Sonder Holdings Inc. and Gores Metropoulos II, Inc. (GMII) Announce Additional Committed Capital to Fully Fund Business Plan and Strategic Revision of Transaction Terms

October 28, 2021 7:19 AM EDT

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Sonder Holdings Inc. (“Sonder'' or the “Company”), a leading next-generation hospitality company that is redefining the guest experience through technology and design, and Gores Metropoulos II, Inc. (Nasdaq: GMII, GMIIW and GMIIU), a special purpose acquisition company formed by affiliates of The Gores Group and Metropoulos & Co., announced strategic amendments to the terms of their previously announced definitive agreement (the “Merger Agreement”) to combine. These amendments and associated incremental investments by leading institutional investors to adapt to current market conditions strongly position Sonder for long-term growth, and underscore Sonder’s and Gores Metropoulos II’s collective commitment to driving long-term value creation for all stockholders.

As part of the amended terms of the transaction, the combined company’s implied pro forma enterprise value will be $1.925 billion. Sonder will receive approximately $110 million in additional capital from affiliates of Gores Metropoulos II and other leading investors, including Fidelity Management & Research LLC, funds and accounts managed by BlackRock, Atreides Management, LP, and Senator Investment Group (the “New PIPEs”), in addition to the $200 million previously announced PIPE (the “Existing PIPE”). Moreover, Sonder has signed a non-binding term sheet for Delayed Draw Notes of $220 million with existing PIPE investors, to be available following the closing of the proposed business combination, which enables the Company to fund its growth over the next several years.

“Sonder continues to generate impressive results amid the ongoing recovery of the travel industry and is well positioned for future growth given their unique value proposition. We strongly believe that Sonder is the hospitality brand of tomorrow and have high conviction that the company will continue to grow, which is why we are increasing our initial investment,” said Alec Gores, Chairman and CEO of The Gores Group and CEO of Gores Metropoulos II. “In response to evolving market dynamics, we are also amending the terms of our merger agreement, reflecting our commitment to driving long-term value creation, transparency and stockholder alignment in this high-performing and innovative business.”

“We continue to see a rebound in leisure travel, and we are aggressively pursuing our expansion plans and capturing significant consumer demand. We reported company-record quarterly revenue in Q2 and are eager to pursue continued growth,” said Francis Davidson, Co-Founder and CEO of Sonder. “We’re thrilled to have a committed and creative partner in Gores and the amendments, and incremental investment announced today will allow us to pursue our ambitious growth and expansion strategy in full force. In the past year alone, we’ve launched in three additional countries and expanded our operations in dozens of other markets, and we expect to continue to scale our business and innovate to adapt to the needs of emerging traveler segments like digital nomads.”

Sonder recently announced its entry into France with the opening of a property in Paris near the iconic Champs-Élysées, as well as large expansions of its operations in the Middle East and Mexico. The Company also launched a corporate travel offering, opening its doors to even more business travelers and continues to grow its extended stays offering to capture new traveler groups.

Transaction Details

The amended terms revise the combined company’s pro forma enterprise value to $1.925 billion. As part of the proposed business combination, the Company will receive approximately $110 million in incremental capital from affiliates of Gores Metropoulos II and other leading investors including Fidelity Management & Research Company LLC, funds and accounts managed by BlackRock, Atreides Management, LP, and Senator Investment Group pursuant to the New PIPEs, in addition to the $200 million Existing PIPE, which continues to be led by affiliates of Gores Metropoulos II, with participation from top-tier institutional investors including Fidelity Management & Research Company LLC, funds and accounts managed by BlackRock, Atreides Management, LP, funds and accounts managed by Principal Global Investors, LLC, and Senator Investment Group. Additionally, the Company has put in place a non-binding term sheet for Delayed Draw Notes of $220 million with existing PIPE investors, to be available following closing of the proposed business combination. Subject to any redemptions by the public stockholders of Gores Metropoulos II and the payment of transaction expenses at the closing, the $200 million in Existing PIPE proceeds and approximately $110 million in proceeds from the New PIPEs will be used together with up to $450 million in cash in Gores Metropoulos II’s trust account and Delayed Draw Notes of $220 million to fund operations and support new and existing growth initiatives.

Additionally, the parties agreed to extend the Merger Agreement end date from October 28, 2021 to January 31, 2022 after which Gores Metropoulos II and Sonder would have the right to terminate the Merger Agreement if the proposed business combination has not been consummated by January 31, 2022. The proposed business combination remains on track to close in the second half of 2021, subject to approval by Gores Metropoulos II’s stockholders and other customary closing conditions.

Advisors

Goldman Sachs & Co. LLC is serving as exclusive financial advisor to Sonder. Wilson Sonsini Goodrich & Rosati, P.C. is serving as legal advisor to Sonder.

Morgan Stanley & Co. LLC is serving as lead financial advisor and Deutsche Bank Securities Inc. and Citigroup are serving as capital markets advisors to Gores Metropoulos II. Moelis & Company LLC acted as additional financial advisor to Gores Metropoulos II. Weil, Gotshal & Manges LLP is serving as legal advisor to Gores Metropoulos II.

Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Citigroup and Deutsche Bank Securities Inc. are serving as joint lead placement agents on the Existing PIPE. Latham & Watkins LLP is serving as legal advisor to the co-placement agents.

About Sonder

Sonder is revolutionizing hospitality through innovative, tech-enabled service and inspiring, thoughtfully designed accommodations combined into one seamless experience. Launched in 2014 and headquartered in San Francisco, Sonder provides a variety of accommodation options — from spacious rooms to fully-equipped suites and apartments — found in over 35 markets spanning ten countries and three continents. The Sonder app gives guests full control over their stay. Complete with self-service features, simple check-in and 24/7 on-the-ground support, amenities and services at Sonder are just a tap away, making a world of better stays open to all.

To learn more, visit www.sonder.com or follow Sonder on Facebook, Twitter or Instagram. Download the Sonder app on Apple or Google Play.

About Gores Metropoulos II, Inc.

Gores Metropoulos II, Inc. (Nasdaq: GMII, GMIIW, and GMIIU) is a special purpose acquisition company sponsored by an affiliate of The Gores Group, LLC, a global investment firm founded in 1987 by Alec Gores, and by an affiliate of Metropoulos & Co. whose Principals are Dean, Evan and Daren Metropoulos. Gores Metropoulos II was formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Messrs. Gores and Metropoulos together have over 100 years of combined experience as entrepreneurs, operators and investors across diverse sectors including industrials, technology, media and entertainment, business services, healthcare and consumer products and services. Over the course of their careers, Messrs. Gores and Metropoulos and their respective teams have invested in more than 180 portfolio companies through varying macroeconomic environments with a consistent, operationally-oriented investment strategy. For more information, please visit www.gores.com.



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