PRER14A 1 d168152dprer14a.htm PRER14A PRER14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

(Amendment No. 1)

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

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

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material under §240.14a-12

Starboard Value Acquisition Corp.

(Name of Registrant as Specified in its Charter)

N/A

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

Payment of Filing Fee (Check the appropriate box):

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1)   Title of each class of securities to which transaction applies:
   

     

  (2)   Aggregate number of securities to which transaction applies:
   

     

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

     

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  (5)   Total fee paid:
   

     

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

(1)

 

Amount Previously Paid:

 

     

 

(2)

 

Form, Schedule or Registration Statement No.:

 

 

 

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(4)

 

Date Filed:

 

     

 

 

 


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PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION, DATED JUNE 14, 2021

 

LOGO    LOGO

PROXY STATEMENT FOR SPECIAL MEETING IN LIEU OF

THE 2021 ANNUAL MEETING OF STOCKHOLDERS

OF STARBOARD VALUE ACQUISITION CORP.

, 2021

Dear Stockholders of Starboard Value Acquisition Corp.:

You are cordially invited to attend a special meeting in lieu of the 2021 annual meeting (the “special meeting”) of stockholders of Starboard Value Acquisition Corp. (“SVAC,” “we,” “our” or “us”). At the special meeting, which will be held virtually, SVAC stockholders will be asked to consider and vote on proposals to:

 

  (1)

(a) approve and adopt the Agreement and Plan of Merger, dated as of February 21, 2021 (a copy of which is attached to this proxy statement as Annex A) (as the same may be amended from time to time, the “Merger Agreement”), by and among SVAC, Mundo Merger Sub 1, Inc., a Delaware corporation and wholly-owned subsidiary of SVAC (“Merger Sub 1”), Mundo Merger Sub 2, LLC, a Delaware limited liability company and wholly-owned subsidiary of SVAC (“Merger Sub 2”), Cyxtera Technologies, Inc., a Delaware corporation (“Cyxtera”), and Mundo Holdings, Inc. (“NewCo”), a Delaware corporation and wholly-owned subsidiary of SIS Holdings LP, a Delaware limited partnership (the “Cyxtera Stockholder”), which provides for, among other things, (i) Cyxtera to be contributed to Newco by the Cyxtera Stockholder, with Cyxtera becoming a wholly-owned subsidiary of Newco and Cyxtera to thereafter be converted to a Delaware limited liability company, (ii) Merger Sub 1 to be merged with and into NewCo (the “First Merger”), with NewCo surviving the First Merger as a wholly-owned subsidiary of SVAC and Merger Sub 1 ceasing to exist, and (iii) immediately following the First Merger, NewCo to be merged with and into Merger Sub 2 (the “Second Merger”, and together with the First Merger and the other transactions contemplated by the Merger Agreement, the “Transactions” or “Business Combination”), with Merger Sub 2 surviving the Second Merger as a wholly-owned subsidiary of SVAC and NewCo ceasing to exist, and (b) approve the Business Combination (such proposal, the “Business Combination Proposal”);

 

  (2)

approve and adopt amendments to SVAC’s amended and restated certificate of incorporation (the “Charter”) to be effective upon the consummation of the Business Combination (the “closing” and such proposal, the “Charter Proposal”), which will include amendments to (a) increase the number of authorized shares of SVAC’s capital stock, par value $0.0001 per share, from 221,000,000 shares, consisting of (i) 220,000,000 shares of common stock, including 200,000,000 shares of Class A common stock (the “Class A common stock”) and 20,000,000 shares of Class B common stock (the “Class B common stock”), and (ii) 1,000,000 shares of preferred stock, to 510,000,000 shares, consisting of (i) 500,000,000 shares of Class A common stock and (ii) 10,000,000 shares of preferred stock, (b) eliminate certain provisions in our Charter relating to the Class B common stock, the initial business combination and other matters relating to SVAC’s status as a blank check company that will no longer be applicable to us following the closing, and (c) approve and adopt certain other changes contained in the full text of our proposed second amended and restated certificate of incorporation (the “Proposed Charter”), a copy of the form of which is attached as Annex B to this proxy statement;

 

  (3)

approve, for purposes of complying with applicable listing rules of the Nasdaq Stock Market LLC (“Nasdaq”), the issuance of (a) 106,100,000 shares of Class A common stock to the Cyxtera Stockholder at the closing of the Business Combination, (b) 25,000,000 shares of Class A common stock to certain qualified institutional buyers and accredited investors, at a price of $10.00 per share,


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  for aggregate consideration of $250,000,000 for purposes of raising additional capital for use by the combined company following the closing and satisfying one of the conditions to the closing of the Business Combination and (c) the number of forward purchase shares that would result in net proceeds in an aggregate amount necessary to satisfy our aggregate payment obligations resulting from the exercise of redemption rights by holders of our public shares in connection with our initial business combination, subject to a maximum funding commitment by the forward purchasers of $100,000,000 (such proposal, the “Nasdaq Proposal”);

 

  (4)

elect the nine director nominees to the board of directors effective as of the closing of the Business Combination in accordance with the Merger Agreement (such proposal, the “Director Election Proposal”);

 

  (5)

approve and adopt the Cyxtera Technologies, Inc. 2021 Omnibus Incentive Plan, substantially in the form attached as Annex G to this proxy statement, and the material terms thereunder (the “2021 Incentive Plan Proposal”); and

 

  (6)

approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal, the Director Election Proposal and/or the 2021 Incentive Plan Proposal (such proposal, the “Adjournment Proposal” and, together with the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal, the Director Election Proposal and the 2021 Incentive Plan Proposal, each, a “Proposal” and collectively, the “Proposals”).

Each of the Proposals is more fully described in the accompanying proxy statement, which each SVAC stockholder is encouraged to review carefully.

SVAC’s Class A common stock and detachable redeemable warrants (as defined herein), which are exercisable for shares of Class A common stock under certain circumstances, are currently listed on Nasdaq under the symbols “SVAC” and “SVACW”, respectively. Certain of our shares of Class A common stock and detachable redeemable warrants currently trade as units consisting of one share of Class A common stock, one-sixth of one redeemable warrant (the “detachable redeemable warrants”) and a contingent right to receive at least one-sixth of one redeemable warrant following the initial business combination redemption time (as defined herein) under certain circumstances, and subject to adjustment (the “distributable redeemable warrants”), and are listed on Nasdaq under the symbol “SVACU.” The units will automatically separate into the component securities upon the closing of the Business Combination and, as a result, will no longer trade as a separate security. Upon the closing, we intend to change our name from “Starboard Value Acquisition Corp.” to “Cyxtera Technologies, Inc.” and our Class A common stock and warrants will be listed following the closing under the symbols “CYXT” and “CYXTW”, respectively. We have applied to continue the listing of our Class A common stock and warrants on Nasdaq following the closing.

Pursuant to our Charter, we are providing the holders of shares of Class A common stock originally sold as part of the units issued in our initial public offering, which closed on September 14, 2020 (the “Initial Public Offering”), as well as in the subsequent sale of additional units in connection with the underwriters’ election to partially exercise their over-allotment option on September 18, 2020 (such shares, collectively, the “public shares,” and holders of public shares, the “public stockholders”), with the opportunity to redeem, upon the closing, all or a portion of the shares of Class A common stock then held by them, at a per share price, payable in cash, equal to (i) the aggregate amount then on deposit (as of two business days prior to the closing) in the trust account (the “Trust Account”) that holds the proceeds from the Initial Public Offering, the partial exercise of the over-allotment option and a concurrent private placement of warrants to our sponsor, SVAC Sponsor LLC (the “Sponsor”), including interest (net of amounts withdrawn to pay our taxes (“permitted withdrawals”)), divided by (ii) the number of then-outstanding public shares (the “pro rata portion”). The founder shares, consisting of all of the outstanding shares of Class B common stock, will be excluded from the pro rata calculation used to determine the per share redemption price. As of March 31, 2021, the number of SVAC’s outstanding public shares is 40,423,453. For illustrative purposes, based on the fair value of marketable securities held in the Trust


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Account as of March 31, 2021 of approximately $404,461,491, the estimated per share redemption price would have been approximately $10.00.

Public stockholders may elect to redeem their public shares irrespective of whether they vote for or against the Business Combination Proposal. Notwithstanding the foregoing, a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the public shares, which we refer to as the “15% limit.” Accordingly, all public shares in excess of the 15% limit beneficially owned by a public stockholder or group will not be redeemed for cash in connection with the completion of the Business Combination. Holders of SVAC’s outstanding detachable redeemable warrants sold in the Initial Public Offering (including the warrants sold as part of the units sold in connection with the underwriters’ election to partially exercise their over-allotment option), which are exercisable for shares of Class A common stock under certain circumstances, do not have redemption rights with respect to such warrants in connection with the Business Combination.

The Sponsor and our officers and directors have agreed to waive their redemption rights with respect to any shares of common stock held by them in connection with the completion of the Business Combination. As of the date of this proxy statement, the Sponsor and our officers and directors collectively own 10,105,863 outstanding shares of Class B common stock, representing, in the aggregate, approximately 20% of SVAC’s outstanding shares of common stock. The Sponsor and our officers and directors have agreed to vote any shares of common stock owned by them in favor of the Proposals.

SVAC is providing this proxy statement and accompanying proxy card to its stockholders in connection with the solicitation of proxies to be voted at the special meeting and any adjournments or postponements thereof. Your vote is very important. Whether or not you plan to attend the special meeting, please submit your proxy card without delay.

We encourage you to read this proxy statement carefully. In particular, you should review the matters discussed under the caption “Risk Factors” beginning on page 44 of this proxy statement.

SVAC’s board of directors recommends that SVAC stockholders vote FOR each of the Proposals. When you consider the recommendation of our board of directors in favor of each of the Proposals, you should keep in mind that certain of SVAC’s directors and officers have interests in the Business Combination that may be different than, or in addition to, or conflict with, your interests as a stockholder. See the section entitled “Proposal Number 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination” for more information.

Approval of each of the Business Combination Proposal, the Nasdaq Proposal, the Director Election Proposal, the 2021 Incentive Plan Proposal and the Adjournment Proposal requires the affirmative vote (in person or by proxy) of the holders of a majority of the shares of Class A common stock and Class B common stock entitled to vote and actually cast thereon at the special meeting, voting as a single class. Approval of the Charter Proposal requires the affirmative vote (in person or by proxy) of the holders of a majority of the outstanding shares of Class A common stock and Class B common stock entitled to vote thereon at the special meeting, voting as a single class.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the Proposals presented at the special meeting. If you fail to return your proxy card or fail to submit your proxy by telephone or over the Internet, or fail to instruct your bank, broker or other nominee how to vote, and do not attend the special meeting, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and, if a quorum is present, will have no effect on the Business Combination Proposal, the Nasdaq Proposal, the Director Election Proposal, the 2021 Incentive Plan Proposal or the Adjournment Proposal, but will have the same effect as a vote AGAINST the Charter Proposal. If you are a stockholder of record and you attend the special meeting and wish to vote virtually, you may withdraw your proxy and vote virtually.


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TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST ELECT TO HAVE SVAC REDEEM YOUR SHARES AT A PER SHARE PRICE, PAYABLE IN CASH, EQUAL TO (I) THE AGGREGATE AMOUNT THEN ON DEPOSIT (AS OF TWO BUSINESS DAYS PRIOR TO THE CLOSING) IN THE TRUST ACCOUNT, DIVIDED BY (II) THE NUMBER OF THEN-OUTSTANDING PUBLIC SHARES, SUBJECT TO THE LIMITATIONS DESCRIBED HEREIN, AND YOU MUST TENDER YOUR SHARES TO SVAC’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING.

Thank you for your consideration of these matters.

Sincerely,

Martin D. McNulty, Jr.

Chief Executive Officer

Starboard Value Acquisition Corp.

Your vote is important regardless of the number of shares you own. Whether or not you plan to attend the special meeting of SVAC stockholders, please submit your proxy by signing, dating and mailing the enclosed proxy card in the pre-addressed postage paid envelope or by using the telephone or Internet procedures provided to you by your broker or bank.

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 to have your shares represented at the special meeting or, if you wish to attend the special meeting of SVAC stockholders and vote virtually, you must obtain a proxy from your broker or bank.

Neither the Securities and Exchange Commission nor any state securities commission has passed upon the adequacy or accuracy of this proxy statement. Any representation to the contrary is a criminal offense.

This proxy statement is dated                     , 2021 and is first being mailed to SVAC stockholders on or about                       , 2021.


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LOGO    LOGO

STARBOARD VALUE ACQUISITION CORP.

777 Third Avenue, 18th Floor

New York, New York 10017

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

OF STARBOARD VALUE ACQUISITION CORP.

To Be Held On               , 2021

To the Stockholders of Starboard Value Acquisition Corp.:

NOTICE IS HEREBY GIVEN that a special meeting in lieu of the 2021 annual meeting (the “special meeting”) of stockholders of Starboard Value Acquisition Corp. (“SVAC,” “we,” “our” or “us”) will be held virtually at                , Eastern time, on                     , 2021, at                  for the following purposes:

 

  1.

The Business Combination Proposal — To consider and vote upon a proposal to (a) approve and adopt the Agreement and Plan of Merger, dated as of February 21, 2021 (a copy of which is attached to this proxy statement as Annex A) (as the same may be amended from time to time, the “Merger Agreement”), by and among SVAC, Mundo Merger Sub 1, Inc., a Delaware corporation and wholly-owned subsidiary of SVAC (“Merger Sub 1”), Mundo Merger Sub 2, LLC, a Delaware limited liability company and wholly-owned subsidiary of SVAC (“Merger Sub 2”), Cyxtera Technologies, Inc., a Delaware corporation (“Cyxtera”), and Mundo Holdings, Inc. (“NewCo”), a Delaware corporation and wholly-owned subsidiary of SIS Holdings LP, a Delaware limited partnership (the “Cyxtera Stockholder”), which provides for, among other things, (i) Cyxtera to be contributed to Newco by the Cyxtera Stockholder, with Cyxtera becoming a wholly-owned subsidiary of Newco and Cyxtera to thereafter be converted to a Delaware limited liability company, (ii) Merger Sub 1 to be merged with and into NewCo (the “First Merger”), with NewCo surviving the First Merger as a wholly-owned subsidiary of SVAC and Merger Sub 1 ceasing to exist, and (iii) immediately following the First Merger, NewCo to be merged with and into Merger Sub 2 (the “Second Merger”, and together with the First Merger and the other transactions contemplated by the Merger Agreement, the “Transactions” or “Business Combination”), with Merger Sub 2 surviving the Second Merger as a wholly-owned subsidiary of SVAC and NewCo ceasing to exist, and (b) approve the Business Combination (such proposal, the “Business Combination Proposal”);

 

  2.

The Charter Proposal — To consider and vote upon a proposal to approve and adopt amendments to SVAC’s amended and restated certificate of incorporation (the “Charter”) to be effective upon the consummation of the Business Combination (the “closing” and such proposal, the “Charter Proposal”), which will include amendments to (a) increase the number of authorized shares of SVAC’s capital stock, par value $0.0001 per share, from 221,000,000 shares, consisting of (i) 220,000,000 shares of common stock, including 200,000,000 shares of Class A common stock (the “Class A common stock”) and 20,000,000 shares of Class B common stock (the “Class B common stock”), and (ii) 1,000,000 shares of preferred stock, to 510,000,000 shares, consisting of (i) 500,000,000 shares of Class A common stock and (ii) 10,000,000 shares of preferred stock, (b) eliminate certain provisions in our Charter relating to the Class B common stock, the initial business combination and other matters relating to SVAC’s status as a blank check company that will no longer be applicable to us following the closing, and (c) approve and adopt certain other changes contained in the full text of our proposed second amended and restated certificate of incorporation (the “Proposed Charter”), a copy of the form of which is attached as Annex B to this proxy statement;

 

  3.

The Nasdaq Proposal — To consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of the Nasdaq Stock Market LLC (“Nasdaq”), the issuance of (a) 106,100,000 shares of Class A common stock to the Cyxtera Stockholder at the closing of the Business


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  Combination, (b) 25,000,000 shares of Class A common stock to certain qualified institutional buyers and accredited investors, at a price of $10.00 per share, for aggregate consideration of $250,000,000 for purposes of raising additional capital for use by the combined company following the closing of the Business Combination and satisfying one of the conditions to the closing and (c) the number of forward purchase shares that would result in net proceeds in an aggregate amount necessary to satisfy our aggregate payment obligations resulting from the exercise of redemption rights by holders of our public shares in connection with our initial business combination (the “Redemption Obligation”), subject to a maximum funding commitment by the forward purchasers of $100,000,000 (the “Maximum Backstop Commitment”) (such proposal, the “Nasdaq Proposal”);

 

  4.

The Director Election Proposal — To consider and vote upon a proposal to elect the nine director nominees to the board of directors effective as of the closing of the Business Combination in accordance with the Merger Agreement (such proposal, the “Director Election Proposal”);

 

  5.

The 2021 Incentive Plan Proposal — To consider and vote upon a proposal to approve and adopt the Cyxtera Technologies, Inc. 2021 Omnibus Incentive Plan, substantially in the form attached as Annex G to this proxy statement, and the material terms thereunder (the “2021 Incentive Plan Proposal”); and

 

  6.

The Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal, the Director Election Proposal and/or the 2021 Incentive Plan Proposal (such proposal, the “Adjournment Proposal” and, together with the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal, the Director Election Proposal and the 2021 Incentive Plan Proposal, each, a “Proposal” and collectively, the “Proposals”).

Only holders of record of SVAC’s Class A common stock and Class B common stock at the close of business on                     , 2021 are entitled to notice of the special meeting and to vote at the special meeting and any adjournments or postponements thereof. A complete list of SVAC’s stockholders of record entitled to vote at the special meeting will be available for 10 days before the special meeting (i) on a reasonably accessible electronic network or (ii) at SVAC’s principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting.

Whether or not you plan to attend the special meeting, we urge you to read this proxy statement carefully.

Unless waived by the parties pursuant to the Merger Agreement, the closing is conditioned upon the approval of each of the Proposals.

Approval of each of the Business Combination Proposal, the Nasdaq Proposal, the Director Election Proposal, the 2021 Incentive Plan Proposal and the Adjournment Proposal requires the affirmative vote (in person or by proxy) of the holders of a majority of the shares of Class A common stock and Class B common stock entitled to vote and actually cast thereon at the special meeting, voting as a single class. Approval of the Charter Proposal requires the affirmative vote (in person or by proxy) of the holders of a majority of the outstanding shares of Class A common stock and Class B common stock entitled to vote thereon at the special meeting, voting as a single class.

Pursuant to our Charter, we are providing the holders of shares of Class A common stock originally sold as part of the units issued in our Initial Public Offering as well as in the subsequent sale of additional units in connection with the underwriters’ election to partially exercise their over-allotment option on September 18, 2020 (such shares, collectively, the “public shares,” and holders of public shares, the “public stockholders”), with the opportunity to redeem, upon the closing, all or a portion of the shares of Class A common stock then held by them, at a per share price, payable in cash, equal to (i) the aggregate amount then on deposit (as of two business days prior to the closing) in the trust account (the “Trust Account”) that holds the proceeds (including interest


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earned on the funds held in the Trust Account and not previously released to us to pay our taxes) from the Initial Public Offering, the partial exercise of the over-allotment option and a concurrent private placement of warrants to our sponsor, SVAC Sponsor LLC (the “Sponsor”), divided by (ii) the number of then-outstanding public shares, subject to the limitations described herein. The founder shares, consisting of all of the outstanding shares of Class B common stock, will be excluded from the pro rata calculation used to determine the per share redemption price. As of March 31, 2021, the number of SVAC’s outstanding public shares is 40,423,453. For illustrative purposes, based on the fair value of marketable securities held in the Trust Account as of March 31, 2021 of approximately $404,461,491, the estimated per share redemption price would have been approximately $10.00. Public stockholders may elect to redeem their public shares irrespective of whether they vote for or against the Business Combination Proposal. Notwithstanding the foregoing, a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the public shares, which we refer to as the “15% limit.” Accordingly, all public shares in excess of the 15% limit beneficially owned by a public stockholder or group will not be redeemed for cash in connection with the completion of the Business Combination. Holders of SVAC’s outstanding detachable redeemable warrants sold in the Initial Public Offering (including the warrants sold as part of the units sold in connection with the underwriters’ election to partially exercise their over-allotment option), which are exercisable for shares of Class A common stock under certain circumstances, do not have redemption rights with respect to such warrants in connection with the Business Combination.

The Sponsor and our officers and directors have agreed to waive their redemption rights with respect to any shares of SVAC common stock held by them in connection with the completion of the Business Combination. As of the date of this proxy statement, the Sponsor and our officers and directors collectively own 10,105,863 outstanding shares of Class B common stock, representing, in the aggregate, approximately 20% of SVAC’s outstanding common stock. The Sponsor and our officers and directors have agreed to vote any shares of common stock owned by them in favor of the Proposals.

The special meeting will be completely virtual. There will be no physical meeting location and the special meeting will only be conducted via live webcast at the following address:

If you have any questions or need assistance voting your shares, please call our proxy solicitor, Okapi Partners, toll free at (855) 305-0857; banks and brokers call at (212) 297-0720.

Thank you for your participation. We look forward to your continued support.

By Order of the Board of Directors,

Martin D. McNulty, Jr.

Chief Executive Officer

                    , 2021


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TABLE OF CONTENTS

 

     Page  

Certain Defined Terms

     ii  

Summary of the Material Terms of the Transaction

     1  

Questions and Answers About the Proposals for SVAC Stockholders

     6  

Summary of the Proxy Statement

     19  

Selected Historical Financial Information of SVAC

     35  

Selected Historical Financial Information of Cyxtera

     36  

Selected Unaudited Pro Forma Condensed Combined Financial Information

     37  

Cautionary Note Regarding Forward-Looking Statements

     42  

Risk Factors

     44  

Unaudited Pro Forma Condensed Combined Financial Information

     83  

Comparative Share Information

     96  

Special Meeting of SVAC Stockholders

     99  

Proposal Number 1 — The Business Combination Proposal

     104  

Proposal Number 2 — The Charter Proposal

     134  

Proposal Number 3 — The Nasdaq Proposal

     138  

Proposal Number 4 — The Director Election Proposal

     140  

Proposal Number 5 — The 2021 Incentive Plan Proposal

     141  

Proposal Number 6 — The Adjournment Proposal

     149  

Business of SVAC

     150  

Management’s Discussion and Analysis of Financial Condition and Results of Operations of SVAC

     170  

Business of Cyxtera

     178  

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Cyxtera

     190  

Material U.S. Federal Income Tax Considerations of the Redemption

     212  

Management Following the Business Combination

     219  

Beneficial Ownership of Securities

     234  

Description of Securities

     239  

Shares Eligible for Future Sale

     254  

Certain Relationships and Related Party Transactions

     256  

Market Price and Dividend Information

     263  

Independent Registered Public Accounting Firm

     264  

Appraisal Rights

     264  

Householding Information

     264  

Submission of Stockholder Proposals

     264  

Future Stockholder Proposals

     264  

Other Stockholder Communications

     265  

Where You Can Find Additional Information

     265  

Index to Financial Statements

     F-1  

ANNEXES

Annex A – Merger Agreement

Annex B –  Form of Second Amended and Restated Certificate of Incorporation

Annex C – Form of Subscription Agreement

Annex D – Form of A&R Registration Rights Agreement

Annex E – Form of Stockholders Agreement

Annex F –  Release and Indemnity Agreement

Annex G – Form of Cyxtera Technologies, Inc. 2021 Omnibus Incentive Plan

 

i


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CERTAIN DEFINED TERMS

Unless otherwise stated, or the context otherwise requires, in this proxy statement:

 

   

“Adjournment Proposal” means the proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal, the Director Election Proposal or the 2021 Incentive Plan Proposal;

 

   

“BC Stockholder” means BCEC Cyxtera Technologies Holdings (Guernsey) L.P.;

 

   

“Business Combination” or “Transactions” means the transactions contemplated by the Merger Agreement;

 

   

“Business Combination Proposal” means the proposal to (a) approve and adopt the Merger Agreement, which provides for, among other things, (i) Cyxtera to be contributed to Newco by the Cyxtera Stockholder, with Cyxtera becoming a wholly-owned subsidiary of Newco and Cyxtera to thereafter be converted to a Delaware limited liability company, (ii) the First Merger, with NewCo surviving the First Merger as a wholly-owned subsidiary of SVAC and Merger Sub 1 ceasing to exist, and (iii) immediately following the First Merger, the Second Merger, and together with the First Merger and the other transactions contemplated by the Merger Agreement, the Business Combination, with Merger Sub 2 surviving the Second Merger as a wholly-owned subsidiary of SVAC and NewCo ceasing to exist, and (b) approve the Business Combination;

 

   

“Charter” means our Amended and Restated Certificate of Incorporation, as in effect prior to the closing;

 

   

“Charter Proposal” means the proposal to approve and adopt amendments to SVAC’s Charter to be effective upon the consummation of the Business Combination;

 

   

“Class A common stock” means the Class A common stock, par value $0.0001 per share, of SVAC;

 

   

“Class B common stock” means the Class B common stock, par value $0.0001 per share, of SVAC;

 

   

“closing” means the consummation of the Business Combination;

 

   

“common stock” means, prior to the closing, Class A common stock and Class B common stock, collectively, and following the closing, Class A common stock;

 

   

“Cyxtera” means, prior to closing, Cyxtera Technologies, Inc., a Delaware corporation;

 

   

“Cyxtera Common Stock” means the common stock of Cyxtera, par value $0.01 per share;

 

   

“Cyxtera Stockholder” means SIS Holdings LP, a Delaware limited partnership;

 

   

“DGCL” means the General Corporation Law of the State of Delaware;

 

   

“distribution time” means the time at which the distributable redeemable warrants and the private placement warrants, if any, issued to the forward purchasers will be distributed, which will occur immediately after the initial business combination redemption time and immediately prior to the closing of our initial business combination;

 

   

“Director Election Proposal” means the proposal to elect the nine director nominees to the board of directors effective as of the closing of the Business Combination in accordance with the Merger Agreement;

 

   

“Exchange Act” means the Securities Exchange Act of 1934, as amended;

 

   

“forward purchase agreement” means the agreement entered into on September 9, 2020 providing for the sale of our Class A common stock and private placement warrants to the forward purchasers and

 

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their permitted transferees in a private placement that will close simultaneously with the closing of our initial business combination to the extent necessary to satisfy our aggregate payment obligations resulting from the exercise of redemption rights by holders of our public shares in connection with our initial business combination, subject to a maximum funding commitment by the forward purchasers of $100,000,000;

 

   

“forward purchase shares” means the shares of our Class A common stock to be issued pursuant to the forward purchase agreement;

 

   

“forward purchasers” means those certain Starboard clients that entered into the forward purchase agreement;

 

   

“founder shares” means shares of our Class B common stock initially purchased by our Sponsor in a private placement prior to our Initial Public Offering, and the shares of our Class A common stock issued upon the conversion thereof as described in this proxy statement;

 

   

“GAAP” means U.S. generally accepted accounting principles;

 

   

“initial business combination” means our initial merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses;

 

   

“initial business combination redemption time” means the time at which we redeem the shares of Class A common stock that the holders thereof have elected to redeem in connection with our initial business combination, which will occur prior to the consummation of our initial business combination;

 

   

“Initial Public Offering” means our initial public offering of units, which closed on September 14, 2020;

 

   

“initial stockholders” means holders of our founder shares prior to our Initial Public Offering;

 

   

“management” or our “management team” means officers and directors of SVAC;

 

   

“Medina Stockholder” means Medina Capital Fund II– SIS Holdco, L.P.;

 

   

“Merger Agreement” means the Agreement and Plan of Merger, dated as of February 21, 2021, by and among SVAC, Merger Sub 1, Merger Sub 2, Cyxtera and NewCo, as the same may be amended from time to time;

 

   

“Merger Sub 1” means Mundo Merger Sub 1, Inc., a Delaware corporation and wholly-owned subsidiary of SVAC;

 

   

“Merger Sub 2” means Mundo Merger Sub 2, LLC, a Delaware limited liability company and wholly-owned subsidiary of SVAC;

 

   

“Merger Subs” means, collectively, Merger Sub 1 and Merger Sub 2;

 

   

“Nasdaq” means the Nasdaq Stock Market LLC;

 

   

“Nasdaq Listing Rules” means the Listing Rules adopted by the Nasdaq Stock Market LLC, as the same may be amended from time to time;

 

   

“Nasdaq Proposal” means the proposal to approve, for purposes of complying with applicable listing rules of the Nasdaq, the issuance of (a) 106,100,000 shares of Class A common stock to the Cyxtera Stockholder at the closing, (b) 25,000,000 shares of Class A common stock to certain qualified institutional buyers and accredited investors, at a price of $10.00 per share, for aggregate consideration of $250,000,000 for purposes of raising additional capital for use by the combined company following the closing and satisfying one of the conditions to the closing and (c) the number of forward purchase shares that would result in net proceeds in an aggregate amount necessary to satisfy Redemption Obligation, subject to Maximum Backstop Commitment;

 

   

“NewCo” means Mundo Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of the Cyxtera Stockholder;

 

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“PIPE Investment” means the private placement of an aggregate of 25,000,000 shares of Class A common stock to the PIPE Investors, at a price of $10.00 per share, in connection with the Business Combination;

 

   

“PIPE Investors” means the qualified institutional buyers and accredited investors participating in the PIPE Investment;

 

   

“Pre-Closing Restructuring” means: the restructuring prior to closing by which: (i) Cyxtera shall be contributed to NewCo by the Cyxtera Stockholder, with Cyxtera becoming a wholly-owned subsidiary of NewCo, and (ii) Cyxtera shall thereafter be converted to a Delaware limited liability company;

 

   

“private placement warrants” means the warrants issued to (i) our Sponsor in a private placement simultaneously with the closing of our Initial Public Offering and (ii) the forward purchasers, if any, at the distribution time;

 

   

“Proposal” means the Adjournment Proposal, the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal, the Director Election Proposal and the 2021 Incentive Plan Proposal, collectively, the “Proposals”;

 

   

“Proposed Charter” means the proposed second amended and restated certificate of incorporation of SVAC, a form of which is attached hereto as Annex B, which will become the post-combination company’s certificate of incorporation upon the approval of the Charter Proposal, assuming the occurrence of the closing;

 

   

“public shares” means shares of our Class A common stock sold as part of the units in our Initial Public Offering (whether they were purchased in such offering or thereafter in the open market, and including the shares included as part of the additional units sold in connection with the underwriters’ election to partially exercise their over-allotment option);

 

   

“public stockholders” means the holders of our public shares;

 

   

“redeemable warrants” means our detachable redeemable warrants included in the units issued in the Initial Public Offering and the distributable redeemable warrants issuable to the remaining public stockholders (after we redeem any shares of Class A common stock that the holders thereof have elected to redeem in connection with our initial business combination);

 

   

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

 

   

“Securities Act” means the U.S. Securities Act of 1933, as amended;

 

   

“Sponsor” means SVAC Sponsor LLC, a Delaware limited liability company;

 

   

“Starboard” means Starboard Value LP, a Delaware limited partnership;

 

   

“Subscription Agreements” means collectively the Subscription Agreements, each dated as of February 21, 2021, by and between SVAC and each individual PIPE Investor;

 

   

“SVAC,” the “Company,” “we,” “our” or “us” means Starboard Value Acquisition Corp., which will be renamed “Cyxtera Technologies, Inc.” in connection with the closing; references in this proxy statement to the “Company,” “we,” “our” or “us” as it relates to matters following the closing means the combined company of SVAC and Cyxtera;

 

   

“SVAC Stockholder Approval” means the approval by the holders of common stock at the special meeting of each of the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal, the Director Election Proposal, the 2021 Incentive Plan Proposal and the Adjournment Proposal;

 

   

“Trust Account” means the trust account that holds the proceeds (including interest earned on the funds held in the Trust Account (net of permitted withdrawals)) from SVAC’s Initial Public Offering, the partial exercise of the over-allotment option and the concurrent private placement of warrants to the Sponsor;

 

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“units” means our units sold in our Initial Public Offering (including the units sold in connection with the underwriters’ election to partially exercise their over-allotment option), each of which consists of one share of Class A common stock, one-sixth of one redeemable warrant and a contingent right to receive at least one-sixth of one redeemable warrant following the initial business combination redemption time under certain circumstances, and subject to adjustment; and

 

   

“2021 Incentive Plan Proposal” means the proposal to approve and adopt the Cyxtera Technologies, Inc. 2021 Omnibus Incentive Plan and the material terms thereunder.

