United States securities and exchange commission logo
September 9, 2021
William F. Concannon
Chief Executive Officer
CBRE Acquisition Holdings, Inc.
2100 McKinney Avenue, Suite 1250
Dallas, TX 75201
Re: CBRE Acquisition
Holdings, Inc.
Registration
Statement on Form S-4
Filed August 11,
2021
File No. 333-258700
Dear Mr. Concannon:
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 S-4
Questions and Answers
What equity stake will current stockholders of Altus, the PIPE
Investors, CBAH s public
stockholders and the Sponsor hold..,?, page 10
1. Please disclose the
sponsor and its affiliates total potential ownership interest in the
combined company,
assuming exercise and conversion of all securities.
Summary
Interests of Certain Persons in the Business Combination, page 30
2. Please revise to
disclose the current value of any loans extended by your sponsor
and quantify the
out-of-pocket expenses for which CBAH officers and directors, and their
affiliates are awaiting
reimbursement, if material. In that regard, we note you disclose on
William F. Concannon
FirstName LastNameWilliam F. Concannon
CBRE Acquisition Holdings, Inc.
Comapany 9,
September NameCBRE
2021 Acquisition Holdings, Inc.
September
Page 2 9, 2021 Page 2
FirstName LastName
page 212 that you borrowed $1,100,000 from the sponsor, which remains
outstanding as
of May 17, 2021. In addition, please clarify whether the sponsor and
its affiliates can earn
a positive rate of return on their investment, even if CBAH's public
shareholders
experience a negative rate of return in the post-business combination
company.
3. Please expand your disclosure regarding your sponsor s ownership
potential interest in
Altus. Disclose the approximate dollar value of the interest based on
the transaction value
and recent trading prices as compared to the price paid.
Risk Factors, page 47
4. Disclose the material risks to unaffiliated investors presented by
taking Altus public
through a merger rather than an underwritten offering. These risks
could include the
absence of due diligence conducted by an underwriter that would be
subject to liability for
any material misstatements or omissions in a registration statement.
5. We note that you considered as a negative factor the decrease in the
vesting period from
10 years to 7 years in your negotiations with Altus. Please revise to
disclose the attendant
risks to shareholders given this proposed change to the combined
entity's articles of
incorporation. Also revise to include balancing disclosure in the last
risk factor on page
75 regarding your "stakeholder aligned initial listing ( SAIL )
structure."
The absence of net energy metering and related policies to offer competitive
pricing to our
customers in our current markets..., page 66
6. Please expand your disclosure to discuss whether the caps on net
metering are close to
being met or if there is an absence of net energy metering for new
customers in your
principal markets of Massachusetts, New Jersey and Hawaii or your
expected near-term
future markets of Maryland, New York and California.
Warrants will become exercisable for our common stock, which would increase the
number of
shares eligible for future resale..., page 78
7. Please highlight the material risks to public warrant holders,
including those arising from
differences between private and public warrants. Clarify whether
recent common stock
trading prices exceed the threshold that would allow the company to
redeem public
warrants. Clearly explain the steps, if any, the company will take to
notify all
shareholders, including beneficial owners, regarding when the warrants
become eligible
for redemption.
The CBAH charter that will be effective following the completion of the
business combination
designates a state court..., page 87
8. You disclose here that your exclusive forum provision will not apply
to any action or
proceeding asserting a claim under the Securities Act or the Exchange
Act. However, we
note your disclosure on page 173 and in Article X of your Form of
Third Amended and
William F. Concannon
CBRE Acquisition Holdings, Inc.
September 9, 2021
Page 3
Restated Certificate of Incorporation that the federal district courts
of the U.S. shall be the
exclusive jurisdiction for the resolution of complaints alleging a
violation of federal
securities laws. If this provision does not apply to actions arising
under the Securities Act
or Exchange Act, please ensure that the exclusive forum provision in
the governing
documents states this clearly. Please also revise your disclosure here
and make
corresponding revisions on page 302 to discuss this exclusive forum
provision.
