to arrange
for the IPO shares to be delivered electronically or physically. Any
holder who desires to physically tender to our transfer agent IPO shares that
are held in street name must instruct the account executive at his or her bank
or broker to withdraw the IPO shares from the holder’s account and request that
a physical certificate be issued in such holder’s name. Our transfer
agent will be available to assist with this process.
If a
holder does not deliver written instructions and tenders his or her IPO shares
(either electronically or physically) to our transfer agent in accordance with
the above procedures, those IPO shares will not be converted into
cash.
Any
request for conversion, once made, may be withdrawn or revoked at any time
before the start (in case of electronic tendering) or at any time before the day
(in case of physical tendering) of our special meeting (or any adjournment or
postponement thereof), in which case the IPO shares will be returned
(electronically or physically) to such holder. Holders of IPO shares
who have exercised conversion rights may not thereafter withdraw or revoke their
decision to convert their IPO shares into a pro rata portion of the trust
account.
If any
holder tenders IPO shares (electronically or physically) and the acquisition is
not completed, the IPO shares will not be converted into cash and they will be
returned (electronically or physically) to such holder.
Q: What is the tender
offer?
A:
GHQ plans to commence a tender offer to purchase up to 11.4 million shares of
its common stock representing approximately 29% of GHQ’s common stock issued in
our IPO, at $10.50 per share, payable in cash (reduced by a number of shares
equal to the amount of cash distributed to stockholders who vote against the
transaction and elect conversion of their shares of GHQ common stock divided by
the per share conversion price). Consequently, if the maximum number of
holders of our IPO shares (30% minus one share of common stock) vote against the
acquisition and properly exercise the right to convert their shares into cash
but the acquisition is consummated, GHQ will not commence the tender
offer. Additionally, in the event the acquisition is not approved or other
conditions to the consummation of the acquisition are not satisfied and are not
waived, GHQ will not commence the tender offer. The tender offer will
offer liquidity to GHQ’s stockholders at $10.50 per share, regardless of the
then-current market price per share, subject to proration if the tender offer is
oversubscribed. While stockholders holding IPO shares may vote all their
shares against the acquisition and elect to properly exercise their conversion
rights, subject to the maximum number of IPO shares which may be converted by
each stockholder and in the aggregate, for the acquisition to be approved (30%
of our IPO shares minus one share), in the event the tender offer is
oversubscribed, stockholders electing to tender their shares will only be
entitled to tender a pro rata portion of the shares of common stock held by them
at such time. Assuming that no stockholders vote against the transaction and
elect conversion of their shares and the maximum number of shares are tendered
in the offer, the aggregate purchase price for the shares of GHQ common stock
purchased in the tender offer will be approximately $120.0 million. For a
more detailed discussion of the tender offer, see “The Tender
Offer.”
Q: Why is GHQ planning the tender
offer?
A:
GHQ is planning the tender offer to provide a meaningful liquidity opportunity
for at least part of the GHQ common shares held by those stockholders who desire
liquidity for their shares. GHQ’s
management
and board of directors believe that the tender offer will enhance the likelihood
of stockholder approval of the acquisition proposal since if the acquisition is
approved, the price per share proposed in our tender offer of $10.50 will be
higher than the per share conversion price of $10.00 to be distributed to our
stockholders electing to vote against the acquisition and properly exercise
their right to convert their IPO shares into cash.
Q. Who will be able to participate in
the tender offer?
A: Stockholders
of GHQ at the time of the tender offer may participate in the tender
offer. However, GHQ’s founding stockholder, officers and directors
have agreed not to tender any of their shares in the tender offer.
Q. When does GHQ expect to commence and
complete the tender offer?
A. GHQ
expects to commence the tender offer as soon as practicable following the
special meeting and legally permissible, and to complete the tender offer
approximately 20 business days after commencement, and concurrent with the
closing of the acquisition.
Q. What effect will the tender offer
have on the capital structure of GHQ?
A. The
tender offer will have the effect of reducing the number of outstanding common
shares of GHQ by the number of common shares tendered by GHQ stockholders, up to
11.4 million shares (reduced by a number of shares equal to the amount of cash
distributed to stockholders who vote against the transaction and elect
conversion of their shares of GHQ common stock divided by the per share
conversion price). The tender offer will also have the effect of
reducing the cash balances of GHQ by $10.50 multiplied by the number of shares
tendered by GHQ stockholders, up to $120 million (reduced by the amount of cash
distributed to stockholders who vote against the transaction and elect
conversion of their shares of GHQ common stock).
Q. How will GHQ fund the purchase of
shares that are tendered?
A. GHQ
expects to fund the purchase of shares that are tendered from the trust
account.
Q: What
happens after the acquisition to the funds from the IPO deposited in our trust
account?
A: Upon
completion of the acquisition, any funds remaining in the trust account after
payment of amounts, if any, to GHQ stockholders exercising their conversion
rights or tendering their shares, will be used for the prepayment of all or a
portion of Iridium Holdings’ debt, payment of transaction expenses and to fund
Iridium Holdings’ working capital after the closing of the
acquisition.
Q: Who
will manage the acquired business?
A: Following
the acquisition, GHQ, to be renamed “Iridium Communications Inc, ” will be
overseen by its board of directors, which will be comprised of: two directors
selected by Greenhill who currently serve on GHQ’s board of directors, four of
Iridium Holdings’ current directors, the current CEO of Iridium Holdings, one
representative of Syncom and two of the current independent directors of
GHQ. The current officers of GHQ shall have resigned and the current
officers of Iridium Holdings will continue to serve in their current
positions. Robert H. Niehaus, Senior Vice President of GHQ, will
become chairman of the board of directors.
Q: What
happens if the acquisition is not completed?
A: If
the acquisition proposal and related matters are not approved by our
stockholders, we will not acquire Iridium Holdings, our certificate will not be
amended and we will continue to seek other potential business
combinations. If we do not consummate a business combination by
February 14, 2010, our corporate existence will cease except for the purpose of
winding up our affairs and liquidating. In connection with our
dissolution and liquidation, all amounts in the trust account plus any other net
assets of GHQ not used for or reserved to pay obligations and claims or such
other corporate expenses relating to or arising from GHQ’s plan of dissolution,
including costs of dissolving and liquidating GHQ, would be distributed on a pro
rata basis to the holders of IPO shares. GHQ will pay no liquidating
distributions with respect to any shares of capital stock of GHQ other than the
IPO shares.
Q: What
do I need to do now?
A: Indicate
on your proxy card how you want to vote on each of our proposals, sign it and
mail it in the enclosed return envelope, as soon as possible, so that your
shares may be represented at our special meeting. If you sign and
send in your proxy card and do not indicate how you want to vote on any of our
proposals, we will count your proxy card as a vote in favor of all such
proposals. You may also attend our special meeting and vote your
shares in person. You should contact your bank or broker to request
assistance in attending the meeting.
Q: How do I vote via the
Internet?
A: Stockholders
who hold their shares through a bank or broker may be able to vote via the
Internet. If available, internet voting instructions will be provided
on the proxy card provided by your bank or broker, accompanying this proxy
statement.
Q: What
do I do if I want to change my vote?
A: Send
in a later-dated, signed proxy card to your bank or broker. If you’ve
previously voted via telephone or Internet you may change your vote by either of
these methods up to 11:59 p.m. Eastern Standard Time the day prior to
our special meeting. You may also attend our meeting in person and
vote at that time. You should contact your bank or broker to request
assistance in attending the meeting. You may also revoke your proxy
by sending a notice of revocation to
at the address under “Who Can Help Answer Your Questions” included elsewhere in
this proxy statement. You can find further details on how to revoke
your proxy under “The Special Meeting—Revoking Your Proxy.”
Q: If
my shares are held in “street name” by my bank or broker, will my broker vote my
shares for me?
A: If
you do not provide your bank or broker with instructions on how to vote your
“street name” shares, your bank or broker will not be able to vote them on the
acquisition proposal or the other proposals described in this proxy statement,
other than the issuance proposal and the adjournment proposal. You
should therefore instruct your bank or broker how to vote your shares, following
the directions provided by your bank or broker on the enclosed proxy
card. Please check the voting form used by your bank or broker to see
if it offers telephone or Internet voting.
If you do
not give voting instructions to your bank or broker, you will not be counted as
voting, unless you appear in person at the special meeting. Please
contact your bank or broker for assistance in attending the special meeting to
vote your shares.
Q: Should
I send in my stock certificates now?
A: No. If
the acquisition is completed, GHQ stockholders will keep their existing stock
certificates.
Q: What
will happen if I abstain from voting or fail to vote?
A: An
abstention, since it is not an affirmative vote in favor of any proposal but
adds to the number of shares present in person or by proxy, will have the same
effect as a vote against the certificate proposal, the share issuance proposal,
the stock incentive plan proposal and the adjournment proposal. An
abstention will have no effect on the acquisition proposal. A failure
to vote will make it more difficult for us to achieve the quorum necessary for
us to conduct business at the special meeting and, because approval of the
certificate proposal requires the affirmative vote of a majority of our
outstanding shares (not the shares actually voted) will have the same effect as
a vote against the certificate proposal.
Q: When
do you expect to complete the acquisition?
A: We
are working to complete the acquisition as soon as possible. We hope
to complete the acquisition shortly after the special meeting, if we obtain the
required stockholder approvals at the special meeting and if we receive the
necessary regulatory approvals prior to the special meeting. We
cannot predict the exact timing of the closing of the acquisition or whether the
acquisition will be consummated because it is subject to conditions that are not
within our control, such as approvals from domestic and foreign regulatory
authorities including, the Federal Communications Commission
(“FCC”). Both GHQ and Iridium Holdings possess the right to terminate
the transaction agreement in certain situations.
The
closing of the acquisition is subject to the conditions and approvals described
in this proxy statement. We expect to complete the acquisition and the related
transactions during the first half of 2009.
If you
have more questions about the acquisition, you should contact:
GHL
Acquisition Corp.
300 Park
Avenue, 23rd Floor
New York,
NY 10022
Attention:
James Babski
Phone
Number: (212) 372-4180
If you
would like additional copies of this document,
or if you
have questions about the acquisition, you should contact:
105
Madison Avenue
New York,
New York 10016
proxy@mackenziepartners.com
Call
Collect: (212) 929-5500
or
Toll-Free
(800) 322-2885
This
summary contains selected information from this proxy statement and may not
contain all of the information that is important to you. To
understand the acquisition fully and to obtain a more complete description of
the legal terms of the acquisition, you should carefully read this entire
document, including the Annexes, and the documents to which we refer
you. See “Where You Can Find More Information” on page
207. In this proxy statement, the terms “we”, “us”, “our” and “GHQ”
refer to GHL Acquisition Corp., the term “Iridium Holdings” refers to Iridium
Holdings LLC.
The
Special Meeting (See page 120)
This proxy
statement is being furnished to holders of GHQ’s common stock for use at the
special meeting, and at any adjournments or postponements of that
meeting. At the special meeting, GHQ’s stockholders will be asked to
consider and vote upon proposals (1) to approve the acquisition of Iridium
Holdings pursuant to the transaction agreement and to approve the other
transactions contemplated by the transaction agreement; (2) to approve a second
amended and restated certificate of incorporation of GHQ, to be effective upon
the closing of the acquisition; (3) to approve the issuance of shares of our
common stock in the acquisition and related transactions; (4); to adopt a
proposed stock incentive plan; and (5); to adopt a proposal to authorize the
adjournment of the special meeting to a later date or dates, including, if
necessary, to permit further solicitation and voting of proxies if there are
insufficient votes at the time of the special meeting to adopt any of these
proposals. The special meeting will be held on
, 2009, at 10:00 a.m.,
Eastern Standard Time, at the Waldorf-Astoria Hotel, 301 Park Avenue, New York,
NY.
Our board
of directors has fixed the close of business on
, 2009 as the record date for the
determination of stockholders entitled to notice of, and to vote at, the special
meeting and at any adjournments or postponements thereof. Record
holders of GHQ warrants do not have voting rights.
Recommendation
of Board of Directors and Reasons for the Acquisition
Our board
of directors has unanimously approved the acquisition and related transactions,
and unanimously recommends that our stockholders vote “FOR” each of our
proposals.
The
Parties
GHL Acquisition Corp. We are
a blank check company formed on November 2, 2007 for the purpose of acquiring,
through a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or other similar business combination, one or more businesses or
assets, which we refer to as our “initial business combination.” Our
efforts in identifying prospective target businesses have not been limited to a
particular industry. Instead, we focused on various industries and
target businesses in the United States and Europe that would provide significant
opportunities for growth.
On
February 21, 2008, we completed our IPO, generating gross proceeds of
approximately $400 million. On February 21, 2008, we also consummated
a private placement of 8.0 million warrants to our founding stockholder at $1.00
per warrant, generating gross proceeds of $8.0 million. A total of
approximately $400 million, including $375.6 million of the IPO proceeds net of
the underwriters’ discounts and commissions and offering expenses, $16.4 million
of deferred underwriting discounts and commissions and $8.0 million from the
sale of warrants to our founding stockholder, was placed into a trust account at
Wachovia Securities, LLC, with the American Stock Transfer & Trust Company
serving as trustee. Except for a portion of the interest income
permitted to be released to us, the proceeds held in trust will not be released
from the trust account until the earlier of the completion of our initial
business combination and our liquidation. Based on our certificate of
incorporation, up to a total of $5.0 million of interest income, subject to
adjustment, may be released to us to fund our working capital requirements and
additional interest income may be released to fund tax
obligations. For the period from inception to September 30, 2008,
approximately $2.7 million has been released to us in accordance with these
terms. As of September 30, 2008, the balance in the trust account was
approximately $402.3 million.
All of our
activity to date relates to our formation, our IPO and efforts to identify
prospective target businesses. We are not presently engaged in, and we will not
engage in, any substantive commercial business until we consummate our initial
business combination. If the proposals set forth in this proxy statement are not
approved, the acquisition of Iridium Holdings will not be consummated and we
will continue to search for businesses or assets to acquire. If we do not
complete an initial business combination by February 14, 2010, our corporate
existence will cease except for purposes of winding up our affairs and
liquidating.
The GHQ
units, common stock and warrants are traded on the NYSE Alternext U.S. under the
symbols “GHQ.U,” “GHQ” and “GHQ.WS,” respectively.
Our
executive offices are located at 300 Park Avenue, 23rd Floor,
New York, New York 10022. We file reports with the Securities and
Exchange Commission (“SEC”), which are available free of charge at
www.sec.gov. For more information about GHQ, please see the section
entitled “Information About GHQ.”
Iridium Holdings
LLC. Iridium Holdings is a leading provider of mobile voice
and data communications services via satellite, and the only provider in the
world offering 100% global coverage. Based on information provided by
Raymond James, Iridium Holdings is the second largest provider of mobile
satellite services and related equipment with an estimated 23% market share of
the principal industry players in 2007, based on revenues.
Iridium
Holdings maintains a website at www.iridium.com. For more information
about Iridium Holdings, please see the section entitled “Information About
Iridium Holdings.”
The
Acquisition (see page 63)
GHQ is
proposing to acquire Iridium Holdings pursuant to a transaction agreement that
provides for the acquisition of 99.5% of the outstanding units of Iridium
Holdings, with Iridium Holdings continuing as a subsidiary of
GHQ. Following the acquisition, GHQ will rename itself “Iridium
Communications Inc.”
Organizational
Structure
The
following diagram sets forth our organizational structure immediately following
the acquisition of Iridium Holdings.
* Assuming
that (i) no holders of our IPO shares vote against the acquisition proposal and
properly exercise their rights to convert their shares into cash, (ii) without
regard to the results of the tender offer and (iii) no holders of GHQ warrants
exercise their rights to acquire GHQ shares.
**
Includes Greenhill Europe’s holding of approximately 2.7% of the outstanding GHQ
common stock as a result of the conversion of the note.
Structure
of the Acquisition (see page 104 and Annex A)
The
transaction agreement provides that upon the closing of the acquisition, GHQ
will own, directly or indirectly, all or substantially all of the units of
Iridium Holdings, and Iridium Holdings will become a subsidiary of
GHQ. Equityholders owning approximately 99.5% of Iridium Holdings’
equity (including the equityholders of Baralonco and Syncom) have signed the
transaction agreement. As part of the acquisition, GHQ will acquire
all of the equity of two of Iridium Holdings largest equityholders, Baralonco
and Syncom. For additional information, please see the section
entitled “The Transaction Agreement.”
Consideration
to be Paid in the Acquisition (see page 104)
The
aggregate consideration to be paid in the acquisition and related transactions
is based upon a total enterprise value for Iridium Holdings of $591 million
(calculated as $100 million of cash to be paid to 100% of the Iridium Holdings’
equityholders, of which $77.1 million will be paid by GHQ and $22.9 million by
Greenhill Europe in the form of the note, plus $360 million of GHQ common stock
to be issued to the Iridium Holdings’ equityholders, plus net indebtedness of
Iridium Holdings of $131 million as of June 30, 2008). Upon
completion of the acquisition, the Sellers who signed the transaction agreement
will receive $76.7 million in cash, subject to certain adjustments, and GHQ will
issue to such Sellers 35.8 million shares of GHQ common stock. The
shares of common stock issued to the Sellers will not be registered under the
Securities Act, in reliance upon the exemptions from the registration
requirements as provided in Regulation D of the Securities Act of 1933, as
amended (the “Securities Act”) and the representations and warranties of the
Sellers that they are “accredited investors” within the meaning of Regulation
D.
GHQ has
agreed in the transaction agreement that it will cause the funds in our trust
account to be disbursed at the closing of the acquisition: (1) to pay
the cash consideration to the Sellers; (2) pay the conversion price to any
stockholders of GHQ who vote against the acquisition and properly exercise their
conversion rights; (3) to pay deferred underwriting fees and commissions to the
underwriters of our IPO; (4) to pay GHQ’s reasonable out-of-pocket documented
third party fees and expenses that are incurred prior to the closing in
connection with the transaction agreement and related transaction documents, to
the extent not paid prior to the closing; and (5) prepay all or a portion of
Iridium Holdings’ outstanding indebtedness. GHQ will then contribute
the funds remaining in our trust account to Iridium Holdings, and Iridium
Holdings will use such funds for working capital and general corporate
matters.