Unless otherwise specified, the equity interests of our stockholders set forth in this proxy statement assume the following:

 

   

no public stockholders elect to have their public shares redeemed;

 

   

at the closing, the Cyxtera Stockholder receives 106,100,000 shares of our Class A common stock;

 

   

the transactions contemplated by each of the Subscription Agreements are consummated concurrently with the closing and the PIPE Investors purchase 25,000,000 shares of Class A common stock, in the aggregate;

 

   

none of SVAC’s existing stockholders or the parties to the Merger Agreement or Subscription Agreements, who will become stockholders of SVAC at the closing, purchase shares of Class A common stock in the open market prior to the closing; and

 

   

there are no other issuances of equity interests of SVAC prior to or in connection with the closing.

Further, unless otherwise specified, the equity interests of SVAC stockholders set forth in this proxy statement do not take into account the private placement warrants, redeemable warrants, the forward purchase shares or the optional shares (as defined below).

The Sponsor and the other initial stockholders have agreed in writing that the shares of Class B common stock will automatically convert into shares of Class A common stock at the closing on a one-for-one basis, resulting in the issuance of 10,105,863 shares of Class A common stock in the aggregate, and not converted into a greater number of shares of Class A common stock with respect to the issuance of additional shares of Class A common stock or equity-linked securities related to the closing.

This proxy statement contains registered and unregistered trademarks and service marks of Cyxtera and SVAC, as well as trademarks and service marks of third parties. Solely for convenience, these trademarks and service marks are referenced without the ®, or similar symbols, but such references are not intended to indicate, in any way, that Cyxtera or SVAC will not assert, to the fullest extent under applicable law, its rights to these trademarks and service marks. All brand names, trademarks and service marks appearing in this proxy statement are the property of their respective holders.

 

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SUMMARY OF THE MATERIAL TERMS OF THE TRANSACTION

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

 

   

Starboard Value Acquisition Corp. is a blank check company incorporated in 2019 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

 

   

Our registration statements for our Initial Public Offering became effective on September 9, 2020. On September 14, 2020, we consummated the Initial Public Offering of 36,000,000 units at $10.00 per unit, generating gross proceeds of $360.0 million, and incurring offering costs of approximately $23.0 million, inclusive of $16.2 million in deferred underwriting commissions. The underwriters were granted a 45-day option from the date of the final prospectus relating to the Initial Public Offering to purchase up to 5,400,000 additional units to cover over-allotments, if any, at $10.00 per unit, less underwriting discounts and commissions. On September 18, 2020, the underwriters partially exercised the over-allotment option and on September 23, 2020, purchased an additional 4,423,453 units, generating gross proceeds of approximately $44.2 million, and incurred additional offering costs of approximately $2.7 million (net of approximately $221,000 in reimbursement for certain expenses from the underwriters), including approximately $2.0 million in deferred underwriting fees.

 

   

Simultaneously with the closing of the Initial Public Offering, we completed the private sale of an aggregate of 6,133,333 private placement warrants to our Sponsor at a purchase price of $1.50 per private placement warrant, generating gross proceeds of $9.2 million. In connection with the underwriters’ partial exercise of their over-allotment option, our Sponsor purchased an additional 589,794 private placement warrants, generating gross proceeds of approximately $0.9 million.

 

   

Upon the closing of the Initial Public Offering, the sale of the private placement warrants, the sale of the over-allotment units and the sale of 589,794 additional private placement warrants, $404.2 million ($10.00 per unit) of the net proceeds of such sales were placed in the trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. “government securities,” within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in money market funds meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations, as determined by us, until the earlier of: (i) the completion of an initial business combination and (ii) the distribution of the trust account as described elsewhere herein.

 

   

Cyxtera Technologies, Inc. is a global data center leader in retail colocation and interconnection services. Cyxtera is the largest privately-held global retail colocation provider based on market share, and will be the third largest provider following the closing of the Business Combination. Cyxtera’s data center platform consists of 61 highly interconnected data centers across 29 markets on three continents. Cyxtera provides an innovative suite of deeply connected and intelligently automated infrastructure and interconnection solutions to more than 2,300 leading enterprises, service providers and government agencies around the world — enabling them to scale faster, meet rising consumer expectations, and gain a competitive edge.

 

   

On February 21, 2021, SVAC entered into an Agreement and Plan of Merger with Merger Sub 1, Merger Sub 2, Cyxtera, and NewCo, which provides for, among other things, (i) Cyxtera to be contributed to Newco by the Cyxtera Stockholder, with Cyxtera becoming a wholly-owned subsidiary of Newco and Cyxtera to thereafter be converted to a Delaware limited liability company, (ii) Merger

 

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Sub 1 to be merged with and into NewCo, with NewCo surviving the First Merger as a wholly-owned subsidiary of SVAC and Merger Sub 1 ceasing to exist, and (iii) immediately following the First Merger, NewCo to be merged with and into Merger Sub 2, with Merger Sub 2 surviving the Second Merger as a wholly-owned subsidiary of SVAC and NewCo ceasing to exist.

 

   

The total merger consideration is 106,100,000 shares of our Class A common stock which will be issued to the Cyxtera Stockholder at the effective time of the First Merger. The approximate dollar value of the merger consideration is $1,061,000,000. The market value of these shares will vary with any change in the SVAC Class A common stock price, and, as such, the market value of the shares to be issued could vary from the market value as of the date of this proxy statement. In connection with the closing, SVAC will be renamed “Cyxtera Technologies, Inc.”

 

   

In connection with its entry into the Merger Agreement, SVAC entered into separate Subscription Agreements, each dated as of February 21, 2021, with the PIPE Investors, pursuant to which, among other things, SVAC agreed to issue and sell in a private placement an aggregate of 25,000,000 shares of Class A common stock to the PIPE Investors, for a purchase price of $10.00 per share, and aggregate consideration of $250,000,000. As part of the PIPE Investment, certain clients of Starboard have committed to purchase, on the same terms as the other subscribers, an aggregate of 6,000,000 shares of Class A common stock, for a purchase price of $10.00 per share and an aggregate purchase price of $60,000,000. The PIPE Investment is expected to close substantially concurrent with the closing of the Business Combination. For more information, see the section entitled “Proposal Number 1 — The Business Combination Proposal — Related Agreements — Subscription Agreements.”

 

   

Pursuant to the Merger Agreement, at the closing, SVAC, the holders of Class B common stock and the Cyxtera Stockholder will enter into the A&R Registration Rights Agreement, pursuant to which SVAC has agreed to provide customary demand and piggyback registration rights, subject to certain conditions. The A&R Registration Rights Agreement also provides that SVAC will pay certain expenses relating to such registrations and indemnify the stockholders against certain liabilities. For more information, see the section entitled “Proposal Number 1 — The Business Combination Proposal — Related Agreements — A&R Registration Rights Agreement.”

 

   

Pursuant to the Merger Agreement, at the closing, SVAC and the Investor Parties will enter into a Stockholders Agreement, providing for certain governance and director nomination rights with respect to the combined company. Pursuant to the Stockholders Agreement, SVAC and the Investor Parties will agree to take all necessary action to cause the board of directors to be comprised of nine directors as of the closing of the Transactions, including: the combined company’s chief executive officer; three individuals designated by the Cyxtera Stockholder; one independent director designated by the Cyxtera Stockholder with the consent of the Sponsor; two individuals designated by the Sponsor; and two independent directors designated by mutual agreement between the Cyxtera Stockholder and the Sponsor. Subject to certain ownership thresholds, the rights of the Investor Parties to designate directors will continue in respect of each annual meeting or special meeting of SVAC’s stockholders until immediately following the conclusion of SVAC’s annual meeting for the calendar year 2024. In addition, pursuant to the Stockholders Agreement, the Cyxtera Stockholder shall distribute all of its common stock to the BC Stockholder, the Medina Stockholder and other equity holders of the Cyxtera Stockholder within 12 months from the date of closing of the Transactions. Further, each of Sponsor and the Cyxtera Stockholder will agree to not transfer any common stock for the 12-month period following the closing of the Transactions, other than transfers contemplated by the foregoing sentence and transfers to certain permitted transferees; provided, however, if the closing price of the Class A common stock equals or exceeds $12.00 per share for 20 trading days within a 30-day trading day period commencing at least 150 days after the closing of the Transactions, the Lock-Up Period will automatically terminate as of such 20th trading day. For more information, see the section entitled “Proposal Number 1 – The Business Combination Proposal – Related Agreements – Stockholders Agreement.”

 

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In connection with the execution of the Merger Agreement, the Cyxtera Stockholder entered into a Stockholder Support Agreement with SVAC and Cyxtera , pursuant to which, among other things, the Cyxtera Stockholder, the sole stockholder of Cyxtera, agreed to (i) provide its consent to the adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement, including the mergers and the Pre-Closing Restructuring, and (ii) take all actions necessary or appropriate to contribute its equity securities in Cyxtera to NewCo and otherwise cause the Pre-Closing Restructuring to occur in accordance with the Merger Agreement. In addition, the Cyxtera Stockholder agreed not to transfer any equity securities of Cyxtera or NewCo until the date upon which the Stockholder Support Agreement expires, except as contemplated by the Stockholder Support Agreement. The Stockholder Support Agreement also contains customary representations and warranties of the Cyxtera Stockholder. The Cyxtera Stockholder Approval was delivered to SVAC by the Cyxtera Stockholder on February 21, 2021. For more information, see the section entitled “Proposal Number 1 – The Business Combination Proposal – Related Agreements – Stockholder Support Agreement.”

 

   

In connection with the Merger Agreement, the Sponsor and the other holders of shares of Class B common stock entered into a Sponsor Support Agreement, pursuant to which, among other things, each Sponsor and the other holders of shares of Class B common stock (together with the Sponsor, the “Insiders”, and each individually, an “Insider”) agreed to (i) vote all Class A common stock and Class B common stock owned by it, him or her in favor of the transactions contemplated by the Merger Agreement, including the mergers, and each other proposal related thereto included on the agenda for the special meeting of stockholders, (ii) vote against any proposal with respect to a stock purchase, asset purchase, merger, business combination or otherwise (each, a “SPAC Alternative Transaction”) and (iii) not redeem, or seek to redeem, any Covered Shares (as defined below) owned by it, him or her in connection with the stockholder approval of the Transactions. In addition, each Insider agreed, subject to certain exceptions, not to transfer, as applicable, any shares of Class B common stock, private placement warrants (or shares of Class A common stock issued or issuable upon the exercise of private placement warrants) or other equity securities of SVAC until the date upon which the Sponsor Support Agreement expires. The Sponsor Support Agreement amends and restates that certain letter agreement, dated as of September 9, 2020, among SVAC and the Insiders that was entered into in connection with the Initial Public Offering. Solely in connection with and only for the purpose of the transactions contemplated by the Merger Agreement, each Insider irrevocably and unconditionally waived and agreed not to assert, claim or perfect any rights to adjustment or other anti-dilution protection with respect to the rate that the shares of Class B common stock held by him, her or it converts into Class A common stock pursuant to Section 4.3 of SVAC’s Charter or any other anti-dilution protections or other adjustment or similar protections that arise in connection with the Transactions. The Sponsor Support Agreement also contains customary representations and warranties of the Insiders. For more information, see the section entitled “Proposal Number 1 – The Business Combination Proposal – Related Agreements – Sponsor Support Agreement.”

 

   

In connection with the Merger Agreement, the Cyxtera Stockholder, Cyxtera and SVAC entered into a Release and Indemnity Agreement, pursuant to which, among other things, the Cyxtera Stockholder (for itself and on behalf of its affiliates) released Cyxtera of all claims to the extent relating to matters which occurred prior to the closing. The Cyxtera Stockholder also agreed to pay SVAC in cash the amount of any Restricted Payments (as defined in the Merger Agreement) made by Cyxtera or any of its subsidiaries during the period commencing on October 1, 2020 and ending at the closing. The maximum aggregate amount of the Restricted Payment Indemnification is $20,000,000 (the “Restricted Payment Indemnification”). The Restricted Payment Indemnification shall terminate 30 days after the completion of SVAC’s audit for the year ended December 31, 2021. For more information, see the section entitled “Proposal Number 1 – The Business Combination Proposal – Related Agreements – Release and Indemnity Agreement.”

 

   

In connection with the Merger Agreement, (i) the BC Stockholder, Cyxtera and SVAC entered into a release agreement, pursuant to which, among other things, the BC Stockholder (for itself and on behalf of its affiliates) released Cyxtera of all claims to the extent relating to matters which occurred prior to

 

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the closing, (ii) the Medina Stockholder, Cyxtera and SVAC entered into a release agreement, pursuant to which, among other things, the Medina Stockholder (for itself and on behalf of its affiliates) released Cyxtera of all claims to the extent relating to matters which occurred prior to the closing, (iii) the Sponsor, Cyxtera and SVAC entered into a release agreement, pursuant to which, among other things, the Sponsor (for itself and on behalf of its affiliates) released SVAC of all claims to the extent relating to matters which occurred prior to the closing. For more information, see the section entitled “Proposal Number 1 – The Business Combination Proposal – Related Agreements – Releases.”

 

   

In connection with the Merger Agreement, Cyxtera and the forward purchasers entered into a letter agreement related to the Optional Share Purchase Agreement (as defined below) pursuant to which the forward purchasers agreed not to purchase optional shares for an aggregate amount exceeding $75,000,000 for all forward purchasers (the “Optional Share Letter Agreement”). In addition, SVAC agreed not to (i) amend, restate, supplement or otherwise modify, and not to waive any provision or right under the Optional Share Purchase Agreement and/or the Optional Share Letter Agreement, without the prior written consent of the Cyxtera Stockholder, and (ii) take any action in contravention of the Optional Share Letter Agreement.

 

   

It is anticipated that, immediately following the closing and based on the assumptions set forth in “Certain Defined Terms,” SVAC’s current public stockholders will own approximately 22.3% of the combined company, SVAC’s Sponsor, management and board will own approximately 5.6% of the combined company, the Cyxtera Stockholder will own approximately 58.4% of the combined company and the PIPE Investors will own approximately 13.8% of the combined company.

 

   

The SVAC board of directors considered various factors in determining whether to approve the Merger Agreement and the transactions contemplated thereby. For more information about the reasons that the SVAC board of directors considered in making its recommendation, please see the section entitled “Proposal No. 1 - The Business Combination Proposal - SVAC’s Board of Directors’ Reasons for the Approval of the Business Combination.” When you consider the SVAC board of directors’ recommendation of these proposals, you should keep in mind that our directors and officers have interests in the business combination that are different from, or in addition to, the interests of SVAC stockholders generally. Please see the section entitled “Proposal No. 1 - The Business Combination Proposal - Interests of Certain Persons in the Business Combination” for additional information. The SVAC board of directors was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination and in recommending to the SVAC stockholders that they vote “FOR” the proposals presented at the special meeting.

 

   

At the special meeting, which will be held virtually, SVAC’s stockholders will be asked to consider and vote on the following proposals:

 

   

The Business Combination Proposal — To consider and vote upon a proposal to approve and adopt the Merger Agreement and to approve the Business Combination;

 

   

The Charter Proposal — To consider and vote upon a proposal to approve and adopt amendments to the Charter to be effective upon the consummation of the Business Combination, which will include amendments to (a) increase the number of authorized shares of SVAC’s capital stock, par value $0.0001 per share, from 221,000,000 shares, consisting of (i) 220,000,000 shares of common stock, including 200,000,000 shares of Class A common stock and 20,000,000 shares of Class B common stock, and (ii) 1,000,000 shares of preferred stock, to 510,000,000 shares, consisting of (i) 500,000,000 shares of Class A common stock and (ii) 10,000,000 shares of preferred stock, (b) eliminate certain provisions in our Charter relating to the Class B common stock, the initial business combination and other matters relating to SVAC’s status as a blank check company that will no longer be applicable to us following the closing, and (c) approve and adopt certain other changes contained in the Proposed Charter, a copy of the form of which is attached as Annex B to this proxy statement;

 

   

The Nasdaq Proposal — To consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of Nasdaq, the issuance of (a) 106,100,000 shares of

 

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Class A common stock to the Cyxtera Stockholder at the closing of the Business Combination, (b) 25,000,000 shares of Class A common stock to certain qualified institutional buyers and accredited investors, at a price of $10.00 per share, for aggregate consideration of $250,000,000 for purposes of raising additional capital for use by the combined company following the closing of the Business Combination and satisfying one of the conditions to the closing and (c) the number of forward purchase shares that would result in net proceeds in an aggregate amount necessary to satisfy the Redemption Obligation, subject to the Maximum Backstop Commitment;

 

   

The Director Election Proposal —To consider and vote upon a proposal to elect the nine director nominees to the board of directors effective as of the closing of the Business Combination in accordance with the Merger Agreement;

 

   

The 2021 Incentive Plan Proposal — To consider and vote upon a proposal to approve and adopt the Cyxtera Technologies, Inc. 2021 Omnibus Incentive Plan, substantially in the form attached as Annex G to this proxy statement, and the material terms thereunder; and

 

   

The Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal, the Director Election Proposal and/or the 2021 Incentive Plan Proposal.

 

   

Under our Charter, any holders of our Class A common stock may elect that such shares be redeemed in exchange for a pro rata share of the aggregate amount on deposit in the Trust Account (including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes), calculated as of two business days prior to the closing. If demand is properly made and the Business Combination is consummated, these shares, immediately prior to the Business Combination, will cease to be outstanding and will represent only the right to receive a pro rata share of the aggregate amount on deposit in the Trust Account, which holds the proceeds of our Initial Public Offering, the exercise of the over-allotment option and the private placements of warrants to the Sponsor (calculated as of two business days prior to the closing, including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes). For illustrative purposes, based on the fair value of marketable securities held in the Trust Account as of March 31, 2021 of approximately $404,461,491, the estimated per share redemption price would have been approximately $10.00.

 

   

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

 

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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR SVAC STOCKHOLDERS

The following questions and answers briefly address some commonly asked questions about the proposals to be presented at the special meeting, including the proposed Business Combination. The following questions and answers do not include all the information that is important to SVAC stockholders. We urge SVAC stockholders to read carefully this entire proxy statement, including the annexes and other documents referred to herein.

 

Q:

Why am I receiving this proxy statement?

 

A:

SVAC stockholders are being asked to consider and vote upon, among other things, a proposal to approve and adopt the Merger Agreement and approve the Business Combination. A copy of the Merger Agreement is attached to this proxy statement as Annex A. This proxy statement and its annexes contain important information about the proposed business combination and the other matters to be acted upon at the special meeting. You should read this proxy statement and its annexes carefully and in their entirety. Approval of the Business Combination Proposal requires the affirmative vote of holders of a majority of the shares of Class A common stock and Class B common stock represented in person or by proxy and entitled to vote and actually cast thereon at the special meeting, voting as a single class. Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement and its annexes.

 

Q:

When and where is the special meeting?

 

A:

In light of public health concerns regarding the coronavirus (COVID-19) pandemic, the special meeting will be held via live webcast at                , on                 , 2021, at                 Eastern Time, or such other date, time and place to which such special meeting may be adjourned or postponed. The special meeting can be accessed by visiting                , where you will be able to listen to the meeting live and vote during the meeting.

 

Q:

What is being voted on at the special meeting?

 

A:

Below are the proposals on which SVAC stockholders will vote at the special meeting.

The Business Combination Proposal — To consider and vote upon a proposal to approve and adopt the Merger Agreement and to approve the Business Combination.

The Charter Proposal — To consider and vote upon a proposal to approve and adopt amendments to the Charter to be effective upon the consummation of the Business Combination, which will include amendments to (a) increase the number of authorized shares of SVAC’s capital stock, par value $0.0001 per share, from 221,000,000 shares, consisting of (i) 220,000,000 shares of common stock, including 200,000,000 shares of Class A common stock and 20,000,000 shares of Class B common stock, and (ii) 1,000,000 shares of preferred stock, to 510,000,000 shares, consisting of (i) 500,000,000 shares of Class A common stock and (ii) 10,000,000 shares of preferred stock, (b) eliminate certain provisions in our Charter relating to the Class B common stock, the initial business combination and other matters relating to SVAC’s status as a blank check company that will no longer be applicable to us following the closing, and (c) approve and adopt certain other changes contained in the Proposed Charter, a copy of the form of which is attached as Annex B to this proxy statement;

The Nasdaq Proposal — To consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of Nasdaq, the issuance of (a) 106,100,000 shares of Class A common stock to the Cyxtera Stockholder at the closing of the Business Combination, (b) 25,000,000 shares of Class A common stock to the PIPE Investors in connection with the PIPE Investment to be completed for purposes of raising additional capital for use by the combined company following the closing of the Business Combination and satisfying one of the conditions to the closing and (c) the number of forward purchase shares that would result in net proceeds in an aggregate amount necessary to satisfy the Redemption Obligation, subject to the Maximum Backstop Commitment;

 

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The Director Election Proposal —To consider and vote upon a proposal to elect the nine director nominees to the board of directors effective as of the closing of the Business Combination in accordance with the Merger Agreement;

The 2021 Incentive Plan Proposal — To consider and vote upon a proposal to approve and adopt the Cyxtera Technologies, Inc. 2021 Omnibus Incentive Plan, substantially in the form attached as Annex G to this proxy statement, and the material terms thereunder; and

The Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal, the Director Election Proposal and/or the 2021 Incentive Plan Proposal.

 

Q:

Are the proposals conditioned on one another?

 

A:

The closing is conditioned on the approval of each of the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal, the Director Election Proposal, the 2021 Incentive Plan Proposal and the Adjournment Proposal at the special meeting. Except for the Adjournment Proposal, each Proposal is conditioned on the approval of each of the other Proposals. The Adjournment Proposal is not conditioned on the approval of any other Proposals set forth in this proxy statement.

 

Q:

Who is Cyxtera?

 

A:

Cyxtera Technologies, Inc. is a global data center leader in retail colocation and interconnection services. Cyxtera is the largest privately-held global retail colocation provider based on market share, and will be the third largest provider following the closing of the Business Combination. Cyxtera’s data center platform consists of 61 highly interconnected data centers across 29 markets on three continents. Cyxtera provides an innovative suite of deeply connected and intelligently automated infrastructure and interconnection solutions to more than 2,300 leading enterprises, service providers and government agencies around the world — enabling them to scale faster, meet rising consumer expectations, and gain a competitive edge.

 

Q:

Why is SVAC proposing the Business Combination?

 

A:

SVAC was organized for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Based on SVAC’s due diligence investigations of Cyxtera and the industries in which Cyxtera operates, including the financial and other information provided by Cyxtera in the course of SVAC’s due diligence investigations, SVAC’s board of directors believes that the Business Combination is in the best interests of SVAC and its stockholders and presents an opportunity to increase stockholder value. However, there can be no assurances of this. Although SVAC’s board of directors believes that the Business Combination presents a beneficial business combination opportunity and is in the best interests of SVAC and its stockholders, the board of directors did consider certain potentially material negative factors in arriving at that conclusion. See the section entitled “Proposal Number 1 — The Business Combination Proposal — SVAC’s Board of Directors’ Reasons for the Approval of the Business Combination” for more information.

 

Q:

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

 

A:

We are seeking approval of the Business Combination for purposes of complying with applicable Nasdaq Listing Rules requiring stockholder approval of issuances of more than 20% of a listed company’s issued and outstanding common stock. In addition, pursuant to our Charter, we must provide all public stockholders with the opportunity to redeem all or a portion of their public shares upon the consummation of

 

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  an initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote to approve such initial business combination.

 

Q:

Do Cyxtera’s stockholders need to approve the Business Combination?

 

A:

Cyxtera’s sole stockholder has adopted and approved the Merger Agreement and, subject to the satisfaction of the closing conditions contained in the Merger Agreement, the consummation of the Business Combination.

 

Q:

What will happen in the Business Combination?

 

A:

Pursuant to the Merger Agreement, (i) Cyxtera will be contributed to Newco by the Cyxtera Stockholder, with Cyxtera becoming a wholly-owned subsidiary of Newco and Cyxtera shall thereafter be converted to a Delaware limited liability company, (ii) Merger Sub 1 will be merged with and into NewCo, with NewCo surviving the First Merger as a wholly-owned subsidiary of SVAC and Merger Sub 1 ceasing to exist, and (iii) immediately following the First Merger, NewCo will be merged with and into Merger Sub 2, with Merger Sub 2 surviving the Second Merger as a wholly-owned subsidiary of SVAC and NewCo ceasing to exist. The total merger consideration is 106,100,000 shares of our Class A common stock which will be issued to the Cyxtera Stockholder at the effective time of the First Merger. The approximate dollar value of the merger consideration is $1,061,000,000. The market value of these shares will vary with any change in the SVAC Class A common stock price, and, as such, the market value of the shares to be issued could vary from the market value as of the date of this proxy statement. In connection with the closing, SVAC will be renamed “Cyxtera Technologies, Inc.”

For more information, see the section entitled “Proposal Number 1 — The Business Combination Proposal.”

 

Q:

What conditions must be satisfied to complete the Business Combination?

 

A:

The Merger Agreement contains a number of conditions to consummating the Business Combination, including the approval by our stockholders of the Proposals. For a summary of the conditions that must be satisfied or waived prior to the closing, see the section entitled “Proposal Number 1 — The Business Combination Proposal — The Merger Agreement — Conditions to Closing of the Business Combination.”

 

Q:

How will the combined company be managed and governed following the Business Combination?

 

A:

Following the closing of the Business Combination, the combined company will be managed by Cyxtera’s officers and a new board of directors will be installed pursuant to the terms of the Merger Agreement and the Stockholders Agreement. For information on the anticipated management following the Business Combination, see the section entitled “Management Following the Business Combination.”

 

Q:

Will SVAC obtain new financing in connection with the Business Combination?

 

A:

In connection with its entry into the Merger Agreement, SVAC entered into the Subscription Agreements, each dated February 21, 2021, with the PIPE Investors, pursuant to which, among other things, SVAC agreed to issue and sell in a private placement an aggregate of 25,000,000 shares of Class A common stock to the PIPE Investors, at a price of $10.00 per share, for aggregate consideration of $250,000,000, of which certain clients of Starboard have committed to purchase, on the same terms as the other subscribers, an aggregate of 6,000,000 shares of Class A common stock, for a purchase price of $10.00 per share and an aggregate purchase price of $60,000,000. The purpose of the PIPE Investment is to provide additional capital for use by the combined company following the closing and to satisfy one of the conditions to the closing.

 

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Q:

What consideration will the Cyxtera Stockholder receive in the Business Combination?

 

A:

Under the Merger Agreement, at the effective time of the First Merger, SVAC shall issue 106,100,000 shares of Class A common stock to the Cyxtera Stockholder. The approximate dollar value of the merger consideration is $1,061,000,000. The market value of these shares will vary with any change in the SVAC Class A common stock price, and, as such, the market value of the shares to be issued could vary from the market value as of the date of this proxy statement.

 

Q:

What equity stake will current SVAC stockholders, the holders of our Class B common stock, the PIPE Investors and the Cyxtera Stockholder hold in SVAC following the closing?

 

A:

It is anticipated that, immediately following the closing and based on the assumptions set forth in “Certain Defined Terms,” the ownership of issued and outstanding shares of SVAC will be as set forth below. Certain figures included in this section have been rounded for ease of presentation and, as a result, percentages may not sum to 100%.

 

     Number of shares
of Class A
common stock
    % of all shares
of Class A
common stock
 

SVAC public stockholders

     40,423,453       22.3

SVAC’s Sponsor, management and board

     10,105,863       5.6

Cyxtera Stockholder

     106,100,000       58.4

PIPE Investors

     25,000,000 (1)      13.8

 

 

(1)

Includes an aggregate of 6,000,000 shares of Class A common stock which certain clients of Starboard have committed to purchase on the same terms as the other PIPE Investors.

 

Q:

What amendments will be made to our Charter?

 

A:

SVAC is asking its stockholders to approve and adopt amendments to our Charter, to be effective upon the closing, which will include amendments to (a) increase the number of authorized shares of SVAC’s capital stock, par value $0.0001 per share, from 221,000,000 shares, consisting of (i) 220,000,000 shares of common stock, including 200,000,000 shares of Class A common stock and 20,000,000 shares of Class B common stock, and (ii) 1,000,000 shares of preferred stock, to 510,000,000 shares, consisting of (i) 500,000,000 shares of Class A common stock and (ii) 10,000,000 shares of preferred stock, (b) eliminate certain provisions in our Charter relating to the Class B common stock, the initial business combination and other matters relating to SVAC’s status as a blank check company that will no longer be applicable to us following the closing, and (c) approve and adopt certain other changes contained in the Proposed Charter, a copy of the form of which is attached as Annex B to this proxy statement. Stockholder approval of the Charter Proposal is required under our Charter and is a condition to closing the Business Combination. See the section entitled “Proposal Number 2 — The Charter Proposal” for more information.

 

Q:

Why is SVAC proposing the Nasdaq Proposal?

 

A:

SVAC is proposing the Nasdaq Proposal in order to comply with Nasdaq Listing Rules, which require stockholder approval of certain transactions that result in the issuance of 20% or more of a company’s outstanding voting power or shares of common stock outstanding before the issuance of stock or securities. SVAC will issue (a) 106,100,000 shares of Class A common stock to the Cyxtera Stockholder at the effective time of the First Merger, (b) 25,000,000 shares of Class A common stock to the PIPE Investors for aggregate consideration of $250,000,000 for purposes of raising additional capital for use by the combined company following the closing and satisfying one of the conditions to the closing and (c) the number of forward purchase shares that would result in net proceeds in an aggregate amount necessary to satisfy the Redemption Obligation, subject to the Maximum Backstop Commitment. Because SVAC will issue 20% or

 

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  more of its outstanding voting power and outstanding common stock in connection with the Business Combination, it is required to obtain stockholder approval of such issuances pursuant to Nasdaq Listing Rules.

Stockholder approval of the Nasdaq Proposal is also a condition to closing in the Merger Agreement. See the section entitled “Proposal Number 3 — The Nasdaq Proposal” for more information.

 

Q:

What happens if I sell my shares of Class A common stock before the special meeting?

 

A:

The record date for the special meeting is earlier than the date that the Business Combination is expected to be completed. If you transfer your shares of Class A common stock after the record date, but before the special meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting. However, you will not be able to seek redemption of your shares of Class A common stock because you will no longer be able to tender them prior to the special meeting in accordance with the provisions described in this proxy statement. If you transferred your shares of Class A common stock prior to the record date, you have no right to vote those shares at the special meeting or redeem those shares for a pro rata portion of the proceeds held in the Trust Account.

 

Q:

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

 

A:

Yes. Upon the closing, we intend to change our name from “Starboard Value Acquisition Corp.” to “Cyxtera Technologies, Inc.” and our Class A common stock and warrants will be listed following the closing under the symbols “CYXT” and “CYXTW,” respectively. We have applied to continue the listing of our Class A common stock and warrants on Nasdaq following the closing. Our units will automatically separate into the component securities upon the closing of the Business Combination and, as a result, will no longer trade as a separate security following the Business Combination.

 

Q:

What vote is required to approve the Proposals presented at the special meeting?

 

A:

Approval of the Business Combination Proposal, the Nasdaq Proposal, the Director Election Proposal, the 2021 Incentive Plan Proposal and the Adjournment Proposal requires the affirmative vote (in person or by proxy) of the holders of a majority of the shares of Class A common stock and Class B common stock entitled to vote and actually cast thereon at the special meeting, voting as a single class. Approval of the Charter Proposal requires the affirmative vote (in person or by proxy) of the holders of a majority of the outstanding shares of Class A common stock and Class B common stock entitled to vote thereon at the special meeting, voting as a single class.

 

Q:

May the Sponsor and our directors, officers or their respective affiliates purchase shares in connection with the Business Combination?

 

A:

In connection with the stockholder vote to approve the Business Combination, the Sponsor and our officers, directors or their respective affiliates may privately negotiate transactions to purchase shares from stockholders who would have otherwise elected to have their shares redeemed for a per share pro rata portion of the Trust Account. None of the Sponsor and our directors, officers or their respective affiliates will make any such purchases when they are in possession of any material non-public information not disclosed to the seller or during a restricted period under Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares as of the record date (to the extent they are still the record holder of such sold shares as of the redemption deadline), is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor and our officers, directors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their

 

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  redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that are below or in excess of the per share pro rata portion of the Trust Account.

The purpose of such purchases would likely be to vote such shares in favor of the Business Combination, thereby increasing the likelihood of obtaining stockholder approval of the Business Combination while ensuring that the minimum cash condition for the closing of the Business Combination is satisfied. This may result in the completion of the Business Combination that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of our common stock may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

If such transactions are effected, the consequence could be to cause the Business Combination to be approved in circumstances where such approval could not otherwise be obtained. Purchases of public shares by the persons described above would allow them to exert more influence over the approval of the Proposals to be presented at the special meeting and would likely increase the chances that such Proposals would be approved. As of the date of this proxy statement, there have been no such discussions and no agreements to such effect have been entered into with any such investor or holder.

 

Q:

How many votes do I have at the special meeting?

 

A:

SVAC’s stockholders are entitled to one vote at the special meeting for each share of Class A common stock and one vote at the special meeting for each share of Class B common stock held of record as of                 , 2021, the record date for the special meeting. As of the close of business on                 , 2021, there were 40,423,453 outstanding shares of Class A common stock and 10,105,863 outstanding shares of Class B common stock.

 

Q:

What constitutes a quorum at the special meeting?

 

A:

Holders of a majority in voting power of Class A common stock and Class B common stock issued and outstanding and entitled to vote at the special meeting, present in person or represented by proxy, constitute a quorum.

 

Q:

What are the recommendations of SVAC’s board of directors?

 

A:

After careful consideration, SVAC’s board of directors recommends that SVAC stockholders vote “FOR” each Proposal being submitted to a vote of the SVAC stockholders at the special meeting. For more information regarding how the board of directors of SVAC recommends that SVAC stockholders vote, see the sections describing each Proposal in this proxy statement.

When you consider the recommendation of our board of directors in favor of approval of these Proposals, you should keep in mind that the Sponsor, our directors and officers have interests in the Business Combination that are different from, in addition to or conflict with your interests as a stockholder. See the section entitled “Proposal Number 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination.”

 

Q:

How will the Sponsor and SVAC’s directors and officers vote?

 

A:

The Sponsor and our officers and directors have agreed to vote any shares of common stock owned by them in favor of the Proposals. As of the date of this proxy statement, the Sponsor and our officers and directors collectively own 10,105,863 outstanding shares of Class B common stock, representing, in the aggregate, approximately 20% of SVAC’s outstanding shares of common stock.

 

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Q:

What interests do the Sponsor and our current officers and directors have in the Business Combination?

 

A:

In considering the recommendation of SVAC’s board of directors to vote in favor of the Business Combination, stockholders should be aware that, aside from their interests as stockholders, the Sponsor and certain of our directors and officers have interests in the Business Combination that are different from, in addition to, or conflict with those of other stockholders generally. Our directors were aware of and considered these interests, among other matters, in evaluating the Business Combination and in recommending to stockholders that they approve the Business Combination. Stockholders should take these interests into account in deciding whether to approve the Business Combination. These interests include, among other things:

 

   

the fact that the Sponsor and our officers and directors have agreed not to redeem any shares of common stock held by them in connection with the completion of the Business Combination;

 

   

the fact that the Sponsor and certain of our directors paid an aggregate of $25,000 for their founder shares and such securities will have a significantly higher value at the time of the Business Combination, which if unrestricted and freely tradable would be valued at approximately $                based on the closing price of our Class A common stock of $                on Nasdaq on                , 2021, the record date for the special meeting;

 

   

the fact that the Sponsor and our officers and directors have waived their rights to liquidating distributions from the Trust Account with respect to any founder shares held by them if we fail to complete an initial business combination by September 14, 2022;

 

   

the fact that the Sponsor has agreed to be liable to SVAC if and to the extent any claims by a third party (except for SVAC’s independent registered public accounting firm) for services rendered or products sold to SVAC, or a prospective target business with which SVAC has entered into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of  (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust Account due to reductions in the value of the trust assets as of the date of the liquidation of the Trust Account, in each case including interest earned on the funds held in the Trust Account (net of permitted withdrawals). This liability will not apply with respect to any claims by a third party or target that executed an agreement waiving claims against and all rights to seek access to the Trust Account whether or not such agreement is enforceable or to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act;

 

   

the anticipated continuation of Jeffrey C. Smith and Michelle Felman and the anticipated election of Gregory Waters as directors of SVAC following the closing;

 

   

the fact that certain clients of Starboard agreed to participate in the PIPE Investment and purchase 6,000,000 shares of Class A common stock in the aggregate at $10.00 per share on the terms set forth in the Subscription Agreements;

 

   

the fact that we agreed to pay our Sponsor a total of $10,000 per month for office space, administrative and support services and such arrangement will terminate upon the closing;

 

   

the fact that our officers and directors have agreed not to become an officer or director of any other special purpose acquisition company with a class of securities registered under the Exchange Act until we have entered into a definitive agreement regarding our initial business combination or we have failed to complete an initial business combination by September 14, 2022;

 

   

the fact that the Sponsor and our officers and directors will lose their entire investment in us with respect to the founder shares and warrants they own if an initial business combination is not completed by September 14, 2022; and

 

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the fact that none of our Sponsor, officers and directors, or any of their respective affiliates is entitled to compensation of any kind, including finder’s and consulting fees, for services rendered prior to or in connection with the completion of an initial business combination (except for reimbursement for out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations).

 

Q:

What happens if I vote against the Business Combination Proposal?

 

A:

Under our Charter, if the Business Combination Proposal is not approved and the Business Combination is not consummated, and we do not otherwise consummate an alternative business combination by September 14, 2022, we will be required (unless an extension of such date is approved by affirmative vote of the holders of at least 65% of our outstanding common stock pursuant to our Charter), to dissolve and liquidate the Trust Account by returning the then-remaining funds in such account to our public stockholders.

 

Q:

Do I have redemption rights?

 

A:

If you are a holder of public shares, you may elect to have your public shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (a) the aggregate amount on deposit in the Trust Account as of two business days prior to the closing, including interest earned on the funds held in the Trust Account (net of permitted withdrawals), by (b) the number of then-outstanding public shares; provided that SVAC will not redeem any public shares to the extent that such redemption would result in SVAC having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of less than $5,000,001.

Notwithstanding the foregoing, a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the public shares, which we refer to as the “15% limit.” Accordingly, all public shares in excess of the 15% limit beneficially owned by a public stockholder or group will not be redeemed for cash. There will be no redemption rights upon the completion of the Business Combination with respect to SVAC’s redeemable warrants.

The Sponsor and our officers and directors have agreed to waive their redemption rights with respect to any shares of common stock held by them in connection with the completion of the Business Combination. The founder shares will be excluded from the pro rata calculation used to determine the per share redemption price. For illustrative purposes, based on the fair value of marketable securities held in the Trust Account as of March 31, 2021 of approximately $404,461,491, the estimated per share redemption price would have been approximately $10.00.

Additionally, shares properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the Trust Account (including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes) in connection with the liquidation of the Trust Account or if we subsequently complete a different business combination on or prior to September 14, 2022.

 

Q:

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

 

A:

No. You may exercise your redemption rights whether you vote your shares of Class A common stock for or against or abstain from voting on the Business Combination Proposal or any other Proposal described in this proxy statement. As a result, the Business Combination can be approved by stockholders who will redeem their shares and no longer remain stockholders.

 

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Q:

What happens if a substantial number of the public stockholders vote in favor of the Business Combination Proposal and exercise their redemption rights?

 

A:

As discussed above, our public stockholders may vote in favor of the Business Combination and also exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of public stockholders are reduced as a result of redemptions of public shares by SVAC’s public stockholders. However, the closing is conditioned upon, among other things, the minimum cash condition described below. Specifically, if the number of redemptions cause the minimum cash condition not to be satisfied, Cyxtera will not be obligated to consummate the Business Combination. In addition, with fewer public shares and public stockholders, the trading market for our Class A common stock may be less liquid than the market for our Class A common stock was prior to the closing and we may not be able to continue to meet the listing standards for Nasdaq or another national securities exchange. In addition, with less funds available from the Trust Account, the working capital infusion from the Trust Account into the combined company’s business will be reduced.

 

Q:

How do I exercise my redemption rights?

 

A:

In order to exercise your redemption rights, you must, prior to 4:30 p.m. Eastern time on                , 2021 (two business days before the special meeting), (i) submit a written request to Continental Stock Transfer & Trust Company, SVAC’s transfer agent, that SVAC redeem your public shares for cash, and (ii) deliver your stock to SVAC’s transfer agent physically or electronically through the Depository Trust Company (“DTC”). The address of SVAC’s transfer agent is listed under the question “Who can help answer my questions?” below. SVAC requests that any requests for redemption include the identity as to the beneficial owner making such request. Electronic delivery of your stock generally will be faster than delivery of physical stock certificates.

A physical stock certificate will not be needed if your stock is delivered to SVAC’s transfer agent electronically. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and SVAC’s transfer agent will need to act to facilitate the request. It is SVAC’s understanding that stockholders should generally allot at least one week to obtain physical certificates from the transfer agent. However, because SVAC does not have any control over this process or over the brokers or DTC, it may take significantly longer than one week to obtain a physical stock certificate. If it takes longer than anticipated to obtain a physical certificate, stockholders who wish to redeem their shares may be unable to obtain physical certificates by the deadline for exercising their redemption rights and thus will be unable to redeem their shares.

Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with SVAC’s consent, until the vote is taken with respect to the Business Combination. If you delivered your shares for redemption to SVAC’s transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that SVAC’s transfer agent return the shares (physically or electronically). Such requests may be made by contacting SVAC’s transfer agent at the phone number or address listed under the question “Who can help answer my questions?”

 

Q:

Did the board of directors of SVAC obtain a third-party valuation or fairness opinion for purposes of determining whether or not to proceed with the Business Combination?

 

A:

No. SVAC’s board of directors did not obtain a third-party valuation or fairness opinion in connection with or for purposes of determining whether or not to proceed with the Business Combination. SVAC’s officers and directors have substantial experience in evaluating the operating and financial merits of businesses and concluded that their experience and backgrounds, together with the experience and backgrounds of their outside advisors, enabled them to make the necessary analyses and determinations regarding the Business Combination. Accordingly, investors will be relying on the judgment of SVAC’s board of directors in valuing Cyxtera and assuming the risk that SVAC’s board of directors may not have properly valued such businesses.

 

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Q:

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

 

A:

The U.S. federal income tax consequences of exercising redemption rights will depend on your particular facts and circumstances. See the section entitled “Material U.S. Federal Income Tax Considerations of the Redemption.” We urge you to consult your tax advisors regarding the tax consequences of exercising your redemption rights.

 

Q:

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

 

A:

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

 

Q:

Do I have appraisal rights if I object to the proposed business combination?

 

A:

No. There are no appraisal rights available to holders of Class A common stock or Class B common stock in connection with the Business Combination.

 

Q:

What happens to the funds deposited in the Trust Account after the closing?

 

A:

If the Proposals required for the Business Combination are approved, SVAC intends to use a portion of the funds held in the Trust Account to pay (i) a portion of SVAC’s aggregate costs, fees and expenses in connection with the closing, (ii) tax obligations and deferred underwriting commissions from the Initial Public Offering, and (iii) for any redemptions of public shares. Any additional funds available for release from the Trust Account, together with proceeds received from the issuance of shares of Class A common stock pursuant to the Subscription Agreements, will be used for general corporate purposes of the combined company following the closing. See the section entitled “Proposal Number 1 — The Business Combination Proposal” for additional information.

 

Q:

What happens if the Business Combination is not consummated or is terminated?

 

A:

There are certain circumstances under which the Merger Agreement may be terminated. See the section entitled “Proposal Number 1 — The Business Combination Proposal — The Merger Agreement — Termination of the Merger Agreement” for additional information regarding the parties’ specific termination rights. In accordance with our Charter, if an initial business combination is not consummated by September 14, 2022, SVAC will be required to (i) cease all operations, except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account (net of permitted withdrawals and $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

SVAC expects that the amount of any distribution its public stockholders will be entitled to receive upon its dissolution will be approximately the same as the amount they would have received if they had redeemed their shares in connection with the Business Combination, subject in each case to SVAC’s obligations under Delaware law to provide for claims of creditors and other requirements of applicable law. Holders of our founder shares have waived any right to any liquidating distributions with respect to those shares. In the event of liquidation, there will be no distribution with respect to SVAC’s outstanding detachable redeemable warrants. Accordingly, the warrants will expire worthless if we fail to complete an initial business combination by September 14, 2022.

 

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Q:

When is the Business Combination expected to be consummated?

 

A:

It is currently anticipated that the Business Combination will be completed promptly following the special meeting of SVAC stockholders to be held on                 , 2021, provided that the conditions to the closing have been satisfied or waived. For a description of the conditions for the closing, see the section entitled “Proposal Number 1 — The Business Combination Proposal — The Merger Agreement — Conditions to the Business Combination.”

 

Q:

What do I need to do now?

 

A:

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

 

Q:

How do I vote?

 

A:

If you were a holder of record of Class A common stock or Class B common stock on                 , 2021, the record date for the special meeting of SVAC stockholders, you may vote with respect to the Proposals virtually at the special meeting or by completing signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the special meeting and vote virtually, obtain a proxy from your broker, bank or nominee.

 

Q:

Do I need to attend the special meeting of stockholders to vote my shares?

 

A:

No. You are invited to attend the special meeting to vote on the Proposals described in this proxy statement. However, you do not need to attend the special meeting of stockholders to vote your shares. Instead, you may submit your proxy by signing, dating and returning the applicable enclosed proxy card(s) in the pre-addressed postage-paid envelope. Your vote is important. We encourage you to vote as soon as possible after carefully reading this proxy statement.

 

Q:

What will happen if I abstain from voting or fail to vote at the special meeting?

 

A:

At the special meeting, which will be held virtually, SVAC will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, if a valid quorum is otherwise established, failure to vote or an abstention will have no effect on the Business Combination Proposal, the Nasdaq Proposal, the Director Election Proposal, the 2021 Incentive Plan Proposal or the Adjournment Proposal, but will have the same effect as a vote AGAINST the Charter Proposal.

 

Q:

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

 

A:

Signed and dated proxies received by SVAC without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders.

 

Q:

If I am not going to attend the special meeting, should I submit my proxy card instead?

 

A:

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

 

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Q:

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

 

A:

No. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. SVAC believes the Proposals presented to the stockholders will be considered non-discretionary and therefore your broker, bank, or nominee cannot vote your shares without your instruction. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

 

Q:

May I change my vote after I have submitted my executed proxy card?

 

A:

Yes. You may change your vote by sending a later-dated, signed proxy card to SVAC’s secretary at the address listed below so that it is received by our secretary prior to the special meeting or attend the special meeting and vote virtually. You also may revoke your proxy by sending a notice of revocation to SVAC’s secretary, which must be received prior to the special meeting.

 

Q:

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

 

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards.

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

 

Q:

Who will solicit and pay the cost of soliciting proxies?

 

A:

SVAC has engaged a professional proxy solicitation firm, Okapi Partners (“Okapi”), to assist in soliciting proxies for the special meeting. SVAC has agreed to pay Okapi a fee of $20,000, plus disbursements. SVAC will reimburse Okapi for reasonable out-of-pocket expenses and will indemnify Okapi Partners and its affiliates against certain claims, liabilities, losses, damages and expenses.

 

Q:

How can I communicate with the board of directors?

 

A:

Stockholders and other interested parties are invited to communicate with any of the independent directors, or the independent directors as a group, by writing to them at Starboard Value Acquisition Corp., 777 Third Avenue, 18th Floor, New York, New York 10017 Attention: Martin D. McNulty, Jr.

 

Q:

Who can help answer my questions?

 

A:

If you have questions about the Proposals or if you need additional copies of the proxy statement or the enclosed proxy card you should contact our proxy solicitor:

LOGO

1212 Avenue of the Americas, 24th Floor

New York, NY 10036

Banks and Brokerage Firms, Please Call: (212) 297-0720

Shareholders and All Others Call Toll-Free: (855) 305-0857

Email: info@okapipartners.com

 

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You may also contact us at:

Starboard Value Acquisition Corp.

777 Third Avenue, 18th Floor

New York, New York 10017

Attention: Martin D. McNulty, Jr.

To obtain timely delivery, our stockholders must request the materials no later than five business days prior to the special meeting.

You may also obtain additional information about SVAC from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find Additional Information.”

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

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004

Attention: Mark Zimkind

Email: Mzimkind@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT

This summary highlights selected information from this proxy statement and does not contain all of the information that is important to you. To better understand the Business Combination and the Proposals to be considered at the special meeting, you should read this entire proxy statement carefully, including the annexes. See also the section entitled “Where You Can Find Additional Information.”

In connection with the closing, we intend to change our name from “Starboard Value Acquisition Corp.” to “Cyxtera Technologies, Inc.” Unless the context otherwise requires, references in this section to the “Company,” “we,” “our” or “us” are to Starboard Value Acquisition Corp. as it relates to matters prior to the closing, and are to the combined company of SVAC and Cyxtera as it relates to matters following the closing.

Information About the Parties to the Business Combination

Starboard Value Acquisition Corp.

Starboard Value Acquisition Corp. is a blank check company formed under the laws of the State of Delaware on November 14, 2019 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have neither engaged in any operations nor generated any revenues to date.

SVAC’s Class A common stock and detachable redeemable warrants, which are exercisable for shares of Class A common stock under certain circumstances, are currently listed on Nasdaq under the symbols “SVAC” and “SVACW”, respectively. Some of our shares of Class A common stock and detachable redeemable warrants currently trade as units consisting of one share of Class A common stock, one-sixth of one redeemable warrant and a contingent right to receive at least one-sixth of one redeemable warrant following the initial business combination redemption time under certain circumstances, and subject to adjustment, and are listed on Nasdaq under the symbol “SVACU.” The units will automatically separate into the component securities upon the closing of the Business Combination and, as a result, will no longer trade as a separate security. Upon the closing, we intend to change our name from “Starboard Value Acquisition Corp.” to “Cyxtera Technologies, Inc.” and our Class A common stock and warrants will be listed following the closing under the symbols “CYXT” and “CYXTW”, respectively. We have applied to continue the listing of our Class A common stock and warrants on Nasdaq upon the closing.

The mailing address of SVAC’s principal executive office is 777 Third Avenue, 18th Floor, New York, New York 10017.

For more information about SVAC, see the sections entitled “Business of SVAC” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of SVAC.”

Cyxtera Technologies, Inc.

Cyxtera Technologies, Inc. is a global data center leader in retail colocation and interconnection services. Cyxtera is the largest privately-held global retail colocation provider based on market share, and will be the third largest provider following the closing of the Business Combination. Cyxtera’s data center platform consists of 61 highly interconnected data centers across 29 markets on three continents. Cyxtera provides an innovative suite of deeply connected and intelligently automated infrastructure and interconnection solutions to more than 2,300 leading enterprises, service providers and government agencies around the world – enabling them to scale faster, meet rising consumer expectations, and gain a competitive edge.

The mailing address of Cyxtera’s principal executive office is BAC Colonnade Office Towers, 2333 Ponce de Leon Boulevard, Suite 900, Coral Gables, Florida 33134.

 



 

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For more information about Cyxtera, see the sections entitled “Business of Cyxtera” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Cyxtera.”

The Business Combination

On February 21, 2021, SVAC entered into the Merger Agreement with Merger Sub 1, Merger Sub 2, Cyxtera and NewCo, which contains customary representations and warranties, covenants, closing conditions, and other terms relating to the mergers and the other transactions contemplated thereby, as summarized below. Capitalized terms used in this section but not otherwise defined herein have the meanings given to them in the Merger Agreement.

The Structure of the Business Combination

Prior to the closing, (i) Cyxtera shall be contributed to NewCo by the Cyxtera Stockholder, with Cyxtera becoming a wholly-owned subsidiary of NewCo, and (ii) Cyxtera shall thereafter be converted to a Delaware limited liability company (the “Pre-Closing Restructuring”). NewCo has not commenced operations and has nominal assets.

At the closing, (i) Merger Sub 1 shall be merged with and into NewCo, with NewCo surviving the First Merger as a wholly-owned subsidiary of SVAC and Merger Sub 1 ceasing to exist and (ii) immediately following the First Merger, NewCo shall be merged with and into Merger Sub 2, with Merger Sub 2 surviving the Second Merger as a wholly-owned subsidiary of SVAC and NewCo ceasing to exist. The Transactions, including the mergers, will constitute a “Business Combination” as contemplated by SVAC’s Charter.

As a result of the Transactions, Cyxtera and the various operating subsidiaries of Cyxtera will become subsidiaries of SVAC, with the Cyxtera Stockholder becoming a stockholder of SVAC. The Cyxtera Stockholder will own approximately 58.4% of SVAC following the closing.

As a consequence of the Transactions, each issued and outstanding share of Class B common stock, will automatically convert into a share of Class A common stock, on a one-for-one basis in accordance with the terms of our Charter.

Consideration to be Received in the Business Combination

At the effective time of the First Merger, SVAC shall issue 106,100,000 shares of Class A common stock to the Cyxtera Stockholder (the “Closing Share Consideration”). The approximate dollar value of the merger consideration is $1,061,000,000. The market value of these shares will vary with any change in the SVAC Class A common stock price, and, as such, the market value of the shares to be issued could vary from the market value as of the date of this proxy statement.

Conditions to the Business Combination

Conditions to Each Party’s Obligations

The respective obligations of each of the parties to complete the Business Combination are subject to the satisfaction of the following conditions:

 

   

the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) shall have been expired or been terminated;

 

   

there shall not be in force and effect any (i) law or (ii) governmental order by any governmental authority, in either case, enjoining, prohibiting, or having the effect of making illegal the consummation of the Business Combination;

 

   

after giving effect to the Transactions, SVAC will have at least $5,000,001 of net tangible assets;



 

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the Proposals contained in this proxy statement shall have been approved by the affirmative vote of the holders of the requisite number of shares of common stock entitled to vote thereon; and

 

   

the authorization of the listing of the shares constituting the Closing Share Consideration on the Nasdaq Stock Market.

Conditions to Obligations of SVAC

The obligations of SVAC and the Merger Subs to complete the Business Combination is also subject to the satisfaction or waiver by SVAC of the following conditions:

 

   

the accuracy of the representations and warranties of Cyxtera and NewCo as of the closing, other than, in most cases, those failures to be true and correct that would not reasonably be expected to have a Company Material Adverse Effect;

 

   

each of the covenants of Cyxtera and NewCo shall have been performed in all material respects prior to the closing, except that Cyxtera shall have performed in all but de minimis respects the covenant required by Section 6.01(cc) of the Merger Agreement;

 

   

Cyxtera shall have delivered to SVAC a certificate to the effect that the two foregoing conditions have been satisfied;

 

   

Cyxtera Stockholder and certain of its stockholders shall have each duly executed and delivered to SVAC a copy of the Stockholders Agreement; and

 

   

certain employee loans shall have been repaid in full prior to the closing.

Conditions to Obligations of Cyxtera

The obligations of Cyxtera and NewCo to complete the Business Combination is also subject to the satisfaction or waiver by Cyxtera of the following conditions:

 

   

the accuracy of the representations and warranties of SVAC and the Merger Subs as of the closing, in most cases, in all material respects;

 

   

each of the covenants of SVAC and Merger Subs shall have been performed in all material respects prior to the closing;

 

   

SVAC shall have delivered to Cyxtera a certificate to the effect that the two foregoing conditions have been satisfied;

 

   

SVAC and the Sponsor shall have each duly executed and delivered to Cyxtera a copy of the Stockholders Agreement;

 

   

SVAC shall have delivered to the Cyxtera Stockholder a copy of the A&R Registration Rights Agreement (as defined below) duly executed by SVAC, the Sponsor and the existing holders of Class B common stock;

 

   

SVAC shall have made all necessary and appropriate arrangements with the trustee to the Trust Account to have all of the funds contained in the Trust Account disbursed to SVAC, all of the funds contained in the Trust Account shall have been actually disbursed to SVAC, and all such funds shall be available to SVAC in respect of all of the obligations of SVAC set forth in the Merger Agreement; and

 

   

SVAC will have at least $550,000,000 in available cash immediately prior to the effective time of the First Merger (after taking into account (a) exercise of the redemption rights, (b) the payment of deferred underwriting commissions and taxes payable on interest earned, and (c) the net proceeds from the Subscription Agreements).



 

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Termination of the Merger Agreement

The Merger Agreement may be terminated and the Transactions may be abandoned at any time prior to the closing, as follows:

 

  a)

by mutual written consent of SVAC and Cyxtera;

 

  b)

by either SVAC or Cyxtera, if there shall be in effect any (i) law or (ii) governmental order (other than a temporary restraining order), that (x) in the case of clauses (i) and (ii) permanently restrains, enjoins, makes illegal or otherwise prohibits the consummation of the Business Combination, and (y) in the case of clause (ii) such governmental order shall have become final and non-appealable;

 

  c)

by either SVAC or Cyxtera if the effective time of the Transactions has not occurred by July 31, 2021 (the “Termination Date”), subject to extension in certain circumstances; provided, however, that the right to terminate the Merger Agreement will not be available to any party whose material breach of any provision of the Merger Agreement caused or resulted in the failure of the Business Combination to be consummated by such time;

 

  d)

by either SVAC or Cyxtera if the approval of SVAC stockholders of the Proposals set forth in this proxy statement are not obtained at the special meeting (or at any adjournment or postponement thereof);

 

  e)

by SVAC if Cyxtera has breached or failed to perform any of its representations, warranties, covenants or agreements set forth in the Merger Agreement, such that (i) one of the conditions set forth in Section 9.02(a) or Section 9.02(b) of the Merger Agreement would not be satisfied at the closing and (ii) such breach or failure to perform is not capable of being cured by Cyxtera by the Termination Date, or, if capable of being cured by Cyxtera by the Termination Date, is not cured by Cyxtera by the earlier of (x) the third business day immediately prior to the Termination Date and (y) the 45th day after written notice of such breach is provided by SVAC; and

 

  f)

by Cyxtera if SVAC or the Merger Subs have breached or failed to perform any of their respective representations, warranties, covenants or agreements set forth in the Merger Agreement, such that (i) one of the conditions set forth in Section 9.03(a) or Section 9.03(b) of the Merger Agreement would not be satisfied at the closing and (ii) such breach or failure to perform is not capable of being cured by SVAC or the Merger Subs by the Termination Date, or, if capable of being cured by SVAC or the Merger Subs by the Termination Date, is not cured by SVAC or the Merger Subs, as applicable, by the earlier of (x) the third business day immediately prior to the Termination Date and (y) the 45th day after written notice of such breach is provided by Cyxtera.

Effect of Termination

If the Merger Agreement is terminated in accordance with its terms, the Merger Agreement shall become void and have no effect and the Business Combination will be abandoned. However, the confidentiality and publicity provisions and certain other technical provisions of the Merger Agreement will continue in effect notwithstanding termination thereof. In addition, no party will be relieved from liability for any fraud or willful breaches of the Merger Agreement.

For more information on the Merger Agreement, see the section entitled “Proposal Number 1 — The Business Combination Proposal — The Merger Agreement”.

Regulatory Matters

To complete the Business Combination, SVAC and Cyxtera must obtain approvals or consents from, or make filings with certain U.S. federal authorities. The Business Combination is subject to the requirements of the



 

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HSR Act, which prevents SVAC and Cyxtera from completing the Business Combination until required information and materials are furnished to the Antitrust Division of the Department of Justice (the “DOJ”) and the Federal Trade Commission (the “FTC”) and the applicable waiting periods have expired or been terminated.

On March 5, 2021, SVAC filed the Premerger Notification and Report Form under the HSR Act in respect of SVAC’s acquisition of Cyxtera. The waiting period expired on April 5, 2021.

For more information, see the section entitled “Proposal Number 1 — The Business Combination Proposal — Regulatory Matters.”

Related Agreements

Subscription Agreements. In connection with its entry into the Merger Agreement, SVAC entered into separate Subscription Agreements, each dated as of February 21, 2021, with the PIPE Investors, pursuant to which, among other things, SVAC agreed to issue and sell in a private placement an aggregate of 25,000,000 shares of Class A common stock to the PIPE Investors, for a purchase price of $10.00 per share, and aggregate consideration of $250,000,000. As part of the PIPE Investment, certain clients of Starboard have committed to purchase, on the same terms as the other subscribers, an aggregate of 6,000,000 shares of Class A common stock, for a purchase price of $10.00 per share and an aggregate purchase price of $60,000,000.

The PIPE Investment is expected to close substantially concurrent with the closing of the Business Combination. The proceeds from the PIPE Investment will be used to provide additional capital for the combined company following the closing and to satisfy one of the conditions to the closing. The closing of the PIPE Investment is contingent upon, among other customary closing conditions, the satisfaction or waiver of all conditions precedent to the closing of the Business Combination set forth in the Merger Agreement and the substantially concurrent closing of the Business Combination.

Pursuant to the Subscription Agreements, SVAC has granted customary registration rights to the PIPE Investors. The shares of Class A common stock to be issued pursuant to the Subscription Agreements have not been registered under the Securities Act, and will be issued in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

The Subscription Agreements also contain customary representations and warranties of SVAC and the PIPE Investors.

The foregoing description of the Subscription Agreements and the transactions contemplated thereby is not complete and is subject to, and qualified in its entirety by reference to, the form agreement, a copy of which is attached hereto as Annex C. For more information, see the section entitled “Proposal Number 1 — The Business Combination Proposal — Related Agreements — Subscription Agreements.”

A&R Registration Rights Agreement. Pursuant to the Merger Agreement, at the closing, SVAC, the holders of Class B common stock and the Cyxtera Stockholder will enter into an amended and restated registration rights agreement (“A&R Registration Rights Agreement”). Pursuant to the A&R Registration Rights Agreement, SVAC will agree to provide to (i) the BC Stockholder and its permitted transferees, (ii) the Medina Stockholder and its permitted transferees, (iii) the Sponsor and its permitted transferees, or (iv) the stockholders holding at least 20% of the registrable securities then outstanding up to three “demand” registrations, customary underwritten offering and “piggyback” registration rights with respect to the Class A common stock and warrants to purchase shares of Class A common stock, subject to certain conditions. The A&R Registration Rights Agreement will also provide that SVAC will pay certain expenses relating to such registrations and indemnify the stockholders against certain liabilities. The A&R Registration Rights Agreement will amend, restate and



 

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replace the registration rights agreement entered into by SVAC, the Sponsor and the other initial stockholders on September 9, 2020.

The foregoing description of the A&R Registration Rights Agreement and the transactions contemplated thereby is not complete and is subject to, and qualified in its entirety by reference to, the form agreement, a copy of which is attached hereto as Annex D.

For more information, see the section entitled “Proposal Number 1 — The Business Combination Proposal — Related Agreements — A&R Registration Rights Agreement.”

Stockholders Agreement. Pursuant to the Merger Agreement, at the closing SVAC, the Cyxtera Stockholder, BC Stockholder, Medina Stockholder and Sponsor (together with the Cyxtera Stockholder, BC Stockholder and Medina Stockholder, the “Investor Parties”) will enter into a stockholders agreement (the “Stockholders Agreement”), providing for certain governance and director nomination rights with respect to the combined company. Pursuant to the Stockholders Agreement, SVAC and the Investor Parties will agree to take all necessary action to cause the board to be comprised of nine directors as of the closing of the Transactions, including: the combined company’s chief executive officer; three individuals designated by the Cyxtera Stockholder; one independent director designated by the Cyxtera Stockholder with the consent of the Sponsor; two individuals designated by the Sponsor; and two independent directors designated by mutual agreement between the Cyxtera Stockholder and the Sponsor. Subject to certain ownership thresholds, the rights of the Investor Parties to designate directors will continue in respect of each annual meeting or special meeting of SVAC’s stockholders until immediately following the conclusion of SVAC’s annual meeting for the calendar year 2024.