The Business Combination
Background of the Business Combination, page 103
9. We note that CBAH's second amended and restated certificate of
incorporation waived the
corporate opportunities doctrine. Please address this potential
conflict of interest here and
whether it impacted your search for an acquisition target. Also revise
to balance the
description of Proposal No. 3C on page 176.
10. We note that Morgan Stanley performed additional services after the
IPO and part of the
IPO underwriting fee was deferred and conditioned on completion of a
business
combination. Please quantify the aggregate fees payable to Morgan
Stanley that are
contingent on completion of the business combination.
11. In your search process, you state that CBAH entered into
non-disclosure agreements in
connection with 8 of 74 companies (including Altus) so that CBAH could
obtain
additional preliminary diligence information to evaluate the companies
as business
combination targets. You further state that other than with respect to
Altus, CBAH did
not submit any offers or proposals for a target company to engage in a
business
combination transaction with CBAH. Please revise your disclosure to
provide additional
detail to explain why CBAH determined not to pursue a transaction with
any of
these other potential targets.
Certain Projected Financial Information of Altus, page 119
12. We note your disclosure cautioning investors "not to rely on the
projections" in making a
decision regarding the transaction. While it may be appropriate to
caution
investors not to place undue reliance upon prospective financial
information, it is not
appropriate to tell readers to not rely upon them as you have included
the disclosures.
Please revise your disclosures accordingly.
13. Please revise your disclosure to qualitatively and quantitatively
discuss all material
assumptions underlying the projections, including the growth
assumptions. For example,
please quantify the assumptions underlying Altus's revenue growth,
including its asset
growth, projected megawatt hour generation per megawatt and rate per
megawatt hour,
FirstName LastNameWilliam F. Concannon
and expenses, if material. Please also clarify whether Altus's financial
projections assume
Comapany NameCBRE
the business Acquisition
combination Holdings,and
is completed Inc.describe the basis for the
assumptions that
underlie
September the Page
9, 2021 projections
3 and the type of market assumed in their
development.
FirstName LastName
William F. Concannon
FirstName LastNameWilliam F. Concannon
CBRE Acquisition Holdings, Inc.
Comapany 9,
September NameCBRE
2021 Acquisition Holdings, Inc.
September
Page 4 9, 2021 Page 4
FirstName LastName
14. Please describe the basis for projecting total estimated revenue
growth in 2022, 2023 and
2024 and the factors or contingencies that could prevent such growth
from materializing.
In particular, enhance your disclosure to explain the basis for the
significant estimated
revenue growth in years 2023 and 2024. In addition, please disclose
the portion of your
revenue growth attributable to EV chargers installed. In that regard,
we note page 31 of
your Investor Presentation filed as an exhibit to the Form 8-K filed
July 13, 2021.
15. We note your disclosure that the financial projections do not take
into account any
circumstances or events occurring after the date they were prepared on
April 23, 2021 and
that you disclaim any responsibility to update or revise the financial
projections to reflect
circumstances or events that may have occurred since, even in the
event that any or all of
the assumptions underlying the financial projections are shown to be
in error or change.
We also note that Duff & Phelps assumed there has been no material
change in the assets,
liabilities, financial condition, results of operations, business, or
prospects of CBAH or
Altus since the date of the most recent financial statements and other
information made
available to them, and that there is no information or facts that
would make the
information reviewed by Duff & Phelps incomplete or misleading in any
material respect
in rendering their opinion. Please revise your disclosure to address
any material changes
that occurred after the time when these forecasts were prepared.
Opinion of Duff & Phelps, the Financial Advisor to the Special Committee of the
CBAH Board,
page 121
16. Please expand your disclosure to clarify the reference to the
"unaudited segment financial
information" for Altus for the year ended December 31, 2020 and the
three months ended
March 31, 2021, explain the differences as compared to the "draft
financial
information" for Altus for the year ended December 31, 2020 and the
three months ended
March 31, 2021, and disclose the run-off assumptions for the remaining
useful life of the
assets developed by Altus and provided to Duff & Phelps.
