Brivo Terminates Merger With SPAC Crown PropTech
Crown PropTech believes Brivo breached certain terms of their combination agreement prior to the termination, while Brivo says the SPAC wanted to renegotiate terms.
WASHINGTON D.C. — Brivo has informed Crown PropTech it will not move forward with its proposed merger, according to an SEC filing from Aug. 10.
Per terms of the merger agreement, either party could terminate the deal if it had not been consummated by Aug. 9.
Brivo and Crown PropTech, a publicly traded special purpose acquisition company, announced last November they had entered into a definitive merger agreement that would result in Brivo becoming a publicly listed company.
The transaction valued the company at a pro forma enterprise value of $808 million, and would have resulted in Brivo being listed under the ticker symbol “BRVS.”
According to the SEC filing, Crown Proptech believes Brivo breached certain terms of their combination agreement prior to the termination. It also states that an affiliate of Brivo Chairman Dean Drako breached a stockholder support agreement related to the proposed merger.
However, Brivo says the deal fell apart after Crown PropTech could no longer meet the minimum cash condition of the deal.
“What really happened is that Crown wanted to renegotiate the terms from what we had agreed in our BCA last November. Then they were not able to reach agreement with their primary financing source to extend, which meant that they couldn’t meet the minimum cash condition of the deal,” Brivo CEO Steve Van Till tells SSI. “Upon expiration of the agreement, we had no choice but to walk away. We do not believe we breached any of the terms of the BCA and will vigorously defend, enforce our rights and consider other options.”
The proptech market has seen increased interest, especially in the security industry, over the last two years. During the Brivo and Eagle Eye Networks Cloud Security Summit last year, Van Till noted that $100 billion dollars has been invested in the area since 2016, and 2021 was on pace for $20 billion.
He added, “The denominator across everything that’s happening in Proptech right now is that there is value in connecting your real estate, your property and building, your home, your work to the Cloud. It might have to do with buying it or selling it, it might have to do with keeping the environment under control, might have to do with security and protection, might have to do with any of those things, but the common thread is there’s value in connecting your building to the Cloud. So we can thank the investors for putting this hundred billion in motion over the last five years for repeating and amplifying something that we already knew.”
The dissolution of the Brivo-Crown Proptech deal comes during a time where SPACs are beginning to face a reckoning, not to mention the countless other challenges that most businesses are facing in the current world climate.
“It’s a challenging time to operate with this kind of investment. There is so much opportunity, but things take time; labor and supply chain issues continue to really challenge every industry,” Parks Associates President Elizabeth Parks shares with SSI. “Parks Associates research shows that a third of multifamily residents are willing to pay an additional 15% per month in rent for smart amenities — so the market is here, but there is a lot of work to do to get the infrastructure in place, the selling, and then the installation to enable all of this technology to get these smart amenities in place.”
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