Additionally,
90 days following the closing of the acquisition, if Iridium Holdings has in
effect a valid election under Section 754 of the Code with respect to the
taxable year in which the closing of the acquisition occurs, GHQ will make a tax
benefit payment of up to $30 million in aggregate to the Sellers (other than the
sellers of the equity of Baralonco and Syncom) to compensate for the tax basis
step-up.
Conditions
to the Closing of the Acquisition (see page 113 and Annex A)
The
obligation of GHQ, Iridium Holdings and the Sellers to complete the acquisition
and related transactions is subject to the requirement that specified conditions
must be satisfied or waived by the parties, including the
following:
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|
·
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GHQ
stockholder approval of the acquisition, the issuance of GHQ common stock
to the Sellers, the amendment of the GHQ certificate of incorporation and
the adoption of a stock incentive plan have been obtained and less than
30% of GHQ stockholders have voted against the acquisition and elected to
convert their shares of GHQ common stock into
cash;
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·
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no
law or injunction shall prohibit the consummation of the transactions
contemplated by the transaction
agreement;
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·
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the
expiration or termination of any applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvement Act of 1976 (the “HSR Act”) (early
termination of the applicable waiting period was granted on October 10,
2008);
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·
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all
FCC consents with respect to the transactions contemplated by the
transaction agreement have been obtained;
and
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·
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all
actions by or in respect of filings with any other governmental authority
required to permit the consummation of the transactions contemplated by
the transaction agreement have been taken, made or obtained other than
actions or filings the failure of which to take, make or obtain would not
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect on Iridium Holdings or
GHQ.
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The
obligation of GHQ to complete the acquisition and related transactions is
subject to the requirement that specified conditions must be satisfied or waived
by GHQ, including the following:
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·
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Iridium
Holdings’ and the Sellers’ representations and warranties must be true and
correct in all respects (without giving effect to any limitations as to
materiality or Company Material Adverse Effect contained therein) at and
as of the closing of the acquisition (or, to the extent any such
representation and warranty specifically states that it refers to an
earlier date, and on as of such earlier date), except where the failures
of such representations and warranties to be so true and correct, in the
aggregate, would not reasonably be expected to have an Iridium Holdings’
Material Adverse Effect;
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·
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Iridium
Holdings and the Sellers must have performed, in all material respects,
their respective obligations to be performed at or prior to the closing of
the acquisition;
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·
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each
Seller which is receiving shares of GHQ common stock at the closing of the
acquisition has executed and delivered the registration rights
agreement;
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·
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the
Sellers of Baralonco and Syncom which are receiving shares of GHQ common
stock at the closing of the acquisition have executed and delivered pledge
agreements;
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·
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the
Sellers have effected the contribution of 100% of the issued and
outstanding equity interests of Iridium Carrier Holdings LLC and Iridium
Carrier Services LLC to Iridium
Holdings;
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GHQ
has received a certification from Iridium Holdings certifying that 50% or
more of the value of the gross assets of Iridium Holdings does not consist
of U.S. real property interests, or that 90% or more of the value of the
gross assets of Iridium Holdings does not consist of U.S. real property
interests plus cash or cash
equivalents;
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·
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GHQ
has received a certification from Baralonco and Syncom that each of them
is not, and has not been, a United States real property holding
corporation as defined in the Code;
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GHQ
has received an affidavit by the custodians of the shares of Baralonco,
substantially to the effect that in its capacity as custodian, each has
actual knowledge of the ultimate beneficial owner of the shares who has
been the ultimate beneficial owner of the shares of Baralonco from the
date of Baralonco’s formation to the closing of the acquisition;
and
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·
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Baralonco
has delivered evidence to GHQ that it has repaid all of its outstanding
debt and all other liabilities.
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The
obligation of Iridium Holdings and the Sellers to complete the acquisition and
the related transactions is subject to the requirement that specified conditions
must be satisfied or waived by Iridium Holdings and the Sellers, including the
following:
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·
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GHQ’s
representations and warranties must be true and correct in all respects
(without giving effect to any limitations as to materiality or GHQ
Material Adverse Effect contained therein) at and as of the closing of the
acquisition (or, to the extent any such representation and warranty
specifically states that it refers to an earlier date, on and as of such
earlier date), except where the failures of such representations and
warranties
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to be so
true and correct, in the aggregate, would not reasonably be expected to have a
GHQ Material Adverse Effect;
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·
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GHQ
must have performed, in all material respects, its obligations to be
performed at or prior to the closing of the
acquisition;
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·
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the
current officers of GHQ have resigned and the current officers of Iridium
Holdings have been duly appointed as officers of GHQ and the directors
described above have been duly appointed as directors of
GHQ;
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GHQ
has made appropriate arrangements to have the trust account disbursed to
GHQ immediately prior to the closing of the
acquisition;
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·
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GHQ
and its affiliates have executed and delivered the registration rights
agreement; and
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GHQ
has executed and delivered the pledge
agreements.
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Termination
of Transaction Agreement (see page 115 and Annex A)
The
transaction agreement may be terminated at any time prior to the closing of the
acquisition in the following circumstances:
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·
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by
mutual written consent of Iridium Holdings and
GHQ;
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·
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by
either Iridium Holdings or GHQ if the acquisition is not consummated by
June 29, 2009 (if all required regulatory approvals have been obtained) or
February 14, 2010 (if the only condition to closing still not fulfilled as
of June 29, 2009 is the obtaining of all regulatory approvals) (the “End
Date”);
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·
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by
either Iridium Holdings or GHQ if any material law or final,
non-appealable order prohibits the consummation of the transactions
contemplated by the transaction
agreement;
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·
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by
either Iridium Holdings or GHQ if the stockholders of GHQ fail to approve
at the GHQ special meeting or any adjournment thereof the adoption of the
transaction agreement, the issuance of GHQ common stock to the Sellers,
the amendment of GHQ’s certificate of incorporation and the adoption of
the a stock incentive plan;
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·
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by
GHQ if there has been a breach by Iridium Holdings or a Seller of any
representation or warranty or failure to perform any covenant or
obligation that would result in the failure of that party to satisfy a
condition to the closing, and such condition is incapable of being
satisfied by the End Date;
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·
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by
Iridium Holdings if there has been a breach by GHQ of any representation
or warranty or failure to perform any covenant or obligation that would
result in the failure of GHQ to satisfy a condition to the closing, and
such condition is incapable of being satisfied by the End Date;
or
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·
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by
Iridium Holdings if the special meeting has not been held within 90 days
of this proxy statement being cleared by the
SEC.
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Summary
of the Duff & Phelps Opinion (See page 77 and Annex F)
In
connection with its consideration of the acquisition, GHQ’s board of directors
engaged Duff & Phelps as an independent financial advisor and pursuant to
its engagement letter dated August 12, 2008, on September 22, 2008, Duff &
Phelps rendered its oral opinion (subsequently confirmed in writing as of
September 22, 2008) to GHQ’s board of directors to the effect that, subject to
the assumptions, qualifications and limitations set forth therein, as of
September 22, 2008, (i) the consideration to be paid by GHQ in the acquisition
is fair, from a financial point of view, to the holders of GHQ’s common stock
(other than Greenhill) and (ii) Iridium Holdings has a fair market
value
equal to at least 80% of the balance in our trust account (excluding deferred
underwriting discounts and commissions). The opinion was approved by Duff &
Phelps’s internal opinion committee.
Duff &
Phelps’s opinion was directed to GHQ’s board of directors and only addressed the
fair market value of Iridium Holdings and the fairness, from a financial point
of view, of the consideration to be paid by GHQ in the acquisition to GHQ
stockholders (other than Greenhill), and does not address any other aspect or
implication of the acquisition. The full text of Duff & Phelps’s written
opinion is included as Annex F to this proxy statement and sets forth the
procedures followed, assumptions made, qualifications and limitations on the
review undertaken and other matters considered by Duff & Phelps in preparing
its opinion. We encourage you to carefully read the full text of Duff &
Phelps’s written opinion. However, neither Duff & Phelps’s written opinion
nor the summary of its related analysis is intended to be, and does not
constitute advice or a recommendation to any stockholders as to how such
stockholder should act or vote with respect to the acquisition.
The
Second Amended and Restated Certificate of Incorporation of GHQ (See page 90 and
Annex B)
Assuming
the acquisition proposal is approved, GHQ’s stockholders are also being asked to
approve the amendment and restatement of our certificate of incorporation, to be
effective immediately prior to closing of the acquisition. The second amended
and restated charter will, among other things:
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·
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change
our name to “Iridium Communications
Inc.,”
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permit
our continued existence after February 14,
2010,
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increase
the number of our authorized shares of common stock,
and
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·
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eliminate
the different classes of our board of
directors;
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We
encourage you to read the second amended and restated certificate of
incorporation of GHQ in its entirety.
