Announcement • Mar 26
Trump Media & Technology Group Corp. (TMTG) completed the acquisition of Digital World Acquisition Corp.
Trump Media & Technology Group Corp. (TMTG) signed a LOI to acquire Digital World Acquisition Corp. on June 4, 2021. Trump Media & Technology Group Corp. entered into a definitive merger agreement to acquire Digital World Acquisition Corp. (NasdaqGM:DWAC) for $1.3 billion in a reverse merger transaction on October 20, 2021. As part of the agreement, Trump Media & Technology will merge with Digital World Acquisition Corp in a deal that gives the newly-founded entity an initial enterprise value of $875 million. The transaction terms provide a potential additional earn-out of $825 million in additional shares for a cumulative valuation of up to $1.7 billion for TMTG, depending on the performance of the stock price post-business combination. In the merger, all shares of Trump Media common stock issued and outstanding immediately prior to the effective time will be converted into the right to receive the merger consideration, each outstanding option to acquire shares of Trump Media common stock (whether vested or unvested) will be assumed by Digital World and automatically converted into an option to acquire shares of Digital World common stock, with its price and number of shares equitably adjusted based on the conversion ratio of the shares of Trump Media common stock into the merger consideration and each outstanding restricted stock unit of Trump Media shall be converted into a restricted stock unit relating to shares of Digital World common stock. The aggregate merger consideration to be paid to holders of Trump Media stock as of immediately prior to the Effective Time ( Trump Media stockholders and, together with the holders of Trump Media options and restricted stock units immediately prior to the Effective Time, the “ Trump Media Security Holders ”) will be an amount equal to $875 million subject to adjustments for Trump Media’s closing debt, net of cash and unpaid transaction expenses, plus the additional contingent right to receive the Earnout Shares after the Closing. The consideration to be paid to Trump Media stockholders will be paid solely by the delivery of new shares of Digital World common stock, with each valued at the price per share at which each Digital World share of common stock is redeemed or converted pursuant to the redemption by Digital World of its public stockholders in connection with Digital World’s initial business combination, as required by Digital World’s amended and restated certificate of incorporation and by-laws and Digital World’s initial public offering prospectus. The consideration will be subject to a post-closing true up 90 days after the closing. The Merger Consideration will be allocated among the holders of TMTG’s common stock, pro rata amongst them based on the number of shares of TMTG common stock owned by such stockholder provided, however, that the Merger Consideration otherwise payable to TMTG Stockholders is subject to the withholding of the Escrow Shares and is subject to reduction for indemnification obligations and purchase price adjustments. At the closing, 5% of the merger consideration (escrow shares) otherwise issuable to the TMTG Stockholders (allocated pro rata among the TMTG Stockholders based on the Merger Consideration otherwise issuable to them at the Closing) will be deposited into a segregated escrow account, and held in escrow together with any dividends, distributions or other income on the Escrow Shares (Escrow Property) in accordance with an escrow agreement to be entered into in connection with the Transactions. The Escrow Property will be held in the escrow account for twelve months after the Closing as the sole and exclusive source of payment for any post-Closing purchase price adjustments and indemnification claims. In addition to the Merger Consideration, the TMTG Stockholders will also have a contingent right to receive up to an additional 40 million shares of DWAC common stock after the Closing based on the price performance of the DWAC common stock during the three (3) year period following the Closing. The Earnout Shares shall be earned and payable during the Earnout Period as follows (i) if the dollar volume-weighted average price (“VWAP”) of DWAC’s common stock equals or exceeds $15 per share for any 20 trading days within any 30 trading day period, the Purchaser shall issue to the TMTG Stockholders an aggregate of 15 million Earnout Shares; (ii) if the VWAP of DWAC’s common stock equals or exceeds $20 per share for any 20 trading days within any 30 trading day period, the Purchaser shall issue to the TMTG Stockholders an aggregate of 15 million Earnout Shares; and (iii) if the VWAP of DWAC’s common stock equals or exceeds $30 per share for any 20 trading days within any 30 trading day period, the Purchaser shall issue to the TMTG Stockholders an aggregate of 10 million Earnout Shares. As part of the merger, Trump Media & Technology Group will become a publicly listed company. At the Closing, Digital World will change its name to “Trump Media & Technology Group Corp.”
At the Closing, the entire Board of Directors of DWAC will consist of seven individuals, four of whom shall be independent Directors. Two of the members of the Post-Closing Board will be individuals (at least one of whom shall be an independent Director) designated by DWAC prior to the closing and five of the members of the Post-Closing Board (at least three of whom shall be independent Directors) will be designated by TMTG prior to the Closing. The transaction is subject to regulatory, approval of both DWAC’s stockholders and TMTG Stockholders, expiration of any applicable waiting period under any antitrust laws, receipt of requisite consents from governmental authorities and third parties, upon the Closing, DWAC shall have net tangible assets of at least $5,000,001, upon the Closing DWAC shall have cash, including funds remaining in DWAC’s trust account and the proceeds of any PIPE Investment, after giving effect any Redemptions but prior to the payment of DWAC’s unpaid expenses or liabilities, of at least equal to $60 million, the members of the Post-Closing Board shall have been elected or appointed as of the Closing, the effectiveness of the Registration Statement, received confirmation from Nasdaq that DWAC’s Class A common stock and warrants shall be eligible for continued listing on the Nasdaq Global Market, employment agreements, DWAC having received a copy of the TMTG’s charter certified by the Secretary of State of the State of Delaware no more than ten business days prior to the Closing date, Escrow Agreement, DWAC having received a duly executed opinion from TMTG’s counsel addressed to DWAC and dated as of the Closing date, DWAC and TMTG having received a customary Non-Competition Agreement and a Lock-up Agreement executed by the Significant Company Holders of TMTG and DWAC shall have received evidence reasonably acceptable to DWAC that TMTG shall have converted, terminated, extinguished and cancelled in full any outstanding convertible securities or commitments therefor, other than the TMTG options and the TMTG restricted stock units. The transaction has been approved by the Boards of DWAC and Trump. The transaction is expected to close in the second half of 2022. On February 14, 2024, the U.S. Securities and Exchange Commission declared effective the Registration Statement on Form S-4. Digital World and TMTG expect to consummate the business combination as soon as the first quarter of 2024.
ARC Group Ltd. acted as the financial advisor to Digital World Acquisition Corp. and was tasked with building the SPAC’s deal pipeline. EF Hutton is acting as sole financial and capital markets advisor to DWAC. Mark Zimkind of Continental Stock Transfer & Trust Company acted as transfer agent to Digital World. Barry I. Grossman of Ellenoff Grossman & Schole LLP acted as legal advisor to Digital.
Trump Media & Technology Group Corp. (TMTG) completed the acquisition of Digital World Acquisition Corp. on March 25, 2024.
