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Presto offers restaurants voice ordering, tablets and other technology. / Photography by Presto
Restaurant technology provider Presto has reworked plans to go public through a SPAC as the market for such offerings cools.
The company, which provides voice ordering, tablets and other devices for restaurants, is still in the process of merging with Ventoux, a publicly traded special purpose acquisition company, or SPAC—but at a lower valuation and a different funding structure than originally envisioned. The transaction makes Presto a public company.
In the year Popular SPAC deals in 2020 are typically funded by public funds raised by a shale company. When Presto and Ventoux announced their plan in November, it was to invest $172.5 million in the Ventoux Trust account and $70 million in PIPE, or private equity investments.
But on Tuesday, citing changes in the SPAC market, the companies restructured the deal to rely more heavily on PIPE: that is, $60 million in private equity led by Cleveland Avenue and $40 million from “other sources.” Ventoux contributes $13 million from his trust account.
The new financing structure will reduce the combined value of the company from $800 million to $525 million, according to an SEC filing. The deal is expected to close in the third quarter and will bring the newly formed company Presto Technology to NASDAQ.
Investor interest in SPACs has increased over the past two years: there were more than 400 such transactions in 2021, compared to 59 in 2019. But the recent economic crisis has not been kind to the once red-hot financial vehicle. Companies that go public through a SPAC By 2022, they have lost about half of their value. CNBC’s SPAC Post Deal Index, as investors shy away from risky bets. And dozens of SPAC deals have been canceled altogether A proposed merger of Panera Bread and Danny Meyer Meyer USHG Acquisition Corp..
Still, the Presto and Ventux are pushing ahead, albeit with more modest expectations.
Ed Schatz, CEO and Chairman of Ventoux, said in a statement, “We believe the additional capital is a strong vote of confidence in the business combination and will provide Presto with all the tools it needs to make a strong start in its public life. “To complete this deal and maximize value for all stakeholders, the Presto team and We look forward to continuing to work with our investors.”
The funding will allow Presto to continue developing its technology and expand into more restaurants. In the year Founded in 2008, it offers a variety of products including drive-thru order automation and table payment tablets that are in demand as customers return to on-premises dining amid recent labor shortages. It has shipped more than 250,000 of its systems to restaurants including McDonald’s and Chili’s.
Lead investor Cleveland Avenue was founded by former McDonald’s CEO and President Don Thompson and focuses on food and technology companies. As part of Presto Investments, Chief Financial and Investment Officer Keith Krawczyk will join the Presto Board.
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