CERTAIN TERMS
References to the "Company," "our," "us" or "we" refer to Avista Healthcare Public Acquisition Corp., a blank check company incorporated on December 4, 2015 as a Cayman Islands exempted company. References to "Avista" refer collectively to Avista Capital Holdings, L.P., and its affiliates, including our Sponsor. References to our "Sponsor" refer to Avista Acquisition Corp. Avista is a middle market private equity firm focused on control buyout and growth investments in the healthcare, communications and industrial sectors, with offices in New York, Houston and London. References to the "Public Offering" refer to the initial public offering of Avista Healthcare Public Acquisition Corp. which closed on October 14, 2016 (the "Close Date").
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position, business strategy and the plans and objectives of management for future operations. These statements constitute projections, forecasts and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of performance. They involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by these statements. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Annual Report on Form 10-K, words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "strive," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. When the Company discusses its strategies or plans, it is making projections, forecasts or forward-looking statements. Such statements are based on the beliefs of, as well as assumptions made by and information currently available to, the Company's management. Actual results and shareholders' value will be affected by a variety of risks and factors, including, without limitation, international, national and local economic conditions, merger, acquisition and business combination risks, financing risks, geo-political risks, acts of terror or war, and those risk factors described under "Item 1A. Risk Factors." Many of the risks and factors that will determine these results and shareholders' value are beyond the Company's ability to control or predict.
All such forward-looking statements speak only as of the date of this Annual Report on Form 10-K. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. All subsequent written or oral forward-looking statements attributable to us or persons acting on the Company's behalf are qualified in their entirety by this Special Note Regarding Forward-Looking Statements.
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PART I
Item 1. Business.
General
We are a blank check company incorporated on December 4, 2015 as a Cayman Islands exempted company and formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses ("Business Combination"). We have reviewed, and continue to review, a number of opportunities to enter into a Business Combination with an operating business, but we are not able to determine at this time whether we will complete a Business Combination with any of the target businesses that we have reviewed or with any other target business. We also have neither engaged in any operations nor generated any revenue to date. Based on our business activities, the Company is a "shell company" as defined under the Exchange Act of 1934 (the "Exchange Act") because we have no operations and nominal assets consisting almost entirely of cash.
Prior to our Public Offering, on December 14, 2015, our Sponsor purchased 8,625,000 shares (the "Founder Shares") of our Class B ordinary shares, par value $0.0001 per share (the "Class B ordinary shares"), for an aggregate purchase price of $25,000, or approximately $0.003 per share. In October 2016, our Sponsor transferred 50,000 Founder Shares to each of our independent directors at their original per share purchase price. In addition, at such time, each of our independent directors purchased an additional 421,250 Founder Shares from our Sponsor at their original purchase price.
On the Close Date, we consummated our Public Offering of 30,000,000 units at a price of $10.00 per unit generating gross proceeds of $300,000,000 before underwriting discounts and expenses. Each unit ("Unit") consists of one Class A ordinary share, par value $0.0001 per share (the "Class A ordinary shares" and, together with the Class B ordinary share, the "ordinary shares"), and one warrant to purchase one-half of one Class A ordinary share for $5.75 per one-half share (or $11.50 per whole share) (each, a "Warrant"). Simultaneously with the closing of our Public Offering, the Company completed the private sale of an aggregate of 16,000,000 warrants (the "Private Placement Warrants"), at a purchase price of $0.50 per Private Placement Warrant, to our Sponsor and our independent directors (collectively, the "Initial Shareholders"), generating gross proceeds to the Company of $8,000,000.
On November 28, 2016, we completed the sale of an additional 1,000,000 Units to the underwriters of the Public Offering at the public offering price of $10.00 per unit pursuant to the partial exercise of the over-allotment option granted to the underwriters in connection with our Public Offering (the "Over-allotment Option"). On November 28, 2016, we sold an additional 400,000 Private Placement Warrants for an aggregate purchase price of $200,000 in connection with the exercise of the Over-allotment Option. Following the partial exercise of the Over-allotment Option, 875,000 Founder Shares were forfeited in order to maintain the ownership of the Initial Shareholders at 20% of the issued and outstanding ordinary shares. On November 28, 2016, our Sponsor sold 161,180 Founder Shares and 350,114 Private Placement Warrants to one of our independent directors at their original purchase price.
We received gross proceeds from the Public Offering, including the partial exercise of the Over-allotment Option, and the sale of the Private Placement Warrants of $310,000,000 and $8,200,000, respectively, for an aggregate of $318,200,000. Of such amount, $310,000,000 was deposited in a trust account with Continental Stock Transfer and Trust Company ("Trustee") acting as Trustee (the "Trust Account"). The remaining $8,200,000 was held outside of the Trust Account, of which $6,200,000 was used to pay underwriting discounts, with the balance used to repay a note to our Sponsor and to pay accrued offering and formation costs, and the remainder was reserved for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative
expenses. In the future, a portion of interest income on the funds held in the Trust Account may be released to us to pay tax obligations. At December 31, 2016, funds held in the Trust Account consisted solely of cash.
On November 28, 2016, we announced that, commencing November 29, 2016, holders of the 31,000,000 Units sold in the Public Offering may elect to separately trade the Class A ordinary shares and Warrants included in the Units. Those Units not separated will continue to trade on the National Association of Securities Dealers Automated Quotations ("NASDAQ") Capital Market under the symbol "AHPAU," and the Class A ordinary shares and Warrants that are separated will trade on the NASDAQ Capital Market under the symbols "AHPA" and "AHPAW," respectively.
While we may acquire a target business in any industry or location, our focus will be to acquire and operate a North American or European healthcare related business. We believe that our management team is well positioned to identify attractive acquisition candidates because of their extensive contacts and transaction sources, including a broad list of industry executives, public board members, private owners, wealthy families, private capital managers, private equity funds, investment bankers and other transaction intermediaries. A central component of our acquisition strategy is our management team's ability to implement value creation initiatives designed to drive shareholder value as they have done in the past for Avista portfolio companies, not all of which have achieved the same level of shareholder value.
Business Strategy
Our acquisition and value creation strategy is to identify, acquire and, after our Business Combination, build a company in the healthcare sector in the public markets that complements the experience and expertise of our management team and board members (the "AHPAC team"). Elements of our business strategy include the following: