United States securities and exchange commission logo
January 18, 2022
Sanjay Patel
Chief Executive Officer
Apollo Strategic Growth Capital
9 West 57th Street 43rd Floor
New York, NY 10019
Re: Apollo Strategic
Growth Capital
Registration
Statement on Form S-4
Filed December 21,
2021
File No. 333-261820
Dear Mr. Patel:
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
Cover Page
1. Please revise to
disclose the anticipated relative ownership of your common stock
between your initial
holders, including Sponsor and Insiders, Continuing JerseyCo
Owners and affiliates,
and your public shareholders, upon closing of the business
combination.
2. Please revise the cover
page to disclose the dual class structure upon the closing of the
initial business
combination with GBT. In this regard, we note that the Continuing
JerseyCo Owners will
hold all of the issued and outstanding shares of Domesticated
Acquiror Class B Common
Stock and will accordingly hold a majority of the voting
power of PubCo s
capital stock on a fully-diluted basis and will be able to control matters
submitted to PubCo s
stockholders for approval, including the election of directors.
Sanjay Patel
FirstName LastNameSanjay Patel
Apollo Strategic Growth Capital
Comapany
January 18,NameApollo
2022 Strategic Growth Capital
January
Page 2 18, 2022 Page 2
FirstName LastName
Q: What are the U.S. Federal Income Tax Consequences of the Domestication?,
page 26
3. Your disclosure here and on page 208 suggests that it is intended that
the Domestication
qualify as a tax-deferred reorganization within the meaning of
Section 368(a)(1)(F) of
the Code. Your further disclosure on pages 25 and 213 indicates that
because the
Domestication will occur immediately prior to the redemption of U.S.
holders that
exercise redemption rights, U.S. holders exercising redemption rights
will be subject to
the potential tax consequences of Section 367 of the Code as a result
of the
Domestication. As a result, it appears that the tax consequences may
be material to
shareholders. Please revise your disclosures to identify tax counsel
and file a related
opinion or provide us an analysis explaining why it is not necessary
to do so. For
guidance, refer to Section III of Staff Legal Bulletin 19 (Oct. 14,
2011).
Summary, page 36
4. Please revise your diagram illustrating the pre-business combination
structure of GBT to
show the relative ownership of GBT shares held by the Continuing
JerseyCo Owners. In
addition, revise your diagram illustrating the post-business
combination PubCo structure
to show the relative ownership of voting and economic interests of GBT
held by PubCo
and the Continuing JerseyCo Owners.
Consideration to be Received in the Business Combination, page 38
5. Please revise to specifically disclose the total consideration to be
paid and how the
consideration will be allocated to the holders of GBT Capital Stock
and GBT MIP
Options. Clearly disclose the consideration to be received, rather
than referring to the Pre-
Money Equity Value. Please also consider clarifying the defined term,
"Pre-Money
Equity Value."
Conditions to Closing, page 44
6. Please revise your disclosure to clarify each condition that is
subject to being waived and
state which party may waive such condition. We note your disclosure
beginning on page
138.
Risk Factors, page 60
7. Disclose the material risks to unaffiliated investors presented by
taking GBT public
through a business combination 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.
The COVID-19 pandemic has had, and is expected to continue to have, an adverse
impact on our
business, page 60
8. We note your disclosure that the extent of the effects of the COVID-19
pandemic on your
Sanjay Patel
FirstName LastNameSanjay Patel
Apollo Strategic Growth Capital
Comapany
January 18,NameApollo
2022 Strategic Growth Capital
January
Page 3 18, 2022 Page 3
FirstName LastName
business, results of operations, cash flows and growth prospects are
uncertain and will
ultimately depend on future developments. We further note the
disclosure in this risk
factor that "as of October 2021, trends generally continue to improve
across key
geographies." Please tell us what consideration you have given to
updating your
disclosures to describe the effects of COVID-19 on your business and
results of
operations.
The terms of the Senior Secured Credit Agreement restrict our current and
future operations,
page 66
9. Please revise to disclose the requirement in GBT's Senior Secured
Credit Agreement that
an aggregate amount of Liquidity equal to at least $200 million as of
the end of each
calendar month be maintained. We note your disclosure on page 254.