The
Issuance of Shares of Common Stock of GHQ (See page 92)
You are
being asked to approve the issuance of up to 38,290,000 common shares as part of
the consideration for the acquisition and related transactions. As of
the date of this proxy statement, there are 48,500,000 shares of GHQ’s common
stock outstanding, so this issuance would represent more than 20% of our
outstanding shares, which requires a stockholder vote under the NYSE Alternext
U.S. Company Guide.
The
Stock Incentive Plan (See page 93 and Annex E)
The stock
incentive plan proposal proposes to reserve 8.0 million shares of our common
stock for issuance in accordance with awards under the plan. We are proposing
the stock incentive plan, which would be effective upon closing of the
acquisition, as a means of securing and retaining key employees and others of
outstanding ability and to motivate such individuals to exert their best efforts
on behalf of GHQ (or “Iridium Communications Inc.” following the closing of the
acquisition) and its affiliates by providing incentives through the grant of
options to acquire shares of our common stock and, if so determined by the
compensation committee of our board of directors, other stock-based awards and
performance incentive awards. GHQ believes that it will benefit from
the added interest that these individuals will have in the welfare of GHQ as a
result of their proprietary interest in GHQ’s success, see “Proposal IV—Adoption
of the Stock Incentive Plan.” Additionally, the stock incentive plan
is attached as Annex E to this proxy statement. We encourage you to read the
stock incentive plan in its entirety.
GHQ’s
Founding Stockholder Ownership
As of
September 30, 2008, all of our directors, Scott L. Bok, Robert H. Niehaus,
Parker W. Rush, Thomas C. Canfield and Kevin P. Clarke, and our founding
stockholder own 200,000, 200,000, 43,479, 43,479, 43,479 and 8,369,563 units of
GHQ, respectively. Messrs. Rush, Canfield and Clarke purchased their
shares prior to our IPO.
Messrs.
Bok and Niehaus purchased their units in the IPO. In addition to the
units of GHQ owned prior to the IPO, our founding stockholder purchased,
concurrently with the IPO, for $8.0 million warrants to purchase up to 8.0
million shares of GHQ common stock at $1.00 per share. At the closing of the
acquisition, our founding stockholder has agreed to forfeit the following GHQ
securities which it currently owns: (1) 1,441,176 shares of our
common stock purchased as part of the unit purchase on November 31, 2007; (2)
8,369,563 warrants purchased as part of the unit purchase on November 13, 2007;
and (3) 2.0 million warrants purchased in a private placement on February 21,
2008.
Consideration
Offered to GHQ’s Stockholders
Existing
GHQ stockholders will not receive any cash or property as a result of the
acquisition, but instead will continue to hold their shares of GHQ common
stock. Upon completion of the acquisition, our stockholders
collectively are expected to own approximately 55% of the outstanding shares of
common stock of GHQ, assuming that (i) no GHQ stockholders vote against the
acquisition proposal and properly exercise their conversion rights, (ii) without
regard to the results of the tender offer and (iii) no holders of GHQ warrants
exercise their rights to acquire GHQ shares.
Conversion
Rights (See page 123)
Each
holder of IPO shares has a right to convert its IPO shares into cash if such
holder votes against the acquisition proposal, the acquisition is completed and
the holder properly exercises its conversion rights as described below. Such IPO
shares would then be converted into cash at the per-share conversion price
described below on the closing date of the acquisition.
Voting
against the acquisition proposal alone will not result in the conversion of the
IPO shares into a pro rata share of the trust account. To convert IPO
shares, the holder must also properly exercise his or her conversion rights by
following the specific procedures for conversion set forth below and the
acquisition must be completed.
We will
not complete the acquisition and will not convert any IPO shares into cash if
stockholders owning 30% or more of the IPO shares both vote against the
acquisition proposal and properly exercise their conversion
rights. It is anticipated that the funds to be distributed to each
holder who properly elects to convert any IPO shares will be distributed
promptly after completion of the acquisition.
Holders of
IPO shares who convert their IPO shares into cash would still have the right to
exercise any warrants that they continue to hold and do not sell.
The actual
per-share conversion price will be equal to the quotient determined by dividing
(i) the amount then on deposit in the trust account (before payment of deferred
underwriting discounts and commissions and including accrued interest net of
income taxes on such interest and net of franchise taxes, after distribution of
interest income on the trust account balance to us as described above), that has
not been distributed to GHQ to cover its working capital expenses as set forth
in GHQ’s certificate of incorporation (“certificate”), calculated as of two
business days prior to the closing by (ii) the total number of IPO
shares. As of September 30, 2008, the per-share conversion price
would have been approximately $10.02, without taking into account any interest
or expenses accrued after such date.
Prior to
exercising conversion rights, holders of IPO shares should verify the market
price of the IPO shares as they may receive higher proceeds from the sale of the
IPO shares in the public market than from exercising conversion rights if the
market price per IPO share is higher than the conversion price.
To
exercise conversion rights, a holder of IPO shares, whether being a record
holder or holding the IPO shares in “street name,” must tender its IPO shares to
our transfer agent, American Stock Transfer & Trust Company, and deliver
written instructions to our transfer agent: (i) stating that the holder wishes
to convert the IPO shares into a pro rata share of the trust account and (ii)
confirming that the holder has held the IPO shares since the record date and
will continue to hold them through the special meeting and the completion of the
acquisition.
To tender
IPO shares to our transfer agent, the holder must deliver its IPO shares either
(i) at any time before the start of the special meeting (or any adjournment or
postponement thereof), electronically using the Depository Trust Company’s DWAC
(Deposit/Withdrawal At Custodian) system or (ii) at any time before the day of
the special meeting (or any adjournment or postponement thereof), physically by
delivering a share certificate. Any holder who holds IPO shares in
“street name” will have to coordinate with his or her bank or broker to arrange
for the IPO shares to be delivered electronically or physically. Any
holder who desires to physically tender to our transfer agent IPO shares that
are held in “street name” must instruct the account executive at his or her bank
or broker to withdraw the IPO shares from the holder’s account and request that
a physical certificate be issued in such holder’s name. Our transfer
agent will be available to assist with this process.
If a
holder does not deliver written instructions and tenders his or her IPO shares
(either electronically or physically) to our transfer agent in accordance with
the above procedures, those IPO shares will not be converted into
cash.
Any
request for conversion, once made, may be withdrawn or revoked at any time
before the start (in case of electronic tendering) or at any time before the day
(in case of physical tendering) of our special meeting (or any adjournment or
postponement thereof), in which case the IPO shares will be returned
(electronically or physically) to such holder. Holders of IPO shares
who have exercised conversion rights may not thereafter withdraw or revoke their
decision to convert their IPO shares into a pro rata portion of the trust
account.
If any
holder tenders IPO shares (electronically or physically) and the acquisition is
not completed, the IPO shares will not be converted into cash and they will be
returned (electronically or physically) to such holder.
Tender
Offer (See page 100)
GHQ
intends to launch a cash self tender offer to purchase up to 11.4 million shares
of its common stock at a price of $10.50 per share, reduced by a number of
shares equal to the amount of cash distributed to stockholders who vote against
the acquisition and elect conversion of their shares of GHQ common stock divided
by the per share conversion price (“total number of the tender offer
shares”). GHQ expects to commence the tender offer as soon as
practicable and legally permissible, and to complete the tender offer
approximately 20 business days after commencement and concurrent with the
closing of the acquisition.
If, at the
expiration date of the tender offer, more than the total number of the tender
offer shares have been validly tendered, GHQ will purchase from each tendering
stockholder a prorated number of shares of GHQ common
stock. Proration for each stockholder tendering shares will be based
on the product of (i) the number of shares of GHQ common stock that have been
properly tendered and not properly withdrawn by a particular stockholder and
(ii) (A) the total number of the tender offer shares, divided by (B) the total
number of shares of GHQ common stock properly tendered and not properly
withdrawn by all stockholders. GHQ’s management believes that the
tender offer will enhance the likelihood of stockholder approval of the
acquisition and stock issuance proposals because the tender offer will provide a
meaningful liquidity opportunity for at least part of the GHQ shares held by
those stockholders desiring liquidity for their shares.
Assuming
the maximum number of shares (11.4 million) is tendered in the tender offer, the
aggregate purchase price for the shares of GHQ common stock tendered in the
tender offer will be approximately $120.0 million.
The
purchase of shares tendered in the tender offer will be funded from cash of GHQ
following the closing of the acquisition, which will include proceeds in the
trust account.
The
founding stockholder has agreed not to tender any shares of GHQ common stock to
GHQ pursuant to the tender offer. In addition, each officer and
director of GHQ has agreed not to tender any of their shares of GHQ common stock
to GHQ pursuant to the tender offer.
