United States securities and exchange commission logo
September 27, 2022
Thiago da Costa Silva
Director
Ambipar Emergency Response
Avenida Ang lica, n 2346, 5th Floor
S o Paulo, SP Brazil, 01228-200
Re: Ambipar Emergency
Response
Draft Registration
Statement on Form F-4
Submitted August
31, 2022
CIK No. 0001937441
Dear Mr. da Costa Silva:
We have reviewed your draft 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 providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. 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 the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form F-4 Filed August 31, 2022
Q. What interests do HPX s current officers and directors have in the
Business Combination?,
page 31
1. Please revise to also
disclose the current value of out-of-pocket expenses related to
identifying,
investigating and completing an initial business combination for which your
directors are awaiting
reimbursement. In addition, please revise to disclose in this section
the directors or other
persons associated with HPX and Sponsor who are expected to
continue as directors
or in other roles at New PubCo. In that regard, we note your
disclosure in the
section New PubCo Management Following the Business Combination
that begins on page
328.
Thiago da Costa Silva
FirstName LastNameThiago da Costa Silva
Ambipar Emergency Response
Comapany 27,
September NameAmbipar
2022 Emergency Response
September
Page 2 27, 2022 Page 2
FirstName LastName
Downside Protection Agreements, page 52
2. Please revise to describe the downside protection provided to the PIPE
Investors, the Non-
Redeeming Shareholders, and the XP Non-Redeeming Shareholders under
the Downside
Protection Agreements. In addition, quantify the benefits that each
such party may
receive under the Downside Protection Agreements.
Summary of the Proxy Statement/Prospectus
Ownership of New PubCo Upon Completion of the Business Combination, page 52
3. Your table on page 52 discloses Ambipar owning 65.6% to 71.8% of total
outstanding
shares at the close of the transactions, depending on the redemption
scenario. On page 65,
you disclose Ambipar owning 95% of New PubCo s voting power at the
close of the
transactions, at the minimum redemption scenario. Please revise to
address this divergence
of ownership of shares outstanding and total voting power resulting
from the dual class
structure.
Recent Development
Recent Acquisition, page 68
4. You disclose the recent acquisitions of four businesses in July and
August 2022. You
state on page 287 that you have completed five additional acquisitions
in 2022; and on
page 295 you disclose the eight acquisitions completed in 2022. Please
clarify and revise
to include consistent disclosures regarding the acquisitions you
completed throughout the
filing.
We are currently operating in a period of economic uncertainty and capital
markets disruption,
which has been significantly impacted..., page 95
5. We note your disclosure that while you do not have any employees,
staff, consultants,
operations, materials or equipment located in Ukraine, Russia or
Belarus, some of your
customers and suppliers may have employees, staff, consultants,
operations, materials or
equipment located in Ukraine, Russia or Belarus which could adversely
affect your
business or the services being provided to you. To the extent your
business or services
provided to you have been disrupted, please disclose whether and how
your business
segments, products, lines of service, projects, or operations are
materially impacted by
supply chain disruptions, especially in light of Russia s invasion
of Ukraine. Explain
whether and how you have undertaken efforts to identify any risks to
your customers and
suppliers, and/or undertaken any efforts to mitigate the impact and
where possible
quantify the impact to your business.
Thiago da Costa Silva
FirstName LastNameThiago da Costa Silva
Ambipar Emergency Response
Comapany 27,
September NameAmbipar
2022 Emergency Response
September
Page 3 27, 2022 Page 3
FirstName LastName
You should not rely on any commitments of the PIPE Investors as validation of
your investment
decision..., page 136
6. We note your disclosure that the additional New PubCo Class A Ordinary
Shares and
New PubCo Warrants that incentivized the PIPE Investors to enter into
the subscription
agreements in connection with the PIPE Financing have effectively
reduced the amount of
the aggregate investment per New PubCo Class A Ordinary Share of the
PIPE Investors
which will be paid in connection with the Business Combination. We
also note your
disclosure that the PIPE Investors will effectively pay a lower price
per New PubCo
Class A Ordinary Share than $10.00 per share. In terms of the shares
and warrants to be
issued at closing, please specify to the extent possible the effective
lower price per Class
A Ordinary share such PIPE investors will pay. Additionally, please
discuss more
specifically the impact on the effective price per Class A Ordinary
share that the PIPE
Investors will pay as a result of the Downside Protection Agreement.