A significant portion of our total outstanding shares are restricted from
immediate resale but may
be sold into the market, page 90
10. We note your disclosure here that you will file one or more
registration statements prior to
or shortly after the closing of the Business Combination to provide
for the resale of the
PIPE Securities from time to time, and that you will also enter into
the Registration Rights
Agreement, which will require you to register under the Securities Act
all the shares of
Domesticated Acquiror Class A Common Stock held, or issuable upon
exchange, by the
parties to the Registration Rights Agreement. Please revise to
disclose the amount of
shares of common stock which will be subject to resale registration,
including under the
Registration Rights Agreement. Please also revise your disclosure on
page 102
accordingly.
The Acquiror Delaware Certificate and Acquiror Delaware Bylaws will also
provide that the
Delaware Court of Chancery, page 91
11. We note that your Acquiror Delaware Certificate will provide that,
unless you consent in
writing to the selection of an alternative forum, the Delaware Court
of Chancery shall, to
the fullest extent permitted by applicable law, be the sole and
exclusive forum for certain
litigation, including any derivative action. We also note your
disclosure (consistent
with your form of Delaware certificate) that the Acquiror Delaware
Certificate will further
provide that, unless you consent in writing to the selection of an
alternative forum, the
federal district courts are the sole and exclusive forum for the
resolution of any complaint
asserting a right under the Securities Act. Please revise your
disclosure to clarify whether
the exclusive forum provision in the Acquiror Delaware Certificate
applies to actions
arising under the Exchange Act. If this provision does not apply to
actions arising under
Securities Act or Exchange Act, please also ensure that the exclusive
forum provision in
Acquiror Delaware Certificate states this clearly, or tell us how you
will inform investors
in future filings that the provision does not apply to any actions
arising under the
Securities Act or Exchange Act.
Sanjay Patel
FirstName LastNameSanjay Patel
Apollo Strategic Growth Capital
Comapany
January 18,NameApollo
2022 Strategic Growth Capital
January
Page 4 18, 2022 Page 4
FirstName LastName
The APSG Founders have potential conflicts of interest in recommending that the
APSG
Shareholders vote in favor of approval of the Business, page 92
12. Please expand your disclosure regarding the sponsor s ownership
interest in the combined
company to disclose the approximate dollar value of the interest based
on the transaction
value and recent trading prices as compared to the price paid.
13. Revise to disclose amounts for any finder s fees, consulting fees or
reimbursement fees to
be paid to the Sponsor, the APSG Board or APSG officers, or any of
their respective
affiliates, for services rendered in connection with the completion of
the initial business
combination.
APSG or PubCo, as applicable, may redeem unexpired warrants prior to their
exercise at a time
that is disadvantageous to holders of such war, page 104
14. 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 Business Combination Proposal
Background to the Business Combination, page 158
15. You disclose that from the date of the IPO through the signing of the
Letter of
Intent, representatives of the Sponsor and APSG considered and
evaluated over 350
potential acquisition targets in a wide variety of industry sectors
and entered into non-
disclosure agreements with over 40 of such potential acquisition
targets (including GBT),
and that representatives of the Sponsor and APSG submitted proposals
to over 10
potential acquisition targets (including GBT). In addition, you
disclose that APSG
entered into letters of intent with two of those potential acquisition
targets (including
GBT). Please expand your discussion in this section to describe the
process utilized to
evaluate the other potential targets. Please describe the reasons you
did not further
consider any alternative proposal and explain why APSG did not believe
the alternatives
to be as compelling as GBT, taking into consideration their business
prospects, strategy,
management teams, structure, likelihood of execution and valuation
considerations.
16. We note that on June 16, 2021, GBT sent APSG a draft preliminary
valuation framework,
which was subsequently discussed by the representatives of APSG and
GBT. Please
revise to disclose whether GBT's preliminary valuation framework
included any range
of Pre-Money Equity Value that was considered by the parties prior to
preliminary non-
binding proposal from APSG.
Sanjay Patel
FirstName LastNameSanjay Patel
Apollo Strategic Growth Capital
Comapany
January 18,NameApollo
2022 Strategic Growth Capital
January
Page 5 18, 2022 Page 5
FirstName LastName
17. We note your disclosure that on June 25, 2021, APSG submitted its
preliminary non-
binding proposal for a business combination with GBT, which included a
proposed Pre-
Money Equity Value for GBT of $3.83 billion to $4.33 billion. Please
expand your
disclosure to explain how this Pre-Money Equity Value range was
determined.