Interests
of Certain Persons in the Acquisition (See page 103)
In
considering the recommendation of GHQ’s board of directors to vote for our
proposals, you should be aware that our executive officers and members of our
board of directors have interests in the acquisition that are different from, or
in addition to, the interests of GHQ’s stockholders generally. The members of
our board of directors were aware of these differing interests and considered
them, among other matters, in evaluating and negotiating the transaction
agreement and in recommending to our stockholders that they vote in favor of the
acquisition proposal and other proposals. These interests include, among other
things:
|
|
·
|
All
of our directors, Messrs. Bok, Niehaus, Rush, Canfield and Clarke, and our
founding stockholder own 200,000, 200,000, 43,479, 43,479, 43,479 and
8,369,563 units of GHQ, respectively. Each of Messrs. Rush, Canfield and
Clarke purchased his units prior to our IPO for an aggregate price of
$128.00 and had an aggregate market value of approximately $404,355, based
upon the last sale price of $9.30 on the NYSE Alternext U.S. on January
12, 2009. If our proposals are not approved and GHQ is unable
to complete another business combination by February 14, 2010, GHQ will be
required to liquidate. In such event, the 8.5 million units held by
Messrs. Rush, Canfield and Clark and our founding stockholder will be
worthless because Messrs. Rush, Canfield and Clarke and our founding
stockholder have agreed that they will not receive any liquidation
proceeds with respect to such shares. Accordingly, Messrs. Rush, Canfield
and Clarke and our founding stockholder have a financial interest in the
completion of the acquisition. The 400,000 shares purchased by
Messrs. Bok and Niehaus in the IPO would receive liquidation
proceeds. Messrs. Bok and Niehaus each purchased 200,000 units
in the IPO.
|
|
|
·
|
In
addition to the shares of GHQ common stock, our founding stockholder
purchased for $8.0 million warrants to purchase up to 8.0 million shares
of GHQ common stock at $1.00 per share. These warrants have an
exercise price of $7.00 per share. If GHQ is unable to complete
a business combination by February 14, 2010 and liquidates its assets,
there will be no distribution with respect to these warrants, and the
warrants will expire worthless.
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|
|
·
|
Two
of our directors, Messrs. Bok and Niehaus purchased units in our
IPO. In addition, Messrs. Bok and Niehaus own shares in our
founding stockholder that give them indirect ownership interests in GHQ.
Because of their indirect ownership interests, each of Messrs. Bok and
Niehaus has financial interests in the completion of the acquisition in
addition to their interests as holders of our
units.
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|
|
·
|
If
the acquisition is completed, certain of our current directors will
continue as directors of GHQ. These non-executive directors will be
entitled to receive any cash fees, stock options, stock awards or other
compensation arrangements that our board of directors determines to
provide to our non-executive
directors.
|
No
Appraisal or Dissenters’ Rights
No
appraisal or dissenters’ rights are available under Delaware law for holders of
GHQ common stock in connection with the proposals described in this proxy
statement.
Regulatory
Matters
U.S.
Antitrust. Under the HSR Act and the rules that have been
promulgated thereunder by the Federal Trade Commission (the “FTC”), the
acquisition may not be consummated unless GHQ and Iridium Holdings furnish
certain information to the Antitrust Division of the United States Department of
Justice (the “Antitrust Division”) and the FTC and specified waiting period
requirements have been satisfied. Pursuant to the requirements of the
HSR Act, GHQ and Iridium Holdings each filed a Notification and Report Forms
with respect to the acquisition with the Antitrust Division and the FTC. GHQ
filed its notification on October 3, 2008 and Iridium Holdings filed its
notification on October 6, 2008. Early termination of the waiting
period applicable to the acquisition was granted by the FTC on October 10,
2008.
The
Antitrust Division and the FTC frequently scrutinize the legality under the
antitrust laws of transactions such as the acquisition. At any time
before or after consummation of the acquisition, the Antitrust Division or the
FTC could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the completion of
the acquisition or seeking the divestiture of substantial assets of GHQ or
Iridium Holdings. Private parties (including individual states) may
also bring legal actions under the antitrust laws. We do not believe
that the consummation of the acquisition will result in a violation of any
applicable antitrust laws. However, there can be no assurance that a
challenge to the acquisition on antitrust grounds will not be made or, if this
challenge is made, what the result will be. See “The Transaction
Agreement—Conditions to the Closing” for certain conditions to the acquisition,
including conditions with respect to litigation and certain governmental actions
and “The Transaction Agreement—Termination” for certain termination rights
pursuant to the transaction agreement in connection with legal prohibitions to
completing the acquisition.
Foreign Competition Law
Filings. Iridium Holdings and its subsidiaries own property
and conduct business in a number of foreign countries. In connection
with the acquisition, the laws of certain of these foreign countries may require
the filing of information with, or the obtaining of the approval of,
governmental authorities therein. The parties do not believe that any
such filings or approvals are required by these laws, but intend to take such
action as they may require.
FCC
Licenses. Certain subsidiaries and affiliates of Iridium
Holdings hold one or more licenses or authorizations (each an “FCC License” and
collectively the “FCC Licenses”) issued by the FCC. Under the
Communications Act of 1934, as amended, and the rules and regulations of the
FCC, prior to completion of the acquisition, the FCC must approve the transfer
of control of these subsidiaries and affiliates and their FCC Licenses to
GHQ. Therefore, GHQ and each subsidiary or affiliate of Iridium
Holdings that holds one or more FCC License must file an application with the
FCC requesting such approval (each an “Application” and collectively the
“Applications”). The FCC will review each Application to determine
whether GHQ’s control of the pertinent subsidiary or affiliate and its FCC
Licenses would comply with applicable law and whether it would be consistent
with the public interest, convenience and necessity. GHQ and Iridium
Holdings jointly filed the Applications with the FCC on October 21,
2008.
On
November 26, 2008, the FCC issued a public notice (the “Public Notice”)
announcing the filing of the Applications, summarizing the information contained
therein, and inviting petitions to deny, oppositions and other comments by third
parties with respect to the Applications. On December 29, 2008,
Cornell University (“Cornell”) and International Communications Group, Inc.
(“ICG”) filed comments with respect to the Applications. The
commenters did not oppose the proposed transfer of control of Iridium Holdings
but asked the FCC to adopt certain conditions in connection with its grant of
the Applications. Also on December 29, 2008, Globalstar License LLC
(“Globalstar License”) filed a petition to deny the Applications.
On January
12, 2009, GHQ and Iridium Holdings jointly filed a consolidated opposition and
response with respect to the comments of Cornell and ICG and the petition to
deny of Globalstar License. The opposition and response asserted that
the comments and petition to deny provide no basis for the FCC to deny,
condition its approval or delay its consideration of the
Applications. On January 21, 2009, Globalstar License filed a reply
to the opposition and response. Pursuant to the Public Notice, the
pleading cycle ended on January 12, 2009. Parties may, however,
continue to make ex parte submissions to the FCC until the FCC acts on the
Applications.
The FCC
has developed an informal timetable for acting upon transfer of control
applications. Pursuant to this informal timetable, it will endeavor
to take action on any such application (i.e., grant, deny, or designate the
application for hearing) within 180 days from the initial public notice
accepting the application for filing (i.e., by May 25, 2009). The FCC
reserves the right to stop the 180-day “clock” at its discretion. We
cannot assure you that the FCC will act on the Applications in a timely manner
or that the FCC will not deny the Applications or impose conditions on the
parties in connection with granting its approval.
Other U.S. Regulatory
Filings. Iridium Holdings engages in several business areas
that are regulated by the U.S. Government on national security
grounds. In particular, it is registered with the U.S. State
Department as a
manufacturer
or exporter of satellite-related items that are controlled under the
International Traffic in Arms Regulations (“ITAR”). In connection
with the acquisition, appropriate notice and other filings will be required to
be made with the Departments of State and Defense. On December 23,
2008, the Department of Justice, the Federal Bureau of Investigation, and the
Department of Homeland Security (the “Executive Agencies”) asked the FCC to
defer action on the Applications until such time that any national security, law
enforcement, or public safety concerns raised by the proposed transaction have
been addressed. Such a request is routine in transactions involving
satellite carriers or other providers of telecommunications
services. In order to address any such concerns, GHQ may be required
to enter into a national security agreement with the Executive Agencies,
compliance with which will be a condition of FCC grant of the FCC
Applications.
Foreign Licenses and
Authorizations. Iridium Holdings, either directly or
indirectly through certain of its subsidiaries and affiliates, provides
communications services to subscribers in foreign countries in all regions of
the world. In many of these countries, Iridium Holdings, its
subsidiaries and/or affiliates have received government licenses or other
authorizations to provide such services. In certain of these
countries, completion of the acquisition may require either government approval
or notification of the change in control over the pertinent licenses or
authorizations. No assurance can be given that, if any such approvals
are required, they will be obtained.
General. It is
possible that governmental authorities having jurisdiction over GHQ and Iridium
Holdings may seek regulatory concessions as conditions for granting approval of
the acquisition. A regulatory body’s approval may contain terms or
impose conditions or restrictions relating or applying to, or requiring changes
in or limitations on, the operation or ownership of any asset or business of
GHQ, Iridium Holdings or any of their subsidiaries, or GHQ’s ownership of
Iridium Holdings, or requiring asset divestitures, which conditional approval
could reasonably be expected to result in a substantial detriment to GHQ,
Iridium Holdings and their subsidiaries, taken as a whole, after the closing of
the acquisition. If this kind of approval occurs, in certain
circumstances, GHQ can decline to close under the transaction
agreement. We can give no assurance that the required regulatory
approvals will be obtained on terms that satisfy the conditions to closing of
the acquisition or are within the time frame contemplated by GHQ and Iridium
Holdings. See “The Transaction Agreement—Conditions to the Closing”
on page 113.
Risk
Factors (See page 40)
In
evaluating each of the proposals set forth in this proxy statement, you should
carefully read this proxy statement and consider the factors discussed in the
section entitled “Risk Factors.”
The
following selected historical financial data as of December 31, 2007 and
September 30, 2008 (unaudited) and for the period from November 2, 2007
(inception) to December 31, 2007, from November 2, 2007 to September 30, 2008
(unaudited), and the nine months ended September 30, 2008 (unaudited) was
derived from the financial statements of GHQ. GHQ is a development
stage enterprise. Interim results are not necessarily indicative of results for
the full year. The selected financial data below should be read in
conjunction with GHQ’s financial statements and related notes beginning on page
F-2 and “GHQ - Management’s Discussion and Analysis of Financial Condition and
Results of Operations” included in this proxy statement.
|
Statement
of Operations Data:
|
November
2, 2007
(inception) to December 31, 2007 |
November
2, 2007
(inception) to September 30, 2008 (unaudited) |
Nine
Months Ended
September 30, 2008 (unaudited) |
|||||||||
|
Other
income (interest)
|
--------- | $ | 4,936,297 | $ | 4,936,297 | |||||||
|
Loss
from operations
|
(3,812 | ) | (304,007 | ) | (300,195 | ) | ||||||
|
Income
before income taxes
|
(3,812 | ) | 4,632,290 | 4,636,102 | ||||||||
|
Provision
for income taxes
|
--------- | (2,087,763 | ) | (2,087,763 | ) | |||||||
|
Net
income (loss)
|
(3,812 | ) | 2,544,527 | 2,548,339 | ||||||||
|
Net
income per share (basic and diluted)
|
0.00 | --------- | 0.06 | |||||||||
|
Weighted
average shares outstanding (basic and diluted)
|
--------- | --------- | 41,511,588 | |||||||||
|
Balance
Sheet Data:
|
December
31, 2007
|
September
30, 2008
(unaudited) |
||||||||||
|
Working
capital (excludes cash held in trust account)
|
$ | (294,434 | ) | $ | (12,752,266 | ) | ||||||
|
Total
assets
|
500,000 | 404,438,928 | ||||||||||
|
Total
liabilities
|
478,812 | 13,288,776 | ||||||||||
|
Common
stock, subject to possible conversion (11,999,999 shares at conversion
value)
|
--------- | 119,999,999 | ||||||||||
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Stockholders’
equity
|
21,188 | 271,150,153 | ||||||||||
The
following selected historical financial data for each of the five years in the
period ended December 31, 2007 was derived from Iridium Holdings’ audited
financial statements and the financial information for the nine months ended
September 30, 2007 and 2008 was derived from Iridium Holdings’ unaudited interim
financial statements included elsewhere in this proxy
statement. Iridium Holdings’ unaudited interim financial statements
reflect all adjustments necessary to state fairly its financial position at
September 30, 2007 and 2008 and its income and cash flows for the nine months
ended September 30, 2007 and 2008. The information for the years
ended December 31, 2003 and 2004 was derived from Iridium Holdings’ audited
financial statements not included in this proxy statement. Interim
results are not necessarily indicative of results for the full year and
historical results are not necessarily indicative of results to be expected in
any future period. The selected financial data below should be read
in conjunction with Iridium Holdings’ financial statements and related notes
beginning on page F-25 and “Iridium Holdings—Management’s Discussion and
Analysis of Financial Condition and Results of Operations” included in this
proxy statement.
|
Years
Ended December 31
|
Nine
Months Ended
September
30
|
|||||||||||||||||||||||||||
|
Statement
of Operations Data:
|
2003
|
2004
|
2005
|
2006
|
2007
|
2007
|
2008
|
|||||||||||||||||||||
|
Revenue:
|
||||||||||||||||||||||||||||
|
Government
Services
|
39,112 | 45,069 | 48,347 | 50,807 | 57,850 | 41,853 | 48,826 | |||||||||||||||||||||
|
Commercial
Services
|
42,527 | 49,611 | 60,690 | 77,661 | 101,172 | 73,207 | 97,542 | |||||||||||||||||||||
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Subscriber
Equipment
|
17,046 | 26,811 | 78,663 | 83,944 | 101,879 | 78,548 | 97,824 | |||||||||||||||||||||
|
Operating
expenses:
|
||||||||||||||||||||||||||||
|
Cost
of subscriber equipment sales
|
18,481 | 26,463 | 62,802 | 60,068 | 62,439 | 48,347 | 55,261 | |||||||||||||||||||||
|
Network
and satellite operations and maintenance(a)
|
50,008 | 50,248 | 56,909 | 60,685 | 60,188 | 44,223 | 47,451 | |||||||||||||||||||||
|
Selling,
general and administrative(a)
|
30,210 | 32,487 | 30,135 | 33,468 | 46,350 | 32,829 | 42,966 | |||||||||||||||||||||
|
Research
and development(b)
|
19,448 | 9,044 | 4,334 | 4,419 | 17,370 | 11,241 | 23,500 | |||||||||||||||||||||
|
Depreciation
and amortization
|
6,695 | 7,132 | 7,722 | 8,541 | 11,380 | 7,598 | 8,959 | |||||||||||||||||||||
|
Satellite
system development refund(b)
|
- | - | (14,000 | ) | - | - | - | - | ||||||||||||||||||||
|
Total
operating expenses
|
124,842 | 125,374 | 147,902 | 167,181 | 197,727 | 144,238 | 178,137 | |||||||||||||||||||||
|
Operating
Profit (Loss)
|
(26,157 | ) | (3,883 | ) | 39,798 | 45,231 | 63,174 | 49,370 | 66,055 | |||||||||||||||||||
|
Other
(expense) income:
|
||||||||||||||||||||||||||||
|
Interest
expense
|
(8,361 | ) | (9,122 | ) | (5,106 | ) | (15,179 | ) | (21,771 | ) | (16,520 | ) | (14,325 | ) | ||||||||||||||
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Interest
expense recovered
|
- | - | 2,526 | - | - | - | - | |||||||||||||||||||||
|
Interest
and other income
|
104 | 483 | 2,377 | 1,762 | 2,370 | 1,745 | 605 | |||||||||||||||||||||
|
Total
other (expense) income, net
|
(8,257 | ) | (8,639 | ) | (203 | ) | (13,417 | ) | (19,401 | ) | (14,775 | ) | (13,720 | ) | ||||||||||||||
|
Net
(Loss) income
|
(34,414 | ) | (12,522 | ) | 39,595 | 31,814 | 43,773 | 34,595 | 52,335 | |||||||||||||||||||
|
Balance
Sheet Data:
|
12/31/03
|
12/31/04
|
12/31/05
|
12/31/06
|
12/31/07
|
9/30/07
|
9/30/08
|
|||||||||||||||||||||
|
Total
current assets
|
54,927 | 59,921 | 65,385 | 84,035 | 80,342 | 86,021 | 132,312 | |||||||||||||||||||||
|
Total
assets
|
153,737 | 150,514 | 129,397 | 161,525 | 167,581 | 164,762 | 219,749 | |||||||||||||||||||||
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Total
long term obligations(c)
|
(110,673 | ) | (119,781 | ) | (53,848 | ) | (208,225 | ) | (178,324 | ) | (186,782 | ) | (152,746 | ) | ||||||||||||||
|
Total
members’ deficit
|
(77,484 | ) | (90,008 | ) | (57,262 | ) | (121,189 | ) | (78,447 | ) | (86,386 | ) | (27,178 | ) | ||||||||||||||
|
Years
Ended December 31
|
Nine
Months Ended
September
30
|
|||||||||||||||||||||||||||
|
Statement
of Operations Data:
|
2003
|
2004
|
2005
|
2006
|
2007
|
2007
|
2008
|
|||||||||||||||||||||
|
Other
Data:
|
||||||||||||||||||||||||||||
|
Cash
provided by (used in):
|
||||||||||||||||||||||||||||
|
Operating
activities
|
6,465 | 10,107 | 30,742 | 41,071 | 36,560 | 29,889 | 61,575 | |||||||||||||||||||||
|
Investing
activities
|
(293 | ) | (1,608 | ) | (9,661 | ) | (11,039 | ) | (19,787 | ) | (13,066 | ) | (9,216 | ) | ||||||||||||||
|
Financing
activities
|
(6,982 | ) | (5,542 | ) | (18,887 | ) | (8,032 | ) | (26,526 | ) | (22,526 | ) | (9,882 | ) | ||||||||||||||
|
EBITDA(d)
|
(19,413 | ) | 3,554 | 49,595 | 54,243 | 74,732 | 57,102 | 74,603 | ||||||||||||||||||||
|
Certain
other items included in EBITDA(e)
|
- | - | - | - | 1,777 | 675 | 8,641 | |||||||||||||||||||||
(a)
Iridium Holdings’ selected historical financial data for the years ended
December 31, 2003 and December 31, 2004 do not include a reclassification of
operating expenses between “network and satellite operations and maintenance”
and “selling, general and administrative.” Therefore, Iridium
Holdings’ selected historical financial data for the operating expenses
described above for the years ended December 31, 2003 and December 31, 2004 is
not directly comparable to the selected historical financial data for subsequent
periods.
