Orisun Acqusition Corporation (ORSN) Quote

Be interesting to follow. Ucommune Group has more than 700,000 members across 211 offices in Greater China and Singapore. The company said it expects to see modest pandemic-related revenue decline in 2020.

Agreement with UCommune (Chinese WeWork)

Chinese version of WeWork. Ucommune appears to be a better, more improved version of WeWork.

ORSN ORSNW

Ucommune and Orisun Acquisition Corp. Combine to Bring to the Public Markets the Most Recognized and Largest Agile Office Space Manager and Co-Working Community Operator in China
Combined Company Expected to Trade on the NASDAQ Post-close under a New Ticker Symbol

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Orisun Acquisition Corp.
Jul 06, 2020, 08:00 ET

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Ucommune was founded in 2015, with early investors including Sequoia Capital China, Matrix Partners China, Sinovation Ventures, and Zhenfund. Ucommune has become the largest agile office space manager and co-working community operator in China with more than 700,000 members across 211 office spaces in Greater China and Singapore.[1]
Ucommune generated revenues of 1,179 million RMB (approximately $170 million in USD) in 2019 (unaudited), and revenues grew over 160% from 2018 to 2019.[2] Management estimates the Company will generate revenues of 1,350 million RMB (approximately $190 million in USD) and 2,100 million RMB (approximately $295 million in USD) in 2021 and 2022 respectively.
The combined company will have a pro forma firm value of approximately $769 million at closing or 2.58x 2022 net revenue, assuming no shareholder redemption and the Company receives $44.8 million cash[3] from Orisun's trust account.
NEW YORK, July 6, 2020 /PRNewswire/ -- Orisun Acquisition Corp. ("Orisun") (NASDAQ: ORSN, ORSNU, ORSNW, ORSNR), a special purpose acquisition company, announced today that it has entered into a definitive merger agreement (the "Merger Agreement") for a business combination with Ucommune Group Holdings Limited ("Ucommune" or the "Company"), a leading agile office space manager and provider in China. Upon consummation of the transaction contemplated by the Merger Agreement, (i) Orisun will reincorporate to Cayman Islands by merging with and into Ucommune International Ltd, a Cayman Islands exempted company and wholly owned subsidiary of Orisun ("Ucommune International"), and (ii) concurrently with the reincorporation merger, Everstone International Ltd ("Merger Sub"), a Cayman Islands exempted company and wholly owned subsidiary of Ucommune International, will be merged with and into Ucommune, resulting Ucommune being a wholly owned subsidiary of Ucommune International. Upon the closing of the transactions, the parties plan to remain NASDAQ-listed under a new ticker symbol.

Founded in 2015, Ucommune currently has more than 700,000 members and more than 94,000 work stations across 211 office spaces in Greater China and Singapore with an aggregate managed area of 686,000 square meters (approximately 7.38 million square feet) as of December 31, 2019. Since its inception, Ucommune has been developing an asset-light model under which Ucommune provides space design, renovation, and management services to develop and manage agile office spaces for landlords who contribute most of the capital investments needed to build out and launch new spaces. In addition to agile office space services, Ucommune cooperates with over 700 business partners to offer its members additional revenue generating services including advertising and branding services, catering, fitness, healthcare, training and entertainment as well as general corporate services, such as corporate secretary, human resources, legal, finance, IT support and tax services. Ucommune's existing investor base includes Sequoia Capital China, Matrix Partners China, Sinovation Ventures, ZhenFund, and Gopher Asset Management.

The Company's revenues grew over 160% from 2018 to 2019. In 2020, the Company expects to experience modest revenue decline due to the COVID-19 pandemic. Ucommune has already seen improved revenues in recent weeks . Management forecasts an approximately 66% CAGR of revenues between 2017 and 2022.

According to Frost & Sullivan, the addressable Agile Office Space Industry in China is 132 billion RMB (approximately $19 billion in USD).[1] The market grew at a compound annual growth rate, or CAGR, of 72% from 2013 to 2018, and is estimated to grow at a CAGR of 50% from 2018 to 1.03 trillion RMB (approximately $146 billion in USD) by 2023.

Ucommune's current management team will continue running the Company after the transaction.

"We are excited to combine Orisun with Ucommune and admire the Company that Mr. Daqing Mao and the Ucommune management team have built" said Wei Chen, Chairwoman of Orisun. "I look forward to working with Ucommune's dynamic management team to help them thrive as a public company while they continue to grow."

Daqing Mao, Founder of Ucommune, commented, "We are thrilled to enter into the Merger Agreement with Orisun, and today's announcement marks a key milestone for Ucommune. This transaction directly aligns with our strategic objectives, and will unleash the exciting potential of our new growth initiatives, including the expansion of our asset-light model. As a publicly listed company, we look forward to strengthening our market leading position and to expanding our footprint in China. With smart technology and efficient business operations, we will continue to empower more members in communities across China, unleashing their potential and creating maximum value for society."

[1] According to Frost & Sullivan's report on November 9, 2019, in terms of the number of agile office spaces, aggregate managed area and number of cities covered in China as of September 30, 2019.

[2] According to the unaudited financial statements of Ucommune.

[3] According to the number as of 03/31/2020.

Key Transaction Terms

Under the terms of the Merger Agreement, Orisun's wholly owned subsidiary Ucommune International will acquire Ucommune, resulting in Ucommune International being a listed company on the Nasdaq Capital Market. At the effective time of the transactions, Ucommune's shareholders and management will receive 70 million ordinary shares of Ucommune International. In addition, Ucommune shareholders will be entitled to receive earn-out consideration of up to an additional four million ordinary shares of Ucommune International, subject to Ucommune exceeding certain net revenue targets in 2020, 2021 and 2022 or achieving certain share price thresholds prior to certain future dates as set forth in the Merger Agreement. All shares held by existing Ucommune shareholders will be subject to lock-up agreements for a period of at the least six (6) months following closing of the transaction, subject to certain exceptions.

The combined company represents a pro forma market value of approximately $769 million at closing, or 2.58x 2022 estimated net revenue, assuming no shareholder redemption and the Company receiving $44.8 million cash from Orisun's trust account.

Chardan is acting as an M&A and financial advisor to Orisun. Loeb & Loeb LLP is acting as legal advisor to Orisun. Davis Polk & Wardwell LLP is acting as the legal advisor to Ucommune.

The description of the transaction contained herein is only a summary and is qualified in its entirety by reference to the Merger Agreement relating to the transaction, a copy of which will be filed by Orisun with the SEC as an exhibit to a Current Report on Form 8-K.

About Ucommune

Ucommune is China's leading agile office space manager and provider. As of December 31, 2019, Ucommune managed 211 agile office spaces in 46 cities in Greater China and Singapore. Ucommune's offline agile office space services include self-operated models of U Space, U Studio and U Design, as well as asset-light models U Brand and U Partner. Founded in 2015, Ucommune has created a large-scale intelligent agile office ecosystem where its members can leverage its network to reach their full potential and collectively create maximum value.

About Orisun Acquisition Corp.

Orisun Acquisition Corp. is incorporated in the State of Delaware as a blank check company for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities. Orisun's efforts to identify a prospective target business have not been limited to a particular industry or geographic region, although Orisun intended to focus on targets located in China.

Forward-Looking Statements

This press release contains, and certain oral statements made by representatives of Or