18. Your charter waived the corporate opportunities doctrine. Please
address this potential
conflict of interest and whether it impacted your search for an
acquisition target.
19. You disclose on page 135 and elsewhere that the holders of GBT Capital
Stock and GBT
Legacy MIP Options will be entitled to receive additional earnout
shares in PubCo and
GBT if PubCo s stock price hits certain agreed thresholds. Please
revise to include
additional details to describe this earnout consideration and the
related negotiations.
20. We note your disclosure on page 93 that upon the consummation of the
Business
Combination, Apollo Global Securities, LLC ("AGS") will receive its
portion of the $28.6
million of deferred underwriting commissions related to APSG s IPO
and its portion of
the $7.5 million of placement fees related to the PIPE Investment. We
also note your
disclosure on page 163 that the aggregate fees payable to Credit
Suisse, Goldman Sachs,
Morgan Stanley, Evercore and Houlihan Lokey or their respective
affiliates upon the
closing of the Business Combination is approximately $29.6 million for
their roles as
financial or capital markets advisors. Please revise to clarify the
role of each of AGSP,
Credit Suisse, and Goldman Sachs, who also acted as AGSP's IPO
underwriters, after the
completion of AGSP's IPO, and the roles of Morgan Stanley, Evercore
and Houlihan
Lokey. Please also disclose the aggregate fees payable to AGSP, Credit
Suisse, Goldman
Sachs, Morgan Stanley, Evercore and Houlihan Lokey that are contingent
on completion
of the business combination on a collective and individual basis.
21. We note that members of management or representatives of APSG, GBT,
and Sponsor
participated in meetings and discussions from April through December
2021 to discuss the
potential business combination. Revise to clarify the members of
management or
representatives of APSG, GBT, and Sponsor who participated in the
referenced meetings
and discussions. As examples, we note your general references to
"representatives" of the
Sponsor, APSG and GBT, "APSG management," and "GBT management."
The APSG Board's Reasons for Approval of the Business Combination, page 171
22. We note that the APSG Board considered a variety of uncertainties,
risks and other
potentially negative factors concerning the Business Combination,
including the potential
conflicts of interest between the Sponsor and its affiliates and APSG
in the Business
Combination. Expand your disclosure to clarify how the board
considered such conflicts
in its determination to recommend the approval of the Business
Combination.
Sanjay Patel
FirstName LastNameSanjay Patel
Apollo Strategic Growth Capital
Comapany
January 18,NameApollo
2022 Strategic Growth Capital
January
Page 6 18, 2022 Page 6
FirstName LastName
Projected Financial Information, page 175
23. As the GBT Projections do not take into account any circumstances or
events occurring
after the date on which the GBT Projections were prepared, revise to
provide a discussion
of any subsequent period material circumstances or events that could
be relevant to an
investment decision.
24. We note that the GBT Projections assume an approximately 70% recovery
in industry
Total Transaction Value in 2023E. Revise to address expectations for
2022E, why this
type of recovery was deemed to be reasonably likely, and how a lesser
recovery of the
travel industry would change the projected financial information
presented. In addition,
clarify what constitutes "new wins" and how this results in revenue
growth for the periods
presented.
In addition, tell us about any differences in assumptions used for
purposes of preparing the
projections included in your filing and the annual impairment review
of goodwill
performed on December 31, 2021.
25. The projected financial information assumes continued expansion and
growth in new
service offerings and new capabilities. Explain how this will be
achieved, especially
considering the permanent cost reductions noted as part of your
discussion of material
assumptions. In addition, more clearly describe expectations for the
expansion of the
GBT Partner Solutions business. Also as part of your revised
disclosure, explain what is
meant by "other future prospects of GBT."
26. Considering that it occurred in November 2021, provide additional
detail explaining the
impact of the Egencia Acquisition on the projections presented.
27. We note the disclosure in the seventh bulleted point that you
considered "economic and
market growth consistent with recent pre-COVID years, including
continued expansion
and growth in new service offerings and new capabilities." Please
revise to
quantify any economic and market growth rates that were utilized in
this assumption.
28. Provide us with the legal basis for the stated intentions of the
parties to not update the
disclosure regarding the prospective financial information "even in
the event that any or
all of the assumptions underlying the GBT Projections are shown to be
in error." Refer
generally to Item 10(b)(3)(iii) of Regulation S-K.