(b)
Iridium Holdings’ research and development for the year ended December 31, 2003
includes $14.0 million of expenses that were subsequently included in the
“satellite system development refund” offsetting the operating expenses for the
year ended December 31, 2005.
(c)
Long-term obligations are presented net of an unamortized discount associated
with a commitment fee to Motorola in connection with the transition services,
products and assets agreement. The balance of the unamortized
discount was $3.4 million at December 31, 2003, $3.0 million at December 31,
2004, $2.7 million at December 31, 2005, $2.3 million at December 31, 2006 and
$1.8 million at December 31, 2007. As of September 30, 2007 and
September 30, 2008 the balance of the unamortized discount was $1.9 million and
$1.4 million, respectively.
(d)
“EBITDA” represents net income before interest expense, interest income, income
tax provision and depreciation and amortization. EBITDA does not represent and
should not be considered as an alternative to net income or cash flow from
operations, as determined in accordance with United States generally accepted
accounting principles (“GAAP”) and Iridium Holdings’ calculations thereof may
not be comparable to similarly entitled measures reported by other
companies. Iridium Holdings presents EBITDA because it believes it is
a useful indicator of its profitability. Iridium Holdings’ management uses
EBITDA principally as a measure of its operating performance and believes that
EBITDA is useful to investors because it is frequently used by securities
analysts, investors and other interested parties in their evaluation of
companies in industries similar to its own. Iridium Holdings also believes
EBITDA is useful to its management and investors as a measure of comparative
operating performance between time periods and among companies as it is
reflective of changes in pricing decisions, cost controls and other factors that
affect operating performance. Iridium Holdings’ management also uses EBITDA for
planning purposes, including the preparation of its annual operating budget and
financial projections.
EBITDA
does not represent and should not be considered as an alternative to results of
operations under GAAP and has significant limitations as an analytical tool.
Although Iridium Holdings uses EBITDA as a measure to assess the performance of
its business, the use of EBITDA is limited because it excludes certain material
costs. For example, it does not include interest expense, which is a necessary
element of its costs and ability to generate revenue, because Iridium Holdings
has borrowed money in order to finance its operations. Because Iridium Holdings
uses capital assets, depreciation expense is a necessary element of its costs
and ability to generate revenue. In addition, the omission of the amortization
expense associated with its intangible assets further limits the usefulness of
this measure. Because EBITDA does not account for these expenses, its utility as
a measure of Iridium Holdings’ operating performance has material limitations.
As a limited liability company that is treated as a partnership for federal
income tax purposes, Iridium Holdings is generally not subject to federal income
tax directly and therefore no adjustment is required for income
taxes. Because of these limitations Iridium Holdings’ management does
not
view
EBITDA in isolation or as a primary performance measure and also uses other
measures, such as net income, revenue and operating profit, to measure operating
performance. Iridium Holdings’ calculations of EBITDA may also differ
from the calculation of EBITDA by its competitors and other companies and as
such, its utility as a comparative measure is limited.
The
following is a reconciliation of EBITDA to net income:
|
Years
Ended December 31
|
Nine
Months Ended
September
30
|
|||||||||||||||||||||||||||
|
2003
|
2004
|
2005
|
2006
|
2007
|
2007
|
2008
|
||||||||||||||||||||||
|
Net
(Loss) income
|
(34,414 | ) | (12,522 | ) | 39,595 | 31,814 | 43,773 | 34,595 | 52,335 | |||||||||||||||||||
|
Interest
expense
|
8,361 | 9,122 | 5,106 | 15,179 | 21,771 | 16,520 | 14,325 | |||||||||||||||||||||
|
Interest
expense recovered
|
- | - | (2,526 | ) | - | - | - | - | ||||||||||||||||||||
|
Interest
income
|
(55 | ) | (178 | ) | (302 | ) | (1,291 | ) | (2,192 | ) | (1,611 | ) | (1,016 | ) | ||||||||||||||
|
Depreciation
and amortization
|
6,695 | 7,132 | 7,722 | 8,541 | 11,380 | 7,598 | 8,959 | |||||||||||||||||||||
|
EBITDA
|
(19,413 | ) | 3,554 | 49,595 | 54,243 | 74,732 | 57,102 | 74,603 | ||||||||||||||||||||
(e) The
following table shows the following items, which are included in EBITDA:
non-recurring expenses relating to Iridium Holdings’ proposed transaction with
GHQ and expenses incurred in the development of Iridium Holdings’ second
generation constellation, Iridium NEXT. This table does not represent and should
not be considered as an alternative to net income or cash flow from operations,
as determined in accordance with GAAP and Iridium Holdings’ calculations thereof
may not be comparable to similarly entitled measures reported by other
companies. Iridium Holdings believes this table, when reviewed in connection
with its presentation of EBITDA provides another useful tool to investors and
its management for measuring comparative operating performance between time
periods and among companies as it is further reflective of cost controls and
other factors that affect operating performance. In addition to EBITDA, Iridium
Holdings’ management assesses the adjustments presented in this table when
preparing its annual operating budget and financial projections. Because of the
significant expenses resulting from the abovementioned transaction and Iridium
NEXT, Iridium Holdings believes that the presentation of the adjustments
relating to acquisition and Iridium NEXT expenses enables its management and
investors to assess the impact of such expenses on its operating performance and
provides a consistent measure of its operating performance for periods
subsequent to the transaction and the full deployment of Iridium
NEXT.
This table
is not intended to comply with GAAP and has significant limitations as an
analytical tool, and you should not consider it in isolation, or as a substitute
for analysis of Iridium Holdings’ results of operations under GAAP. Although
Iridium Holdings uses this table as a financial measure to assess the
performance of its business, the use of this table is limited because, in
addition to the costs excluded in its presentation of EBITDA, it excludes
certain material costs that Iridium Holdings has incurred over the periods
presented. Because this table does not account for these expenses, its utility
as a measure of Iridium Holdings’ operating performance has material
limitations.
EBITDA, as
defined above, was decreased by the following non-recurring and certain other
items, each of which is further discussed below:
|
Years
Ended December 31
|
Nine
Months Ended
September
30
|
|||||||||||||||||||||||||||
|
2003
|
2004
|
2005
|
2006
|
2007
|
2007
|
2008
|
||||||||||||||||||||||
|
Non-recurring
transaction expenses (1)
|
- | - | - | - | - | - | 2,376 | |||||||||||||||||||||
|
Iridium
NEXT expenses (2)
|
- | - | - | - | 1,777 | 675 | 6,265 | |||||||||||||||||||||
|
Total
|
1,777 | 675 | 8,641 | |||||||||||||||||||||||||
(1)
Consists of non-recurring expenses relating to Iridium Holdings’ financing
activities, including the proposed transaction with GHQ.
(2)
Consists of expenses, net of customer revenues, incurred in connection with the
design, manufacture and deployment of Iridium NEXT, including certain milestone
payments paid to the two companies vying to serve as the prime system
contractor. Iridium Holdings expects to incur such expenses through 2016 until
the deployment of the new constellation, with the majority of these expenses
incurred during the capital intensive launch phase between 2014 and
2016.
The
following unaudited pro forma condensed combined balance sheet as of September
30, 2008 and the unaudited pro forma condensed combined statement of operations
for the nine months ended September 30, 2008 and for the fiscal year ended
December 31, 2007 are based on the historical financial statements of GHQ and
Iridium Holdings after giving effect to the acquisition in which GHQ will
acquire Iridium Holdings. The acquisition is expected to close in 2009.
Consequently, the acquisition will be accounted for using the acquisition method
of accounting in accordance with Financial Accounting Standards Board (“FASB”)
Statement No. 141R, “Business Combinations” (“SFAS 141R”) as SFAS 141R is effective for fiscal years
beginning after December 15, 2008.
The unaudited pro forma condensed
combined statements of operations for the nine month period ended September 30,
2008 and for the year ended December 31, 2007 gives effect to the acquisition as
if it had occurred on January 1, 2007. The unaudited pro forma condensed
combined balance sheet as of September 30, 2008 assumes that the acquisition
took place on September 30, 2008.
The unaudited condensed balance sheet
and statement of operations as of and for the nine months ended September 30,
2008 were derived from GHQ’s unaudited condensed financial statements and
Iridium Holdings’ unaudited financial statements as of and for the nine months
ended September 30, 2008.
The unaudited condensed statement of
operations for the year ended December 31, 2007 were derived from GHQ’s audited
statements of income and Iridium Holdings’ audited statements of income for the
year ended December 31, 2007. GHQ’s statement of operations as of December 31,
2007 includes two months of activity as GHQ was incorporated on November 2,
2007.
GHQ will consummate the acquisition only
if (i) holders of a majority of the IPO shares voting in person or by proxy
approve the acquisition and (ii) stockholders holding no more than 30% of the
IPO shares less one share exercise their conversion rights. The unaudited pro
forma condensed combined financial statements have been prepared using the
assumptions below with respect to the number of outstanding shares of GHQ common
stock:
• Assuming Minimum Conversion: This
presentation assumes that no GHQ stockholders seek to convert their IPO shares
into a pro rata portion of the trust account;
• Assuming Maximum Conversion: This
presentation assumes that 30% of the GHQ stockholders less one IPO share
(11,999,999 shares) vote against the acquisition and elect to exercise their
conversion rights.
