NEW YORK and BOSTON, Oct. 7, 2021 /PRNewswire/
-- Starry, a next generation licensed fixed wireless
technology developer and internet service provider, and FirstMark
Horizon Acquisition Corp. (NYSE: FMAC) ("FirstMark"), a
special purpose acquisition company sponsored by an affiliate
of FirstMark Capital, today announced that they have entered into a
definitive merger agreement. Upon completion of the mergers
contemplated therein, the combined company will continue to operate
as Starry and will be listed on a national exchange under the
ticker symbol "STRY."
The transaction implies a pro forma enterprise value
of $1.66 billion and will give Starry
$452 million in cash on the balance sheet (assuming no
redemptions of the common stock held by FirstMark's stockholders),
including $130 million from a fully
committed PIPE and contemporaneous equity round in Starry that
includes ArrowMark Partners, Atreides Management, Fidelity
Management & Research Company LLC, Tiger Global Management, and
affiliates of FirstMark Capital, to fund its growth and the
deployment of its services across the
United States, and to retire Starry's existing debt. The
transaction is also supported by important execution partners,
including Quanta Services, that will help Starry continue its
significant growth.
Additionally, the transaction includes significant sponsor
alignment: FirstMark Capital, an affiliate of FirstMark's sponsor,
is an existing long-term investor in Starry and will retain its
board seat, and 75% of the sponsor-held shares are subject to a
performance-based earn-out and forfeiture of one million
shares.
Uniquely, the holders of FirstMark Class A common stock that do
not elect to redeem their shares in connection with the transaction
will share in a pool of one million additional shares based on an
exchange ratio between 1.0242 and 1.2415, to be determined based on
the number of unredeemed shares. Assuming a price of
$10.00 per share of FirstMark Class A
common stock at the closing of the transaction, each share of
FirstMark Class A common stock would receive shares of the
post-combination company with a value ranging between $10.24 (assuming no redemptions by FirstMark's
stockholders) and $12.42 (assuming
redemptions resulting in the maximum exchange ratio).
"When we set out to build this business, we wanted to transform
how broadband networks were built so that we could
meaningfully improve people's lives with faster, better, more
affordable internet access," said Chet
Kanojia, co-Founder and CEO of Starry. "Nearly seven
years later, Starry's wireless technology has transformed the
economics of connecting homes and small businesses to a
fiber-quality connection through the air – without having to
sacrifice reliability or the customer experience. This business
combination with FirstMark will give us the necessary capital to
expand our business and reach profitability. More importantly, it
will allow us to continue to deliver for customers and execute on
our mission. We believe broadband connectivity is a social good
and, if it is universally available and affordable, that great
things will happen for families, for communities and for society as
a whole. I cannot think of partners better suited to support our
growth than FirstMark and FirstMark Capital and we're excited to
continue our relationship with them to bring #HappyInterneting to
more places and people."
Upon closing, Starry will continue to be led by Kanojia as CEO,
along with his experienced management team.
"We believe a key driver of long-term value creation is having
truly exceptional, mission-driven founders who have the discipline,
passion and vision to change the world," said Amish Jani,
Chairman and President of FirstMark. "Chet and the Starry
team have built a company grounded in deep R&D, capable of
disrupting the status quo in an enormous broadband market that is
largely untouched by competition. We have known Chet and the Starry
team over multiple companies and have the utmost confidence in
their ability to execute and perform because we've seen them do it
before. Starry is not a 'grand idea.' It is a proven and
operational technology that is already transforming how networks
are built and significantly changing the customer experience into
something that delights, not frustrates. We could not be more
thrilled to bring Starry to the public markets through this
transaction that we believe is aligned for the long-term
performance and long-term success of the company."
Starry Overview
Founded in 2014, Starry believes broadband is essential and is
committed to delivering on its mission – offering customers a
superior internet service that is fast, reliable, uncapped and
competitively-priced, while also working to improve digital access
and equity.
Starry's wireless network is designed exclusively to serve the
needs of fixed broadband users, including residential and small-
and medium-sized businesses, with broadband that meets the growing
bandwidth needs of today's consumer. Starry is a research and
development company at its core, having invested nearly
$200 million to develop and
commercialize proprietary technology that enables it to
wirelessly beam gigabit-speed internet from towers and rooftops to
people's homes at a fraction of the cost of traditional fiber. The
company has a full intellectual property stack and developed each
piece of its network hardware, from the base stations to the home
receiver on customer premises, all the way down to the Wi-Fi router
that serves the customer's home. The company has also built its own
software billing, customer care, and network management systems to
provide complete visibility and flexibility in serving the
customer.