Risk Factors
HPX may be deemed a "foreign person" under the regulations relating to the
Committee on
Foreign Investment in the United States, page 138
7. We note your disclosure that HPX may be deemed a foreign person,
and the risk of
CFIUS review of the business combination. Please also tell us whether
any other person
or entity associated with or otherwise involved in the transaction,
is, is controlled by, or
has substantial ties with a non-U.S. person. If so, also include risk
factor disclosure that
addresses how this fact could impact your ability to complete your
initial business
combination.
Business Combination Proposal
Background of the Business Combination, page 170
8. We note your disclosure regarding due diligence performed by BRZ
Advogados,
Greenberg Traurig, LLP, and PricewaterhouseCoopers Corporate Finance &
Recovery
Ltda, and the reports prepared by each such firm. Please provide your
analysis as to
whether any of these reports may be "a report, opinion or appraisal
materially related to
the transaction" pursuant to Item 4(b) of Form F-4 such that
information required by Item
1015(b) of Regulation M-A with respect to such report, opinion or
appraisal is required to
be provided in your filing. In addition, please obtain and file a
consent from each such
firm, or provide your analysis as to why a consent is not required.
Refer to Rule 436 and
Securities Act Section 7.
Certain Unaudited Projected Financial Information, page 192
9. In terms of key assumptions of the projections provided by the
management of
Emergencia to HPX, you disclose that Emergencia assumed funding for
growth assuming
a capitalization of $353 million. Please expand to disclose what
capitalization you are
referencing and any material assumptions.
Thiago da Costa Silva
FirstName LastNameThiago da Costa Silva
Ambipar Emergency Response
Comapany 27,
September NameAmbipar
2022 Emergency Response
September
Page 4 27, 2022 Page 4
FirstName LastName
Merger Proposal, page 228
10. We note that the Merger Proposal, if approved, will authorize the
First Plan of Merger and
the Second Plan of Merger, relating to two separate special
resolutions under Cayman
Islands law. If you do not intend to present these matters as two
separate proposals on the
form of proxy, please provide your analysis as to why such
presentation is not required.
Refer to Exchange Act Rule 14a-4(a)(3).
Unaudited Pro Forma Condensed Combined Financial Information, page 240
11. We note from page F-31 that Response Group is a direct subsidiary of
Ambipar Group in
the Emergency Response segment. We also note form page 52 that
Emergencia and
certain of its subsidiaries will enter into a cost sharing agreement
pursuant to which
Ambipar Group will agree to provide certain share support services to
Emergencia.
Please clarify why autonomous entity adjustments were not made to
reflect operations and
financial positions of Emergencia as an autonomous entity. Refer to
Rule 11-02(a)(6)(ii)
of Regulation S-X.
12. We note from page 295 that you made eight acquisitions in 2022. Please
provide us a
detail analysis why these eight individual acquisitions or in
aggregate were not included in
the pro forma financial information. Refer to Rule 11-01(a)(2) of
Regulations S-X. In
addition, tell us why the financial statements of these businesses you
acquired were not
required. Refer to Rule 3-05(a) of Regulation S-X.
Notes to Unaudited Pro Forma Condensed Combined Financial Information
1. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information,
page 248,
page 248
13. We note from page 246 you made adjustments e and h for a net of R$33
and adjustment k
for R$90 regarding Class A ordinary share, R$0.0006 par value. Please
revise the notes
for adjustments e, h and k on page 249 to clearly show how you derived
such amounts. In
addition, please explain how you have reflected the issuance of
5,050,000 New PubCo
Class B ordinary shares discussed in note k.
14. We note from the transaction accounting adjustment j on page 249 that
the difference in
the amount between the fair value of the equity instruments issued to
acquire HPX and the
fair value of the identifiable net assets acquired represents a stock
exchange listing service
of new PubCo under IFRS 2 Share-Based Payments. Please revise to
clearly show the fair
values of each component of equity instruments issued to acquire HPX.