In addition, pursuant to the Stockholders Agreement, the Cyxtera Stockholder shall distribute all of its common stock to the BC Stockholder, the Medina Stockholder and other equity holders of the Cyxtera Stockholder within 12 months from the date of closing of the Transactions. Further, each of Sponsor and the Cyxtera Stockholder will agree to not transfer any common stock for the 12-month period following the closing of the Transactions (the “Lock-Up Period”), other than transfers contemplated by the foregoing sentence and transfers to certain permitted transferees; provided, however, if the closing price of the Class A common stock equals or exceeds $12.00 per share for 20 trading days within a 30-day trading day period commencing at least 150 days after the closing of the Transactions, the Lock-Up Period will automatically terminate as of such 20th trading day.

The foregoing description of the Stockholders Agreement and the transactions contemplated thereby is not complete and is subject to, and qualified in its entirety by reference to, the form agreement, a copy of which is attached hereto as Annex E.

For more information, see the section entitled “Proposal Number 1 – The Business Combination Proposal – Related Agreements – Stockholders Agreement.”

Stockholder Support Agreement. In connection with the execution of the Merger Agreement, the Cyxtera Stockholder entered into a Stockholder Support Agreement with SVAC and Cyxtera (the “Stockholder Support Agreement”), pursuant to which, among other things, the Cyxtera Stockholder, the sole stockholder of Cyxtera, agreed to (i) provide its consent to the adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement, including the mergers and the Pre-Closing Restructuring, and (ii) take all actions necessary or appropriate to contribute its equity securities in Cyxtera to NewCo and otherwise cause the Pre-Closing Restructuring to occur in accordance with the Merger Agreement. In addition, the Cyxtera Stockholder agreed not to transfer any equity securities of Cyxtera or NewCo until the date upon which the Stockholder Support Agreement expires, except as contemplated by the Stockholder Support Agreement.



 

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The Stockholder Support Agreement also contains customary representations and warranties of the Cyxtera Stockholder. The Cyxtera Stockholder Approval was delivered to SVAC by the Cyxtera Stockholder on February 21, 2021.

For more information, see the section entitled “Proposal Number 1 – The Business Combination Proposal – Related Agreements – Stockholder Support Agreement.”

Sponsor Support Agreement. In connection with the Merger Agreement, the Insiders entered into a Sponsor Support Agreement with SVAC and Cyxtera (the “Sponsor Support Agreement”), pursuant to which, among other things, each Insider agreed to (i) vote all Class A common stock and Class B common stock owned by it, him or her (all such common stock, the “Covered Shares”) in favor of the transactions contemplated by the Merger Agreement, including the mergers, and each other proposal related thereto included on the agenda for the special meeting of stockholders, (ii) vote against any proposal with respect to a SPAC Alternative Transaction (as defined below) and (iii) not redeem, or seek to redeem, any Covered Shares owned by it, him or her in connection with the stockholder approval of the Transactions. In addition, each Insider agreed, subject to certain exceptions, not to transfer, as applicable, any shares of Class B common stock, private placement warrants (or shares of Class A common stock issued or issuable upon the exercise of private placement warrants) or other equity securities of SVAC until the date upon which the Sponsor Support Agreement expires. The Sponsor Support Agreement amends and restates that certain letter agreement, dated as of September 9, 2020, among SVAC and the Insiders that was entered into in connection with SVAC’s Initial Public Offering. Solely in connection with and only for the purpose of the transactions contemplated by the Merger Agreement, each Insider irrevocably and unconditionally waived and agreed not to assert, claim or perfect any rights to adjustment or other anti-dilution protection with respect to the rate that the shares of Class B common stock held by him, her or it converts into Class A common stock pursuant to Section 4.3 of SVAC’s Charter or any other anti-dilution protections or other adjustment or similar protections that arise in connection with the Transactions. The Sponsor Support Agreement also contains customary representations and warranties of the Insiders.

For more information, see the section entitled “Proposal Number 1 – The Business Combination Proposal – Related Agreements – Sponsor Support Agreement.”

Release and Indemnity Agreement. In connection with the Merger Agreement, the Cyxtera Stockholder, Cyxtera and SVAC entered into the Release and Indemnity Agreement, pursuant to which, among other things, the Cyxtera Stockholder (for itself and on behalf of its affiliates) released Cyxtera of all claims to the extent relating to matters which occurred prior to the closing (the “Release and Indemnity Agreement”). The Cyxtera Stockholder also agreed to pay SVAC in cash the amount of any Restricted Payments (as defined in the Merger Agreement) made by Cyxtera or any of its subsidiaries during the period commencing on October 1, 2020 and ending at the closing. The maximum aggregate amount of the Restricted Payment Indemnification is $20,000,000. The Restricted Payment Indemnification shall terminate 30 days after the completion of SVAC’s audit for the year ended December 31, 2021.

The foregoing description of the Release and Indemnity Agreement and the transactions contemplated thereby is not complete and is subject to, and qualified in its entirety by reference to, the actual agreement, a copy of which is attached hereto as Annex F.

For more information, see the section entitled “Proposal Number 1 – The Business Combination Proposal – Related Agreements – Release and Indemnity Agreement.”

Releases. In connection with the Merger Agreement, (i) the BC Stockholder, Cyxtera and SVAC entered into a release agreement, pursuant to which, among other things, the BC Stockholder (for itself and on behalf of its affiliates) released Cyxtera of all claims to the extent relating to matters which occurred prior to the closing



 

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(the “BC Release”), (ii) the Medina Stockholder, Cyxtera and SVAC entered into a release agreement, pursuant to which, among other things, the Medina Stockholder (for itself and on behalf of its affiliates) released Cyxtera of all claims to the extent relating to matters which occurred prior to the closing (the “Medina Release”), and (iii) the Sponsor, Cyxtera and SVAC entered into a release agreement, pursuant to which, among other things, the Sponsor (for itself and on behalf of its affiliates) released SVAC of all claims to the extent relating to matters which occurred prior to the closing (the “SVAC Sponsor Release”).

For more information, see the section entitled “Proposal Number 1 – The Business Combination Proposal – Related Agreements – Releases.”

Proposed Charter

Pursuant to the terms of the Merger Agreement, upon the closing, SVAC will amend and restate the Charter to (a) increase the number of authorized shares of SVAC’s capital stock, par value $0.0001 per share, from 221,000,000 shares, consisting of (i) 220,000,000 shares of common stock, including 200,000,000 shares of Class A common stock and 20,000,000 shares of Class B common stock, and (ii) 1,000,000 shares of preferred stock, to 510,000,000 shares, consisting of (i) 500,000,000 shares of Class A common stock and (ii) 10,000,000 shares of preferred stock, (b) eliminate certain provisions in our Charter relating to the Class B common stock, the initial business combination and other matters relating to SVAC’s status as a blank check company that will no longer be applicable to us following the closing, and (c) approve and adopt certain other changes contained in the Proposed Charter, a copy of the form of which is attached as Annex B to this proxy statement.

For more information about the amendments to our Charter, see the section entitled “Proposal Number 2 — The Charter Proposal.”

Other Proposals

In addition to the Business Combination Proposal, SVAC stockholders will be asked to vote on the Charter Proposal, the Nasdaq Proposal, the Director Election Proposal, the 2021 Incentive Plan Proposal and the Adjournment Proposal. For more information about the Charter Proposal, the Nasdaq Proposal, the Director Election Proposal, the 2021 Incentive Plan Proposal and the Adjournment Proposal, see the sections entitled “Proposal Number 2 — The Charter Proposal,” “Proposal Number 3 — The Nasdaq Proposal,” “Proposal Number 4 — The Director Election Proposal,” “Proposal Number 5 — The 2021 Incentive Plan Proposal” and “Proposal Number 6 — The Adjournment Proposal.”

Appraisal Rights

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

Date, Time and Place of Special Meeting

In light of public health concerns regarding the coronavirus (COVID-19) pandemic, the special meeting will be held via live webcast at                , on                 , 2021, at                 Eastern Time, or such other date, time and place to which such special meeting may be adjourned or postponed. The special meeting can be accessed by visiting                , where you will be able to listen to the meeting live and vote during the meeting.

Voting Power; Record Date

You will be entitled to vote or direct votes to be cast at the special meeting if you owned shares of Class A common stock or Class B common stock at the close of business on                 , 2021, which is the record date for the special meeting. You are entitled to one vote for each share of Class A common stock or Class B common



 

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stock that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. As of                 , 2021 (the record date for the special meeting), there are 50,529,316 shares of Class A common stock and Class B common stock outstanding in the aggregate, of which 40,423,453 are public shares and 10,105,863 are founder shares held by the Sponsor and the other initial stockholders.

Proxy Solicitation

Proxies may be solicited by mail. SVAC has engaged Okapi to assist in the solicitation of proxies. If a stockholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the special meeting. A stockholder may also change its vote by submitting a later-dated proxy as described in the section entitled “Special Meeting of SVAC Stockholders — Revoking Your Proxy.”

Quorum and Required Vote for Proposals for the Special Meeting

A quorum of SVAC stockholders is necessary to hold a valid meeting. Holders of a majority in voting power of Class A common stock and Class B common stock issued and outstanding and entitled to vote at the special meeting, present in person or represented by proxy, constitute a quorum. Abstentions will count as present for the purposes of establishing a quorum.

Approval of the Business Combination Proposal, the Nasdaq Proposal, the Director Election Proposal, the 2021 Incentive Plan Proposal and the Adjournment Proposal each requires the affirmative vote of holders of a majority of the shares of Class A common stock and Class B common stock represented in person or by proxy and entitled to vote thereon and actually cast at the special meeting, voting as a single class. In connection with the Merger Agreement, the Sponsor and the other holders of Class B common stock entered into the Sponsor Support Agreement pursuant to which the Sponsor and such other holders of Class B common stock have agreed to vote shares representing 20% of the aggregate voting power of the common stock (comprised of all the outstanding founder shares) in favor of each of the proposals presented at the special meeting, regardless of how public stockholders vote. Accordingly, the Sponsor Support Agreement will increase the likelihood that SVAC will receive the requisite stockholder approval for the Business Combination and the transactions contemplated thereby. Because the Business Combination Proposal, the Nasdaq Proposal, the Director Election Proposal, the 2021 Incentive Plan Proposal and the Adjournment Proposal require the affirmative vote of holders of a majority of the shares of Class A common stock and Class B common stock represented in person or by proxy and entitled to vote thereon and actually cast at the special meeting, the affirmative vote of approximately only 6.25% of the outstanding public shares, in addition to the founder shares, would be required to approve such proposals (assuming only the minimum number of shares representing a quorum are voted).

Approval of the Charter Proposal requires the affirmative vote of the holders of a majority of the shares of Class A common stock and Class B common stock represented in person or by proxy and entitled to vote thereon at the special meeting, voting as a single class.

Accordingly, if a valid quorum is otherwise established, a stockholder’s failure to vote by proxy or in person at the special meeting, or an abstention, will have no effect on the outcome of any vote on the Business Combination Proposal, the Nasdaq Proposal, the Director Election Proposal, the 2021 Incentive Plan Proposal or the Adjournment Proposal, but will have the same effect as a vote AGAINST the Charter Proposal.

Recommendation to SVAC Stockholders

Our board of directors believes that each of the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal, the Director Election Proposal, the 2021 Incentive Plan Proposal and the Adjournment



 

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Proposal is in the best interests of SVAC and its stockholders and recommends that its stockholders vote “FOR” each of the Proposals to be presented at the special meeting.

When you consider the recommendation of the board of directors in favor of approval of these Proposals, you should keep in mind that the Sponsor and our members of the board of directors and officers have interests in the Business Combination that are different from, in addition to, or conflict with, your interests as a stockholder. See the section entitled “Proposal Number 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination.”

Summary of Risk Factors

In evaluating the Proposals set forth in this proxy statement, you should carefully read this proxy statement, including the annexes, and especially consider the factors discussed in the section entitled “Risk Factors.” Some of the risks related to SVAC and Cyxtera are summarized below:

SVAC

 

   

Our Sponsor and certain officers and directors have interests in the Business Combination that are different from or are in addition to other stockholders in recommending that stockholders vote in favor of approval of the Business Combination Proposal and approval of the other Proposals described in this proxy statement.

 

   

The unaudited pro forma condensed combined financial information included in this proxy statement may not be indicative of what our actual financial position or results of operations would have been.

 

   

Our Sponsor and certain of our directors and officers hold all of our founder shares and private placement warrants. They will lose their entire investment with respect to such securities if we do not complete an initial business combination.

 

   

If you elect to exercise your redemption rights with respect to your shares of Class A common stock, you will not receive any distributable redeemable warrants.

 

   

If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share.

 

   

Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

 

   

The grant of registration rights to our initial stockholders and holders of our forward purchase shares, and the future exercise of such rights, may adversely affect the market price of our Class A common stock.

 

   

If, before distributing the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

 

   

In evaluating the Business Combination, our management relied on the availability of funds from the sale of the forward purchase shares which will be used to satisfy the Redemption Obligation. If the sale of some or all of the forward purchase shares fails to close, for any reason, we may lack sufficient funds to consummate the Business Combination.

 

   

A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.



 

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Subsequent to our completion of the Business Combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.

 

   

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.

 

   

If our stockholders fail to comply with the redemption requirements specified in this proxy statement, they will not be entitled to redeem their shares for a pro rata portion of the Trust Account.

 

   

SVAC’s board of directors did not obtain a fairness opinion in determining whether or not to proceed with the Business Combination and, as a result, the terms may not be fair from a financial point of view to the public stockholders.

 

   

The Business Combination is subject to conditions, including certain conditions that may not be satisfied on a timely basis, if at all.

Cyxtera

 

   

The ongoing COVID-19 pandemic could have a negative effect on Cyxtera’s business, results of operations and financial condition.

 

   

Cyxtera’s business depends upon the demand for data centers.

 

   

Cyxtera’s products and services have a long sales cycle that may harm its revenues and operating results.

 

   

Any failure of Cyxtera’s physical infrastructure, negative impact on its ability to provide its services, or damage to customer infrastructure within its data centers, could lead to significant costs and disruptions that could reduce Cyxtera’s revenue and harm its business reputation and financial results.

 

   

Cyxtera may be vulnerable to physical and electronic security breaches and cyber-attacks, which could disrupt its operations and have a material adverse effect on its financial performance and operating results.

 

   

Adverse global economic conditions and credit market uncertainty could adversely impact Cyxtera’s business and financial condition.

 

   

Cyxtera may be impacted by disruptions associated with events beyond its control, such as war, acts of terror, political unrest, public health concerns, labor disputes or natural disasters.

 

   

Cyxtera’s international operations expose it to regulatory, currency, legal, tax and other risks distinct from those faced by it in the United States.

 

   

Inadequate or inaccurate external and internal information, including budget and planning data, could lead to inaccurate financial forecasts and inappropriate financial decisions.

 

   

Cyxtera may not be able to compete successfully against current and future competitors.

 

   

Cyxtera’s operating results may fluctuate.

 

   

Cyxtera has incurred substantial losses in the past and may incur additional losses in the future. Cyxtera’s net losses for the periods ended March 31, 2021, December 31, 2020 and December 31, 2019 was $52.6 million, $122.8 million and $514.2 million, respectively.

 

   

Cyxtera leases space in several locations under long-term non-cancellable lease agreements and the non-renewal or loss of such leases, or the continuing obligations under such leases in the event of a loss of customers or customer revenues, could have a material adverse effect on it.



 

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Environmental regulations may impose new or unexpected costs on Cyxtera.

 

   

Cyxtera’s substantial debt could adversely affect its cash flows and limit its flexibility to raise additional capital.

 

   

Cyxtera’s substantial debt could adversely affect its cash flows and limit its flexibility to raise additional capital. As of March 31, 2021, Cyxtera had $976.3 million and $1,319.5 million in capital lease obligations and long-term debt outstanding under its Senior Secured Credit Facilities, respectively.

Interests of Certain Persons in the Business Combination

In considering the recommendation of our board of directors to vote in favor of the Business Combination, stockholders should be aware that, aside from their interests as stockholders, the Sponsor and certain of our directors and officers have interests in the Business Combination that are different from, in addition to, or conflict with those of other stockholders generally. Our directors were aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to stockholders that they approve the Business Combination. Stockholders should take these interests into account in deciding whether to approve the Business Combination. These interests include, among other things:

 

   

the fact that the Sponsor and our officers and directors have agreed not to redeem any shares of common stock held by them in connection with the completion of the Business Combination;

 

   

the fact that the Sponsor and certain of our directors paid an aggregate of $25,000 for their founder shares and such securities will have a significantly higher value at the time of the Business Combination, which if unrestricted and freely tradable would be valued at approximately $                based on the closing price of our Class A common stock of $                on Nasdaq on                , 2021, the record date for the special meeting;

 

   

the fact that the Sponsor and our officers and directors have waived their rights to liquidating distributions from the Trust Account with respect to any founder shares held by them if we fail to complete an initial business combination by September 14, 2022;

 

   

the fact that the Sponsor has agreed to be liable to SVAC if and to the extent any claims by a third party (except for SVAC’s independent registered public accounting firm) for services rendered or products sold to SVAC, or a prospective target business with which SVAC has entered into a transaction agreement reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust Account due to reductions in the value of the trust assets as of the date of the liquidation of the Trust Account, in each case including interest earned on the funds held in the Trust Account (net of permitted withdrawals). This liability will not apply with respect to any claims by a third party or target that executed an agreement waiving claims against and all rights to seek access to the Trust Account whether or not such agreement is enforceable or to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act;

 

   

the anticipated continuation of Jeffrey C. Smith and Michelle Felman and the anticipated election of Gregory Waters as directors of SVAC following the closing;

 

   

the fact that certain clients of Starboard agreed to participate in the PIPE Investment and purchase 6,000,000 shares of Class A common stock in the aggregate at $10.00 per share on the terms set forth in the Subscription Agreements;

 

   

the fact that we agreed to pay our Sponsor a total of $10,000 per month for office space, administrative and support services and such arrangement will terminate upon the closing;



 

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the fact that our officers and directors have agreed not to become an officer or director of any other special purpose acquisition company with a class of securities registered under the Exchange Act until we have entered into a definitive agreement regarding our initial business combination or we have failed to complete an initial business combination by September 14, 2022;

 

   

the fact that the Sponsor and our officers and directors will lose their entire investment in us with respect to the founder shares and warrants they own if an initial business combination is not completed by September 14, 2022; and

 

   

the fact that none of our Sponsor, officers and directors, or any of their respective affiliates is entitled to compensation of any kind, including finder’s and consulting fees, for services rendered prior to or in connection with the completion of an initial business combination (except for reimbursement for out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations).

Reasons for the Approval of the Business Combination

After careful consideration, SVAC’s board of directors recommends that SVAC stockholders vote “FOR” each Proposal being submitted to a vote of the SVAC stockholders at the SVAC special meeting.

For a description of SVAC’s reasons for the approval of the Business Combination and the recommendation of SVAC’s board of directors, see the section entitled “Proposal Number 1 — The Business Combination Proposal — SVAC’s Board of Directors’ Reasons for the Approval of the Business Combination.”

Redemption Rights

Under our Charter, holders of our public shares may elect to have their shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (a) the aggregate amount on deposit in the Trust Account as of two business days prior to the closing, including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes, by (b) the number of then-outstanding public shares; provided that SVAC will not redeem any public shares to the extent that such redemption would result in SVAC having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of less than $5,000,001. As of March 31, 2021, this would have amounted to approximately $10.00 per share. Notwithstanding the foregoing, under our Charter, in connection with an initial business combination, a public stockholder, together with any affiliate or any other person with whom such stockholder is acting in concert of as a “group” (as defined under Section 13(d)(3) of the Exchange Act), is restricted from seeking redemption rights with respect to more than an aggregate of 15% of the public shares, which we refer to as the “15% limit.” Accordingly, all public shares in excess of the 15% limit beneficially owned by a public stockholder or group will not be redeemed for cash. There will be no redemption rights upon the completion of the Business Combination with respect to SVAC’s redeemable warrants. However, we are not restricting our stockholders’ ability to vote all of their shares (including the shares in excess of the 15% limit) for or against the Business Combination. Each redemption of public shares by our public stockholders will decrease the amount in our Trust Account, which holds approximately $404,461,491 as of March 31, 2021. In no event will we redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon completion of the Business Combination.

If a holder exercises its redemption rights, then such holder will be exchanging its shares of Class A common stock for cash and will no longer own shares of Class A common stock and will not participate in the future growth of SVAC, if any. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to our transfer agent in accordance with the procedures described herein. See the section entitled “Special Meeting of Stockholders — Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.



 

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Impact of the Business Combination on SVAC’s Ownership

It is anticipated that, immediately following the closing and based on the assumptions set forth in “Certain Defined Terms,” the ownership of issued and outstanding shares of SVAC will be as set forth below. Certain figures included in this section have been rounded for ease of presentation and, as a result, percentages may not sum to 100%. See the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for more information with respect to ownership of SVAC following the closing.

 

     Number of shares
of Class A
common stock
    % of all shares
of Class A
common stock
 

SVAC public stockholders

     40,423,453       22.3

SVAC’s Sponsor, management and board

     10,105,863       5.6

Cyxtera Stockholder

     106,100,000       58.4

PIPE Investors

     25,000,000 (1)      13.8

 

(1)

Includes an aggregate of 6,000,000 shares of Class A common stock which certain clients of Starboard have committed to purchase on the same terms as the other PIPE Investors.

Organizational Structure

Prior to the Business Combination

The following diagram illustrates the ownership structure of SVAC prior to the Business Combination.

LOGO

 

(1)

For more information about the ownership interests of our initial stockholders, including the Sponsor, prior to the Business Combination, please see the section entitled “Beneficial Ownership of Securities”.



 

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Following the Business Combination

The diagram below illustrates the ownership structure of SVAC immediately following the Business Combination.

LOGO

See the sections entitled “Summary of the Proxy Statement — Impact of the Business Combination on SVAC’s Ownership” and “Unaudited Pro Forma Condensed Combined Financial Information” for more information.

Status as a Controlled Company

Immediately following the consummation of the Business Combination, the Cyxtera Stockholder will beneficially hold approximately 58.4% of the outstanding Class A common stock (assuming a no redemption scenario). As a result, SVAC will be a “controlled company” within the meaning of Nasdaq rules. However, although SVAC will be eligible to take advantage of certain exemptions from certain Nasdaq corporate governance standards, it does not intend to do so.

Board of Directors of SVAC Following the Business Combination

Following the Business Combination, the combined company’s board of directors will expand to nine members and will consist of Fahim Ahmed, John Diercksen, Michelle Felman, Nelson Fonseca, Melissa Hathaway, Manuel Medina, Jeffrey Smith, Raymond Svider and Gregory Waters. We believe a majority of our board of directors will meet the independence standards under the applicable Nasdaq rules. Please see the section entitled “Management Following the Business Combination”.



 

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Accounting Treatment

The Business Combination will be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, SVAC is treated as the “acquired” company for financial reporting purposes. This determination was primarily based on the following:

 

   

Cyxtera’s ultimate stockholders prior to the Business Combination will collectively have the majority and greatest voting interest in the combined entity after giving effect to the proposed Business Combination under the no redemption and maximum redemption scenarios with over 55% voting interest, in each case;

 

   

after giving effect to the proposed Business Combination, the largest individual minority stockholder of the combined entity will be an existing ultimate stockholder of Cyxtera;

 

   

Cyxtera’s existing directors and individuals designated by existing Cyxtera stockholders will represent the majority of the combined company’s board of directors since pursuant to the Merger Agreement, Cyxtera has the right to designate certain initial members of the board of directors of the post- combination company immediately after giving effect to the Transactions;

 

   

Cyxtera’s senior management will be the senior management of the combined company;

 

   

Cyxtera is the larger entity based on total assets, historical revenue and operating results, and total number of employees; and

 

   

Cyxtera’s operations prior to the proposed Business Combination comprise the only ongoing operations of the combined entity.

Based on the aforementioned factors of management, board representation, largest minority stockholder, and the continuation of Cyxtera’s business as well as size it was determined that accounting for the Business Combination as a reverse recapitalization was appropriate. Accordingly, for accounting purposes, the financial statements of the combined entity will represent a continuation of the financial statements of Cyxtera’s with the acquisition being treated as the equivalent of Cyxtera’s issuing stock for the net assets of SVAC, accompanied by a recapitalization, with no goodwill or other intangible assets recorded.



 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF SVAC

The following tables present selected historical financial information of SVAC for the periods and as of the dates indicated. You should read this information in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of SVAC,” SVAC’s audited financial statements and related notes and the other information included elsewhere in this proxy statement. SVAC derived the statements of operations data and the statements of cash flows data for the three months ended March 31, 2021 and March 31, 2020 and the balance sheet data as of March 31, 2021 from SVAC’s unaudited financial statements included elsewhere in this proxy statement, and derived the statements of operations data and the statements of cash flows data for the year ended December 31, 2020, and the period from November 14, 2019 (inception) through December 31, 2019 and the balance sheets data as of December 31, 2020 and 2019 from SVAC’s audited financial statements that are included elsewhere in this proxy statement. SVAC’s historical results are not necessarily indicative of future results.

 

    

For the Three Months Ended

March 31,

     For the Year Ended
December 31, 2020

(As Restated)
     For the period from
November 14, 2019
(inception) through
December  31, 2019
 
Statement of Operations Data:    2021      2020  
     (dollars in millions)  

Revenues

   $ —        $ —        $ —        $ —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total operating costs and expenses

     (1.1      (0.0      (0.4      (0.0
  

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) from continuing operations

     13.1        0.0        (27.1      —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Net loss

   $ 12.0      $ (0.0    $ (27.1    $ (0.0
  

 

 

    

 

 

    

 

 

    

 

 

 

 

Balance Sheet Data:    March 31, 2021      As of
December 31, 2020

(As Restated)
     As of
December 31, 2019
 
     (dollars in millions)  

Total Assets

     406.6      $ 407.2      $ 0.4  

Total Long-term debt, net of current portion

     —          —          —    
  

 

 

    

 

 

    

 

 

 

Total Other liabilities

     53.4        66.0        0.4  
  

 

 

    

 

 

    

 

 

 

Total shareholder’s equity

     5.0        5.0        0.0  
  

 

 

    

 

 

    

 

 

 

Total liabilities and shareholder’s equity

     406.6      $ 407.2      $ 0.4  
  

 

 

    

 

 

    

 

 

 

 

    

For the Three Months Ended

March 31,

     For the Year Ended
December 31, 2020

(As Restated)
     For the period from
November 14, 2019
(inception) through
December  31, 2019
 
Cash Flow Data:    2021      2020  
     (dollars in millions)  

Net cash provided by (used in):

           

Operating activities

     (0.7)        0.0        (0.4              0.0  
  

 

 

    

 

 

    

 

 

    

 

 

 

Investing activities

     —          —          (404.2      —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Financing activities

     —          —          407.1                0.1  
  

 

 

    

 

 

    

 

 

    

 

 

 


 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF CYXTERA

The following table shows selected historical financial information of Cyxtera for the periods and as of the dates indicated.

The selected historical financial information of Cyxtera as of March 31, 2021 and for the three months ended March 31, 2021 and 2020 was derived from the unaudited condensed consolidated financial statements of Cyxtera included elsewhere in this proxy statement.

The selected historical financial information of Cyxtera as of December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019 and 2018 was derived from the audited historical consolidated financial statements of Cyxtera included elsewhere in this proxy statement.

The following selected historical financial information should be read together with the consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Cyxtera” appearing elsewhere in this proxy statement. The selected historical financial information in this section is not intended to replace Cyxtera’s consolidated financial statements and the related notes appearing elsewhere in this proxy statement. Cyxtera’s historical results are not necessarily indicative of Cyxtera’s future results.

As explained elsewhere in this proxy statement, the financial information contained in this section relates to Cyxtera, prior to and without giving pro-forma effect to the impact of the Business Combination and, as a result, the results reflected in this section may not be indicative of the results of the post-combination company going forward. See the sections entitled “Summary of the Proxy Statement” and “Unaudited Pro Forma Condensed Combined Financial Information” included elsewhere in this proxy statement.

 

     For the Three Months
Ended March 31,
    For the Years Ended
December 31,
 
     2021     2020     2020     2019     2018  

(in millions)

          

Operating Data:

          

Revenues

   $ 172.9     $ 172.5     $ 690.5     $ 678.6     $ 703.3  

Income (loss) from continuing operations

     (21.8     (18.2     50.4       (227.3     (73.2

Interest expense, net

     (43.2     (43.3     (169.4     (152.7     (108.7

Loss from continuing operations before income taxes

     (65.5     (61.8     (119.3     (380.9     (186.7

Net loss from continuing operations

     (52.6     (47.4     (122.8     (295.0     (145.4

Net loss from discontinued operations, net of tax

     —         —         —         (219.2     (46.4

Net loss

     (52.6     (47.4     (122.8     (514.2     (191.8
     As of March
31, 2021
    As of December 31,              
    2020     2019              

(in millions)

          

Balance Sheet Data:

          

Cash

   $ 113.6     $ 120.7     $ 13.0      

Total assets

     3,075.8       3,266.1       3,222.4      

Long-term debt, net of current portion

     1,310.4       1,311.5       1,224.8      

Capital leases and other financing obligations, net of current portion

     927.3       933.1       891.7      

Total liabilities

     2,666.4       2,708.3       2,560.2      


 

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information has been provided to aid you in your analysis of the financial aspects of the Business Combination. The following unaudited pro forma condensed combined financial information presents the combination of the financial information of SVAC and Cyxtera adjusted to give effect to the Business Combination and related transactions. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X.

The following unaudited pro forma condensed combined balance sheet information as of March 31, 2021 assumes that the Transactions occurred on March 31, 2021. The unaudited pro forma condensed combined statement of operations information for the year ended December 31, 2020 and for the three months ended March 31, 2021 present the pro forma effect to the Transactions as if they had been completed on January 1, 2020.

This information should be read together with SVAC’s and Cyxtera’s audited and unaudited financial statements and related notes, the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Cyxtera,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of SVAC” and other financial information included elsewhere in this proxy statement.

The Business Combination was accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Cyxtera has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

 

   

Cyxtera’s ultimate stockholders prior to the Business Combination will collectively have the majority and greatest voting interest in the combined entity after giving effect to the proposed Business Combination under the no redemption and maximum redemption scenarios with over 55% voting interest, in each case;

 

   

after giving effect to the proposed Business Combination, the largest individual minority stockholder of the combined entity will be an existing ultimate stockholder of Cyxtera;

 

   

Cyxtera’s existing directors and individuals designated by existing Cyxtera stockholders will represent the majority of the combined company’s board of directors since pursuant to the Merger Agreement, Cyxtera has the right to designate certain initial members of the board of directors of the post-combination company immediately after giving effect to the Transactions;

 

   

Cyxtera’s senior management will be the senior management of the combined company;

 

   

Cyxtera is the larger entity based on total assets, historical revenue and operating results, and total number of employees; and

 

   

Cyxtera’s operations prior to the proposed Business Combination comprise the only ongoing operations of the combined entity.

Under this method of accounting, SVAC is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination is treated as the equivalent of Cyxtera issuing stock for the net assets of SVAC, accompanied by a recapitalization, with no goodwill or other intangible assets recorded.



 

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The unaudited pro forma condensed combined financial information has been prepared assuming two alternative levels of redemption of the Class A common stock into cash:

 

   

Assuming No Redemptions. This presentation assumes:

No existing public shareholders exercise their redemption rights with respect to their redeemable Class A common stock upon consummation of the Business Combination.

