MGO Global Inc. and Heidmar, Inc. have entered into a significant Business Combination Agreement (BCA) aimed at merging their operations into a unified entity under the Heidmar name.
Heidmar specializes in managing crude oil and refined petroleum product tankers globally. The merger aims to leverage MGO Global’s digital expertise and brand portfolio with Heidmar’s established position in commercial tanker management. This move is expected to enhance operational capabilities and market presence in the maritime logistics sector.
Maximiliano Ojeda, Founder, Chairman, and CEO of MGO, expressed enthusiasm about the Business Combination Agreement with Heidmar, highlighting its potential to capitalize on the $370 billion global tanker shipping market.
Meanwhile, Pankaj Khanna, Chief Executive Officer of Heidmar, described the agreement as a pivotal moment for Heidmar, underscoring the company’s significant revenue growth and robust financial performance, including $19.6 million in net income for 2023 with approximately 40% net margins.
Under the terms of the agreement, MGO shareholders will receive one registered common share of PubCo for each share of MGO common stock they own, implying a fully diluted equity value of $18.0 million. Heidmar’s shareholders, on the other hand, will exchange their Heidmar common stock for $300 million in registered common shares of PubCo, adjusted to match the implied price per share as MGO.
Additionally, the transaction includes an earnout provision for existing Heidmar shareholders, potentially totaling $30 million in additional registered common shares of PubCo. This earnout will be triggered if PubCo achieves or exceeds specified financial targets for the fiscal year ending 2024, including $45 million in revenue, $30 million in EBITDA, or $25 million in net income.
The boards of directors of both MGO and Heidmar have unanimously approved the Business Combination Agreement (BCA). The transaction is expected to close in the late third quarter of 2024, subject to customary closing conditions, such as approval from MGO’s shareholders and the listing of PubCo’s registered common shares on Nasdaq.