In addition,
revise to present in a way to show the detail of the fair value of the
identifiable net assets
acquired.
15. Please disclose the basis for determining the amount of payment
relating to Earn-out
shares in the amount of R$49.9 million presented in adjustment f.
Thiago da Costa Silva
FirstName LastNameThiago da Costa Silva
Ambipar Emergency Response
Comapany 27,
September NameAmbipar
2022 Emergency Response
September
Page 5 27, 2022 Page 5
FirstName LastName
U.S. Federal Income Tax Considerations
Effects of the First Merger to U.S. Holders, page 256
16. We note your disclosure that it is intended that the First Merger
qualify as an F
Reorganization, and your disclosure that assuming that the First
Merger qualifies as an F
Reorganization, U.S. Holders of HPX Securities will generally not
recognize gain or loss
for U.S. federal income tax purposes as a result of the First Merger.
Please revise to
clarify the tax consequences of the transaction. Refer to Item 4(a)(6)
of Form F-4. In
addition, please file a tax opinion pursuant to Item 601(b)(8) of
Regulation S-K.
Historical Results of Operations, page 313
17. We note your discussions attribute the significant increase of net
revenues and cost of
services rendered to the completed acquisitions. Please revise to
discuss the impact of
changes of foreign exchange rates from period to period. Disclose the
increase in revenue
and cost of services attributable to the acquisitions. Excluding the
impact of acquisitions,
disclose the change in revenue and cost of services and discuss the
business reasons for
the significant change.
18. We note you derive revenue by providing Emergency Response and
Industrial Field
Services, Consulting services and Training Services. Disclose the
revenue for each of the
services for the periods presented. To provide more insight to your
investors, please
provide a more fulsome discussion of factors impacting changes in each
of your revenue
stream during the periods presented.
19. Please expand your disclosures to discuss the business reasons for
significant decrease in
gross profit from 29.7% to 24.8%. In addition, disclose any known
trends or events that
are reasonably likely to cause a material change in the relationship
between costs and
revenues.
Liquidity and Capital Resources
Net Cash Generated from Operating Activities, page 316
20. Please revise to provide a robust discussion describing and
quantifying the specific effect
of the significant drivers that contributed to the material changes in
your net cash
generated from operating activities for the periods presented. The
disclosures should also
include a discussion of the underlying reasons for material changes in
operating assets and
liabilities i.e. accounts receivable, suppliers and other accounts
payable etc., that affect
operating cash flows and the impact of acquisitions. See guidance in
Section IV.B.1 of
SEC Release 33-8350.
Critical Accounting Policies and Estimates, page 317
21. We note that your discussion in MD&A excludes disclosure of any
critical accounting
estimates. Please revise to include disclosure of all critical
accounting estimates as
required by Item 303 of Regulation S-K. Your disclosure should include
qualitative and
Thiago da Costa Silva
FirstName LastNameThiago da Costa Silva
Ambipar Emergency Response
Comapany 27,
September NameAmbipar
2022 Emergency Response
September
Page 6 27, 2022 Page 6
FirstName LastName
quantitative information necessary to understand the estimation
uncertainty and the impact
the critical accounting estimate has had or is reasonably likely to
have on your financial
condition or results of operations to the extent the information is
material and reasonably
available. This information should include why each critical
accounting estimate is subject
to uncertainty and, to the extent the information is material and
reasonably available, how
much each estimate and/or assumption has changed over the period, and
the sensitivity of
the reported amount to the methods, assumptions and estimates
underlying its calculation.
Notes to Combined Financial Statements
1. General Information, page F-31
22. We note the combined financial statements presented include several
separate entities.
Please revise to disclose the following:
Tabular disclosure of entities included in the combined financial
statements, its
relationship to Emerg ncia Participa es S.A., Ambipar Group
and ownership of the
entities;
Disclose the basis for including the separate entities in the
combined financial
statements i.e. entities under common control etc.,;
Disclose how costs and expenses are allocated and inter-company
transactions are
reflected;
Explain which entity holds the outstanding shares of the entities
that are combined
and ; .
Disclose how equity, number of shares of separate entities, are
determined and
presented and the basis for calculating earnings per share.