17. Revise to enhance the "DevCo" disclosures to describe the development
opportunities that
Duff & Phelps considered in its valuation of Altus. In this regard, we
note the disclosure
that based on the information provided by Altus s management, Duff &
Phelps assumed
that (i) revenue is expected to increase from $10.0 million in 2021 to
$270.1 million by
2024 and that (ii) EBITDA increases from negative $15.0 million in
2021 to
$173.0 million in 2024.
Market Approach (Selected Public Companies/M&A Transactions Analysis) Summary,
page 126
18. If any companies or transactions that fit the criteria used to select
the companies in the
Selected Public Companies Analysis and transactions used in the M&A
Transactions
Analysis were excluded from such analyses, please discuss the reason
such companies
and/or transactions were excluded. Please also make corresponding
revisions to the
selected public companies in CBAH management's analysis on page 131
and disclose the
methodology and criteria used to select the companies in such
analysis.
William F. Concannon
FirstName LastNameWilliam F. Concannon
CBRE Acquisition Holdings, Inc.
Comapany 9,
September NameCBRE
2021 Acquisition Holdings, Inc.
September
Page 5 9, 2021 Page 5
FirstName LastName
Financial Analysis of CBAH Management, page 131
19. Please explain the references to Phase III, Phase II and Phase I in
the tabular disclosure for
the EBITDA Trading Multiple Comparison.
20. Please tell us whether any operational and trading multiples analysis
was performed and
considered with respect to the company's energy transition business.
In that respect, we
note pages 35 and 36 of the Company's Investor Presentation filed as
Exhibit 99.2 to the
Form 8-K on July 13, 2021.
Interests of Certain Persons in the Business Combination, page 132
21. We note your affiliation with CBRE and that CBRE will make a loan to
your Chief
Financial Officer, Mr. Smith. Please tell us on how you intend to
comply with Section
13(k) of the Securities Exchange Act of 1934 with respect to the loan
CBRE has agreed to
make to Mr. Smith.
Sources and Uses for the Business Combination, page 136
22. Please expand your disclosure to also reflect sources and uses
assuming the maximum
redemption of CBAH Class A common stock.
Certain U.S. Federal Income Tax Considerations, page 137
23. We note your disclosure that the parties "intend" for the business
combination to be
treated as a reorganization within the meaning of Section 368(a) of
the Tax Code. Please
revise your disclosure throughout your filing, including this section
and your Questions
and Answers section, to describe the material federal income tax
consequences of the
business combination and disclose whether the parties expect the
business combination to
be a tax-free transaction. If you are unable to conclude that the
business combination is
likely to be tax-free, revise your disclosure relating to the material
tax consequences of the
business combination to focus on the uncertainty and the consequences
of the business
combination being taxable to holders. If you are able to conclude that
the business
combination is likely to be tax-free to holders, include a tax opinion
supporting such a
conclusion. For further guidance see Staff Legal Bulletin No. 19 and
Item 601(b)(8) of
Regulation S-K.
Unaudited Pro Forma Condensed Combined Financial Information
Description of the Merger, page 198
24. We note your disclosure describing "consideration to be paid" to the
existing Altus Power,
Inc. stockholders of $900 million in CBAH Class A common stock.
Given that you intend to account for the transaction as a reverse
merger, please expand
this and all similar disclosures elsewhere in your filing to also
describe consideration from
the standpoint of Altus Power, Inc., which you have identified as the
accounting acquirer,
William F. Concannon
FirstName LastNameWilliam F. Concannon
CBRE Acquisition Holdings, Inc.
Comapany 9,
September NameCBRE
2021 Acquisition Holdings, Inc.
September
Page 6 9, 2021 Page 6
FirstName LastName
and to clarify that the number and value of shares to be issued to the
Altus Power, Inc.
shareholder group in conjunction with the merger does not represent
funding or
consideration from an accounting standpoint.
