RealWear and Cascadia Acquisition, a publicly-traded special purpose acquisition company (SPAC), have entered into a definitive business combination agreement that is expected to result in RealWear becoming a publicly traded company.
Upon closing of the proposed transaction, the combined company will be named RealWear, Inc. and is expected to trade on the Nasdaq.
RealWear provides wearable assisted reality solutions to frontline professionals to engage, empower, and elevate the modern industrial worker to be more efficient and perform work tasks more safely and with precision. The Company’s assisted reality tools enable frontline professionals to view, communicate and share documents, diagrams, photos, and video, all while keeping their hands and field-of-view free for the work. As a full-stack offering, RealWear’s SaaS-based cloud platform provides advanced data analytics and real-time technical support to help IT and operations leaders streamline updates and accelerate scaled deployments. With its ruggedized design, form factor and unique modular platform, RealWear devices, including the RealWear Navigator wearable series, are designed to withstand and perform in the harsh, often challenging environments regularly faced by modern frontline professionals.
Investment Highlights
- Scaled, Category-Creating Platform: Established market leader for modern frontline professionals
- Large TAM: Rapidly expanding market TAM with anticipated 41% CAGR (2022-2027)ii
- Blue Chip Customer Validation: 41 of the Fortune 100 are RealWear customers
- Efficient Business Model: 2022 Gross Marginiii of 63% poised to expand through increasing emphasis on cloud platform
Management Commentary
“RealWear’s mission is to engage, empower, and elevate frontline professionals around the world and across industries to increase productivity and enhance safety,” said Andrew Chrostowski, Chairman and CEO of RealWear. “This combination with CCAI will accelerate our ability to deliver new assisted reality products, services, and solutions at scale that transform the way people work today, tomorrow and into our sustainable future.”
Jamie Boyd, Chief Executive Officer of CCAI, said, “CCAI was established with the intention of identifying and partnering with businesses that are utilizing technology and innovation to disrupt industry in sizable and expanding markets. RealWear perfectly fits these criteria, and we are thrilled to partner with them and add value by strengthening their financial position in pursuit of growth initiatives across product, customer, geography and industry initiatives.”
Transaction Summary
The boards of directors of RealWear and CCAI have both unanimously approved the transaction, which is expected to be completed in the second half of 2023. The transaction will require the approval of the shareholders of both RealWear and CCAI and is subject to other customary closing conditions identified in the business combination agreement. In connection with the execution of the business combination agreement, a sufficient number of RealWear shareholders have agreed to vote or consent to approve the proposed business combination prior to the closing.
The combined company is expected to have a post-transaction enterprise value of $375.5 million (assuming no redemptions of CCAI public shares by CCAI public stockholders through the closing of the business combination). CCAI currently has $150 million of cash in trust. Cash proceeds to the combined company upon closing of the transaction are expected to consist of remaining cash in trust following any redemptions of CCAI public shares by CCAI public stockholders through the closing of the business combination and up to $35 million of additional financing.
The net proceeds raised from the proposed transaction will be used to support RealWear’s strategic growth and corporate initiatives comprised of hiring additional team members for product development and cloud engineering, expanding contract manufacturing capabilities, accelerating sales channel penetration, and pursuing additional industry verticals.
Current RealWear shareholders will roll 100% of their existing share holdings into equity of the combined company. Shares of CCAI Class A common stock and Class B common stock will automatically convert into common stock of the combined company on a one-for-one basis.