The company has transformed the economics of broadband,
pioneering the use of licensed high frequency spectrum at a low
cost to deliver high-capacity, low-latency, symmetrical
connectivity over distances up to one mile. To date, Starry has
successfully deployed its gigabit network in six U.S. cities
including Boston, New York, Los
Angeles, Washington D.C.,
Denver, and Columbus – covering
more than 4.7 million households. With its licensed spectrum
rights, Starry intends to further develop its offerings and expand
its network to cover more than 25 million households by 2026,
with a projected 1.4 million subscribers and $1.1 billion in revenue. The company saw 187%
year over year revenue growth from 2019 to 2020 and
expects revenues of $22 million in 2021. The company
expects a revenue CAGR of 124% for the period between 2020 and
2023.
Starry's customer-first philosophy is core to how the company
operates, from its proprietary hardware approach all the way to the
subscriber experience. Starry's technology and service is
engineered to delight customers in an industry that has to date
been universally disappointing, with incumbents generating an
industry average net promoter score of 0 as of 2021, compared to
Starry's 2021 net promoter score of 72.
Starry is also deeply committed to its mission to expand access
to high-quality, affordable broadband service including to
communities such as public and affordable housing, which have been
traditionally underserved and under-connected by incumbent
broadband providers. In late 2018, Starry established its digital
equity program, Starry Connect, to bring ultra-low-cost broadband
service to public and affordable housing residents without
requiring credit checks, long-term contracts, individual
eligibility requirements or a lengthy application process.
Summary of the Transaction
The transaction is expected to be funded through a combination
of FirstMark's $414 million of cash
in trust (assuming no redemptions of common stock held by
FirstMark's stockholders) supported by a $130 million fully committed PIPE and
contemporaneous equity investment at $10.00 per share.
The transaction implies a pro forma Starry enterprise value of
$1.66 billion, or approximately 7x
2025 estimated adjusted EBITDA. It is estimated that
post-transaction, Starry will have approximately $452 million on its balance sheet (assuming no
redemptions of common stock held by FirstMark's stockholders) to
fund growth initiatives. Starry will use a portion of cash raised
in the PIPE, as well as a $150
million issuance of new convertible debt, to retire Starry's
existing debt. The new convertible debt is led by AS Birch Grove,
an existing lender to Starry, and certain funds managed by
Highbridge Capital Management, LLC.
The transaction, which has been unanimously approved by the
boards of directors of Starry and FirstMark, is expected to close
in Q1 2022, subject to receipt of FirstMark stockholder
approval and the satisfaction of other customary closing
conditions.
Governance
At the close of the transaction and once public, Starry will
have a seven-person board, with three independent directors. Amish
Jani (FirstMark and FirstMark Capital), Starry CEO Chet Kanojia, and independent director
James Chiddix will remain on the
board.
Investor Presentation
A copy of the investor presentation can be found by accessing
the Starry investor page.
Advisors
Goldman Sachs & Co. LLC served as financial advisor to
Starry and placement agent to FirstMark Horizon Acquisition Corp.
Credit Suisse served as financial advisor and capital markets
advisor to FirstMark.
Latham & Watkins LLP acted as legal advisor to Starry.
Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor
to FirstMark.
Additional Information about the Business Combination and
Where to Find It
In connection with the proposed business combination, Starry
Holdings, Inc. ("Starry Holdings"), a newly formed subsidiary of
Starry, will file a registration statement on Form S-4 (the "Form
S-4") with the Securities and Exchange Commission (the "SEC"). The
Form S-4 will include a proxy statement of FirstMark Horizon
Acquisition Corp. ("FirstMark") and a prospectus of Starry
Holdings, referred to as a proxy statement/prospectus. The proxy
statement/prospectus will be sent to all FirstMark stockholders.
Additionally, Starry Holdings and FirstMark will file other
relevant materials with the SEC in connection with the proposed
business combination. Copies of the Form S-4, the proxy
statement/prospectus and all other relevant materials filed or that
will be filed with the SEC may be obtained free of charge at the
SEC's website at www.sec.gov. Before making any voting or
investment decision, investors and security holders of FirstMark
are urged to read the Form S-4, the proxy statement/prospectus and
all other relevant materials filed or that will be filed with the
SEC in connection with the proposed business combination because
they will contain important information about the proposed business
combination and the parties to the proposed business
combination.