Please include quantification of the ownership interests that the
Altus Power, Inc.
shareholder group is relinquishing and the funds to be
received/retained by the company
in exchange under both the no redemption and maximum redemption
scenarios. Please
similarly revise your disclosure of sources and uses "for funding" the
transaction on page
136, to segregate your discussion of these shares from that pertaining
to the actual sources
and uses of funds.
Notes to Unaudited Pro Forma Condensed Combined Financial Information
Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined
Statements
of Operations, page 207
25. We note you include a pro forma adjustment to reflect the Alignment
Shares as liability-
classified derivatives within the Pro Forma Balance Sheet. Tell us why
you have not also
presented pro forma adjustments within the Pro Forma Statements of
Operations for the
incremental stock compensation expense associated with the subsequent
measurement and
change in classification to comply with Rule 11-02(a)(6)(i)(B) of
Regulation S-X.
26. Please expand your description of pro forma adjustment (DD) to include
details of the
adjustments to the Pro Form Statement of Operations for the year ended
December 31,
2020.
Executive Compensation of CBAH Following the Business Combination
Compensation Discussion and Analysis
Narrative Disclosure to Summary Compensation Table, page 239
27. We note your disclosure that you intend to enter into employment
agreements with Gregg
Felton and Lars Norell in connection with the transactions. When
known, please describe
the material terms of such agreements and file the same as exhibits.
28. Please expand the narrative to the summary compensation table to
discuss how each
officer's bonus was determined. Refer to Item 402(o) of Regulation
S-K.
Altus's Management's Discussion and Analysis of Financial Condition and Results
of Operations
Components of Results of Operations, page 248
29. We note that the cost of operations measure excludes depreciation,
amortization and
accretion expense for property, plant and equipment and intangibles
directly attributable
to the generation of revenue. Please revise your presentation on the
Statements of
Operations, and any tabulations of corresponding activity elsewhere in
the filing, as
necessary to comply with SAB Topic 11:B.
William F. Concannon
FirstName LastNameWilliam F. Concannon
CBRE Acquisition Holdings, Inc.
Comapany 9,
September NameCBRE
2021 Acquisition Holdings, Inc.
September
Page 7 9, 2021 Page 7
FirstName LastName
Information About Altus, page 267
30. Please revise your disclosure to clearly state the source information
in this section. For
instance, provide the source for your statement that "2020 solar
generation and storage
capacity only comprised approximately 8% of total U.S. capacity and
this figure is
expected to grow approximately 11.5x to a capacity of approximately
48% by 2050" and
the chart on page 268 as well as your disclosure under the heading
"Industry."
31. We note your disclosure that you currently have over 45 distinct
development
opportunities comprising a 900+MW pipeline. Please clarify the meaning
of the term
"development opportunities."
Description of CBAH's Securities
Alignment Shares Conversion, page 282
32. Please disclose the maximum number of Class A common shares that the
Alignment
Shares may convert into assuming that the Conversion Cap is met in
each of the seven-
year Alignment Shares conversion time period.
Beneficial Ownership Table, page 306
33. Please disclose the natural person or persons who exercise sole or
shared voting and/or
dispositive powers with respect to the shares held by GSO Altus
Holdings L.P.
Financial Statements, page F-1
34. Please update the financial statements of CBRE Acquisition Holdings,
Inc. and Altus
Power, Inc. and the corresponding historical and pro forma financial
information
presented elsewhere in your filing to comply with Rule 3-12 of
Regulation S-X.
CBRE Acquisition Holdings, Inc. - Unaudited Financial Statements
Note 1 - Description of Organization and Business Operations
Revision of Prior Period Financial Statements, page F-30
35. We note that you have restated your December 31, 2020 balance sheet in
the interim
financial statements to give effect of the error correction, which
includes changing
Stockholders' Equity of $5 million to a deficit of $30 million, though
you have not
restated the corresponding balance sheet in your annual financial
statements.
Please similarly revise the presentation on page F-4 and label the
column headings on
pages F-4 and F-23 as restated, as well as any corresponding
tabulations elsewhere in your
filing, having balance sheet information as of December 31, 2020.