 

   

Assuming Maximum Redemptions. This presentation assumes:

SVAC’s public stockholders exercise redemptions in connection with their Class A common stock. This scenario results in the redemption of 20,446,149 public shares, which is derived from the number of shares that could be redeemed in connection with the Business Combination at an approximate redemption price of $10.00 per share based on SVAC’s as-adjusted trust account balance as of March 31, 2021. This maximum redemption scenario is based on the maximum number of redemptions that may occur but which would still provide the minimum aggregate Business Combination proceeds.

If redemptions exceed the minimum aggregate Business Combination proceeds then the merger cannot be consummated under the current terms of the Merger Agreement. However, Cyxtera has the right under the terms of the Merger Agreement to waive such condition in order to consummate the merger. Accordingly, we cannot reasonably predict whether or not Cyxtera would waive the minimum aggregate Business Combination proceeds condition and we expect such decision, if necessary, would be based on the underlying facts and circumstances at the time of the consummation of the merger, including the amount of public stockholder redemptions in excess of the minimum aggregate Business Combination proceeds.

However, if redemptions exceed the minimum aggregate Business Combination proceeds and Cyxtera agrees to waive such minimum aggregate Business Combination proceeds condition, then for every one million shares of additional public stockholder redemptions beyond the minimum aggregate Business Combination proceeds there would be a corresponding $10 million reduction in incremental cash proceeds received by the combined company. To the extent redemptions reduce the proceeds below $500 million, each $10 million of additional public stockholder redemptions below $500 million would additionally result in a corresponding $10 million reduction in the paydown of Cyxtera debt and increase in annual pro forma interest expense of approximately $0.3 million.

The existing Cyxtera Stockholder will hold 106,100,000 shares of the public shares immediately after the Business Combination, which approximates a 58% ownership level assuming no redemptions and, assuming maximum redemptions, the existing Cyxtera Stockholder will hold 106,100,000 shares, which approximates to a 62% ownership level. The following table summarizes the number of the public shares outstanding following the consummation of the Business Combination under the two scenarios. Additionally, the table excludes the potential dilutive effect of warrants and optional shares:

Ownership

 

     No Redemptions     Maximum Redemptions  
     Shares
Outstanding
     %     Shares
Outstanding
     %  

SVAC Public Stockholders

     40,423,453        22.2     19,977,304        11.6

SVAC Sponsor management and board

     10,105,863        5.6     10,105,863        5.9

Cyxtera Stockholder

     106,100,000        58.4     106,100,000        61.8

PIPE Investors

     25,000,000        13.8     25,000,000        14.6

Forward Purchasers

     —          0     10,526,315        6.1
  

 

 

    

 

 

   

 

 

    

 

 

 

Total Shares at Closing

     181,629,316          171,709,482     


 

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The unaudited pro forma condensed combined financial information is for illustrative purposes only. The unaudited condensed combined pro forma adjustments reflecting the consummation of the Business Combination and related transactions are based on certain estimates and assumptions. These estimates and assumptions are based on information available as of the dates of these unaudited pro forma condensed combined financial statements and may be revised as additional information becomes available. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments, and it is possible the difference may be material. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined entity will experience. SVAC and Cyxtera have not had any historical relationship prior to the Transactions. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

The unaudited condensed combined pro forma financial information should also be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Cyxtera,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of SVAC” and other financial information included elsewhere in this proxy statement.

Description of the Transactions

The unaudited pro forma condensed combined financial information has been prepared assuming two alternative levels of redemption of the Class A common stock into cash:

 

   

Assuming No Redemptions. This presentation assumes:

        No existing public shareholders exercise their redemption rights with respect to their redeemable Class A common stock upon consummation of the Business Combination.

 

   

Assuming Maximum Redemptions. This presentation assumes:

        SVAC’s public stockholders exercise redemptions in connection with their Class A common stock. This scenario results in the redemption of 20,446,149 public shares, which is derived from the number of shares that could be redeemed in connection with the Business Combination at an approximate redemption price of $10.00 per share based on SVAC’s as-adjusted trust account balance as of March 31, 2021. This maximum redemption scenario is based on the maximum number of redemptions that may occur but which would still provide sufficient cash to satisfy the minimum cash condition to the closing of the Business Combination.

If the actual facts are different than these assumptions, then the amounts and shares outstanding in the unaudited pro forma condensed combined financial information will be different.

 

     Historical     Pro Forma Combined  
(in millions)    SVAC     Cyxtera     No
Redemption
    Maximum
Redemptions
 

Operating Data – Three Months Ended March 31, 2021:

        

Revenues

   $ —       $ 172.9     $ 172.9     $ 172.9  

Loss from continuing operations

     (1.1     (21.8     (21.8     (21.8

Interest expense, net

     0.0       (43.2     (35.1     (35.1

Change in fair value of derivative liabilities

     13.0       0.0       9.0       8.9  

Income (loss) from continuing operations before income taxes

     12.0       (65.5     (48.4     (48.5

Net income (loss) from continuing operations

     12.0       (52.6     (37.5     (37.6

Net income (loss)

     12.0       (52.6     (37.5     (37.6


 

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     Historical     Pro Forma Combined  
(in millions)    SVAC     Cyxtera     No
Redemption
    Maximum
Redemptions
 

Operating Data - Year Ended December 31, 2020:

        

Revenues

   $ —       $ 690.5     $ 690.5     $ 690.5  

(Loss) income from continuing operations

     (0.4     50.4       50.4       50.4  

Interest expense, net

     0.0       (169.4     (143.9     (143.9

Change in fair value of derivative liabilities

     (26.3     0.0       (19.5     (19.6

Offering costs associated with derivative liabilities

     (0.6     0.0       (0.6     (0.6

Loss from continuing operations before income taxes

     (27.1     (119.3     (113.9     (114.0

Net loss from continuing operations

     (27.1     (122.8     (123.6     (123.7

Net loss

     (27.1     (122.8     (123.6     (123.7

Balance Sheet Data - As of March 31, 2021:

        

Cash

   $ 1.9     $ 113.6     $ 264.0     $ 159.5  

Total assets

     406.6       3,075.8       3,221.0       3,116.5  

Derivative liabilities

     34.3       0.0       31.5       31.7  

Long-term debt, net of current portion

     0.0       1,310.4       863.6       863.6  

Capital leases and other financing obligations, net of current portion

     0.0       927.3       927.3       927.3  

Total liabilities

     53.4       2,666.4       2,244.4       2,244.6  


 

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MARKET PRICE AND DIVIDEND INFORMATION

SVAC

Market Information

SVAC’s units, Class A common stock and redeemable warrants are each traded on the Nasdaq Capital Market under the symbols “SVACU,” “SVAC” and “SVACW,” respectively. SVAC’s units commenced public trading on September 10, 2020, and SVAC’s Class A common stock and detachable redeemable warrants commenced separate public trading on November 2, 2020.

 

     Units      Class A
Common Stock
     Warrants  
Quarter Ended    High      Low      High      Low      High      Low  

2020

                 

Third Quarter(1)

   $ 10.88      $ 9.97      $ —      $ —      $ —      $ —  

Fourth Quarter(2)

   $ 11.09      $ 9.92      $ 10.88      $ 9.65      $ 2.45      $ 1.20  

2021

                 

First Quarter

   $ 12.50      $ 9.94      $ 12.00      $ 9.74      $ 3.50      $ 1.25  

Second Quarter (through June 11, 2021)

   $ 10.40      $ 10.07      $ 10.07      $ 9.86      $ 1.97      $ 1.35  

 

(1)

The Third Quarter 2020 reflects the high and low trade prices of our units beginning as of September 10, 2020, the first day that our units began trading on the Nasdaq Capital Market.

(2)

The Fourth Quarter 2020 reflects the high and low trade prices of our Class A common stock and detachable redeemable warrants beginning as of November 2, 2020, the first day that the shares of Class A common stock and detachable redeemable warrants began trading on the Nasdaq Capital Market.

Holders

On June 11, 2021, there was one holder of record of SVAC’s units, one holder of record of SVAC’s Class A common stock, six holders of record of SVAC’s Class B common stock and one holder of record of SVAC’s detachable redeemable warrants.

Dividend Policy

SVAC has not paid any cash dividends on our common stock to date and we do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon the combined company’s revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to a business combination will be within the discretion of the combined company’s board of directors at such time. In addition, the combined company’s board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. Further, the combined company’s ability to declare dividends may be limited by restrictive covenants pursuant to any debt financing.

Cyxtera

Price Range of Cyxtera securities

Historical market price information regarding Cyxtera is not provided because there is no historical public market for Cyxtera’s securities.



 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The statements contained in this proxy statement that are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. The information included in this proxy statement in relation to Cyxtera has been provided by Cyxtera and its management team. Forward-looking statements include statements relating to each of Cyxtera and Cyxtera’s management teams’ expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement may include, for example, statements about:

 

   

conditions to the completion of the Business Combination and PIPE Investment, including stockholder approval of the Business Combination, may not be satisfied or the regulatory approvals required for the Business Combination may not be obtained on the terms expected or on the anticipated schedule;

 

   

the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement between the parties or the termination of any Subscription Agreement;

 

   

the effect of the announcement or pendency of the Business Combination on Cyxtera’s business relationships, operating results, and business generally;

 

   

risks that the proposed business combination disrupts Cyxtera’s current plans and operations and potential difficulties in Cyxtera’s employee retention as a result of the Business Combination;

 

   

risks related to diverting management’s attention from Cyxtera’s ongoing business operations;

 

   

potential litigation that may be instituted against SVAC or Cyxtera or their respective directors or officers related to the Business Combination, the PIPE Investment, the Merger Agreement, any Subscription Agreement or in relation to Cyxtera’s business;

 

   

the amount of redemption requests made by SVAC’s public stockholders and the effects of such requests on the funds available to the company following the Business Combination and the liquidity of the common stock;

 

   

the amount of the costs, fees, expenses and other charges related to the Business Combination and the PIPE Investment;

 

   

risks relating to the uncertainty of the projected financial information with respect to Cyxtera;

 

   

the ability of SVAC to issue equity or equity-linked securities in connection with the transaction or in the future;

 

   

the impact of the global COVID-19 pandemic on any of the foregoing risks; and

 

   

such other factors as are set forth in the section of this proxy statement entitled “Risk Factors,” SVAC’s periodic public filings with the SEC, including but not limited to those described in the section entitled “Risk Factors” and “Forward Looking Statements” in its final prospectus for its Initial Public Offering, which was filed with the SEC on September 11, 2020, and Annual Report on Form 10-K for the fiscal year ended December 31, 2020, its quarterly reports on Form 10-Q, and in its other filings made with the SEC from time to time, which are available via the SEC’s website at www.sec.gov.

The forward-looking statements contained in this proxy statement are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a

 

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number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Before you grant your proxy or instruct how your vote should be cast or vote on the Proposals, you should be aware that the occurrence of the events described in the section entitled “Risk Factors” and elsewhere in this proxy statement may adversely affect SVAC or Cyxtera.

 

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RISK FACTORS

SVAC stockholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement, before they decide whether to vote or instruct their vote to be cast to approve the relevant proposals described in this proxy statement. The following risk factors apply to the business and operations of Cyxtera Technologies, Inc. and its subsidiaries prior to the consummation of the Business Combination, which will be the business of the surviving company following the consummation of the Business Combination. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the Business Combination, and may have an adverse effect on the business, cash flows, financial condition and results of operations of the post-combination company. You should also carefully consider the following risk factors in addition to the other information included in this proxy statement, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” We and Cyxtera may face additional risks and uncertainties that are not presently known to us or Cyxtera, or that we or Cyxtera currently deem immaterial, which may also impair our or Cyxtera’s business or financial condition. The following discussion should be read in conjunction with the financial statements and notes to the financial statements included herein.

Risks Related to Cyxtera’s Business and Operations

The ongoing COVID-19 pandemic could have a negative effect on Cyxtera’s business, results of operations and financial condition.

Cyxtera faces various risks related to public health issues, including epidemics, pandemics, and other outbreaks, including the ongoing COVID-19 pandemic. Cyxtera has continuously monitored and adjusted its global operations as the COVID-19 pandemic has spread across the globe. While a substantial portion of Cyxtera’s team transitioned to work from home in March 2020, Cyxtera’s data center operations personnel have continued to work on site to ensure the continued operation of Cyxtera’s critical data center infrastructure. Cyxtera implemented a number of precautionary measures to protect its employees, customers, partners and suppliers all while complying with applicable governmental regulations and local public health guidance and ordinances. These measures have included changes to work shifts, including the use of “clean teams” to ensure continuity of service at Cyxtera’s data centers, processes to limit and schedule access to certain Cyxtera data centers, as well as the implementation of screening, social distancing and hygiene protocols at all data center and office locations.

These proactive measures taken by Cyxtera, and any additional actions Cyxtera may take in the future, could result in business delays, operational disruption and customer dissatisfaction. Employee illnesses resulting from the pandemic could result in further inefficiencies or delays and a suspected or confirmed case in a Cyxtera data center could require temporary closure of the affected data center for cleaning or until local regulatory requirements are fulfilled. Furthermore, responses by governmental authorities to COVID-19 have varied, resulting in multiple, conflicting, changing and uncertain regulatory requirements. If Cyxtera is unable to comply with regulatory obligations required in response to COVID-19, it may experience fines and other penalties, including data center closures, as well as harm to its reputation. Any closure of a Cyxtera data center or limitation of customer access could cause customer dissatisfaction if customers are unable to access their equipment within the affected data center and could trigger obligations under Cyxtera’s service level agreements with customers.

The impact of COVID-19, including travel restrictions, “shelter in place” orders and supply chain disruptions, could delay scheduled, preventative and emergency maintenance of Cyxtera facilities and equipment, leading to equipment failure and service interruptions, which would cause reputational harm to Cyxtera, trigger provisions in service level agreements in contracts with Cyxtera’s customers, and adversely impact Cyxtera’s revenues and results of operations. COVID-19 impacts may also delay data center expansion

 

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efforts by Cyxtera or its landlords to deliver additional capacity to Cyxtera’s data centers, which could cause Cyxtera to run out of capacity in markets with high demand and/or cause Cyxtera to fail to meet contractual obligations to customers who have contracted for such additional capacity.

Preventative measures instituted by governments and businesses to mitigate the spread of COVID-19, including travel restrictions, social distancing requirements, shelter in place orders and quarantines, have negatively impacted the global economy and may adversely impact Cyxtera, its customers and its suppliers. Some of Cyxtera’s customers have been negatively impacted by the COVID-19 pandemic, which could affect Cyxtera’s revenues. Certain customers have requested revised payment terms and more customers could potentially request such terms. If such an increase in requests for revised payment terms occurs, some delays in accounts receivable collection would result. In general, a prolonged economic downturn could result in a larger customer churn than currently anticipated and reduce demand for Cyxtera’s services, in which case Cyxtera’s revenues could be significantly impacted. Given the uncertainty around the duration and extent of the COVID-19 pandemic, Cyxtera cannot accurately predict at this time how the pandemic will affect its business over time.

While the full extent and impact of the ongoing COVID-19 pandemic cannot be reasonably estimated at this time, it could have a material adverse impact on Cyxtera’s business and financial condition. The extent to which the ongoing COVID-19 pandemic will impact Cyxtera’s financial condition or results of operations will depend on many factors and future developments, including new information about the ongoing pandemic, additional surges in infection rates and any new government regulations which may emerge to contain the virus.

Cyxtera’s business depends upon the demand for data centers.

Cyxtera is in the business of owning, leasing and operating data centers. A reduction in the demand for data center space, power or connectivity would have a greater adverse effect on Cyxtera’s business and financial condition than if Cyxtera had less specialized use. Cyxtera is susceptible to general economic slowdowns as well as adverse developments in the data center, internet and data communications and broader technology industries. Any such slowdown or adverse development could lead to reduced corporate IT spending or reduced demand for data center space. Reduced demand could also result from business relocations, including to markets that Cyxtera does not currently serve. Changes in industry practice or in technology could also reduce demand for the physical data center space Cyxtera provides. In addition, Cyxtera’s customers may choose to develop new data centers or expand their own existing data centers or consolidate into data centers that Cyxtera does not own or operate, which could reduce demand for Cyxtera’s data centers or result in the loss of one or more key customers. If any of Cyxtera’s key customers were to do so, it could result in a loss of business to Cyxtera or put pressure on Cyxtera’s pricing. If Cyxtera loses a customer, it may not be able to replace that customer at a competitive rate or at all. Mergers or consolidations could reduce further the number of Cyxtera’s customers and potential customers and make Cyxtera more dependent on a more limited number of customers. If Cyxtera’s customers merge with or are acquired by other entities that are not Cyxtera customers, they may discontinue or reduce the use of Cyxtera’s data centers in the future. Cyxtera’s financial condition, results of operations, cash flow and ability to satisfy its debt service obligations could be materially adversely affected as a result of any or all of these factors.

Cyxtera’s products and services have a long sales cycle that may harm its revenues and operating results.

A customer’s decision to license space in one of Cyxtera’s data centers and to purchase additional services typically involves a significant commitment of resources. As a result, Cyxtera has a long sales cycle for its products and services. Furthermore, Cyxtera may expend significant time and resources in pursuing a particular sale or customer that ultimately does not result in revenue.

Macroeconomic conditions, including economic and market downturns may further impact this long sales cycle by making it extremely difficult for customers to accurately forecast and plan future business activities. This could cause customers to slow spending or delay decision-making on Cyxtera’s products and services, which would delay and lengthen its sales cycle.

 

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Delays due to the length of Cyxtera’s sales cycle may materially and adversely affect Cyxtera’s revenues and operating results, which could harm its ability to meet its financial forecasts for a given quarter and cause volatility in Cyxtera’s stock price.

Any failure of Cyxtera’s physical infrastructure, negative impact on its ability to provide its services, or damage to customer infrastructure within its data centers, could lead to significant costs and disruptions that could reduce Cyxtera’s revenue and harm its business reputation and financial results.

Cyxtera’s business depends on providing customers with highly reliable solutions. Cyxtera must safehouse its customers’ infrastructure and equipment located in its data centers and ensure that its data centers and offices remain operational at all times. While Cyxtera owns two of its data centers, it leases the remainder of its data centers and relies on its landlord for basic maintenance of its leased data centers. If a landlord fails to properly and adequately maintain such data center, Cyxtera may be forced to exit that data center earlier that it would have otherwise, which could be disruptive to its business.

Problems at one or more of Cyxtera’s data centers, whether or not within its control, could result in service interruptions or significant infrastructure or equipment damage. These could result from numerous factors, including:

 

   

human error;

 

   

equipment failure;

 

   

availability of parts and materials needed to appropriately maintain Cyxtera’s infrastructure;

 

   

physical, electronic and cyber security breaches;

 

   

fire, earthquake, hurricane, flood, tornado and other natural disasters;

 

   

extreme temperatures;

 

   

water damage;

 

   

fiber cuts;

 

   

power loss, water loss and or loss of other local utilities;

 

   

terrorist acts;

 

   

sabotage and vandalism;

 

   

civil disorder; and

 

   

global pandemics or health emergencies, such as COVID-19.

Cyxtera has service level commitment obligations to its customers. As a result, service interruptions or significant equipment damage in its data centers could result in difficulty maintaining service level commitments to these customers and potential claims related to such failures. Because Cyxtera’s data centers are critical to many of its customers’ businesses, service interruptions or significant equipment damage in its data centers could also result in lost profits or other indirect or consequential damages to its customers. There can be no assurance that a court would enforce any contractual limitations on Cyxtera’s liability in the event that one of its customers brings a lawsuit against it as a result of a problem at one of its data centers. Furthermore, Cyxtera may decide to reach settlements with affected customers irrespective of any such contractual limitations. Any such settlement may result in a reduction of revenue under GAAP. In addition, any loss of service, equipment damage or inability to meet its service level commitment obligations could reduce the confidence of Cyxtera’s customers and could consequently impair its ability to obtain and retain customers, which would adversely affect both its ability to generate revenues and its operating results.

 

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Furthermore, Cyxtera is dependent upon major internet service providers, telecommunications carriers and other website operators in North America, Europe and Asia, some of which have experienced significant system failures and electrical outages in the past. Cyxtera’s customers may in the future experience difficulties due to system failures unrelated to Cyxtera’s systems and offerings. If, for any reason, these providers fail to provide the required services, Cyxtera’s business, financial condition and results of operations could be materially and adversely impacted.

Cyxtera may be vulnerable to physical and electronic security breaches and cyber-attacks, which could disrupt its operations and have a material adverse effect on its financial performance and operating results.

Cyxtera faces risks associated with unauthorized access to its computer systems, loss or destruction of data, computer viruses, malware or other malicious activities. A party who is able to compromise the security measures on Cyxtera’s networks or the security of its infrastructure could, among other things, misappropriate Cyxtera’s proprietary information and the personal information of its customers and employees, cause interruptions or malfunctions in Cyxtera’s or its customers’ operations, cause delays or interruptions to Cyxtera’s ability to meet customer needs, cause Cyxtera to breach its legal, regulatory or contractual obligations, create an inability to access or rely upon critical business records or cause other disruptions to Cyxtera’s operations. These breaches may result from human errors, equipment failure, or fraud or malice on the part of employees or third parties. As Cyxtera increasingly markets the security features in its data centers, Cyxtera may be targeted by computer hackers seeking to compromise data security.

Cyxtera expends significant financial resources to protect against such threats and may be required to further expend financial resources to alleviate problems caused by physical, electronic, and cyber security breaches. As techniques used to breach security are growing in frequency and sophistication and are generally not recognized until launched against a target, regardless of Cyxtera’s expenditures and protection efforts, it may not be able to promptly detect that a breach has occurred, or implement security measures in a timely manner or, if and when implemented, Cyxtera may not be able to determine the extent to which these measures could be circumvented. Any breaches that may occur could expose Cyxtera to increased risk of lawsuits, regulatory penalties, loss of existing or potential future customers, damage relating to loss of proprietary information, harm to its reputation and increases in its security costs, which could have a material adverse effect on Cyxtera’s financial performance and operating results. Any breaches could also delay or prevent Cyxtera from maintaining security certifications that Cyxtera’s customers rely on such as SOC-1, SOC-2 and ISO 27001. Cyxtera maintains insurance coverage for cyber risks, but such coverage may be unavailable or insufficient to cover its losses. In the event of a breach resulting in loss of data, such as personally identifiable information or other such data protected by data privacy or other laws, Cyxtera may be liable for damages, fines and penalties for such losses under applicable regulatory frameworks despite not handling the data. Furthermore, if a high-profile security breach or cyber-attack occurs with respect to another provider of mission-critical data center facilities, Cyxtera’s customers and potential customers may lose trust in the security of these business models generally, which could harm Cyxtera’s reputation and brand image as well as its ability to retain existing customers or attract new ones. In addition, the regulatory framework around data custody, data privacy and breaches varies by jurisdiction and is an evolving area of law. Cyxtera may not be able to limit its liability or damages in the event of such a loss.

Cyxtera offers professional services to its customers where it assists with implementation. The access to Cyxtera’s clients’ networks and data, which is gained from these services, creates some risk that Cyxtera’s clients’ networks or data will be improperly accessed. If Cyxtera were held responsible for any such breach, it could result in a significant loss to Cyxtera, including damage to its client relationships, harm to its brand and reputation, and legal liability.

Adverse global economic conditions and credit market uncertainty could adversely impact Cyxtera’s business and financial condition.

Adverse global economic conditions and uncertain conditions in the credit markets have created, and in the future may create, uncertainty and unpredictability and add risk to Cyxtera’s future outlook. An uncertain global

 

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economy could also result in churn in Cyxtera’s customer base, reductions in revenues from Cyxtera’s offerings, longer sales cycles, slower adoption of new technologies and increased price competition, adversely affecting Cyxtera’s business prospects. Customers and suppliers filing for bankruptcy can also lead to costly and time-intensive actions with adverse effects.

Cyxtera may be impacted by disruptions associated with events beyond its control, such as war, acts of terror, political unrest, public health concerns, labor disputes or natural disasters.

Cyxtera manages data centers worldwide. Cyxtera’s data centers could be disrupted by events beyond its control, such as war, acts of terror, political unrest, public health concerns, labor disputes or natural disasters. Any such disruption could adversely affect Cyxtera’s ability to attract and retain customers and employees, its ability to raise capital and the operation and maintenance of its data centers. Cyxtera may not be insured against all such potential losses and, if insured, the insurance proceeds that it receives may not adequately compensate it for all of its losses. Additionally, Cyxtera may need to incur additional costs in the future to provide enhanced security, including cyber security, which could have a material adverse effect on its business and results of operations.

Cyxtera’s international operations expose it to regulatory, currency, legal, tax and other risks distinct from those faced by it in the United States.

Although Cyxtera’s operations are primarily based in the United States, Cyxtera also has a presence outside of the United States. Foreign operations involve risks that are in addition to those risks generally associated with investments in the United States, including:

 

   

Cyxtera’s limited knowledge of and relationships with customers, contractors, suppliers or other parties in these markets;

 

   

protectionist laws and business practices favoring local competition;

 

   

political and economic instability;

 

   

complexity and costs associated with managing international operations;

 

   

difficulty in hiring qualified management, sales and other personnel and service providers in these markets;

 

   

differing employment practices and labor issues;

 

   

compliance with evolving governmental regulation with which Cyxtera has limited experience;

 

   

compliance with economic and trade sanctions enforced by the Office of Foreign Assets Control of the U.S. Department of Treasury;

 

   

Cyxtera’s ability to obtain, transfer or maintain licenses required by governmental entities with respect to its business;

 

   

unexpected changes in regulatory, tax and political environments such as the United Kingdom’s withdrawal from the European Union (“Brexit”), and trade wars;

 

   

exposure to increased taxation, confiscation or expropriation and the risk of forced nationalization;

 

   

fluctuations in currency exchange rates;

 

   

currency transfer restrictions and limitations on Cyxtera’s ability to distribute cash earned in foreign jurisdictions to the United States;

 

   

difficulty in enforcing agreements in non-U.S. jurisdictions, including in the event of a default by one or more of Cyxtera’s customers, suppliers or contractors;

 

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compliance with anti-bribery, corruption and export control laws; and

 

   

difficulties in managing across cultures and in foreign languages.

Geopolitical events, such as the ongoing COVID-19 pandemic, Brexit, and trade wars may increase the likelihood of the risks above to occur and could have a negative effect on Cyxtera’s business in the affected regions. With respect to Brexit, it is possible that the level of economic activity in the United Kingdom and the rest of Europe will be adversely impacted and that Cyxtera will face increased regulatory and legal complexities in these regions which could have an adverse impact on Cyxtera’s business and employees in Europe and Asia and could adversely affect Cyxtera’s financial condition and results of operations. In addition, compliance with international and U.S. laws and regulations that apply to Cyxtera’s international operations increases Cyxtera’s cost of doing business in foreign jurisdictions. These laws and regulations include the General Data Protection Regulation (“GDPR”) and other data privacy laws and requirements, labor relations laws, tax laws, anti-competition regulations, import and trade restrictions, export requirements, economic and trade sanctions, U.S. laws such as the Foreign Corrupt Practices Act and local laws which also prohibit corrupt payments to governmental officials. Cyxtera has several customers in China named in restrictive executive orders by the previous U.S. administration that are currently covered by a freeze issued by the current U.S. administration or currently enjoined from enforcement subject to pending litigation. If Cyxtera is required to cease business with these companies, or additional companies in the future, its revenues could be adversely affected. Violations of any of these domestic or international laws and regulations could result in fines, criminal sanctions against Cyxtera, its officers or its employees, and prohibitions on the conduct of its business. Any such violations could include prohibitions on Cyxtera’s ability to make its offerings available in one or more countries and could also materially damage Cyxtera’s reputation, brand, ability to attract and retain employees, business and results of operations.

Cyxtera’s inability to overcome these risks could adversely affect its foreign operations and growth prospects and could have a material adverse effect on its business, financial condition and results of operations.

Inadequate or inaccurate external and internal information, including budget and planning data, could lead to inaccurate financial forecasts and inappropriate financial decisions.

Cyxtera’s financial forecasts are dependent on estimates and assumptions regarding budget and planning data, market growth, foreign exchange rates and its ability to generate sufficient cash flow to reinvest in the business, fund internal growth, and meet its debt obligations. Cyxtera’s financial projections are based on historical experience and on various other assumptions that its management believes to be reasonable under the circumstances and at the time they are made. However, if Cyxtera’s external and internal information is inadequate, its actual results may differ materially from its forecasts and cause Cyxtera to make inappropriate financial decisions. Any material variation between Cyxtera’s financial forecasts and its actual results may also adversely affect its future profitability, stock price and stockholder confidence.

The level of insurance coverage that Cyxtera purchases may prove to be inadequate.

Cyxtera carries liability, property, business interruption and other insurance policies to cover insurable risks. Cyxtera selects the types of insurance, the limits and the deductibles based on its specific risk profile, the cost of the insurance coverage versus its perceived benefit and general industry standards. Cyxtera’s insurance policies contain industry standard exclusions for events such as war and nuclear reaction. Any of the limits of insurance that Cyxtera purchases could prove to be inadequate, which could materially and adversely impact its business, financial condition and results of operations.

If Cyxtera is unable to recruit or retain key executives and qualified personnel, its business could be harmed.

Cyxtera’s business is substantially dependent on the performance of senior management and key personnel. Cyxtera must also continue to identify, hire, train and retain key personnel who maintain relationships with its

 

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customers and who can provide the technical, strategic and marketing skills required for its growth. There is a shortage of qualified personnel in these fields, and Cyxtera competes with other companies for the limited pool of talent. The failure to recruit and retain necessary key executives and personnel could cause disruption, harm Cyxtera’s business and hamper Cyxtera’s ability to grow the company.

Cyxtera may not be able to compete successfully against current and future competitors.

The global multi-tenant data center market is highly fragmented. Cyxtera competes with a significant number of firms which vary in terms of their data center offerings. Cyxtera must continue to evolve its product strategy and be able to differentiate its data centers and product offerings from those of its competitors.

Cyxtera’s competitors may adopt aggressive pricing policies. As a result, Cyxtera may suffer from pricing pressure that would adversely affect its ability to generate revenues. Some of Cyxtera’s competitors may also provide customers with additional benefits, including bundled communication services or cloud services, and may do so in a manner that is more attractive to potential customers than obtaining space in Cyxtera’s data centers. Similarly, with growing acceptance of cloud-based technologies, Cyxtera is at risk of losing customers that may decide to fully leverage cloud infrastructure offerings instead of managing their own. Competitors could also operate more successfully or form alliances to acquire significant market share.

Failure to compete successfully may materially adversely affect Cyxtera’s financial condition, cash flows and results of operations.

Cyxtera’s operating results may fluctuate.

Cyxtera has experienced fluctuations in its results of operations on a quarterly and annual basis. The fluctuations in Cyxtera’s operating results may cause the market price of its common stock to be volatile. Cyxtera may experience significant fluctuations in its operating results in the foreseeable future due to a variety of factors, including, but not limited to:

 

   

fluctuations of foreign currencies in the markets in which it operates that may impact the value of Cyxtera’s foreign revenue and profitability;

 

   

demand for space, power and solutions at its data centers;

 

   

changes in general economic conditions, such as an economic downturn, or specific market conditions in the internet and data communications and broader technology industries, all of which may have an impact on Cyxtera’s customer base;

 

   

the duration of the sales cycle for its offerings;

 

   

additions and changes in product offerings and its ability to ramp up and integrate new products;

 

   

the financial condition and credit risk of its customers;

 

   

the provision of customer discounts and credits;

 

   

the mix of current and proposed products and offerings and the gross margins associated with its products and offerings;

 

   

the timing required for future data centers to open or become fully utilized;

 

   

competition in the markets in which it operates;

 

   

conditions related to international operations;

 

   

increasing repair and maintenance expenses in connection with aging data centers;

 

   

changes in rent expense and shared operating costs in connection with its leases, which are commonly referred to as common area maintenance expenses, as Cyxtera amends, extends or renews its data center leases in the future;

 

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the timing and magnitude of other operating expenses;

 

   

the cost and availability of adequate public utilities, including electricity;

 

   

implementation of its employee stock-based compensation practices as a newly public company and changes in employee stock-based compensation;

 

   

overall inflation;

 

   

increasing interest expense due to any increases in interest rates and/or potential additional debt financings;

 

   

changes in tax planning strategies or failure to realize anticipated benefits from such strategies; and

 

   

changes in income tax benefit or expense.

