United States securities and exchange commission logo
June 11, 2021
J. Morgan Rutman
Chief Financial Officer
Capri Listco
PO Box 1093
Queensgate House
Grand Cayman, KY1-1102
Cayman Islands
Re: Capri Listco
Registration
Statement on Form F-4
Filed on on May 14,
2021
File No. 333-256152
Dear Mr. Rutman:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form F-4 Filed on May 14, 2021
Cover Page
1. Revise to disclose that
the business combination vote may be influenced by Ajax's
sponsor or affiliates
purchasing shares in private transactions or in the open market.
2. Please expressly state,
if true, that cash consideration payable to Cazoo shareholders will
be pro-rated if the
cash election amount exceeds the cash consideration payable.
3. Please revise here, in
the Question and Answer, and throughout the registration statement,
as appropriate, to
clearly state the total value of the consideration payable pursuant to this
transaction. While the
maximum cash consideration is disclosed to investors, your
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Capri Listco
June 11, 2021
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disclosure related to the aggregate consideration and value of the
share consideration is
more opaque. Revise for clarity.
Industry and Market Data, page 4
4. We note that you have commissioned market data reports by certain
third parties,
including OC&C Strategy Consultants. Please file the required written
consents with your
next amendment. Refer to Rule 436 of the Securities Act.
Questions and Answers, page 10
5. Please revise to disclose whether contractual limitations prevent the
parties from seeking
an alternate transaction and, if so, the consequences if these terms
are breached.
What is the amount of cash and/or number of Listco shares, page 13
6. We note your disclosure about the potential effects of rising rates on
the cash
consideration in a maximum redemption scenario. Please provide
corresponding
disclosure about how rate increases will affect the cash consideration
if there are no
redemptions.
7. Please revise to provide the current GBP/USD exchange rate and a
corresponding
example using such rate, for illustrative purposes.
What vote is required to approve each proposal at the meeting, page 17
8. Refer to the final paragraph of this Question and Answer on page 18.
Please revise to
disclose the percentage of shares that must vote in favor of the
business combination after
giving effect to the support agreement. In addition, please revise to
disclose, if true, that
parties to the support agreement are required to vote for the
transaction even if they
subsequently determine that the transaction is not advisable.
May the Sponsor or its affiliates purchase shares, page 18
9. We note disclosure that you may provide incentives to encourage certain
investors to
acquire Ajax shares and vote them in favor of the business combination.
Please clarify
how you will determine which investors may receive incentives. In
addition, we note that
possible incentives include financial protections and equity grants.
Please disclose, if
material, whether the incentives may be expected to affect the
consideration payable to
FirstName LastNameJ. Morgan Rutman
investors and, if so, revise your disclosure, including your risk
factors, accordingly.
Comapany NameCapri
Lastly, Listco
please revise the final paragraph of this Question and Answer
to clarify that any
incentives
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Do any of Ajax's directors or executive officers, page 19
10. Please revise your disclosure here to include the following:
The market value of the private placement warrants purchased by
the sponsor that
will expire if the transaction is not completed;
The current market value of the shares that the Subscribers
will receive in exchange
for the $800M PIPE investment; and
The value of the out of pocket expenses incurred by the
sponsor, directors, officers
and their affiliates that are subject to reimbursement.
Please include similar disclosure, as applicable, in the related
discussion on pages 33,
77 and 116.
Cazoo Holdings Limited, page 22
11. Please revise here to disclose the company's revenues and net losses
since inception. In
addition, please revise here, in the Question and Answer, and in the
risk factors, as
appropriate, to clarify that Cazoo has operated under non-pandemic
business conditions
for only a short period of time since its formation in October 2018.
Consideration to the Cazoo Shareholders, page 34
12. Please revise, where appropriate, to provide illustrative examples of
the share-by-share
election process.