With regard to the private placement warrants issued to your Sponsor
on page F-6, and
considering your disclosures on pages F-21 and F-41, indicating you
are accounting for
William F. Concannon
FirstName LastNameWilliam F. Concannon
CBRE Acquisition Holdings, Inc.
Comapany 9,
September NameCBRE
2021 Acquisition Holdings, Inc.
September
Page 8 9, 2021 Page 8
FirstName LastName
these warrants in accordance with FASB ASC 718, also explain the
reasons you appear to
have adjusted Additional paid-in capital to remove the $11 million
associated with the
private placement warrants.
Altus Power, Inc. - Audited Financial Statements
Note 2 - Significant Accounting Policies
Revenue Recognition, page F-55
36. Please expand your disclosures pertaining to Net Metering Credits and
Solar Renewable
Energy Certificates to identify the issuing authorities and to
describe -
the benefits conveyed thereunder,
the manner by which the benefits may be realized by the holder,
how these are valued and quantified in relation to the power that
you have generated,
and
your accounting policy for the receipt of such credits and
certificates prior to any
subsequent conveyance.
Tell us the extent to which such credits and certificates are granted
directly to your
customers rather than to you, and how your entitlement to the benefits
is secured in these
instances prior to the sale.
Note 7 - Variable Interest Entity, page F-66
37. We note that consolidated VIEs represent about 63% of total assets as
of December 31,
2020. Please expand your disclosures to provide the information
required by FASB ASC
810-10-50-3 and 5A, with regard to material interests held in
consolidated VIEs, as
necessary to satisfy the objectives set forth in FASB ASC
810-10-50-2AA.
For example, the disclosures should include the following information
to the extent
applicable -
the methodology applied in determining that the company is the
primary beneficiary,
including judgments and assumptions made, and the types of
involvements
considered to be significant;
the type and amounts of any support provided during the periods
presented and the
reasons;
qualitative and quantitative information about the company's
involvement with the
VIEs, including the nature, purpose, size, activities of, and the
manner of financing,
the VIEs;
the nature of restrictions on VIE assets; and
any arrangements that could require that Altus Power, Inc. or its
subsidiaries provide
financial support.
It should be clear which particular VIEs are significant, where the
operations of such VIEs
are conducted, and how your characterization of the VIEs as "tax
equity financing
arrangements and partnerships" corresponds to the additional
information that you
William F. Concannon
CBRE Acquisition Holdings, Inc.
September 9, 2021
Page 9
provide; please identify the salient features.
With regard to your disclosure indicating total assets associated with
VIEs are restricted
for settlement of the VIE obligations, please clarify the extent and
effect of any purchase
accounting and intercompany balances excluded in quantifying these
amounts if material.
Note 14 - Net Loss Per Share, page F-77
38. We note that your measures of net income (loss) attributable to common
stockholders of
$6,793 and $(4,367) for 2020 and 2019 as reported on page F-44 are not
consistent with
the corresponding amounts disclosed under this heading of $(10,963)
and $(6,121) for the
same periods. Please revise your financial statements as necessary to
resolve these
inconsistencies and to utilize parentheses for denoting adjustments to
net loss in a manner
that is consistent with your presentation of net loss.
39. We note that you adjust your 2020 net loss of $(1,887) for an
allocation to non-controlling
interests and redeemable non-controlling interests of $(8,680), which
appears to be the
result of applying the accounting policy described on page F-58. You
indicate that such
interests represent contractual arrangements that were created "to
finance the costs of solar
energy facilities under long-term operating agreements" and represent
"substantive profit-
sharing arrangements" that cause your allocation of subsidiary
economics to be
inconsistent with the ownership percentages.
Please expand your disclosures on pages 264 and 265 to describe the
salient features and
structure of the contractual arrangements that constitute profit
sharing and
yield the disproportionate allocations. Please also describe any
pattern or expected change
in the relative allocations over time, and expand your disclosures on
pages 250, 254 and
256, as appropriate, to identify the circumstances and main drivers
associated
with the particular allocations made for 2019, 2020 and the subsequent
interim period.