Any of the foregoing factors, or other factors discussed elsewhere in this proxy statement, could have a material adverse effect on Cyxtera’s business, results of operations and financial condition. In addition, a relatively large portion of Cyxtera’s expenses are fixed in the short-term, particularly with respect to lease and personnel expenses, depreciation and amortization and interest expenses. Therefore, Cyxtera’s results of operations are particularly sensitive to fluctuations in revenues. As such, comparisons to prior reporting periods should not be relied upon as indications of Cyxtera’s future performance. In addition, Cyxtera’s operating results in one or more future quarters may fail to meet the expectations of securities analysts or investors.

Cyxtera has significant customer concentration, with a limited number of customers accounting for a substantial portion of our revenues.

For the year ended December 31, 2020, Lumen, Cyxtera’s largest customer, accounted for 14% of revenue. As of December 31, 2020, Cyxtera’s top 20 and top 50 largest customers accounted for 42% and 57% of recurring revenue, respectively. While Cyxtera’s customer contracts generally include committed terms of three years with early termination charges for termination prior to the end of such committed term, there are risks whenever a large percentage of total revenues are concentrated with a limited number of customers. It is not possible for us to predict the level of demand that will be generated by any of these customers in the future. In addition, revenues from these larger customers may fluctuate from time to time based on these customers’ business needs and customer experience, the timing of which may be affected by market conditions or other factors outside of our control. These customers could also potentially pressure us to reduce the prices we charge, which could have an adverse effect on our margins and financial position and could negatively affect our revenues and results of operations. If any of our largest customers terminates its relationship with us or materially reduces the services it acquires from us, such termination or reduction could negatively affect our revenues and results of operations.

Cyxtera has incurred substantial losses in the past and may incur additional losses in the future.

Cyxtera had a net loss of $52.6 million for the three months ended March 31, 2021 and had an accumulated deficit of $1,016.1 million as of March 31, 2021. Cyxtera has never been profitable and does not expect to generate positive net income until at least 2025. However, Cyxtera’s ability to achieve profitability is dependent upon many factors, including several that may be difficult to predict and/or control, such as continued bookings growth, stable customer churn, the ability to continue to apply contractual price escalators under its customer contracts, stability in energy pricing, management of personnel costs, stability in interest rates. Cyxtera cannot provide any assurances that it will become profitable within this timeframe or at all.

Cyxtera leases space in several locations under long-term non-cancellable lease agreements and the non-renewal or loss of such leases, or the continuing obligations under such leases in the event of a loss of customers or customer revenues, could have a material adverse effect on it.

Cyxtera leases the space that houses its data centers in all but two of its locations. Cyxtera’s data center leases are typically long-term, non-cancellable leases. As of March 31, 2021, Cyxtera’s data center leases had an

 

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average remaining lease duration of approximately 21 years, assuming the exercise of all extension options exercisable by Cyxtera in its discretion. As of March 31, 2021, two of Cyxtera’s leased facilities had a lease term expiring in less than five years, and an additional three leased facilities had lease terms expiring in less than 10 years.

Cyxtera’s landlords could attempt to evict Cyxtera for reasons beyond its control. If Cyxtera is forced to vacate any leased data center space, it will incur significant costs due to the high costs of relocating the equipment in these facilities and installing the necessary infrastructure in a new data center property. Cyxtera may also lose customers that chose their services based on the location of the relevant data center. In addition, Cyxtera cannot provide any assurance that it will be able to renew its data center leases on or prior to their expiration dates on favorable terms or at all. Certain of Cyxtera’s landlords may view Cyxtera as a competitor, which may impact their willingness to extend these leases beyond their contracted expiration dates. If Cyxtera is unable to renew its lease agreements, it could lose a significant number of customers who are unwilling to relocate their equipment to another one of its data center properties, which could have a material adverse effect on Cyxtera. Even if Cyxtera is able to renew its lease agreements, the terms and other costs of renewal may be less favorable than its existing lease arrangements. Failure to sufficiently increase revenue from customers at these facilities to offset these potential higher costs could have a material adverse effect on Cyxtera. Further, Cyxtera may be unable to maintain good working relationships with its landlords, which would adversely affect its relationship with and potentially result in the loss of current customers. This would have a significant impact on Cyxtera’s customer satisfaction and relationship and would greatly reduce Cyxtera’s chances of not only retaining the revenue in question, but also any future business with those customers.

Cyxtera’s government customers, contracts and subcontracts may subject it to additional risks, including early termination, audits, investigations, sanctions and penalties, which could have a material adverse effect on it.

Cyxtera derives revenue from contracts with state and local governments and subcontracts with government contractors that provide services to the U.S. federal government and state and local governments. Some of these customers may be entitled to terminate all or part of their contracts at any time, without cause.

Recently, political pressure has increased for governments and their agencies, both domestically and internationally, to reduce spending. Some of Cyxtera’s federal government subcontracts may directly or indirectly be subject to Congressional approval of appropriations to fund the expenditures under these contracts. Similarly, some of Cyxtera’s state and local contracts and subcontracts are subject to government funding authorizations. To the extent that funding underlying any of these government contracts or subcontracts is reduced or eliminated, whether by failure to get Congressional approval or as a result of partial U.S. government shutdowns, there is an increased risk of termination by the counterparties, which could have a material adverse effect on Cyxtera.

Government contracts and subcontracts also are generally subject to government audits and investigations. To the extent Cyxtera fails to comply with laws or regulations related to such contracts, any such audit or investigation of it could result in various civil and criminal penalties and administrative sanctions, including termination of such contracts, refund of a portion of fees received, forfeiture of profits, suspension of payments, fines and suspensions or debarment from future government business, any of which could have a material adverse effect on Cyxtera.

Failure to attract, grow and retain a diverse and balanced customer base could harm Cyxtera’s business and operating results.

Cyxtera’s ability to attract, grow and retain a diverse and balanced customer base, consisting of enterprises, cloud service providers and network service providers, may affect Cyxtera’s ability to maximize its revenues. Dense and desirable customer concentrations within a facility enable Cyxtera to better generate significant interconnection revenues, which in turn increases Cyxtera’s overall revenues. Cyxtera’s ability to attract

 

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customers to its data centers depends on a variety of factors, including its product offerings, the presence of carriers, the overall mix of customers, the presence of key customers attracting business through ecosystems, the data center’s operating reliability and security and Cyxtera’s ability to effectively market its product offerings. If Cyxtera is unable to develop, provide or effectively execute any of these factors, it may fail to develop, grow and retain a diverse and balanced customer base, which would adversely affect its business, financial condition and results of operations.

Cyxtera depends on a number of third parties to provide network connectivity to its data centers; if connectivity is interrupted or terminated, Cyxtera’s operating results and cash flow could be materially and adversely affected.

The presence of diverse telecommunications carriers’ fiber networks in Cyxtera’s data centers is critical to its ability to retain and attract new customers. Cyxtera is not a telecommunications carrier, and as such, it relies on third parties to provide its customers with carrier services. Cyxtera believes that the availability of carrier capacity will directly affect its ability to achieve its projected results. Cyxtera relies on revenue opportunities from the telecommunications carriers’ customers to encourage them to invest the capital and operating resources required to connect from their centers to its data centers. Carriers will likely evaluate the revenue opportunity of a data center based on the assumption that the environment will be highly competitive. Cyxtera cannot provide assurance that each and every carrier will elect to offer its services within Cyxtera’s data centers or that once a carrier has decided to provide network connectivity to a Cyxtera data center that it will continue to do so for any period of time.

If the establishment of highly diverse network connectivity to Cyxtera’s data centers does not occur, is materially delayed or is discontinued, or is subject to failure, Cyxtera’s operating results and cash flow will be adversely affected.

Acquisitions present many risks, and Cyxtera may not realize the financial or strategic goals that were contemplated at the time of any transaction.

Cyxtera may make acquisitions in the future. Such acquisitions may include, without limitation, acquisitions of individual facilities in new geographic markets as well as acquisitions of individual facilities or larger platforms that would enhance its customer and service provider ecosystem. Cyxtera may pay for future acquisitions by using Cyxtera’s existing cash resources (which may limit other potential uses of cash), incurring additional debt (which may increase interest expense, leverage and debt service requirements) and/or issuing shares (which may dilute existing stockholders). Cyxtera has a limited history of acquisitions, and there can be no assurance that Cyxtera will be able to effectively and successfully complete acquisitions in the future. Acquisitions expose Cyxtera to many potential risks, including risks relating to disruption of its business; diversion of management attention; Cyxtera’s ability to properly identify and value suitable acquisition targets; Cyxtera’s ability to identify and plan for all material risks and potential liabilities of any particular acquisition target; Cyxtera’s ability to complete acquisitions for which it enters into a definitive acquisition agreement; litigation related to any potential acquisition; Cyxtera’s ability to integrate the acquired business in a timely and efficient manner that does not disrupt the acquired business or Cyxtera’s remaining business; and continuity of the acquired business and its key customer, landlord and/or supplier relationships. The occurrence of any of these risks could have a material adverse effect on Cyxtera’s business, results of operations, financial condition or cash flows. If an acquisition does not proceed or is materially delayed for any reason, the price of Cyxtera’s common stock may be adversely impacted, and Cyxtera may not recognize the anticipated benefits of the acquisition.

Cyxtera may not be able to protect its intellectual property rights.

Cyxtera cannot make assurances that the steps taken by it to protect its intellectual property rights will be adequate to deter misappropriation of proprietary information or that it will be able to detect unauthorized use and take appropriate steps to enforce its intellectual property rights. Cyxtera is also subject to the risk of litigation

 

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alleging infringement of third-party intellectual property rights. Any such claims could require Cyxtera to spend significant sums in litigation, pay damages, develop non-infringing intellectual property or acquire licenses to the intellectual property that is the subject of the alleged infringement.

If Cyxtera cannot continue to develop, acquire, market and provide new offerings or enhancements to existing offerings that meet customer requirements and differentiate it from competitors, its operating results could suffer.

Cyxtera must remain flexible and evolve along with new technologies and industry and market shifts. In order to adapt effectively, Cyxtera must sometimes make long-term investments, develop, acquire or obtain certain intellectual property and commit significant resources before knowing whether there will be adequate customer demand for its new offerings. If Cyxtera misjudges customer needs in the future, its new offerings may not succeed, and its revenues and earnings may be harmed. Additionally, any delay in the development, acquisition, marketing or launch of a new offering could result in customer dissatisfaction or attrition. Ineffective planning and execution in Cyxtera’s product development strategies may cause difficulty in sustaining its competitive advantages. If Cyxtera cannot continue adapting its products, or if its competitors can adapt their products more quickly, its business could be harmed.

The process of developing new offerings and enhancing existing offerings is complex. Cyxtera’s research and software development teams has positioned Cyxtera well to develop innovative new offerings and enhance existing offerings to meet its customers’ evolving IT strategies. However, there can be no assurance that Cyxtera will be able to develop such offerings or enhancements in a timely and cost-effective manner or at all. If Cyxtera cannot develop such offerings or enhancements in house, it may have to acquire technologies from third parties if available, which may require significant expenditures and may require Cyxtera to compete against other data center providers, some of whom are significantly larger and have greater financial and other resources, to acquire such technologies.

Cyxtera’s customer contracts could subject it to significant liability, which may adversely affect Cyxtera’s business, results of operations and financial condition.

In the ordinary course of business, Cyxtera enters into agreements with its customers pursuant to which it provides them with data center space, power and connectivity products. These contracts typically contain indemnification and liability provisions, in addition to service level commitments, which could potentially impose a significant cost on Cyxtera in the event of losses arising out of certain breaches of such agreements, services to be provided by Cyxtera or its subcontractors (if any) or from third-party claims. Customers increasingly are looking to pass through their regulatory obligations and other liabilities to their outsourced data center providers and Cyxtera may not be able to limit its liability or damages in an event of loss suffered by such customers whether as a result of Cyxtera’s breach of an agreement or otherwise. Further, liabilities and standards for damages and enforcement actions, including the regulatory framework applicable to different types of losses, vary by jurisdiction, and Cyxtera may be subject to greater liability for certain losses in certain jurisdictions. If such an event of loss occurred, Cyxtera could be liable for material monetary damages and could incur significant legal fees in defending against such an action, which could adversely affect its financial condition and results of operations.

Cyxtera’s ability to provide data center space to existing or new customers could be constrained by its ability to provide sufficient electrical power.

As current and future customers increase their power footprint in Cyxtera’s data centers over time, the corresponding reduction in available power could limit Cyxtera’s ability to increase occupancy rates or network density within its existing data centers. Furthermore, at certain of its data centers, Cyxtera’s aggregate maximum contractual obligation to provide power and cooling to its customers may exceed the physical capacity at such data centers if customers were to quickly increase their demand for power and cooling. If Cyxtera is not able to

 

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increase the available power and/or cooling or move the customer to another location within its data centers with sufficient power and cooling to meet such demand, Cyxtera could lose the customer as well as be exposed to liability under its agreement with such customer. In addition, Cyxtera’s power and cooling systems are difficult and expensive to upgrade. Accordingly, Cyxtera may not be able to efficiently upgrade or change these systems to meet new demands without incurring significant costs that it may not be able to pass on to its customers. Any such material loss of customers, liability or additional costs could adversely affect Cyxtera’s business, financial condition and results of operations.

Cyxtera may not be able to adapt to changing technologies and customer requirements, and its data center infrastructure may become obsolete.

The technology industry generally and specific industries in which certain of Cyxtera’s customers operate are characterized by rapidly changing technology, customer requirements and industry standards. New systems to deliver power to or eliminate heat in data centers or the development of new server technology that does not require the levels of critical load and heat removal that Cyxtera’s facilities are designed to provide and could be run less expensively on a different platform could make Cyxtera’s data center infrastructure obsolete. Cyxtera’s power and cooling systems are difficult and expensive to upgrade, and Cyxtera may not be able to efficiently upgrade or change these systems to meet new demands without incurring significant costs that it may not be able to pass on to Cyxtera’s customers which could adversely impact Cyxtera’s business, financial condition and results of operations. In addition, the infrastructure that connects Cyxtera’s data centers to the internet and other external networks may become insufficient, including with respect to latency, reliability and connectivity. Cyxtera may not be able to adapt to changing technologies or meet customer demands for new processes or technologies in a timely and cost-effective manner, if at all, which would adversely impact its ability to sustain and grow its business.

Further, Cyxtera’s inability to adapt to changing customer requirements may make its data centers obsolete or unmarketable to such customers. Some of Cyxtera’s customers operate at significant scale across numerous data center facilities and have designed cloud and computing networks with redundancies and fail-over capabilities across these facilities, which enhances the resiliency of their networks and applications. As a result, these customers may realize cost benefits by locating their data center operations in facilities with less electrical or mechanical infrastructure redundancy than is found in Cyxtera’s existing data center facilities. Additionally, some of Cyxtera’s customers have begun to operate their data centers using a wider range of humidity levels and at temperatures that are higher than servers customarily have operated at in the past, all of which may result in energy cost savings for these customers. Cyxtera may not be able to operate its existing data centers under these environmental conditions, particularly as its other customers may not be willing to operate under these conditions, and Cyxtera’s data centers could be at a competitive disadvantage to facilities that satisfy such requirements. Because Cyxtera may not be able to modify the redundancy levels or environmental systems of its existing data centers cost effectively, these or other changes in customer requirements could have a material adverse effect on Cyxtera’s business, results of operations and financial condition.

Additionally, due to regulations that apply to Cyxtera’s customers as well as industry standards that customers may deem desirable, such as ISO and SOC certifications, its customers may seek specific requirements from Cyxtera’s data centers that they are unable to provide. If new or different regulations or standards are adopted or such extra requirements are demanded by its customers, Cyxtera could lose some customers or be unable to attract new customers in certain industries, which could materially and adversely affect its operations.

Risks Related to Cyxtera’s Capital Needs and Capital Strategy

Cyxtera’s substantial debt could adversely affect its cash flows and limit its flexibility to raise additional capital.

Cyxtera has a significant amount of debt and may need to incur additional debt to support its growth in the future. Additional debt may also be incurred to fund future acquisitions. As of March 31, 2021, Cyxtera had

 

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total outstanding indebtedness of $2,295.8 million, consisting of $1,319.5 million indebtedness under its Senior Secured Credit Facilities (as defined below), including $142.6 million under its $150 million Revolving Credit Facility (as defined below), $976.3 million of capital lease obligations and total cash and cash equivalents of $113.6 million. See “Management’s Discussion and Analysis of Financial Condition And Results Of Operations of Cyxtera – Liquidity and Capital Resources.” In addition to its substantial debt, Cyxtera leases many of its data centers and certain equipment under lease agreements.

Cyxtera’s substantial amount of debt and related covenants could have important consequences. For example, they could:

 

   

require Cyxtera to dedicate a substantial portion of its cash flow from operations to make interest and principal payments on its debt and, reducing the availability of Cyxtera’s cash flow to fund future capital expenditures, expansion efforts, working capital and other general corporate requirements;

 

   

increase the likelihood of negative outlook from credit rating agencies, or of a downgrade to Cyxtera’s current rating;

 

   

make it more difficult for Cyxtera to satisfy its obligations under its various debt instruments;

 

   

increase Cyxtera’s cost of borrowing and limit its ability to access additional debt to fund future growth or maintain adequate liquidity;

 

   

increase Cyxtera’s vulnerability to general adverse economic and industry conditions and adverse changes in governmental regulations;

 

   

limit Cyxtera’s flexibility in planning for, or reacting to, changes in its business and industry;

 

   

limit Cyxtera’s operating flexibility through covenants with which it must comply; and

 

   

make Cyxtera more vulnerable to increases in interest rates because of the variable interest rates on some of its borrowings.

The occurrence of any of the foregoing factors could have a material adverse effect on Cyxtera’s business, results of operations and financial condition.

Further, in connection with the Business Combination, Cyxtera expects to repay $452.6 million of its current debt, including extinguishment of the $310 million 2017 Second Lien Term Facility, the paydown of $142.6 million outstanding balance on the Revolving Credit Facility and related accrued interest.

In addition, certain of Cyxtera’s outstanding indebtedness have near term maturity dates, including its Revolving Credit Facility, which matures on May 1, 2022. Cyxtera may need to refinance a portion of such outstanding debt as it matures. Cyxtera may not be able to refinance existing debt. If Cyxtera is able to refinance its debt, the terms of any refinancing may not be as favorable as the terms of its existing debt. Furthermore, if prevailing interest rates or other factors at the time of refinancing result in higher interest rates upon refinancing, then the interest expense relating to that refinanced indebtedness would increase. These risks could materially adversely affect Cyxtera’s financial condition, cash flows and results of operations.

An inability to access external sources of capital on favorable terms or at all could limit Cyxtera’s ability to execute its business and growth strategies.

Cyxtera may not be able to fund future capital needs from operating cash flow, especially with respect to new data center expansions and acquisitions. Consequently, Cyxtera intends to rely on third-party sources of capital to fund a substantial amount of its future capital needs. Cyxtera may not be able to obtain such financing on favorable terms or at all. Any additional debt Cyxtera incurs will increase its leverage, expose it to the risk of default and impose operating restrictions on it. In addition, any equity financing could be materially dilutive to the equity interests held by Cyxtera’s stockholders. Cyxtera’s access to third-party sources of capital depends, in

 

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part, on general market conditions, the market’s perception of Cyxtera’s growth potential, its leverage, its current and expected results of operations, liquidity, financial condition and the market price of its common stock. If Cyxtera cannot obtain capital when needed, it may not be able to execute its business and growth strategies, satisfy its debt service obligations, or fund its other business needs, which could have a material adverse effect on it.

Cyxtera may incur goodwill and other intangible asset impairment charges, or impairment charges to its property, plant and equipment, which could result in a significant reduction to its earnings.

In accordance with GAAP, Cyxtera is required to assess its goodwill and other intangible assets, including goodwill and other intangible assets assumed in acquisition transactions, annually, or more frequently whenever events or changes in circumstances indicate potential impairment, such as changing market conditions or any changes in key assumptions. If the testing performed indicates that an asset may not be recoverable, Cyxtera will be required to record a non-cash impairment charge for the difference between the carrying value of the goodwill or other intangible assets and the implied fair value of the goodwill or other intangible assets in the period the determination is made. These impairment charges could be significant and could adversely affect Cyxtera’s financial condition and results of operations.

Fluctuations in foreign currency exchange rates in the markets in which Cyxtera operates internationally could harm its results of operations.

Cyxtera may experience gains and losses resulting from fluctuations in foreign currency exchange rates. A majority of revenues and costs in Cyxtera’s international operations are denominated in foreign currencies. Cyxtera is exposed to risks resulting from fluctuations in foreign currency exchange rates in connection with its international operations. To the extent Cyxtera is required to pay foreign contractors in foreign currencies, its operations could cost more than anticipated as a result of declines in the U.S. Dollar relative to foreign currencies. In addition, fluctuating foreign currency exchange rates have a direct impact on how Cyxtera’s international results of operations translate into U.S. Dollars.

Cyxtera does not currently have any foreign exchange hedging transactions to reduce foreign currency transaction exposure. Therefore, any weakness of the U.S. Dollar may have a positive impact on its consolidated results of operations because the currencies in the foreign countries in which Cyxtera operates may translate into more U.S. Dollars. However, if the U.S. Dollar strengthens relative to the currencies of the foreign countries in which Cyxtera operates, its consolidated financial position and results of operations may be negatively impacted as amounts in foreign currencies will generally translate into fewer U.S. Dollars.

Risks Related to Environmental Laws and Climate Change Impacts

Environmental regulations may impose new or unexpected costs on Cyxtera.

Cyxtera is subject to various federal, state, local and international environmental and health and safety laws and regulations, including those relating to the generation, storage, handling and disposal of hazardous substances and wastes. Certain of these laws and regulations also impose joint and several liability, without regard to fault, for investigation and cleanup costs on current and former owners and operators of real property and persons who have disposed of or released hazardous substances into the environment. Cyxtera’s operations involve the use of hazardous substances and materials such as petroleum fuel for emergency generators, as well as batteries, refrigerants, cleaning solutions and other materials. In addition, Cyxtera leases, owns or operates real property at which hazardous substances and regulated materials have been used in the past. At some of its locations, hazardous substances or regulated materials are known to be present in soil or groundwater, and there may be additional unknown hazardous substances or regulated materials present at sites it leases, owns or operates. At some of Cyxtera’s locations, there are land use restrictions in place relating to earlier environmental cleanups that do not materially limit Cyxtera’s use of the sites. To the extent any hazardous substances or any

 

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other substance or material must be cleaned up or removed from its property, Cyxtera may be responsible under applicable laws, permits or leases for the removal or cleanup of such substances or materials, the cost of which could be substantial.

Cyxtera purchases significant amounts of electricity from generating facilities and utility companies that are subject to environmental laws, regulations and permit requirements. These environmental requirements are subject to material change, which could result in increases in Cyxtera’s electricity suppliers’ compliance costs that may be passed through to Cyxtera. Regulations promulgated by the United States Environmental Protection Agency could limit air emissions from coal-fired power plants, restrict discharges of cooling water, and otherwise impose new operational restraints on conventional power plants that could increase costs of electricity. Regulatory programs intended to promote increased generation of electricity from renewable sources may also increase Cyxtera’s costs of procuring electricity. In addition, Cyxtera is directly subject to environmental, health and safety laws regulating air emissions, storm water management and other issues arising in its business. For example, Cyxtera’s emergency generators are subject to state and federal regulations governing air pollutants, which could limit the operation or preventative maintenance testing of those generators or require the installation of new pollution control technologies. While environmental regulations do not normally impose material costs upon Cyxtera’s operations, noncompliance with such laws, such as unexpected events, equipment malfunctions, or human error, could result in substantial administrative, civil and criminal penalties and injunctive obligations, and lead to additional capital requirements, limitations upon its operations and unexpected increased costs. Environmental regulations may also impose new and unforeseen regulations that may delay the construction of new capacity within a given market, which may lead to a limitation on the capacity available to sell to customers.

Regulation of greenhouse gas (“GHG”) emissions could increase the cost of electricity by reducing amounts of electricity generated from fossil fuels, by requiring the use of more expensive generating methods or by imposing taxes or fees upon electricity generation or use. There has been interest in the U.S. Congress and in countries where Cyxtera operates abroad in addressing climate change. In the U.S., with the new administration, there is a likelihood that new regulations or legislation will be proposed and potentially enacted that would seek to limit carbon dioxide emissions and the use of fossil fuels. Past legislative proposals to address climate change include measures ranging from “carbon taxes,” to tax credits, to federally imposed limitations on GHG emissions.

Additionally, at the international level, in December 2015, the United States and a coalition of international partners adopted the Paris Agreement at the United Nations Framework Convention on Climate Change (the “Paris Agreement”), which calls on the parties to undertake “ambitious efforts” to limit the average global temperature, and to conserve and enhance sinks and reservoirs of greenhouse gases. The Paris Agreement went into effect on November 4, 2016. The Paris Agreement establishes a framework for the parties to cooperate and report actions to reduce greenhouse gas emissions. Although the United States withdrew from the Paris Agreement effective November 4, 2020, President Biden issued an Executive Order on January 20, 2021 to rejoin the Paris Agreement, which went into effect on February 19, 2021. The course of future legislation and regulation in the U.S. and abroad remains difficult to predict and the potential increased costs associated with GHG regulation or taxes cannot be estimated at this time.

State regulations also have the potential to increase Cyxtera’s costs of obtaining electricity. Certain states, like California, have issued or may enact environmental regulations that could materially affect Cyxtera’s facilities and electricity costs. California has limited GHG emissions from new and existing conventional power plants by imposing regulatory caps and by auctioning the rights to emission allowances. Washington, and Massachusetts have issued regulations to implement similar carbon cap and trade programs, and other states are considering proposals to limit carbon emissions through cap-and-trade programs, carbon pricing programs and other mechanisms. Some northeastern states adopted a multi-state program for limiting carbon emissions through the Regional Greenhouse Gas Initiative (“RGGI”) cap and trade program. State programs have not had a material adverse effect on Cyxtera’s electricity costs to date, but due to the market-driven nature of some of the programs, they could have a material adverse effect on electricity costs in the future.

 

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Aside from regulatory requirements, Cyxtera has separately undertaken efforts to procure energy from renewable energy projects in order to support new renewables development. The costs of procuring such energy may exceed the costs of procuring electricity from existing sources, such as existing utilities or electric service provided through conventional grids. These efforts to support and enhance renewable electricity generation may increase Cyxtera’s costs of electricity above those that would be incurred through procurement of conventional electricity from existing sources.

Cyxtera’s business may be adversely affected by climate change and responses to it.

Severe weather events, such as droughts, heat waves, fires, hurricanes, and flooding, pose a threat to Cyxtera’s data centers and its customers’ IT infrastructure through physical damage to facilities or equipment, power supply disruption, and long-term effects on the cost of electricity. The frequency and intensity of severe weather events are reportedly increasing locally and regionally as part of broader climate changes and may cause the cost of operating expenses, like power, to increase over time. Global weather pattern changes may also pose long-term risks of physical impacts to Cyxtera’s business.

Cyxtera maintains disaster recovery and business continuity plans that have been and would be implemented in the event of severe weather events that interrupt its business or affect its customers’ IT infrastructure. While these plans are designed to allow Cyxtera to recover from natural disasters or other events that can interrupt its business, Cyxtera cannot be certain that its plans will protect its or its customers from all such disasters or events. Failure to prevent impact to customers from such events could adversely affect Cyxtera’s business.

Cyxtera faces pressures from its customers, who are increasingly focused on climate change, to prioritize sustainable energy practices, reduce its carbon footprint and promote sustainability. To address these concerns, Cyxtera pursues opportunities to improve energy efficiency and implement energy-saving retrofits. It is possible, however, that Cyxtera’s customers and investors might not be satisfied with its sustainability efforts or the speed of their adoption. If Cyxtera does not meet its customers’ or stockholders’ expectations, its business and/or share price could be harmed.

Concern about climate change in various jurisdictions may result in more stringent laws and regulatory requirements regarding emissions of carbon dioxide or other GHGs. For example, the European Union Commission recently published a digital strategy that announced an intent to enact initiatives to achieve climate-neutral, highly energy-efficient and sustainable data centers by no later than 2030. Restrictions on carbon dioxide or other GHG emissions could result in significant increases in operating or capital costs, including higher energy costs generally, and increased costs from carbon taxes, emission cap and trade programs and renewable portfolio standards that are imposed upon Cyxtera’s electricity suppliers. These higher energy costs, and the cost of complying across Cyxtera’s global platform, or of failing to comply with these and other climate change regulations, may have an adverse effect on Cyxtera’s business and results of operations.

Cyxtera’s business could be harmed by prolonged power outages, power and fuel shortages or capacity constraints.

Cyxtera’s data centers are affected by problems accessing electricity sources, such as planned or unplanned power outages and limitations on transmission or distribution. Unplanned power outages, including, but not limited to, those relating to large storms, earthquakes, fires, tsunamis, cyberattacks and planned power outages by public utilities such as those related to Pacific Gas and Electric Company’s (“PG&E”) planned outages in California to minimize fire risks, could harm Cyxtera’s customers and its business. Some of Cyxtera’s data centers are located in leased buildings where, depending upon the lease requirements and number of tenants involved, Cyxtera may or may not control some or all of the infrastructure including generators and fuel tanks. As a result, in the event of a power outage, Cyxtera may be dependent upon the landlord, as well as the utility company, to restore the power. Cyxtera attempts to limit its exposure to system downtime by using backup generators and alternative power supplies, but these measures may not always prevent downtime, which can adversely affect customer experience and revenues.

 

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In each of its markets, Cyxtera relies on third parties to provide a sufficient amount of power for current and future customers. At the same time, power and cooling requirements are increasing per unit of equipment. As a result, some customers are consuming an increasing amount of power for the same amount of infrastructure. Cyxtera generally does not control the amount of power its customers draw from their installed circuits, which can result in growth in the aggregate power consumption of its facilities beyond its original planning and expectations. This means that limitations on the capacity of Cyxtera’s electrical delivery systems and equipment could limit customer utilization of its data centers. These limitations could have a negative impact on the effective available capacity of a given data center and limit Cyxtera’s ability to grow its business, which could have a negative impact on Cyxtera’s financial performance, operating results and cash flows. Cyxtera attempts to limit its exposure to system downtime by using backup generators and alternative power supplies, but these measures may not always prevent downtime, which can adversely affect customer experience and revenues.

Cyxtera is subject to risks related to corporate social responsibility.

The growing integration of Environmental, Social and Governance (“ESG”) factors in making investment decisions is relatively new, and frameworks and methods used by investors for assessing ESG policies are not fully developed and vary considerably among the investment community. While Cyxtera has enacted various policies and practices to address ESG matters, it has not publicly announced a formal ESG program or framework and does not currently report on its ESG policies and practices. As a result, Cyxtera may not be adequately recognized for its current ESG efforts and there may be a perception held by the general public, Cyxtera’s governmental partners, vendors, suppliers, other stakeholders, or the communities in which Cyxtera does business that Cyxtera’s policies and procedures are insufficient.

Cyxtera expects to take a more proactive stance with respect to ESG reporting in the future. However, by electing to set and publicly share these ESG standards, Cyxtera may also face increased scrutiny related to its ESG activities. As a result, its reputation could be harmed if it fails to act responsibly in the areas in which it chooses to report. Any harm to Cyxtera’s reputation resulting from setting these standards or its failure or perceived failure to meet such standards could impact employee retention; the willingness of Cyxtera’s governmental partners, vendors and suppliers to do business with it; investors’ willingness or ability to purchase or hold its securities; or Cyxtera’s ability to access capital, any of which could adversely affect Cyxtera’s business, financial performance, and growth.

Risks Related to Regulatory Compliance and Laws including Tax Laws

The requirements of being a public company, including maintaining adequate internal control over its financial and management systems, may strain Cyxtera’s resources, divert management’s attention, and affect Cyxtera’s ability to attract and retain executive management and qualified board members.