The pro forma condensed combined
financial statements reflect management’s best estimate of the fair value of the
tangible and intangible assets acquired and liabilities assumed based on a
preliminary valuation study performed by an independent third party valuation
firm based on information available to GHQ as of the date of this
report. As final valuations are performed, increases or decreases in
the fair value of assets acquired and liabilities assumed will result in
adjustments, which may be material, to the balance sheet and/or statement of
operations.
As required, the unaudited pro forma
condensed, combined financial data include adjustments which give effect to the
events that are directly attributable to the acquisition, expected to have a
continuing impact and are factually supportable. Hence any planned
adjustments affecting the balance sheet, statement of operations or changes in
common stock outstanding subsequent to the assumed closing of the acquisition
are not included.
The unaudited pro forma condensed
financial statements are provided for informational purposes only and are
subject to a number of uncertainties and assumptions and do not purport to
represent what the companies’ actual performance or financial position would
have been had the acquisition occurred on the dates indicated and does not
purport to indicate the financial position
or results of operations as of any future date or for any future period. Please
refer to the following information in conjunction with the accompanying
notes to these pro forma financial statements and the historical financial
statements and the accompanying notes thereto and the sections entitled “GHQ
Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and “Iridium Holdings Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in this proxy
statement.
|
GHL
Acquisition Corp.
|
||||||||||||
|
Unaudited
Pro Forma Condensed Combined Balance Sheet
|
||||||||||||
|
As
of September 30, 2008
|
|
Historical
|
||||||||||||||||||||||||
|
GHQ
|
Iridium
|
Pro
Forma
Adjustments (assuming minimum conversion) |
Combined
Pro
Forma (assuming minimum conversion) |
Additional
Pro Forma Adjustments (assuming maximum conversion) |
Combined
Pro Forma (assuming maximum conversion) |
|||||||||||||||||||
|
(In
thousands)
|
||||||||||||||||||||||||
|
Assets
|
||||||||||||||||||||||||
|
Current
assets:
|
||||||||||||||||||||||||
|
Cash and cash
equivalents
|
490 | 64,582 | (106,663 | ) |
A
|
233,978 | (120,000 | ) |
P
|
119,041 | ||||||||||||||
| 402,270 |
B
|
5,063 |
C
|
|||||||||||||||||||||
| (16,351 | ) |
C
|
||||||||||||||||||||||
| (102,000 | ) |
D
|
||||||||||||||||||||||
| (8,350 | ) |
E
|
||||||||||||||||||||||
|
Restricted
cash
|
- | 3,020 | 3,020 | 3,020 | ||||||||||||||||||||
|
Accounts
receivable
|
- | 44,931 | 44,931 | 44,931 | ||||||||||||||||||||
|
Inventory
|
- | 16,144 | 5,856 |
F
|
22,000 | 22,000 | ||||||||||||||||||
|
Prepaid expenses and other current
assets
|
47 | 3,635 | - | 3,682 | 3,682 | |||||||||||||||||||
|
Total current
assets
|
537 | 132,312 | 174,762 | 307,611 | (114,937 | ) | 192,674 | |||||||||||||||||
|
Property and equipment,
net
|
- | 61,827 | 369,025 |
G
|
430,852 | 430,852 | ||||||||||||||||||
|
Restricted cash, net of current
portion
|
- | 15,400 | 15,400 | 15,400 | ||||||||||||||||||||
|
Deferred financing costs and other
assets
|
- | 10,210 | (3,901 | ) |
D
|
6,309 | 6,309 | |||||||||||||||||
|
Investments held in trust at
broker
|
402,270 | - | (402,270 | ) |
B
|
- | - | |||||||||||||||||
|
Deferred tax
asset
|
135 | - | 6,100 |
H
|
6,235 | 6,235 | ||||||||||||||||||
|
Deferred acquisition
costs
|
1,497 | - | (1,497 | ) |
E
|
- | - | |||||||||||||||||
|
Intangible
assets
|
- | - | 59,881 |
I
|
59,881 | 59,881 | ||||||||||||||||||
|
Goodwill
|
- | - | 71,079 |
J
|
71,079 | 71,079 | ||||||||||||||||||
|
Total
assets
|
404,439 | 219,749 | 273,179 | 897,367 | (114,937 | ) | 782,430 | |||||||||||||||||
|
Liabilities
|
||||||||||||||||||||||||
|
Current
liabilities:
|
||||||||||||||||||||||||
|
Accounts
payable
|
10 | 6,667 | - | 6,677 | 6,677 | |||||||||||||||||||
|
Accrued expenses and other current
liabilities
|
1,535 | 30,026 | - | 31,561 | 31,561 | |||||||||||||||||||
|
Credit facility, current
portion
|
- | 32,639 | (3,512 | ) |
D
|
8,727 | 8,727 | |||||||||||||||||
| (20,400 | ) |
D
|
||||||||||||||||||||||
|
Deferred revenue, current
portion
|
- | 24,849 | (14,449 | ) |
K
|
10,400 | 10,400 | |||||||||||||||||
|
Income tax
payable
|
456 | - | 456 | 456 | ||||||||||||||||||||
|
Deferred underwriter
commissions
|
11,288 | - | (11,288 | ) |
C
|
- | - | |||||||||||||||||
|
Total current
liabilities
|
13,289 | 94,181 | (49,649 | ) | 57,821 | - | 57,821 | |||||||||||||||||
|
Accrued
satellite operations and maintenance expense, net of current
portion
|
- | 10,516 | - | 10,516 | 10,516 | |||||||||||||||||||
|
Motorola
payable
|
- | 10,575 | (175 | ) |
L
|
10,400 | 10,400 | |||||||||||||||||
|
Credit
facility
|
- | 127,521 | (14,048 | ) |
D
|
31,873 | 31,873 | |||||||||||||||||
| (81,600 | ) |
D
|
||||||||||||||||||||||
|
Other
long-term liability
|
- | 4,134 | - | 4,134 | 4,134 | |||||||||||||||||||
|
Income
tax reserve
|
- | - | 678 | 678 | 678 | |||||||||||||||||||
|
Deferred
tax liability
|
- | - | 74,068 |
H
|
74,069 | 74,068 | ||||||||||||||||||
|
Total
liabilities
|
13,289 | 246,927 | (70,726 | ) | 189,490 | - | 189,490 | |||||||||||||||||
|
Common
stock subject to possible conversion
|
120,000 | - | (120,000 | ) |
M
|
- | - | |||||||||||||||||
|
Stockholders'
equity
|
||||||||||||||||||||||||
|
Common
stock
|
36 | - | 36 |
N
|
84 | (12 | ) |
P
|
72 | |||||||||||||||
| 12 |
M
|
|||||||||||||||||||||||
|
Additional paid-in
capital
|
268,569 | 4,049 | 329,287 |
N
|
704,934 | (119,988 | ) |
P
|
588,009 | |||||||||||||||
| (4,049 | ) |
O
|
5,063 |
C
|
||||||||||||||||||||
| (1,497 | ) |
E
|
||||||||||||||||||||||
| 114,925 |
C,M
|
|||||||||||||||||||||||
| (8,350 | ) |
E
|
||||||||||||||||||||||
|
Retained earnings/(accumulated
deficit)
|
2,545 | (28,982 | ) | 28,982 |
O
|
2,545 | 2,545 | |||||||||||||||||
|
Accumulated other comprehensive income
(loss)
|
- | (2,245 | ) | 2,245 |
O
|
- | - | |||||||||||||||||
|
Total parent
stockholders' equity
|
271,150 | (27,178 | ) | 461,591 | 705,563 | (114,937 | ) | 590,626 | ||||||||||||||||
|
Noncontrolling
interest
|
2,314 |
V
|
2,314 | 2,314 | ||||||||||||||||||||
|
Total
stockholders' equity
|
271,150 | (27,178 | ) | 463,905 | 707,877 | (114,937 | ) | 592,940 | ||||||||||||||||
|
Total
liabilities and stockholders' equity
|
404,439 | 219,749 | 273,179 | 897,367 | (114,937 | ) | 782,430 | |||||||||||||||||
|
See
accompanying notes to the unaudited pro forma condensed combined financial
statements.
|
|
GHL
Acquisition Corp.
|
|
Unaudited
Pro Forma Condensed Combined Statement of Operations
|
|
For
the Nine Months Ended September 30,
2008
|
|
Historical
|
|||||||||||||||||||||||||
|
GHQ
|
Iridium
|
Pro
Forma
Adjustments (assuming minimum conversion) |
Combined
Pro Forma (assuming minimum conversion) |
Additional
Pro Forma Adjustments (assuming maximum conversion) |
Combined
Pro Forma (assuming maximum conversion) |
||||||||||||||||||||
|
(In
thousands, except per share amounts)
|
|||||||||||||||||||||||||
|
Revenue:
|
|||||||||||||||||||||||||