7. Business Combination, page F-61
23. We note from your tabular disclosure on pages F-61 and F-62 that you
made 15
acquisitions in 2021. However you include only 11 acquisitions on
pages F-67 to F-68.
Please revise to describe the remaining acquisitions and provide the
disclosures required
by IFRS 3, Paragraph B64.
24. We note in three acquisitions in 2021, you acquired less than 100% of
the equity interest.
Please revise to provide the information about non-controlling
interest required under
Paragraph 64(o) of IFRS 3.
25. We note you recorded significant amounts of goodwill from business
combinations in
2020 and 2021, as compared to the amounts of consideration
transferred, on pages F-66
and F-68, respectively. Please revise to provide a qualitative
description of the factors
that made up the goodwill recognized. Refer to Paragraph B64(e) of
IFRS 3.
26. We note from the tabular disclosure of the assets and liabilities
acquired at fair value on
page F-67 the total identifiable net assets was R$79,533. However, you
used R$70,517 as
total amount of identifiable net liabilities in the calculation
of goodwill. In addition,
you have not included non-controlling interest related to acquisition
of Controlpar. Please
clarify and revise the disclosures as appropriate.
Thiago da Costa Silva
FirstName LastNameThiago da Costa Silva
Ambipar Emergency Response
Comapany 27,
September NameAmbipar
2022 Emergency Response
September
Page 7 27, 2022 Page 7
FirstName LastName
27. Provide a summary table which includes all the acquisitions during
each period presented,
disclosing how the goodwill was derived and reconciling to disclosures
in note 9, page F-
75. In addition, reconcile the cash paid for the acquisitions to
disclosures in cash flows,
page F-30.
23. Subsequent Events, page F-91
28. We note the several acquisitions in 2022. Please revise to provide the
disclosures required
by IFRS 3, paragraphs 59 and 60.
Exhibits
29. Please file as an exhibit the warrant agreement for the New PubCo
Warrants.
General
30. Please provide us with your engagement letter with Credit Suisse as
placement agent for
the PIPE Financing. Please also provide us with any correspondence
between HPX and
Credit Suisse relating to the firm's resignation. In addition, please
provide us with the
termination letter and waiver letter described on page 38.
31. Please provide us with a letter from Credit Suisse stating whether it
agrees with the
statements made in your prospectus related to their resignation and,
if not, stating the
respects in which they do not agree. Please revise your disclosure
accordingly to reflect
that you have discussed the disclosure with Credit Suisse and it
either agrees or does not
agree with the conclusions and the risks associated with such outcome.
If Credit Suisse
does not respond, please revise your disclosure to indicate you have
asked and not
received a response and disclose the risks to investors. Additionally,
please indicate that
the firm refused to discuss the reasons for its resignation and
forfeiture of fees, if
applicable, with management.
32. We note disclosure in the registration statement for the initial
public offering of HPX that
the HPX sponsor, directors, officers, advisors or any of their
respective affiliates may
purchase public shares in privately negotiated transactions from
public shareholders who
have already elected to exercise their redemption rights or submitted
a proxy to vote
against the initial business combination. We also note disclosure in
such registration
statement that the purpose of any such transaction could be to vote
such shares in favor of
the initial business combination, and disclosure that any such price
per share may be
different than the amount per share a public shareholder would receive
if it elected to
redeem its shares in connection with the initial business combination.
Please explain how
such purchases would comply with the requirements of Rule 14e-5 under
the Exchange
Act. Refer to Tender Offer Rules and Schedules Compliance and
Disclosure
Interpretation 166.01 for guidance.
Thiago da Costa Silva
Ambipar Emergency Response
September 27, 2022
Page 8
You may contact Steve Lo at (202) 551-3394 or Raj Rajan at (202)
551-3388 if you have
questions regarding comments on the financial statements and related matters.
Please contact
Kevin Dougherty at (202) 551-3271 or Laura Nicholson, Special Counsel, at (202)
551-3584
with any other questions.
Sincerely,
FirstName LastNameThiago da Costa Silva
Division of
Corporation Finance
Comapany NameAmbipar Emergency Response
Office of Energy &
Transportation
September 27, 2022 Page 8
cc: Grenfel S. Calheiros
FirstName LastName