Cyxtera will become a public company following the Business Combination, and will have incurred, and will continue to incur, significant legal, accounting and other expenses that Cyxtera did not incur as a private company. Cyxtera will become subject to the reporting requirements of the Exchange Act, and will be required to comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as the rules and regulations subsequently implemented by the SEC and Nasdaq listing standards, including changes in corporate governance practices and the establishment and maintenance of effective disclosure and financial controls. Cyxtera is currently not subject to Section 404 of the Sarbanes-Oxley Act. However, following the closing, the combined company will be required to provide management’s attestation on internal controls. The standards required for a public company under Section 404(a) of the Sarbanes-Oxley Act are significantly more stringent than those required of Cyxtera as a privately-held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable after the Business Combination. If the combined company is not able to implement the additional requirements of Section 404(a) in a timely manner or with adequate compliance, it may not be able to assess whether its internal

 

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controls over financial reporting are effective, which may subject it to adverse regulatory consequences and could harm investor confidence and the market price of its securities.

Compliance with these rules and regulations can be burdensome. Cyxtera’s management and other personnel need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase Cyxtera’s historical legal and financial compliance costs and will make some activities more time-consuming and costly. For example, Cyxtera expects that these rules and regulations may make it more difficult and more expensive for Cyxtera to attract and retain qualified members of its board of directors as compared to Cyxtera as a private company. Cyxtera may need to hire additional accounting and financial staff, and engage outside consultants, all with appropriate public company experience and technical accounting knowledge and maintain an internal audit function, which will increase its operating expenses. Moreover, Cyxtera could incur additional compensation costs in the event that it decides to pay cash compensation closer to that of other publicly listed companies, which would increase its general and administrative expenses and could materially and adversely affect its profitability. Cyxtera is evaluating these rules and regulations and cannot predict or estimate the amount of additional costs it may incur or the timing of such costs.

U.S. and non-U.S. tax legislation and future changes to applicable U.S. or non-U.S. tax laws and regulations and/or their interpretation may have an adverse effect on Cyxtera’s business, financial condition and results of operations. Tax rules and regulations are subject to interpretation and require judgment by Cyxtera that may be successfully challenged by the applicable taxation authorities upon audit, which could result in additional tax liabilities.

Cyxtera is subject to tax laws in the United States and each other jurisdiction where it does business, including the United Kingdom, Canada and Singapore, where a number of its subsidiaries are organized. Changes in tax laws or their interpretation could decrease the amount of revenues Cyxtera receives, the value of any tax loss carry-forwards and tax credits recorded on Cyxtera’s balance sheet and the amount of Cyxtera’s cash flow, and adversely affect Cyxtera’s business, financial condition or results of operations. In addition, other factors or events, including business combinations and investment transactions, changes in the valuation of Cyxtera’s deferred tax assets and liabilities, adjustments to taxes upon finalization of various tax returns or as a result of deficiencies asserted by taxing authorities, increases in expenses not deductible for tax purposes, changes in available tax credits, other changes in the apportionment of Cyxtera’s income and other activities among tax jurisdictions, and changes in tax rates, could also increase Cyxtera’s future effective tax rate.

In addition, Cyxtera’s effective tax rate and tax liability are based on the application of current income tax laws, regulations and treaties. These laws, regulations and treaties are complex, and the manner which they apply to Cyxtera and its diverse set of business arrangements is often open to interpretation, and can require Cyxtera to take positions regarding the interpretation of applicable rules or the valuation of its assets that are subject to material uncertainty. Significant management judgment is required in determining Cyxtera’s provision for income taxes, Cyxtera’s deferred tax assets and liabilities and any valuation allowance recorded against Cyxtera’s net deferred tax assets. The tax authorities could challenge Cyxtera’s interpretation of laws, regulations and treaties or the positions that it has taken regarding the valuation of its assets, resulting in additional tax liability or adjustment to Cyxtera’s income tax provision that could increase Cyxtera’s effective tax rate.

Cyxtera’s tax filings are subject to review or audit by the U.S. Internal Revenue Service (the “IRS”) and state, local and non-U.S. taxing authorities. As discussed above, Cyxtera exercises significant judgment in determining Cyxtera’s worldwide provision for taxes and, in the ordinary course of Cyxtera’s business, there may be transactions and calculations where the proper tax treatment is uncertain. Cyxtera may also be liable for taxes in connection with businesses it acquires. Cyxtera’s determinations are not binding on the IRS or any other taxing authorities, and accordingly the final determination in an audit or other proceeding may be materially different than the treatment reflected in Cyxtera’s tax provisions, accruals and returns. An assessment of additional taxes because of an audit could have a material adverse effect on Cyxtera’s business, financial condition, results of operations and cash flows.

 

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New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, or interpreted, changed, modified or applied adversely to Cyxtera, any of which could adversely affect its business operations and financial performance. Cyxtera is are unable to predict what changes will occur and, if so, the ultimate impact on its business. To the extent that such changes have a negative impact on Cyxtera, they may materially and adversely impact its business, financial condition, results of operations and cash flows. For purposes of the foregoing, reference to Cyxtera shall include references to Cyxtera and its subsidiaries.

Cyxtera’s net operating losses (“NOLs”) may not be available to offset future taxable income in the United States.

As of December 31, 2020, Cyxtera had net operating loss carryforwards, or NOLs, of $230.1 million for federal income tax purposes and $356.7 million for state income tax purposes. Subject to expiration or other uses or limitations, these NOLs may be available to offset Cyxtera’s future U.S. taxable income, if any. However, as of the date hereof, Cyxtera has not had any history of prior positive earnings. Further, certain of these NOLs, which are available and could potentially be utilized to offset tax that would otherwise be owed in respect of prior taxable corporate actions (including any incremental tax that might otherwise be owed as a result of an audit adjustment), if any, will begin to expire at various dates through 2040. In addition, under Section 382 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change” (very generally defined as a greater than 50% change, by value, in the corporation’s equity ownership by certain shareholders or groups of shareholders over a rolling three-year period), the corporation’s ability to utilize its pre-change NOLs to offset future taxable income is limited. Future changes in Cyxtera’s stock ownership, some of which might be beyond Cyxtera’s control, could result in an ownership change under Section 382 of the Code. Future regulatory changes could also limit Cyxtera’s ability to utilize Cyxtera’s NOLs. In addition, utilization of NOLs in the United States generated in tax years beginning after December 31, 2017 are limited to a maximum of 80% of the taxable income for such year determined without regard to the NOL deduction. To the extent Cyxtera’s NOLs expire, are utilized to offset tax that would otherwise be owed as a result of prior corporate actions, are restricted or are otherwise not available to offset future taxable income with NOLs, Cyxtera’s cash flows and results of operations may be adversely affected. For purposes of the foregoing, references to Cyxtera shall include references to Cyxtera and its subsidiaries.

Government regulation may adversely affect Cyxtera’s business.

Various laws and governmental regulations, both in the U.S. and abroad, governing internet-related services, related communications services and information technologies remain largely unsettled, even in areas where there has been some legislative action. For example, the Federal Communications Commission (“FCC”) recently overturned network neutrality rules, which may result in material changes in the regulations and contribution regime affecting Cyxtera and its customers. Furthermore, the U.S. Congress and state legislatures are reviewing and considering changes to the new FCC rules making the future of network neutrality and its impact on Cyxtera uncertain. There may also be forthcoming regulation in the U.S. in the areas of cybersecurity, data privacy and data security, any of which could impact Cyxtera and its customers. Similarly, data privacy regulations continue to evolve and must be addressed by Cyxtera as a global company.

Cyxtera remains focused on whether and how existing and changing laws, such as those governing intellectual property, privacy, libel, telecommunications services, data flows/data localization, carbon emissions impact, and taxation apply to the internet and to related offerings such as Cyxtera’s offerings, and substantial resources may be required to comply with regulations or bring any non-compliant business practices into compliance with such regulations. In addition, the continuing development of the market for online commerce and the displacement of traditional telephony service by the internet and related communications services may prompt an increased call for more stringent consumer protection laws or other regulation both in the U.S. and abroad that may impose additional burdens on companies conducting business online and their service providers.

 

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The adoption or modification of laws or regulations relating to the internet and Cyxtera’s business, or interpretations of existing laws, could have a material adverse effect on Cyxtera’s business, financial condition and results of operations.

Cyxtera may become subject to litigation, securities class action or threatened litigation which may divert management time and attention, require Cyxtera to pay damages and expenses or restrict the operation of its business.

Cyxtera may become subject to disputes with parties with whom it conducts business, including as a result of any breach in its security systems or downtime in its critical power and cooling systems. Any such dispute could result in litigation between Cyxtera and the other parties. Whether or not any dispute actually proceeds to litigation, Cyxtera may be required to devote significant management time and attention to its resolution (through litigation, settlement or otherwise), which would detract from management’s ability to focus on Cyxtera’s business. Any such resolution could involve the payment of damages or expenses by Cyxtera, which may be significant. In addition, any such resolution could involve Cyxtera’s agreement with terms that restrict the operation of its business.

Risks Related to SVAC and the Business Combination

We and Cyxtera will be subject to business uncertainties and contractual restrictions while the Business Combination is pending.

Uncertainty about the effect of the Business Combination on employees and third parties may have an adverse effect on us and Cyxtera. These uncertainties may impair the ability of Cyxtera to retain and motivate key personnel and could cause third parties that deal with Cyxtera to defer entering into contracts or making other decisions or seek to change existing business relationships. If employees depart because of uncertainty about their future roles and the potential complexities of the business combination, our business following the Business Combination could be harmed.

Our ability to successfully effect the Business Combination and successfully operate the business thereafter will be largely dependent upon the efforts of certain key personnel. The loss of such key personnel and our inability to hire and retain replacements could negatively affect the operations and profitability of SVAC following the Business Combination.

Our ability to successfully effect the Business Combination and successfully operate the business is dependent upon the efforts and expertise of certain key personnel, including the management team of Cyxtera. Although we expect key personnel to remain with the combined company following the Business Combination, there can be no assurance that they will do so. Key employees may depart either before or after such transactions because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the combined company following such transactions. The loss of such key personnel and our inability to hire and retain replacements could negatively affect the operations of the combined company. There is a shortage of qualified personnel in these fields, and we compete with other companies for the limited pool of talent in the locations in which we operate. Furthermore, following the closing, certain of the key personnel of Cyxtera may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause the combined company to have to expend time and resources helping them become familiar with such requirements.

Our Sponsor and certain officers and directors have interests in the Business Combination that are different from or are in addition to other stockholders in recommending that stockholders vote in favor of approval of the Business Combination Proposal and approval of the other Proposals described in this proxy statement.

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stockholders should be aware that our Sponsor and certain officers and directors have interests in the Business Combination that may be different from, in addition to, or conflict with the interests of our stockholders in general. For a more complete description of these interests, see section entitled “Proposal Number 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination.”

The unaudited pro forma condensed combined financial information included in this proxy statement may not be indicative of what our actual financial position or results of operations would have been.

The unaudited pro forma condensed consolidated combined financial information for SVAC following the Business Combination in this proxy statement is presented for illustrative purposes only and is not necessarily indicative of what our actual financial position or results of operations would have been had the Business Combination been completed on the dates indicated. See the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”

Our Sponsor and certain of our directors and officers hold all of our founder shares and private placement warrants. They will lose their entire investment with respect to such securities if we do not complete an initial business combination.

Our Sponsor and certain of our officers and directors currently hold all of our 10,105,863 founder shares, representing 20% of the total outstanding shares of common stock as of the date hereof. The founder shares will be worthless if we do not complete an initial business combination by September 14, 2022. In addition, our Sponsor holds all of the 6,723,127 private placement warrants. Such private placement warrants will also be worthless if we do not complete an initial business combination by September 14, 2022.

The personal and financial interests of our Sponsor and our officers and directors may have influenced their motivation in identifying and selecting Cyxtera, completing the Business Combination with Cyxtera and influencing the operation of Cyxtera following the Business Combination. For a more complete description of these interests, see the section entitled “Proposal Number 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination.”

If you elect to exercise your redemption rights with respect to your shares of Class A common stock, you will not receive any distributable redeemable warrants.

In connection with our initial business combination, public stockholders will have the opportunity to exercise their right to redeem their shares of Class A common stock for cash. However, our distributable redeemable warrants will be distributed only to the holders of record of those shares of our Class A common stock that remain outstanding after such redemptions. Accordingly, to the extent that you elect to redeem your shares of Class A common stock, you will receive no distributable redeemable warrants in respect of such shares. The contingent right to receive the distributable redeemable warrants will remain attached to our Class A common stock, will not be separately transferable, assignable or salable, and will not be evidenced by any certificate or instrument.

If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share.

Our placing of funds in the Trust Account may not protect those funds from third-party claims against us. Although we seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim

 

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against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where we are unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within 24 months from the closing of our Initial Public Offering, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per share redemption amount received by public stockholders could be less than the $10.00 per share initially held in the trust account, due to claims of such creditors.

Our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below: (1) $10.00 per public share; or (2) the actual amount per public share held in the Trust Account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of permitted withdrawals, except as to any claims by a third party that executed a waiver of any and all rights to the monies held in the trust account (whether any such waiver is enforceable) and except as to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act. We have not independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and we have not asked our Sponsor to reserve for such indemnification obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our Trust Account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months from the closing of the Initial Public Offering may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the 24th month from the closing of our Initial Public Offering in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures.

 

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Because we do not intend to comply with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, consultants, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our Trust Account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 24 months from the closing of the Initial Public Offering is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.

The grant of registration rights to our initial stockholders and holders of our forward purchase shares, and the future exercise of such rights, may adversely affect the market price of our Class A common stock.

Pursuant to the A&R Registration Rights Agreement, we will agree to provide customary demand and piggyback registration rights to our initial stockholders and the Investor Parties, subject to certain conditions. Pursuant to the forward purchase agreement, we will use our commercially reasonable efforts to file within 30 days after the closing of our initial business combination a registration statement with the SEC for a secondary offering of the forward purchase shares and use our best efforts to cause such registration statement to be declared effective promptly thereafter, but in no event later than 60 days. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A common stock.

Our independent directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our public stockholders.

In the event that the proceeds in the Trust Account are reduced below the lesser of: (1) $10.00 per public share; or (2) the actual amount per share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of permitted withdrawals, and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in certain instances. For example, the cost of such legal action may be deemed by the independent directors to be too high relative to the amount recoverable or the independent directors may determine that a favorable outcome is not likely. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.

 

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If, after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board may be exposed to claims of punitive damages.

If, after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith by paying public stockholders from the Trust Account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.

If, before distributing the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If, after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith by paying public stockholders from the trust account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.

In evaluating the Business Combination, our management relied on the availability of funds from the sale of the forward purchase shares which will be used to satisfy the Redemption Obligation. If the sale of some or all of the forward purchase shares fails to close, for any reason, we may lack sufficient funds to consummate the Business Combination.

Pursuant to the forward purchase agreement, the forward purchasers have agreed to purchase forward purchase shares in an aggregate amount of up to $100,000,000 in a private placement that will close simultaneously with the closing of our initial business combination. The funds from the sale of forward purchase shares will be used to satisfy the Redemption Obligation and is therefore intended to provide us with a minimum funding level for our initial business combination.

If the sale of some or all of the forward purchase shares does not close for any reason, including by reason of the failure by the forward purchasers to fund the purchase price for their forward purchase shares, we may lack sufficient funds to consummate our initial business combination. The forward purchasers’ obligations to purchase the forward purchase shares is subject to termination prior to the closing of the sale of the forward purchase shares by mutual written consent of the company and the forward purchasers. The forward purchasers’ obligations to purchase its forward purchase shares is subject to fulfillment of customary closing conditions. In the event of any such failure to fund by the forward purchase investors, any obligation is so terminated or any such closing condition is not satisfied and not waived by the forward purchasers, we may lack sufficient funds to consummate our initial business combination.

The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.

Since the Merger Agreement requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful increases. If our initial business combination is

 

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unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open market.

The parties to the Merger Agreement may amend the terms of the Merger Agreement or waive one or more of the conditions to the Business Combination, and the exercise of discretion by our directors and officers in agreeing to changes to the terms of or waivers of closing conditions in the Merger Agreement may result in a conflict of interest when determining whether such changes to the terms of the Merger Agreement or waivers of conditions are appropriate and in the best interests of our stockholders.

In the period leading up to the closing, other events may occur that, pursuant to the Merger Agreement, would require us to agree to amend the Merger Agreement, to consent to certain actions or to waive certain closing conditions or other rights that we are entitled to under the Merger Agreement. Such events could arise because of changes in the course of Cyxtera’s business, a request by Cyxtera to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on Cyxtera’s business and would entitle us to terminate the Merger Agreement. In any of such circumstances, it would be in our discretion, acting through our board of directors, to grant our consent or waive our rights. The existence of the financial and personal interests of the directors and officers described elsewhere in this proxy statement may result in a conflict of interest on the part of one or more of the directors or officers between what he or she may believe is best for SVAC and our stockholders and what he or she may believe is best for himself or herself or his or her affiliates in determining whether or not to take the requested action.

As of the date of this proxy statement, we do not believe there will be any material changes or waivers that our directors and officers would be likely to make after stockholder approval of the Business Combination has been obtained. While certain changes could be made without further stockholder approval, if there is a change to the terms of the Business Combination that would have a material impact on the stockholders, we will be required to circulate a new or amended proxy statement or supplement thereto and resolicit the vote of our stockholders with respect to the Business Combination Proposal.

Even if we consummate the Business Combination, there is no guarantee that the public warrants will be in the money at the time they become exercisable, and they may expire worthless.

The exercise price for our redeemable warrants is $11.50 per share of Class A common stock. There is no guarantee that the redeemable warrants will be in the money following the time they become exercisable and prior to their expiration, which will occur on the fifth anniversary of the completion of our initial business combination, and as such, the redeemable warrants may expire worthless.

We may amend the terms of the redeemable warrants in a manner that may be adverse to holders of such warrants with the approval by the holders of at least 50% of the then outstanding redeemable warrants. As a result, the exercise price of your redeemable warrants could be increased, the redeemable warrants could be converted into cash or stock (at a ratio different than initially provided), the exercise period could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a redeemable warrant could be decreased, all without your approval.

Our redeemable warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the redeemable warrants may be amended without the consent of any holder to cure any ambiguity, mistake (including to conform the warrant agreement to the description thereof herein) or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding redeemable warrants to make any

 

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change that adversely affects the interests of the registered holders of such warrants. Accordingly, we may amend the terms of the redeemable warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding redeemable warrants approve of such amendment and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 50% of the number of the then outstanding private placement warrants. Although our ability to amend the terms of the redeemable warrants with the consent of at least 50% of the then outstanding redeemable warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock (at a ratio different than initially provided), shorten the exercise period or decrease the number of shares of our common stock purchasable upon exercise of a warrant. Our initial stockholders may purchase redeemable warrants with the intention of reducing the number of redeemable warrants outstanding or to vote such warrants on any matters submitted to warrantholders for approval, including amending the terms of the redeemable warrants in a manner adverse to the interests of the registered holders of redeemable warrants. While our initial stockholders have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for such transactions, there is no limit on the number of our redeemable warrants that our initial stockholders may purchase and it is not currently known how many redeemable warrants, if any, our initial stockholders may hold at any time during which the terms of the redeemable warrants may be proposed to be amended.

We may redeem the unexpired redeemable warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making their warrants worthless.

We have the ability to redeem outstanding redeemable warrants at any time after they become exercisable and prior to their expiration, at a price of  $0.01 per warrant, provided that the last sale price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrant holders. If and when the redeemable warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you to: (1) exercise your redeemable warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so (2) sell your redeemable warrants at the then-current market price when you might otherwise wish to hold your redeemable warrants; or (3) accept the nominal redemption price which, at the time the outstanding redeemable warrants are called for redemption, is likely to be substantially less than the market value of your redeemable warrants.

In addition, we may redeem your redeemable warrants after they become exercisable (after the $10.00 per share threshold is met) for $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their redeemable warrants prior to redemption for a number of Class A common stock determined based on the redemption date and the fair market value of our Class A common stock. Any such redemption may have similar consequences to a cash redemption described above. In addition, such redemption may occur at a time when the redeemable warrants are “out-of-the-money,” in which case you would lose any potential embedded value from a subsequent increase in the value of the Class A common stock had your warrants remained outstanding.

Because each unit contains one-sixth of one warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.

Each unit contains one-sixth of one detachable redeemable warrant. Because, pursuant to our warrant agreement, the redeemable warrants may only be exercised for a whole number of shares, only a whole warrant may be exercised at any given time. While holders of units (or the underlying shares of Class A common stock) who elect not to redeem such shares in connection with our initial business combination will also receive a distribution of redeemable warrants in the form of distributable redeemable warrants, it is likely that the number

 

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of distributable redeemable warrants issued to any such holder will not be a whole number. This is different from other offerings similar to ours whose units include one share of common stock and one warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of an initial business combination since the detachable redeemable warrants and distributable warrants will be exercisable in the aggregate for one-third of the number of shares compared to units that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if they included a warrant to purchase one whole share.

Warrants will become exercisable for our Class A common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

We issued detachable redeemable warrants to purchase an aggregate of 6,737,242 shares of Class A common stock as part of the units offered in our Initial Public Offering and, simultaneously with the closing of our Initial Public Offering, we issued private placement warrants to the Sponsor to purchase an aggregate of 6,723,127 shares of Class A common stock. Each warrant issued is exercisable to purchase one whole share of Class A common stock at $11.50 per whole share. In addition, at the distribution time, we will effect a distribution of a number of warrants equal to the number of units issued in the Initial Public Offering multiplied by one-sixth (i.e., 6,737,242 warrants) (the “Aggregate Warrant Amount”) as follows: (i) to the extent that no public stockholders redeem their shares of Class A common stock issued in the Initial Public Offering (whether acquired in the Initial Public Offering or afterwards) in connection with the initial business combination, each public stockholder will receive one-sixth of one distributable redeemable warrant per public share and (ii) to the extent that any public stockholders redeem any of their public shares in connection with the initial business combination, then (A) one-sixth of one distributable redeemable warrant will be distributed per each public share that was not redeemed (the “remaining public shares”) and (B) the warrants in an amount equal to the Aggregate Warrant Amount less the number of warrants distributed pursuant to the foregoing clause (A) will be distributed on a pro rata basis to (x) the holders of the remaining public shares based on their percentage of Class A common stock held after redemptions and the issuance of any forward purchase shares, as distributable redeemable warrants and (y) the holders of the forward purchase shares based on their percentage of Class A common stock held after redemptions and the issuance of any forward purchase shares, as private placement warrants. Public stockholders who exercise their redemption rights are not entitled to receive any distribution of distributable redeemable warrants in respect of such redeemed public shares. The number of distributable redeemable warrants to be distributed in respect of each public share is contingent upon the aggregate number of public shares that are redeemed in connection with our initial business combination. The distributable redeemable warrants, together with the detachable redeemable warrants, are collectively referred to herein as the “redeemable warrants”.

To the extent such warrants are exercised, additional shares of our Class A common stock will be issued, which will result in dilution to the then existing holders of our Class A common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our Class A common stock.

Our warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.

Our warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

 

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Notwithstanding the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope of the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.

This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.

Following the Business Combination, the price of our securities may fluctuate significantly due to the market’s reaction to the Business Combination and general market and economic conditions. An active trading market for our securities following the Business Combination may never develop or, if developed, it may not be sustained. In addition, the price of our securities after the Business Combination can vary due to general economic conditions and forecasts, our general business condition and the release of our financial reports. Additionally, if our securities are not listed on, or become delisted from Nasdaq for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if we were quoted or listed on Nasdaq or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

Subsequent to our completion of the Business Combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.

Although we have conducted extensive due diligence on Cyxtera, we cannot assure you that this diligence identified all material issues that may be present with Cyxtera, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of Cyxtera and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we will be subject as a result of assuming pre-existing debt held by Cyxtera. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following the Business Combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.

 

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If the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of our securities may decline.

If the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of our securities prior to the closing may decline. The market values of our securities at the time of the Business Combination may vary significantly from their prices on the date the Merger Agreement was executed, the date of this proxy statement, or the date on which our stockholders vote on the Business Combination. Because the number of shares to be issued in the Merger Agreement will not be adjusted to reflect any changes in the market price of our Class A common stock, the market value of the Class A common stock issued in the Business Combination may be higher or lower than the values of these shares on earlier dates.

In addition, following the Business Combination, fluctuations in the price of our securities could contribute to the loss of all or part of your investment. Prior to the Business Combination, there has not been a public market for the securities of Cyxtera and trading in the shares of our Class A common stock has not been active. Accordingly, the valuation ascribed to Cyxtera and our Class A common stock in the Business Combination may not be indicative of the price that will prevail in the trading market following the Business Combination. If an active market for our securities develops and continues, the trading price of our securities following the Business Combination could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our securities and our securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of our securities may not recover and may experience a further decline.

Factors affecting the trading price of our securities following the Business Combination may include:

 

   

actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

 

   

changes in the market’s expectations about our operating results;

 

   

success of our competitors;

 

   

our operating results failing to meet the expectation of securities analysts or investors in a particular period;

 

   

changes in financial estimates and recommendations by securities analysts concerning SVAC or the industries in which SVAC operates in general;

 

   

operating and stock price performance of other companies that investors deem comparable to SVAC;

 

   

changes in laws and regulations affecting our business;

 

   

commencement of, or involvement in, litigation involving SVAC;

 

   

changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;

 

   

the volume of shares of our Class A common stock available for public sale;

 

   

major changes in our board or management;

 

   

sales of substantial amounts of Class A common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and

 

   

general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. Trading of stock on a national securities exchange has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular

 

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companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for the stocks of other companies which investors perceive to be similar to SVAC following the Business Combination could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

Following the Business Combination, if securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our Class A common stock adversely, the price and trading volume of our Class A common stock could decline.

The trading market for our Class A common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market, or our competitors. If any of the analysts who may cover SVAC following the Business Combination change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, the price of our Class A common stock would likely decline. If any analyst who may cover SVAC following the Business Combination were to cease their coverage or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.

We are subject to laws, regulations and rules enacted by national, regional and local governments and Nasdaq. In particular, we are required to comply with certain SEC, Nasdaq and other legal or regulatory requirements. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly. Those laws, regulations and rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws, regulations or rules, as interpreted and applied, could have a material adverse effect on our business and results of operations.

We have identified a material weakness in our internal control over financial reporting related to our accounting for instruments that have an equity and liability component related to the instruments we issued in connection with the Initial Public Offering. This material weakness could continue to adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner.

On April 12, 2021, the staff of the SEC issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies” (the “SEC Staff Statement”). Following the issuance of the SEC Staff Statement on April 12, 2021, in May 2021, after consultation with our independent registered public accounting firm, our management and our audit committee concluded that, in light of the SEC Staff Statement, it was appropriate to restate the previously issued and audited financial statements as of and for the period ended December 31, 2020.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our management is likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes and material weaknesses identified through such evaluation of those internal controls. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

 

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We have identified a material weakness in our internal control over financial reporting related to the accounting for instruments that have an equity and liability component related to the instruments we issued in connection with our Initial Public Offering in September 2020. As a result of this material weakness, our management has concluded that our internal control over financial reporting was not effective as of December 31, 2020. This material weakness resulted in a material misstatement of our derivative liabilities, change in fair value of derivative liabilities, Class A common stock subject to possible redemption, accumulated deficit and related financial disclosures for the previously issued audited financial statements as of and for the year ended December 31, 2020 and the unaudited interim financial statements as of and for the three and nine months ended September 30, 2020. For a discussion of management’s consideration of the material weakness identified related to our accounting for instruments that have an equity and liability component related to the instruments we issued in connection with our September 2020 Initial Public Offering, see “Note 2—Restatement of Previously Issued Financial Statements” to our accompanying financial statements.

We have concluded that our internal control over financial reporting was ineffective as of March 31, 2021 because material weaknesses existed in our internal control over financial reporting. We have taken a number of measures to remediate the material weaknesses described therein; however, if we are unable to remediate our material weaknesses in a timely manner or we identify additional material weaknesses, we may be unable to provide required financial information in a timely and reliable manner and we may incorrectly report financial information. Likewise, if our financial statements are not filed on a timely basis, we could be subject to sanctions or investigations by the stock exchange on which our common stock is listed, the SEC or other regulatory authorities. Failure to timely file will cause us to be ineligible to utilize short form registration statements on Form S-3 or Form S-4, which may impair our ability to obtain capital in a timely fashion to execute our business strategies or issue shares to effect an acquisition. In either case, there could result a material adverse effect on our business. The existence of material weaknesses or significant deficiencies in internal control over financial reporting could adversely affect our reputation or investor perceptions of us, which could have a negative effect on the trading price of our stock. In addition, we will incur additional costs to remediate material weaknesses in our internal control over financial reporting.

We can give no assurance that the measures we have taken and plan to take in the future will remediate the material weakness identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls. In addition, even if we are successful in strengthening our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements.

There can be no assurance that our Class A common stock that will be issued in connection with the Business Combination will be approved for listing on Nasdaq following the closing, or that we will be able to comply with the continued listing standards of Nasdaq.

Our Class A common stock, units and detachable redeemable warrants are currently listed on Nasdaq. We have applied to continue to list our Class A common stock and redeemable warrants on Nasdaq. Our continued eligibility for listing may depend on, among other things, the number of our shares that are redeemed. If, after the Business Combination, Nasdaq delists our Class A common stock from trading on its exchange for failure to meet the listing standards, we and our stockholders could face significant material adverse consequences including:

 

   

a limited availability of market quotations for our securities;

 

   

reduced liquidity for our securities;

 

   

a determination that our Class A common stock is a “penny stock,” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

 

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a limited amount of news and analyst coverage; and

 

   

a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our Class A common stock, units and detachable redeemable warrants are currently listed on Nasdaq, they are covered securities. Although states are preempted from regulating the sale of our securities, the federal statute does allow states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the state of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities.

The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.

We, and the combined company will, qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. As a result, our stockholders may not have access to certain information they deem important. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year (a) following September 14, 2025, the fifth anniversary of our Initial Public Offering, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as measured on the last business day of our most recently completed second fiscal quarter, or (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can, therefore, delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

We cannot predict if investors will find our Class A common stock less attractive because we will rely on these exemptions. If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock and our stock price may be more volatile.

 

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There is uncertainty regarding the U.S. federal income tax consequences of the redemption to the holders of our Class A common stock.

There is some uncertainty regarding the U.S. federal income tax consequences to holders of our Class A common stock who exercise their redemption rights. The uncertainty of tax consequences relates primarily to the individual circumstances of the taxpayer and includes (i) whether the redemption results in treatment of amounts received as part of a corporate distribution, potentially taxable as ordinary income, or a sale, potentially giving rise to capital gain, and (ii) whether such capital gain is “long-term” or “short-term.” Whether the redemption qualifies for sale treatment, resulting in potential taxation as capital gain rather than ordinary income, will depend largely on whether the holder owns (or is deemed to own) any shares of Class A common stock following the redemption, and if so, the total number of shares of our Class A common stock held (or deemed held) by the holder both before and after the redemption relative to all shares of our Class A common stock considered outstanding both before and after the redemption. The redemption generally will be treated as a sale, rather than a corporate distribution, if the redemption (i) is “substantially disproportionate” with respect to the holder, (ii) results in a “complete termination” of the holder’s interest in SVAC or (iii) is “not essentially equivalent to a dividend” with respect to the holder. Because the application of these tests depends on the particular circumstances of each holder, and in the absence of clear guidance from the IRS, there is uncertainty regarding how a holder who elects to exercise his, or her or its redemption rights will be taxed for U.S. federal income tax purposes. See the section entitled “Material U.S. Federal Income Tax Considerations of the Redemption.”

Changes in tax laws or regulations, or their interpretations, may adversely affect our business, investments and results of operations.

The Biden administration in the U.S. has proposed increases, among other things, to the U.S. corporate income tax rate and the top tax rate on capital gains. Although such proposals, if adopted as currently contemplated, could have a tax impact on our operations, we cannot predict the likelihood, timing or substance of U.S. tax reform. We will continue to monitor the progress of U.S. tax reform, as well as other global tax reform initiatives.