Participants in Solicitation
FirstMark, Starry Holdings and Starry and their respective
directors and executive officers, under SEC rules, may be deemed to
be participants in the solicitation of proxies of FirstMark's
stockholders in connection with the proposed business combination.
Investors and security holders may obtain more detailed information
regarding the names and interests in the proposed business
combination of FirstMark's directors and officers in FirstMark's
filings with the SEC, including FirstMark's registration statement
on Form S-1, which was originally filed with the SEC on
September 18, 2020. To the extent
that holdings of FirstMark's securities have changed from the
amounts reported in FirstMark's registration statement on Form S-1,
such changes have been or will be reflected on Statements of Change
in Ownership on Form 4 filed with the SEC. Information regarding
the persons who may, under SEC rules, be deemed participants in the
solicitation of proxies to FirstMark's stockholders in connection
with the business combination will be included in the proxy
statement/prospectus relating to the proposed business combination
when it becomes available. You may obtain free copies of these
documents as described in the preceding paragraph.
No Offer or Solicitation
This communication shall not constitute a proxy statement or
solicitation of a proxy, consent or authorization with respect to
any securities or in respect of the proposed business combination.
This communication shall also not constitute an offer to sell or a
solicitation of an offer to buy any securities of FirstMark, Starry
Holdings or Starry, nor shall there be any sale of securities in
any state or jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction. No offering of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
Forward-Looking Statements
This communication includes "forward-looking statements" within
the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995 with respect to the
proposed business combination between FirstMark and Starry. Words
such as "expect," "estimate," "project," "budget," "forecast,"
"anticipate," "intend," "plan," "may," "will," "could," "should,"
"believe," "predict," "potential," "continue," "strategy,"
"future," "opportunity," "would," "seem," "seek," "outlook" and
similar expressions are intended to identify such forward-looking
statements. Forward-looking statements are predictions, projections
and other statements about future events that are based on current
expectations and assumptions and, as a result, are subject to risks
and uncertainties that could cause the actual results to differ
materially from the expected results. These statements are based on
various assumptions, whether or not identified in this
communication. These forward-looking statements are provided for
illustrative purposes only and are not intended to serve as, and
must not be relied on by an investor as, a guarantee, an assurance,
a prediction or a definitive statement of fact or probability.
Actual events and circumstances are difficult or impossible to
predict and will differ from assumptions. These forward-looking
statements include, without limitation, Starry's and FirstMark's
expectations with respect to anticipated financial impacts of the
proposed business combination, the satisfaction of closing
conditions to the proposed business combination, and the timing of
the completion of the proposed business combination. You should
carefully consider the risks and uncertainties described in the
"Risk Factors" section of FirstMark's registration statement on
Form S-1 (File No. 333-248916), its Annual Report on Form 10-K, as
amended from time to time, for the fiscal year ended December 31, 2020, and its subsequent Quarterly
Reports on Form 10-Q. In addition, there will be risks and
uncertainties described in the Form S-4 and other documents filed
by FirstMark or Starry Holdings from time to time with the SEC.