Tell us how your allocations each period reconcile to your accounting
for the non-
controlling and redeemable non-controlling interests on the balance
sheet.
Exhibits
40. Please file Mr. Weber's employment agreement with Altus Power America
Management
as an exhibit to your registration statement. Refer to Item 601(b)(10)
of Regulation S-K.
41. Please file all agreements related to your material financing
arrangements, including the
Blackstone Capital Facility, the Blackstone Credit Facility and the
Fifth Third Credit
FirstName LastNameWilliam F. Concannon
Facility, as exhibits to your registration statement or tell us why you
do not believe that
Comapany
theseNameCBRE
are materialAcquisition
agreements Holdings,
required toInc.
be filed pursuant to Item
601(b)(10) of
Regulation
September 9, 2021S-K.
Page 9
FirstName LastName
William F. Concannon
FirstName LastNameWilliam F. Concannon
CBRE Acquisition Holdings, Inc.
Comapany 9,
September NameCBRE
2021 Acquisition Holdings, Inc.
September
Page 10 9, 2021 Page 10
FirstName LastName
General
42. Revise your disclosure to show the potential impact of redemptions on
the per share value
of the shares owned by non-redeeming shareholders by including a
sensitivity analysis
showing a range of redemption scenarios, including minimum, maximum
and interim
redemption levels.
43. Please revise to disclose all possible sources and extent of dilution
that shareholders who
elect not to redeem their shares may experience in connection with the
business
combination. Provide disclosure of the impact of each significant
source of dilution,
including the amount of equity held by founders, and convertible
securities, including
warrants retained by redeeming shareholders, at each of the redemption
levels detailed in
your sensitivity analysis, including any needed assumptions.
44. Quantify the value of warrants, based on recent trading prices, that
may be retained by
redeeming stockholders assuming maximum redemptions and identify any
material
resulting risks.
45. It appears that underwriting fees remain constant and are not adjusted
based on
redemptions. Revise your disclosure to disclose the effective
underwriting fee on a
percentage basis for shares at each redemption level presented in your
sensitivity analysis
related to dilution.
46. We note that Proposal No. 2 seeks shareholder approval for certain
amendments to your
articles of incorporation, which will (i) include certain changes to
the number of
conversion shares issued upon conversion of the Alignment Shares,
including decreasing
the vesting period from ten years to seven years, (ii) create the
Class B Director and the
rights of holders of the CBAH Class B common stock to elect such
director annually, (iii)
include a staggered board, and (iv) include an exclusive forum
provision, among other
changes that may substantively affect stockholder rights. Please tell
us whether you will
provide stockholders with a separate vote regarding these material
changes and provide
your analysis as to why you believe you are not required to unbundle
these changes to
your amended charter. Please refer to Rule 14a-4(a)(3) of Regulation
14A and Question
201.01 of the Division's Exchange Act Rule 14a-4(a)(3) Compliance and
Disclosure
Interpretations, available on our website. Additionally, please
include a form of proxy
card marked as preliminary when available for review.
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.
William F. Concannon
CBRE Acquisition Holdings, Inc.
September 9, 2021
Page 11
You may contact Jenifer Gallagher, Staff Accountant, at (202) 551-3706
or Karl Hiller,
Accounting Branch Chief, at (202) 551-3686 if you have questions regarding
comments on the
financial statements and related matters. Please contact Karina Dorin, Staff
Attorney, at (202)
551-3763 or Loan Lauren Nguyen, Legal Branch Chief, at (202) 551-3642 with any
other
questions.
Sincerely,
FirstName LastNameWilliam F. Concannon
Division of
Corporation Finance
Comapany NameCBRE Acquisition Holdings, Inc.
Office of Energy &
Transportation
September 9, 2021 Page 11
cc: William B. Brentani
FirstName LastName