Unlike some other blank check companies, SVAC does not have a specified maximum redemption threshold. The absence of such a redemption threshold will make it easier for us to consummate the Business Combination even if a substantial number of our stockholders redeem.

Unlike some other blank check companies, SVAC does not have a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (such that we do not then become subject to the SEC’s “penny stock” rules). As a result, we may be able to complete the Business Combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the Merger Agreement exceed the aggregate amount of cash available to us, we may not complete the Business Combination or redeem any shares, in which case, all shares of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

We may not be able to complete our initial business combination by September 14, 2022, in which case we would cease all operations, except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only $10.00 per share, or less than such amount in certain circumstances, and our detachable redeemable warrants will expire worthless, and our distributable redeemable warrants will never have been distributed.

Our Charter provides that we must complete our initial business combination within 24 months from the closing of our Initial Public Offering (i.e. September 14, 2022). We may not be able to complete our initial

 

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business combination within such time period. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. For example, while the extent of the impact of the outbreak of the novel coronavirus disease 2019 (“COVID-19”) on us will depend on future developments, it could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all. Additionally, the outbreak of COVID-19 may negatively impact businesses we may seek to acquire.

If we have not completed our initial business combination within such time period, we will: (1) cease all operations, except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders may receive only $10.00 per share, or less than $10.00 per share, on the redemption of their shares, and our detachable redeemable warrants will expire worthless, and no distributable redeemable warrants will have been distributed.

Our Sponsor, officers, directors or advisors and their respective affiliates may elect to purchase shares from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A common stock.

In connection with the stockholder vote to approve the Business Combination, our Sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares or detachable redeemable warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation or other duty to do so. Such a purchase may include a contractual acknowledgement that such public stockholder, although still the record holder of our shares (to the extent they are still the record holder of such sold shares as of the redemption deadline) is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our Sponsor, directors, officers, advisors or any of their respective affiliates purchase public shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling public stockholders would be required to revoke their prior elections to redeem their shares. The price per share paid in any such transaction may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. The purpose of such purchases could be to vote such shares in favor of the Business Combination, thereby increasing the likelihood of obtaining stockholder approval of the Business Combination while ensuring that the minimum cash condition for the closing of the Business Combination is satisfied. The purpose of any such purchases of detachable redeemable warrants could be to reduce the number of such warrants outstanding. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.

In addition, if such purchases are made, the public “float” of our Class A common stock and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

 

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If our stockholders fail to comply with the redemption requirements specified in this proxy statement, they will not be entitled to redeem their shares for a pro rata portion of the Trust Account.

In order to exercise their redemption rights, holders of our public shares are required to submit a request in writing and deliver their shares (either physically or electronically) to our transfer agent prior to 4:30 p.m. Eastern Time on                      , 2021 (two business days before the special meeting) in accordance with the procedures described in the section entitled “Special Meeting of SVAC Stockholders — Redemption Rights”. If a holder of public shares does not follow the procedures specified in this proxy statement for redemptions of its public shares, such public shares will not be redeemed for cash in connection with the closing.

SVAC’s board of directors did not obtain a fairness opinion in determining whether or not to proceed with the Business Combination and, as a result, the terms may not be fair from a financial point of view to the public stockholders.

In analyzing the Business Combination, SVAC’s board of directors conducted significant due diligence on Cyxtera. For a complete discussion of the factors utilized by SVAC’s board of directors in approving the Business Combination, see the section entitled “Proposal Number 1 — The Business Combination Proposal — SVAC’s Board of Directors’ Reasons for the Approval of the Business Combination.” SVAC’s board of directors believes because of the financial skills and background of its directors, it was qualified to conclude that the Business Combination was fair from a financial perspective to its stockholders and that Cyxtera’s fair market value was at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the agreement to enter into the Business Combination.

Notwithstanding the foregoing, SVAC’s board of directors did not obtain a fairness opinion to assist it in its determination. Accordingly, SVAC’s board of directors may be incorrect in its assessment of the Business Combination.

There is no guarantee that a stockholder’s decision whether to redeem its shares for a pro rata portion of the Trust Account will put the stockholder in a better future economic position.

We can give no assurance as to the price at which a stockholder may be able to sell its public shares in the future following the completion of the Business Combination, or any alternative business combination. Certain events following the consummation of an initial business combination, including the Business Combination, may cause an increase in SVAC’s share price, and may result in a lower value realized now than a stockholder of SVAC might realize in the future had the stockholder not redeemed its shares. Similarly, if a stockholder does not redeem its shares, the stockholder will bear the risk of ownership of our public shares after the consummation of an initial business combination, and there can be no assurance that a stockholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement. A stockholder should consult the stockholder’s own tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.

Our Sponsor and our officers and directors have agreed to vote in favor of the Business Combination Proposal, regardless of how our public stockholders vote.

Unlike many other blank check companies in which the initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, the Sponsor and our officers and directors have agreed to vote any shares of Class A common stock and Class B common stock owned by them in favor of the Proposals. As of the record date, the Sponsor and our officers and directors own 20% of our issued and outstanding shares of Class A common stock and Class B common stock in the aggregate. Accordingly, it is more likely that the necessary stockholder approval will be received than would be the case if our Sponsor, officers and directors agreed to vote their shares of Class A common stock and Class B common stock owned by them in accordance with the majority of the votes cast by our public stockholders.

 

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The Business Combination is subject to conditions, including certain conditions that may not be satisfied on a timely basis, if at all.

The completion of the Business Combination is subject to a number of conditions. The completion of the Business Combination is not assured and is subject to risks, including the risk that SVAC stockholder approval is not obtained or that there are not sufficient funds in the Trust Account, in each case subject to certain terms specified in the Merger Agreement (as described under section titled “Proposal Number 1 — The Business Combination Proposal — The Merger Agreement — Conditions to the Business Combination”), or that other closing conditions are not satisfied. If SVAC does not complete the Business Combination, it could be subject to several risks, including:

 

   

the parties may be liable for damages to one another under the terms and conditions of the Merger Agreement;

 

   

negative reactions from the financial markets, including declines in the price of SVAC’s stock due to the fact that current prices may reflect a market assumption that the Business Combination will be completed; and

 

   

the attention of our management will have been diverted to the Business Combination rather than pursuit of other potentially beneficial business combination opportunities.

If the adjournment proposal is not approved, and an insufficient number of votes have been obtained to authorize the consummation of the Business Combination, our board of directors will not have the ability to adjourn the special meeting to a later date in order to solicit further votes, and, therefore, the Business Combination will not be approved.

Our board of directors is seeking approval to adjourn the special meeting to a later date or dates if, at the special meeting, we are unable to consummate the Business Combination. If the adjournment proposal is not approved, our board will not have the ability to adjourn the special meeting to a later date and, therefore, the Business Combination would not be completed.

We have incurred and will incur substantial transaction costs in connection with the Business Combination and following the closing, we will incur significant increased expenses and administrative burdens as a public company, which could have a material adverse effect on our business, financial condition and results of operations.

We have incurred and expect to incur substantial costs in connection with consummating the Business Combination and operating as a public company following the closing. As part of the Business Combination, we are utilizing professional service firms for legal, accounting and financial advisory. Although we have been provided with estimates of the costs for each advisory firm, the total actual costs may exceed those estimates.

Following the closing, the combined company will face increased legal, accounting, administrative and other costs and expenses as a public company that Cyxtera does not incur as a private company. The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board (the “PCAOB”) and the securities exchanges, impose additional reporting and other obligations on public companies. Compliance with public company requirements will increase costs and make certain activities more time-consuming. A number of those requirements will require the combined company to carry out activities Cyxtera has not done previously. In addition, additional expenses associated with SEC reporting requirements will be incurred. Furthermore, if any issues in complying with those requirements are identified (for example, if the auditors identify a material weakness or significant deficiency in the internal control over financial reporting), the combined company could incur additional costs rectifying those issues, and the existence of those issues could adversely affect the combined company’s reputation or investor perceptions of

 

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it. It may also be more expensive to obtain director and officer liability insurance. Risks associated with the combined company’s status as a public company may make it more difficult to attract and retain qualified persons to serve on the board of directors or as executive officers. The additional reporting and other obligations imposed by these rules and regulations will increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. These increased costs will require the combined company to divert a significant amount of money that could otherwise be used to expand the business and achieve strategic objectives. Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs.

We may need additional capital in the future, and it may not be available on acceptable terms, if at all.

Following the Business Combination, we may need to access the debt and equity capital markets. However, these sources of financing may not be available on acceptable terms, or at all. Our ability to obtain additional financing will be subject to a number of factors, including market conditions, our operating performance, investor sentiment and ability to incur additional debt in compliance with agreements governing our then-outstanding debt. These factors may make the timing, amount, terms or conditions of additional financings unattractive to us. If we raise additional funds by issuing equity, equity-linked or debt securities, those securities may have rights, references or privileges senior to the rights of our currently issued and outstanding equity or debt, and our existing stockholders may experience dilution. If we are unable to generate sufficient funds from operations or raise additional capital, our growth could be impeded.

Our stockholders will experience immediate dilution as a consequence of the issuance of Class A common stock to the Cyxtera Stockholder as consideration in the Business Combination and to the PIPE Investors in connection with the closing. Having a minority share position may reduce the influence that our current stockholders have on the management of SVAC.

It is anticipated that, immediately following the closing and based on the assumptions set forth in “Certain Defined Terms,” SVAC’s current public stockholders will own approximately 22.3% of the combined company, SVAC’s Sponsor, management and board will own approximately 5.6% of the combined company, the Cyxtera Stockholder will own approximately 58.4% of the combined company and the PIPE Investors will own approximately 13.8% of the combined company. Our stockholders will experience immediate dilution upon the closing of the Business Combination, and as a consequence, the minority position of the former SVAC stockholders may give them limited influence over the management and operations of the combined company. See the sections entitled “Summary of the Proxy Statement — Impact of the Business Combination on SVAC’s Ownership” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

The BC Stockholder and the Medina Stockholder will own a substantial amount of equity interests in us, and have other substantial interests in us and agreements with us, and may have conflicts of interest with us or the other holders of our capital stock.

As of the closing of the Transactions, the Cyxtera Stockholder will beneficially hold approximately 58.4 % of the Class A common stock, which it will distribute to the BC Stockholder, the Medina Stockholder and other equity holders of the Cyxtera Stockholder within 12 months from the date of closing of the Transactions. The Cyxtera Stockholder, BC Stockholder and Medina Stockholder will become parties to the Stockholders Agreement and, as a result thereof, subject to certain circumstances, will have the right to appoint three individuals to the combined company’s board of directors, none of whom is required to be deemed “independent” (collectively, the “Seller Designees”) until 2024. The initial Seller Designees are expected to be Manuel D. Medina, who, pursuant to the Stockholders Agreement, is expected to serve as Chair of the board of directors, Raymond Svider and Fahim Ahmed. For more information, see the section entitled “Proposal Number 1 —The Business Combination Proposal—Related Agreements—Stockholders Agreement.”

As long as the BC Stockholder and Medina Stockholder own a significant percentage of our outstanding voting power, they will have the ability to significantly influence corporate actions requiring stockholder

 

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approval, including the election and removal of directors and the size of the board of directors, and any amendment to the Proposed Charter and our bylaws. In addition, the BC Stockholder and the Medina Stockholder may have substantial influence over our decisions, including without limitation decisions relating to our strategy and corporate transactions regardless of whether other holders of our capital stock believe that any such transactions are in their own best interests. For example, the BC Stockholder and Medina Stockholder could potentially cause us to refrain from making acquisitions or disposition in a manner that is not in the best interests of the BC Stockholder and Medina Stockholder or delay or prevent a change of control, even if the change of control would benefit our other stockholders. Additionally, Nelson Fonseca, Randy Rowland and Victor Semah, each a member of our management team, are partners of Medina Capital.

Neither the BC Stockholder, Medina Stockholder nor any of the Seller Designees are required to present us with transaction opportunities and may pursue them separately or otherwise compete with us.

Neither the BC Stockholder, Medina Stockholder nor any of the Seller Designees is obligated to present us with investment opportunities. Moreover, each of the BC Stockholder and Medina Stockholder and the Seller Designees may have additional fiduciary or contractual obligations to another entity pursuant to which it, he or she is required to present a transaction opportunity to such entity. Accordingly, if any of the BC Stockholder, Medina Stockholder or any of the Seller Designees becomes aware of a transaction opportunity which is suitable for an entity to which it, he or she has then current fiduciary or contractual obligations, it, he or she will honor its, his or her fiduciary or contractual obligations to present such transaction opportunity to such other entity, and only present it to us if such entity rejects the opportunity. The Proposed Charter provides that we renounce our interest or expectancy in any corporate opportunity of which any of the directors or officers of the combined company, or any of their respective affiliates, may become aware, except the doctrine of corporate opportunity shall apply with respect to any of the directors or officers of the combined company only with respect to a corporate opportunity that was offered to such person solely and exclusively in his or her capacity as a director or officer of the combined company and (i) such opportunity is one the combined company is legally and contractually permitted to undertake and would otherwise be reasonable for the combined company to pursue and (ii) to the extent the director or officer is permitted to refer that opportunity to the combined company without violating any other legal obligation.

Additionally, affiliates of the BC Stockholder and Medina Stockholder are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us, that compete with us for transaction opportunities or that otherwise presents a conflict to our interests. The BC Stockholder, the Medina Stockholder and their affiliates may also pursue transaction opportunities that may be complementary to our business and, as a result, those transaction opportunities may not be available to us. In addition, the BC Stockholder’s and Medina Stockholder’s affiliates’ interests in their respective portfolio companies could impact our ability to pursue transaction opportunities or otherwise present a conflict.

If a stockholder or a “group” of stockholders are deemed to hold in excess of 15% of the issued and outstanding shares of our Class A common stock, such stockholder or group will lose the ability to redeem all such shares in excess of 15% of the issued and outstanding shares of our Class A common stock.

In connection with a stockholder approval of our initial business combination, our Charter provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the public shares, which we refer to as the “15% limit.” Accordingly, all public shares in excess of the 15% limit beneficially owned by a public stockholder or group will not be redeemed for cash. Our public stockholders’ inability to redeem the shares in excess of the 15% limit will reduce their influence over our ability to complete our business combination and they could suffer a material loss on their investment in us if they sell such shares in open market transactions. Additionally, they will not receive redemption distributions with respect to the shares in excess of

 

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the 15% limit if we complete our business combination. And as a result, they will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell their stock in open market transactions, potentially at a loss.

Because we have no current plans to pay cash dividends on our Class A common stock for the foreseeable future, you may not receive any return on investment unless you sell your Class A common stock for a price greater than that which you paid for it.

We may retain future earnings, if any, for future operations, expansion and debt repayment and have no current plans to pay any cash dividends for the foreseeable future. Any decision to declare and pay dividends as a public company in the future will be made at the discretion of our board of directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that our board of directors may deem relevant. In addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness we incur. As a result, you may not receive any return on an investment in our common stock unless you sell our common stock for a price greater than that which you paid for it. See the section entitled “Market Price and Dividend Information — Dividends.”

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Defined terms included below have the same meaning as terms defined and included elsewhere in this proxy statement.

Introduction

The following unaudited pro forma condensed combined financial statements present the combination of the financial information of SVAC and Cyxtera, adjusted to give effect to the Business Combination and consummation of the transactions contemplated by the forward purchase shares, or collectively, the Transactions. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X.

SVAC is a blank check company incorporated in Delaware on November 14, 2019. SVAC was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses. At March 31, 2021, there was $404.5 million held in SVAC’s trust account.

Cyxtera was incorporated in Delaware on February 22, 2017 and will become a wholly owned subsidiary of SVAC upon the closing of the Business Combination. Cyxtera is a global data center leader in retail colocation and interconnection services headquartered in Miami, Florida. As of March 31, 2021, the company operates a footprint of 61 data centers in 29 markets around the world, providing services to more than 2,300 leading enterprises, service providers, and U.S. federal government agencies. Cyxtera brings proven operational excellence, global scale, flexibility, and customer-focused innovation together to provide a comprehensive portfolio of data center and interconnection solutions.

The following unaudited pro forma condensed combined balance sheet as of March 31, 2021 assumes that the Transactions occurred on March 31, 2021. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 and for the three months ended March 31, 2021 present pro forma effect to the Transactions as if they had been completed on January 1, 2020.

The unaudited pro forma combined financial statements do not necessarily reflect what Cyxtera’s financial condition or results of operations would have been had the Transactions occurred on the dates indicated. The unaudited pro forma combined financial information also may not be useful in predicting the future financial condition and results of operations of Cyxtera. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

This information should be read together with SVAC’s and Cyxtera’s audited and unaudited financial statements and related notes, the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of SVAC” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Cyxtera” and other financial information included elsewhere in this proxy statement.

The Business Combination was accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Cyxtera has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

 

   

Cyxtera’s ultimate stockholders prior to the Business Combination will collectively have the majority and greatest voting interest in the combined entity after giving effect to the proposed Business Combination under the no redemption and maximum redemption scenarios with over 55% voting interest, in each case;

 

   

after giving effect to the proposed Business Combination, the largest individual minority stockholder of the combined entity will be an existing ultimate stockholder of Cyxtera;

 

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Cyxtera’s existing directors and individuals designated by existing Cyxtera stockholders will represent the majority of the combined company’s board of directors since pursuant to the Merger Agreement, Cyxtera has the right to designate certain initial members of the board of directors of the post-combination company immediately after giving effect to the transactions;

 

   

Cyxtera’s senior management will be the senior management of the combined company;

 

   

Cyxtera is the larger entity based on total assets, historical revenue and operating results, and total number of employees; and

 

   

Cyxtera’s operations prior to the proposed Business Combination comprise the only ongoing operations of the combined entity.

Under this method of accounting, SVAC is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination is treated as the equivalent of Cyxtera issuing stock for the net assets of SVAC, accompanied by a recapitalization, with no goodwill or other intangible assets recorded.

Description of the Transactions

The unaudited pro forma condensed combined financial information has been prepared assuming two alternative levels of redemption of the Class A common stock into cash:

 

   

Assuming No Redemptions. This presentation assumes:

No existing public shareholders exercise their redemption rights with respect to their redeemable Class A common stock upon consummation of the Business Combination.

 

   

Assuming Maximum Redemptions. This presentation assumes:

SVAC’s public stockholders exercise redemptions in connection with their Class A common stock. This scenario results in the redemption of 20,446,149 public shares, which is derived from the number of shares that could be redeemed in connection with the Business Combination at an approximate redemption price of $10.00 per share based on SVAC’s as-adjusted trust account balance as of March 31, 2021. This maximum redemption scenario is based on the maximum number of redemptions that may occur but which would still provide sufficient cash to satisfy the minimum cash condition to the closing of the Business Combination.

If redemptions exceed the minimum aggregate Business Combination proceeds then the merger cannot be consummated under the current terms of the Merger Agreement. However, Cyxtera has the right under the terms of the Merger Agreement to waive such condition in order to consummate the merger. Accordingly, we cannot reasonably predict whether or not Cyxtera would waive the minimum aggregate Business Combination proceeds condition and we expect such decision, if necessary, would be based on the underlying facts and circumstances at the time of the consummation of the merger, including the amount of public stockholder redemptions in excess of the minimum aggregate Business Combination proceeds.

However, if redemptions exceed the minimum aggregate Business Combination proceeds and Cyxtera agrees to waive such minimum aggregate Business Combination proceeds condition, then for every one million shares of additional public stockholder redemptions beyond the minimum aggregate Business Combination proceeds there would be a corresponding $10 million reduction in incremental cash proceeds received by the combined company. To the extent redemptions reduce the proceeds below $500 million, each $10 million of additional public stockholder redemptions below $500 million would additionally result in a corresponding $10 million reduction in the paydown of Cyxtera debt and increase in annual pro forma interest expense of approximately $0.3 million.

The existing Cyxtera Stockholder will hold 106,100,000 shares of the public shares immediately after the Business Combination, which approximates a 58% ownership level assuming no redemptions and an

 

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approximate 62% ownership level assuming maximum redemptions. The following table summarizes the number of the public shares outstanding following the consummation of the Business Combination under the two scenarios. Additionally, the table excludes the potential dilutive effect of the warrants and optional shares:

Ownership

 

     No Redemptions     Maximum Redemptions  
     Shares
Outstanding
         %         Shares
Outstanding
         %      

SVAC Public Stockholders

     40,423,453        22.2     19,977,304        11.6

SVAC Sponsor management and board

     10,105,863        5.6     10,105,863        5.9

Cyxtera Stockholder

     106,100,000        58.4     106,100,000        61.8

PIPE Investors

     25,000,000        13.8     25,000,000        14.6

Forward Purchasers

     —          0     10,526,315        6.1
  

 

 

    

 

 

   

 

 

    

 

 

 

Total Shares at Closing

     181,629,316          171,709,482     

The unaudited pro forma condensed combined financial information is for illustrative purposes only. The unaudited condensed combined pro forma adjustments reflecting the consummation of the Business Combination and related transactions are based on certain estimates and assumptions. These estimates and assumptions are based on information available as of the dates of these unaudited pro forma condensed combined financial statements and may be revised as additional information becomes available. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments, and it is possible the difference may be material. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined entity will experience. SVAC and Cyxtera have not had any historical relationship prior to the Transactions. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

The unaudited pro forma condensed combined information contained herein assumes that the public stockholders approve the Business Combination. The public stockholders may elect to redeem their public shares for cash even if they approve the Business Combination. SVAC cannot predict how many of its public stockholders will exercise their right to have their Class A common stock redeemed for cash. As a result, we have elected to provide the unaudited pro forma condensed combined financial information under two different redemption scenarios, which produce different allocations of total Cyxtera equity between holders of the common shares. As described in greater detail in Note 1, Basis of Presentation, of the unaudited pro forma condensed combined financial information, the first scenario, or “no redemption scenario,” assumes that none of the SVAC’s public stockholders will exercise their right to have their public shares redeemed for cash, and the second scenario, or “maximum redemption scenario,” assumes that holders of the maximum number of public shares that could be redeemed for cash while still leaving sufficient cash available to consummate the Business Combination will exercise their right to have their public shares redeemed for cash. The actual results will be within the parameters described by the two scenarios. However, there can be no assurance regarding which scenario will be closest to the actual results. Under both scenarios, Cyxtera is considered the accounting acquirer, as further discussed in Note 1, Basis of Presentation, of the unaudited pro forma condensed combined financial information.

 

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Unaudited Pro Forma Condensed Combined Balance Sheet

 

    Historical     No Redemption Scenario    

Maximum Redemptions Scenario

 
    As of
March 31,
2021
                As of
March 31,
2021
                As of
March 31,
2021
 
    SVAC
    Cyxtera     Transaction
Accounting
Adjustments
(Note 2)
          Pro Forma
Combined
    Transaction
Accounting
Adjustments
(Note 2)
          Pro Forma
Combined
 

Assets:

               

Current assets:

               

Cash

  $ 1.9     $ 113.6     $ 404.5       (A )   $ 264.0     $ 404.5       (A )   $ 159.5  
        (49.3     (B )       (49.3     (B )  
        250.0       (C )       250.0       (C )  
        (0.7     (D )       (0.7     (D )  
        (456.0     (J )       (456.0     (J )  
              (204.5     (M )  
              100.0       (L )  

Accounts receivable, net

    —         12.6           12.6           12.6  

Prepaid and other current assets

    0.2       38.9       (0.2     (E )     38.9       (0.2     (E )     38.9  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total current assets

    2.1       165.1       148.3         315.5       43.8         211.0  

Property, plant and equipment, net

    —         1,554.0           1,554.0           1,554.0  

Goodwill

    —         763.0           763.0           763.0  

Intangible assets, net

    —         569.7           569.7           569.7  

Other assets

    —         24.0       (5.2     (B )     18.8       (5.2     (B )     18.8  

Investments held in trust account

    404.5       —         (404.5     (A )     —         (404.5     (A )     —    
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total assets

  $ 406.6     $ 3,075.8     $ (261.4     $ 3,221.0     $ (365.9     $ 3,116.5  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Liabilities and stockholders’ equity:

               

Current liabilities:

               

Accounts payable

  $ 0.6   $ 48.2     $ —         (B )   $ 48.2     $ —         (B )   $ 48.2  
        (0.6     (D       (0.6     (D  

Accrued expenses

    —         91.0       (3.2     (B )     84.3       (3.2     (B )     84.3  
        (0.1     (D )       (0.1     (D )  
        (3.4     (J )       (3.4     (J )  

Franchise tax payable

    —         —         —         (D )     —         —         (D )     —    

Current portion of long-term debt, capital leases and other financing obligations

    —         58.1           58.1           58.1  

Deferred revenue

    —         59.9           59.9           59.9  

Other current liabilities

    —         7.0           7.0           7.0  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total current liabilities

    0.6       264.2       (7.3       257.5       (7.3       257.5  

Deferred legal fees

    0.3       —         (0.3     (B )     —         (0.3     (B )     —    

Deferred underwriting commissions in connection with the initial public offering

    18.2       —         (18.2     (B )     —         (18.2     (B )     —    

Derivative liabilities

    34.3       —         (2.8     (N )     31.5       (2.8     (N )     31.7  
        —         (O )       —         (O )  
              0.2       (P )  

Long-term debt, net of current portion

    —         1,310.4       (452.6     (J )     863.6       (452.6     (J )     863.6  
        5.8       (K )       5.8       (K )  

Capital leases and other financing obligations, net of current portion

    —         927.3           927.3           927.3  

Deferred income taxes

    —         64.9           64.9           64.9  

Other liabilities

    —         99.6           99.6           99.6  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total liabilities

    53.4       2,666.4       (475.4       2,244.4       (475.2       2,244.6  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

 

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    Historical     No Redemption Scenario    

Maximum Redemptions Scenario

 
    As of
March 31,
2021
                As of
March 31,
2021
                As of
March 31,
2021
 
    SVAC
    Cyxtera     Transaction
Accounting
Adjustments
(Note 2)
          Pro Forma
Combined
    Transaction
Accounting
Adjustments
(Note 2)
          Pro Forma
Combined
 

Commitments and contingencies

               

Class A common stock, $0.0001 par value; shares subject to possible redemption

    348.2       —         (348.2     (F     —         (348.2     (F     —    

Stockholders’ equity:

               

Common shares, $0.01 par value; 1,000 shares authorized; 0.88 of a share issued and outstanding as of March 31, 2021

    —         —         —         (G     —         —         (G     —    

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding

    —         —             —             —    

Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 5,607,535 shares issued and outstanding (excluding 34,815,918 shares subject to possible redemption)

    —         —         —         (F     —         —         (F     —    

Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 10,105,863 shares issued and outstanding

    —         —         —         (H     —         —         (H     —    

Class A Common stock (New)

    —         —         —         (C     —         —         (C     —    
        —         (F       —         (F  
        —         (G       —         (G  
        —         (H       —         (H  
              —         (L  

Additional paid-in capital

    20.1       1,408.6       (32.8     (B     1,981.8       (32.8     (B     1,877.1  
        250.0       (C       250.0       (C  
        348.2       (F       348.2       (F  
        —         (G       —         (G  
        (15.1     (I       (15.1     (I  
        2.8       (N       100.0       (L  
        —         (O       (204.5     (M  
              2.8       (N  
              —         (O  
              (0.2     (P  

Accumulated other comprehensive income

    —         16.9           16.9           16.9  

Accumulated deficit

    (15.1     (1,016.1     (0.2     (E     (1,022.1     (0.2     (E     (1,022.1
        15.1       (I       15.1       (I  
        (5.8     (K       (5.8     (K  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total stockholders’ equity

    5.0       409.4       562.2         976.6       457.5         871.9  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total liabilities and stockholders’ equity

  $ 406.6     $ 3,075.8     $ (261.4     $ 3,221.0     $ (365.9     $ 3,116.5  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

 

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Unaudited Pro Forma Condensed Combined Results of Operations

 

    Historical     No Redemption Scenario     Maximum Redemptions Scenario  
    Three Months
Ended
March 31,
2021
                Three Months
Ended
March 31,
2021
                Three Months
Ended
March 31,
2021
 
    SVAC
    Cyxtera     Transaction
Accounting
Adjustments
(Note 2)
          Pro Forma
Combined
    Transaction
Accounting
Adjustments
(Note 2)
          Pro Forma
Combined
 

Revenues

  $ —     $ 172.9     $ —       $ 172.9     $ —       $ 172.9  

Operating costs and expenses:

               

Cost of revenues, excluding depreciation and amortization

    —         98.4       —           98.4       —           98.4  

Selling, general and administrative expenses

    1.0       27.6       (1.0     (AA     27.6       (1.0     (AA     27.6  

Franchise tax expense and administrative expenses – related party

    0.1       —         (0.1     (AA     —         (0.1     (AA     —    

Depreciation and amortization

    —         60.6       —           60.6       —           60.6  

Restructuring, impairment, site closures and related costs

    —         8.1       —           8.1       —           8.1  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total operating cost and expenses

    1.1       194.7       (1.1       194.7       (1.1       194.7  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

(Loss) income from operations

    (1.1     (21.8     1.1         (21.8     1.1         (21.8

Interest expense, net

    —         (43.2     7.6       (CC     (35.1     7.6       (FF     (35.1
        0.5       (II       0.5       (II  

Other expenses, net

    —         (0.5     —           (0.5     —           (0.5

Change in fair value of derivative liabilities

    13.0         (4.0     (GG     9.0       (4.0     (GG     8.9  
              (0.1     (HH  

Net gain from investments held in Trust Account

    0.1       —         (0.1     (BB     —         (0.1     (BB     —    
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Income (loss) from operations before income taxes

    12.0       (65.5     5.1         (48.4     5.0         (48.5

Income tax (expense) benefit

    —         12.9       (2.0     (EE     10.9       (2.0     (EE     10.9  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Net income (loss)

  $ 12.0     $ (52.6   $ 3.1       $ (37.5)     $ 3.0       $ (37.6
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Weighted average shares outstanding of Class A common stock

    40,423,453             181,629,316           171,709,482  
 

 

 

         

 

 

       

 

 

 

Basic and diluted net income per share

    —             $ (0.21       $ (0.22
 

 

 

         

 

 

       

 

 

 

Weighted average shares outstanding of Class B common stock

    10,105,863                
 

 

 

               

Basic and diluted net income per share

  $ 1.19                
 

 

 

               

 

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    Historical     No Redemption Scenario    

Maximum Redemptions Scenario

 
    Year Ended
December 31,
2020
                Year Ended
December 31,
2020
                Year Ended
December 31,
2020
 
    SVAC
(Restated)
    Cyxtera     Transaction
Accounting
Adjustments
(Note 2)
          Pro Forma
Combined
    Transaction
Accounting
Adjustments
(Note 2)
          Pro Forma
Combined
 

Revenues

  $ —     $ 690.5     $ —       $ 690.5     $ —       $ 690.5  

Operating costs and expenses:

               

Cost of revenues, excluding depreciation and amortization

    —         390.5       —           390.5       —           390.5  

Selling, general and administrative expenses

    0.2       115.5       (0.2     (AA     115.5       (0.2     (AA     115.5  

Franchise tax expense

    0.2       —         (0.2     (AA     —         (0.2     (AA     —    

Depreciation and amortization

    —         231.8       —           231.8       —           231.8  

(Recovery) Impairment of notes receivable from affiliate

    —         (97.7     —           (97.7     —           (97.7
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

Total operating cost and expenses

    0.4       640.1       (0.4       640.1       (0.4       640.1  
 

 

 

   

 

 

   

 

 

     

 

 

   

 

 

     

 

 

 

(Loss) income from continuing operations

    (0.4     50.4       0.4         50.4       0.4         50.4  

Interest expense, net

    —         (169.4     31.6       (CC     (143.9     31.6       (FF     (143.9
        (6.1     (DD       (6.1     (DD  

Other expenses, net

    —         (0.3     —           (0.3     —           (0.3

Change in fair value of derivative liabilities

    (26.3       6.8       (GG     (19.5     6.8       (GG     (19.6
              (0.1     (HH  

Offering costs associated with derivative liabilities

    (0.6       —           (0.6     —           (0.6

Net gain from investments held in Trust Account

    0.2       —         (0.2     (BB     —         (0.2     (BB     —