If the Group is unable to adapt to and satisfy customer demand, page 54
13. Please reconcile your disclosure about your limited ability to
refurbish cars with your
disclosure in your Business section emphasizing your ability to
thoroughly inspect and
refurbish cars to a high standard at your conditioning facilities. If
your ability to refurbish
cars is limited, please explain how these limitations affect your
ability to sell inventory.
Ajax has limited ability to assess the management of Cazoo's business, page 74
14. We note your disclosure that your ability to assess Cazoo's management
was limited by "a
lack of time, resources, or information." Please explain why you are
willing to
recommend this transaction despite the constraints identified in this
risk factor. Also,
please reconcile this statement with your disclosure at page 112 and
elsewhere in the
prospectus that the experienced leadership team is one of the reasons
the Ajax board
recommended approval of the merger.
Background of the Business Combination, page 106
15. We note that your discussion of the background of the merger provides
a fairly high-level
view of the deal negotiations. Please revise your disclosure
throughout this section to
describe in greater detail the negotiations relating to the evolution
of the material terms of
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Capri Listco
June 11, 2021
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the transaction, including how the deal is structured, the exchange
ratio, the terms and
amount of the PIPE transaction, the lock-up agreements, and the
treatment of convertible
equity. For example, describe the terms provided in the non-binding
LOI delivered on
February 10, 2021. Since the Ajax shareholders are voting to approve
the business
combination, and essentially their equity ownership percentage in the
post-combination
company, your revised disclosure should place particular emphasis on
valuation and how
the equity ownership of the Ajax stockholders was negotiated and
ultimately determined,
including specific details about why particular terms were sought,
each party's position on
the issues, how these positions evolved, and how you reached agreement
on the final
terms of the transaction. Please also address the reasons for, and the
negotiations
surrounding, the cash versus stock election, adjustments to the
aggregate purchase price,
and material due diligence findings which affected the negotiations.
16. Refer to the final paragraph on page 106. Despite your disclosure in
this paragraph that
you evaluated over 400 potential targets, your narrative in this
section appears to focus
almost exclusively on the Cazoo transaction. Please expand your
discussion to describe
the methodology by which you selected 400 companies for initial review
and how you
ultimately pared that group to 20, and then 13 targets, for further
consideration. Also,
please expand your discussion in this section to describe the process
utilized to evaluate
the 13 potential targets. Please discuss the information gathered, how
and by whom it was
evaluated, the negotiations which occurred, and any offers that were
made or received.
Your disclosure should clearly state why you deem the Cazoo
transaction to be superior to
available alternatives.
17. We note Cazoo hired Goldman Sachs and Credit Suisse as its financial
advisors to provide
financial advice on the potential transaction. However it is not clear
who Ajax retained to
provide financial advice, though the disclosure indicates that Ajax
management consulted
and received input from financial advisors, particularly on due
diligence matters. Please
revise to identify these financial advisors and discuss in greater
detail the role that these
third-parties played in the proposed transaction. Please clarify
whether the financial
advisors delivered any reports to the board that were materially
related to the transaction.
Ajax's Board of Directors' Reasons for Approval, page 112
18. Revise to quantify and identify the manner in which Cazoo has
outperformed this year's
projections, as of February 2021, and state why this factor supports
the transaction when
you state elsewhere that the projections were prepared in February
2021.
Attractive Valuation, page 113
19. Please revise to disclose the underlying information for the valuation
analyses so that
FirstName LastNameJ. Morgan Rutman
investors can understand how this information supported the board's
recommendation. For
Comapany NameCapri
example, Listco
it appears that Ajax management conducted a comparable
companies analysis;
please
June 11, 2021revise
Page 4to disclose this analysis.
FirstName LastName
J. Morgan Rutman
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Capri ListcoLastNameJ. Morgan Rutman
Comapany
June NameCapri Listco
11, 2021
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Certain Projected Financial Information, page 114
20. Please expand to disclose the assumptions that are most significant to
the prospective
information being presented, as well as the key factors upon which the
financial results
depend. Please also state any limitations to the projections. See Item
10(b)(3) of
Regulation S-K.
21. In the course of various meetings, you mention that the parties
discussed "financial
projections," such as during the meetings held on February 21 and 22,
2021. Please
confirm that the projections summarized here constitute the same
projections that were
discussed during these meetings and, if not, provide those projections
or tell us why you
believe they are not required. If the prepared projections were
revised over time, please
explain why. Finally, you have provided projections with additional
elements beyond
these "key" elements in your communications with shareholders,
pursuant to Rule 425. If
these projections were considered by your Board in recommending the
transaction, please
present them here.
Certain U.S. Federal Income Tax Considerations, page 119
22. You have not included in your exhibit list a tax opinion, even though
your disclosure here
suggests that one is required given that you state that holders of
your securities who
exchange them in the Business Combination will not recognize gain or
loss. Please revise
to provide a tax opinion, and revise this section as applicable,
consistent with Item
601(b)(8) of Regulation S-K.
Letter from Cazoo's Founder, page 161
23. Refer to the second-to-last paragraph on page 161. Please revise to
balance your projected
revenue disclosure with disclosure of your net losses since inception.
Business of Cazoo, page 163
24. We note the disclosure in the second paragraph of the "Overview" that
Cazoo purchases
the cars it believes best-suited for its platform. Please clarify the
criteria upon which this
determination is made. In addition, please clarify whether you
specialize in cars made by
certain manufacturers and whether your offerings are influenced by
incentives provided
by manufacturers or other third-parties.
M & A Strategy, page 165
25. Please revise to disclose the material terms of the four acquisitions
discussed in this
section. Also, please file material agreements related to the
acquisitions. Alternatively, if
the transactions are not material, please revise your registration
statement to avoid
disclosure which may imply otherwise. Additionally, we note your
disclosure that your
European expansion will follow the "UK playbook." If so, please state
whether you
J. Morgan Rutman
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Comapany
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11, 2021
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anticipate engaging in multiple acquisitions as part of your strategy
to enter new markets.
If so, please address the risks of this strategy.
Delivery and Collection, page 167
26. Please file and describe the terms of your material agreements, if
any, related to your
delivery and collections logistics. In addition, please clarify
whether your delivery
workers are employees, independent contractors, or a combination.
Cazoo Subscription Service, page 168
27. Your current disclosure is unclear as to the status of your
subscription service. Please
clarify the extent to which the service is already launched or
currently pending. In
addition, please disclose subscription pricing, the extent of your
management's experience
with the proposed short-term leasing model, and any unique challenges
that you believe it
presents, such as potentially fluctuating service costs on a fixed
price product.
MD&A of Cazoo
Key trends and factors affecting the results of our operations
Inventory Sourcing, page 196
28. Please revise to make clear that your sourcing to date has been
predominantly from
channels other than directly from customers.
Results of Operations, page 201
29. Please quantify the impact of the acquisition of Imperial Cars on your
revenue and costs
for the year ended December 31, 2020.
Cazoo Holdings Limited
Notes to Consolidated Financial Statements
Note 3.16 Business Segments, page F-40
30. Please revise to clarify the second paragraph, which also appears on
page F-41.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
J. Morgan Rutman
Capri Listco
June 11, 2021
Page 7
You may contact Ta Tanisha Meadows at (202) 551-3322 or Lyn Shenk at
(202) 551-
3380 if you have questions regarding comments on the financial statements and
related
matters. Please contact Daniel Morris at (202) 551-3314 or Mara Ransom at (202)
551-
3264 with any other questions.
Sincerely,
FirstName LastNameJ. Morgan Rutman
Division of Corporation
Finance
Comapany NameCapri Listco
Office of Trade &
Services
June 11, 2021 Page 7
cc: Debbie Yee
FirstName LastName