Opinion of the Financial Advisor to APSG, page 185
29. We note your disclosure on page 185 and opinion letter from Houlihan
Lokey included as
Annex R to the registration statement states that Houlihan Lokey s
opinion was furnished
for the use of the APSG Board (in its capacity as such) in connection
with its evaluation of
the Business Combination and "may not be used for any other purpose
without our prior
written consent." This disclosure suggests that shareholders may not
consider or rely on
the information in the opinion which you have included with your
registration statement.
Sanjay Patel
FirstName LastNameSanjay Patel
Apollo Strategic Growth Capital
Comapany
January 18,NameApollo
2022 Strategic Growth Capital
January
Page 7 18, 2022 Page 7
FirstName LastName
Please revise to remove this limitation on reliance.
30. We note your disclosure on page 188 that taking into account the
results of the selected
companies analysis, Houlihan Lokey applied selected multiple ranges of
9.0x to 11.0x
FY 2019 Adjusted EBITDA and 9.0x to 11.0x FY 2023E Adjusted EBITDA to
corresponding financial data for GBT. However, we note the FY 2019
Adjusted
EBITDA and FY 2023E Adjusted EBITDA ranges implied by this analysis
were not the
same. Please explain why Houlihan Lokey selected and applied the same
range of 9.0x to
11.0x to FY 2019 Adjusted EBITDA and FY 2023E Adjusted EBITDA.
31. With regards to the discounted cash flow analysis of GBT discussed on
page 189, provide
expanded disclosure explaining how the discount rates and perpetuity
growth rates were
determined and deemed to be appropriate.
Unaudited Pro Forma Condensed Combined Financial Information
Introduction, page 216
32. We note your disclosure that following the closing of the Business
Combination, APSG
will acquire a minority interest in GBT, which will serve as PubCo s
operating company
in an Up-C structure. Revise to provide additional information
regarding the post-
transaction ownership structure, including with regard to interests
held by the non-
controlling interest holders.
Note 2. Unaudited pro forma adjustments related to Egencia Acquisition, page
223
33. We note that the equity interests issued as part of the Egencia
Acquisition are subject to
changes based on final debt/cash and working capital adjustments.
Revise to clarify the
extent to which material changes could occur.
34. Expand your disclosure for adjustment (ii) to provide a qualitative
description of the
factors that make up the goodwill recognized on a pro forma basis as
part of the
acquisition of Egencia consistent with FASB ASC 805-30-50-1a.
35. Expand your disclosure for adjustment (vi) to further explain the
basis of the estimated
value of 19% of equity interest in GBT.
Note 3. Unaudited pro forma condensed combined balance sheet adjustments
related to Business
Combination, page 226
36. Expand your disclosure for adjustment (g) to provide additional detail
regarding how the
fair value of the Sponsor Earn-Out Shares contingently issuable to the
Sponsor were
determined.
37. Revise your disclosure for adjustments (j) and (aa) to clarify the
nature of the pro forma
adjustments for noncontrolling interest based on the ownership
interest in GBT following
the proposed transaction.
Sanjay Patel
FirstName LastNameSanjay Patel
Apollo Strategic Growth Capital
Comapany
January 18,NameApollo
2022 Strategic Growth Capital
January
Page 8 18, 2022 Page 8
FirstName LastName
Note 5. Earnings per Share, page 226
38. Revise to include a discussion of the impact of potentially dilutive
equity outstanding,
such as warrants.
Business of GBT, page 232
39. We note your use of market and industry data here and throughout your
proxy
statement/prospectus derived from industry sources disclosed on page
1. We also note
your internal CAGR data. Please tell us what consideration you have
given to updating
this information to reflect completed fiscal years 2020 and 2021.
APSG's Management's Discussion and Analysis of Financial Condition and Results
of
Operations
Liquidity and Capital Resources, page 260
40. You state "APSG does not believe it will need to raise additional
funds in order to meet
the expenditures required for operating our business." Revise this
disclosure as it does not
appear to be consistent with the language in the footnotes to your
financial statements
regarding your ability to continue as a going concern.
41. Expand your disclosure to address that, upon closing of the proposed
business
combination, you will be a holding company with no operations and will
depend on
distributions from GBT to meet your financial obligations, including
taxes and other
expenses. Please also disclose any restrictions or other factors that
could limit GBT's
ability to pay dividends or make other distributions to you. Refer to
Item 303(a)(1) of
Regulation S-K.