These filings would identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Most of these factors are outside Starry's, Starry Holdings' and
FirstMark's control and are difficult to predict. Many factors
could cause actual future events to differ from the forward-looking
statements in this communication, including but not limited to: (1)
the outcome of any legal proceedings that may be instituted against
FirstMark, Starry or Starry Holdings following the announcement of
the proposed business combination; (2) the inability to complete
the proposed business combination, including due to the inability
to concurrently close the business combination and related
transactions, including the private placements of common stock and
convertible notes or due to failure to obtain approval of the
stockholders of FirstMark; (3) the risk that the proposed business
combination may not be completed by FirstMark's business
combination deadline and the potential failure to obtain an
extension of the business combination deadline if sought by
FirstMark; (4) the failure to satisfy the conditions to the
consummation of the proposed business combination, including the
approval by the stockholders of FirstMark, the satisfaction of the
minimum trust account amount following any redemptions by
FirstMark's public stockholders and the receipt of certain
governmental and regulatory approvals; (5) delays in obtaining,
adverse conditions contained in, or the inability to obtain
necessary regulatory approvals or complete regulatory reviews
required to complete the proposed business combination; (6) the
occurrence of any event, change or other circumstance that could
give rise to the termination of the merger agreement; (7)
volatility in the price of FirstMark's, Starry's or Starry
Holdings' securities; (8) the risk that the proposed business
combination disrupts current plans and operations as a result of
the announcement and consummation of the business combination; (9)
the inability to recognize the anticipated benefits of the proposed
business combination, which may be affected by, among other things,
competition, the ability of the combined company to grow and manage
growth profitably, maintain relationships with customers and
suppliers and retain key employees; (10) costs related to the
proposed business combination; (11) changes in the applicable laws
or regulations; (12) the possibility that the combined company may
be adversely affected by other economic, business, and/or
competitive factors; (13) the risk of downturns and a changing
regulatory landscape in the highly competitive industry in which
Starry operates; (14) the impact of the global COVID-19 pandemic;
(15) Starry's ability to obtain or maintain rights to use licensed
spectrum in any market in which Starry operates and potential
declines in the value of Starry's FCC licenses; (16) the potential
inability of Starry to raise additional capital needed to pursue
its business objectives or to achieve efficiencies regarding other
costs; (17) the enforceability of Starry's intellectual property,
including its patents, and the potential infringement on the
intellectual property rights of others, cyber security risks or
potential breaches of data security; and (18) other risks and
uncertainties described in FirstMark's registration statement on
Form S-1 and Annual Report on Form 10-K, as amended from time to
time, for the fiscal year ended December 31,
2020 and its subsequent Quarterly Reports on Form 10-Q.
These risks and uncertainties may be amplified by the COVID-19
pandemic, which has caused significant economic uncertainty.
Starry, Starry Holdings and FirstMark caution that the foregoing
list of factors is not exclusive or exhaustive and not to place
undue reliance upon any forward-looking statements, including
projections, which speak only as of the date made. None of Starry,
Starry Holdings or FirstMark gives any assurance that Starry,
Starry Holdings or FirstMark will achieve its expectations. None of
Starry, Starry Holdings or FirstMark undertakes or accepts any
obligation to publicly provide revisions or updates to any
forward-looking statements, whether as a result of new information,
future developments or otherwise, or should circumstances change,
except as otherwise required by securities and other applicable
laws.
About Starry
At Starry, we believe the future is built on connectivity and
that connecting people and communities to high-speed, broadband
internet should be simple and affordable. Using our innovative,
next generation licensed fixed wireless technology, Starry is
deploying fiber-quality broadband to the home without bundles, data
caps, or long-term contracts. Starry is a different kind of
internet service provider. We're building a platform for the future
by putting our customers first, protecting their privacy, ensuring
access to an open and neutral net, and putting the customer
experience at the heart of everything we do. Headquartered in
Boston and backed by world-class
investors, Starry is currently available in Boston, New
York, Los Angeles,
Washington, DC, Denver, and Columbus, and is expanding
nationwide. To learn more about Starry or to join our team and help
us build a better internet, visit: https://starry.com.
About FirstMark
FirstMark is a special purpose acquisition company whose mission
is to drive long-term value creation by actively supporting the
next generation of iconic public companies. FirstMark is comprised
of a team of seasoned investors and industry executives with an
extensive track record of identifying transformative trends across
innovative subsectors of technology. Notably, FirstMark's
management team is composed of the founders and executives of
FirstMark Capital, a prominent technology venture capital firm
founded in 2008 with $2.2 billion in
total capital commitments, which has backed entrepreneurs that have
created leading companies, many valued over a billion dollars. For
more information, please visit http://firstmarkhorizon.com.
Contacts
For Media Inquiries regarding Starry, Inc.
Meredith Ryals
mryals@starry.com / press@starry.com
Lauren Odell / Felipe Ucros
Gladstone Place Partners for Starry
starry@gladstoneplace.com
212-230-5930
Jennifer Wlach / John Collins / Kimberly
Winston
Mercury for Starry
starry@mercuryllc.com
212-681-1380
For Media Inquiries regarding FirstMark Horizon Acquisition
Corp.
Gregory McNiff
The Blue Shirt Group for FirstMark
greg@blueshirtgroup.com
For Non-Media Inquiries regarding Starry,
Inc.
investors@starry.com
For Non-Media Inquiries regarding FirstMark Horizon
Acquisition Corp.
Eric D.
Cheung
eric@firstmarkcap.com
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