MGO Global (NASDAQ: MGOL) stock soared during intraday trading Thursday after the company agreed to merge with Heidmar, Inc.
MGO Global, a lifestyle brand portfolio company, and Heidmar, Inc., a leading maritime services provider, recently disclosed their agreement to merge, consolidating under the Heidmar name. The merger, expected to close in the latter part of the third quarter of 2024, is contingent upon customary closing conditions and approval from MGO’s shareholders.
Heidmar is known for its asset-light business model and extensive maritime services across the tanker and dry bulk sectors. With a robust financial position boasting no debt, Heidmar reported a net income of $19.6 million for the fiscal year ending December 31, 2023. The company manages a fleet exceeding 60 vessels and anticipates transitioning to a dividend-paying company post-transaction.
Merger Agreement Details
The merger blueprint outlines the creation of a new Marshall Islands holding company, PubCo, which will own MGO and Heidmar as its wholly-owned subsidiaries. Under the terms of the agreement, MGO shareholders will receive one common share of PubCo for each MGO common stock in their possession, reflecting an implied fully diluted equity value of $18.0 million. Heidmar shareholders, in turn, will exchange their common stock for $300 million worth of PubCo shares, subject to adjustments.
Additionally, Heidmar shareholders may receive an earnout of $30 million in PubCo shares contingent upon achieving specific financial targets for the fiscal year ending 2024. This transaction offers a substantial premium to MGO’s current stock price, with MGO shareholders projected to own approximately 5.6% of PubCo post-merger.
The boards of directors of both companies have unanimously approved the agreement, and MGO will disclose comprehensive details in a forthcoming Form 8-K filing with the SEC.
MGO and Heidmar have enlisted Maxim Group LLC and Seaborne Capital Advisors as financial advisors, respectively, with Sichenzia Ross Ference Carmel, LLP, and Seward & Kissel LLP providing legal guidance.
MGO Global (NASDAQ: MGOL) Stock Movement
On Thursday, MGOL stock surged 63.39%, closing at $0.7490, marking a 56.37% increase for the week. The trading volume was 160,269,744 shares, significantly higher than the average daily volume of 9.85 million.
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