GBT's Management's Discussion and Analysis of Financial Condition and Results
of Operations
Key Factors Affecting Our Results of Operations
Acquisitions, page 266
42. Revise your disclosure here and elsewhere in the filing to clarify
that the acquisition of
Ovation completed in January 2021 has been reflected in the historical
financial results.
Key Operating and Financial Metrics
Non-GAAP Financial Measures, page 268
43. We note the non-GAAP financial measures Adjusted EBITDA and Adjusted
Operating
Expenses exclude restructuring charges related to mitigating actions
taken in response to
adverse business impact resulting from travel restrictions due to the
COVID-19 pandemic.
We also note that funds were received from governments in connection
with programs
designed to minimize employment losses related to the COVID-19
pandemic. Tell us
how the funds received were considered in the calculation of these
non-GAAP financial
measures.
Sanjay Patel
FirstName LastNameSanjay Patel
Apollo Strategic Growth Capital
Comapany
January 18,NameApollo
2022 Strategic Growth Capital
January
Page 9 18, 2022 Page 9
FirstName LastName
Results of Operations, page 272
44. Revise to quantify the effect of each causal factor identified for
material changes in your
financial statement amounts. For example, in the discussion regarding
salaries and
benefits expenses, quantify the decreases due to the COVID-19 BRP and
funds received
from governments separately as part of the analysis of cost of
revenue. Refer to
Item 303 of Regulation S-K.
Security Ownership of Certain Beneficial Owners and Management, page 320
45. Please revise to also disclose the sponsor and its affiliates' total
potential ownership
interest in the combined company, assuming exercise and conversion of
all securities. We
note certain of this information on page 21.
GBT JerseyCo Limited
Audited Annual Financial Statements
Note 2. Summary of Significant Accounting Policies
Revenue Recognition, page F-76
46. The disclosure regarding transaction fees and other revenues states
that performance
obligation under these contracts are typically satisfied over time as
the clients benefit from
these services as they are performed. Clarify the nature of the
performance obligations in
arrangements with corporate clients to provide travel related services
and how revenue is
recognized. In addition, describe the nature of the stand ready
obligation to provide
travel-related services in the context of FASB ASC 606-10-25-18e.
Note 24. Segment Information, page F-105
47. We note that the Business Travel and Meetings and Events operating
segments have been
aggregated and presented as one reportable segment due to their
similar economic
characteristics, nature of services provided, type of customers,
methods used to provide
services and regulatory environment. Provide us with an analysis of
each of the
aggregation criteria per FASB ASC 280-10-50-11.
Exhibits
48. We note your disclosure on page 42 and elsewhere that in connection
with the Business
Combination Agreement, on December 2, 2021, the Continuing JerseyCo
Owners and
GBT entered into the Company Holders Support Agreement. Please file a
copy of this
agreement as an exhibit to your registration statement or tell us why
you believe it is not
required to be filed. Please also file the consent of Houlihan Lokey
to the inclusion of its
opinion letter dated December 2, 2021 in your proxy
statement/prospectus as an exhibit to
your registration statement.
Sanjay Patel
Apollo Strategic Growth Capital
January 18, 2022
Page 10
General
49. 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. Please also provide disclosure of the impact of each
significant source
of dilution, including the amount of equity held by founders, convertible
securities,
including warrants retained by redeeming shareholders, at each of the
redemption levels
detailed in your analysis, including any needed assumptions. Also include
disclosure
regarding your underwriting fees on a percentage basis for shares at each
redemption level
presented in your sensitivity analysis related to dilution. It appears
that underwriting fees
remain constant and are not adjusted based on redemptions.
50. 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.
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.
You may contact Wei Lu, Staff Accountant, at 202-551-3725 or Ethan
Horowitz,
Accounting Branch Chief, at 202-551-3311 if you have questions regarding
comments on the
financial statements and related matters. Please contact Irene
Barberena-Meissner, Staff
Attorney, at 202-551-6548 or Loan Lauren Nguyen, Legal Branch Chief, at
202-551-3642 with
any other questions.
Sincerely,
FirstName LastNameSanjay Patel
Division of
Corporation Finance
Comapany NameApollo Strategic Growth Capital
Office of Energy &
Transportation
January 18, 2022 Page 10
cc: Ross A. Fieldston, Esq.
FirstName LastName