Private Equity Acquisition of Vampires: Term Sheet Leaked!
This horrifying document will turn you white with terror!
In a previous edition of the Frontier Psychiatrists, we told the tale of the Vampires who were Acquired as Part of a Horrifying Private Equity Roll-Up … and today, coincidentally, also on October 31st, that Term Sheet has surfaced. Witness, with horror, the Terms of The Deal…the Saga Continues! Happy Some-Hallows-Eve! This is satire. Not real. Based on no real events. The podcast of the original post is available here:
STRICTLY CONFIDENTIAL
All of us at LastChoice BloodCare Partners, LP (“LastChoice”) acknowledge and value the extensive periods you and your inner circle have devoted, allowing us to decipher the arcane intricacies of your dominion. Based on our nocturnal evaluations, we discern that with Brooklyn Shadows Coven, P.C., encompassing each of your lairs, ancestral chambers, and The Netherrealm, Inc. (collectively, “Brooklyn Shadows” or the “Coven”), you have established a dominion of considerable influence, resonating with the very attributes we seek in a formidable ally for LastChoice. Hence, we are poised to present this pact of intent for the empowerment and expansion of the Coven.
About LastChoice
We would like to begin by highlighting several important things about our firm that make us a uniquely qualified partner for you and for Brooklyn Shadows Coven, P.C.
Our Distinctive Strategy. LastChoice is a spinout investment firm combining the experience and relationships of Death, Madness, and Bones (“DMB”), one of the country’s leading investment banking advisors to undead services companies like Brooklyn Shadows Coven, P.C., and Stricken Partners (“Stricken”), part of The Rotworth Company, an independently owned family office/investment management firm with over $7 billion in assets under management, with an exceptional record over the past year of principal investment with Vampires like you.
LastChoice targets investments in undead businesses focusing on distributed models of horror, including skeleton-based haunting services businesses, nightmare support organizations, companies that support these organizations with horrific service offerings and precious little technology, and value-subtracted debt-leverage shell games to the undead industry.
Destroying value in the lives of those who live now, those who died, those who serve the shadow forever, and services for the future? It requires working at the intersection of both high-quality, cost-effective solutions and crisis-driven know-how. The demand for distributed horror is increasing as a shift occurs from the day to the night, in which just the specter of the dead was at the center of all that is horrible and nightmarish, to one which focuses on ongoing horror for both the living and the dead. The highly fragmented nature of the undeath industry and those of the living present a large (and largely untapped) opportunity for investment in smaller, dead-owned undead services companies. We also have limited regard for short, declarative sentences.
We believe the characteristics defining the nightmarish future described above will drive significant change and increase the amount of dread and horror over time. This market is going straight to hell, and we intend to ride it all the way down.
Finally, and most importantly, LastChoice also believes it is important to be “on the right side” of the life and death equation in the undeath space. We feel that holding true to core values like abject misery and an unquenchable thirst for the blood of the living is critical to building successful Blood Sucking ventures that go straight to hell. All undesirable businesses have undead teams and business development associates, often consisting of the living. Yet, we believe that “Dark of Night Vampire Cloak” Values are at the core of any real horror show and will guide the “Blue Coat” business execution.
Our Experience. The LastChoice team has over some years of experience as principal investors in petit-morte companies and, for the past year, has been one the more active advisors and investors in multi-site distributed time bombs in the United States.
By way of example:
In 2014, our team acquired Little Fangs Pediatric Infusion Centers in a recapitalization with the company’s founder/vampire. Together, we identified an opportunity to further the nightmare that was slowly draining the blood from the young! We chose two of the fastest-growing metropolitan areas in the U.S. (San Antonio and Another City We Can’t Remember and Doesn’t Matter Anyway). The pediatric vampiric market was immature—we know, we know— compared to traditional “infusion settings,” and an opportunity was present to create a platform for the removal of fresh, young blood. In partnership with the Sire, we executed a strategy that helped the company grow by draining more youth of their precious blood and leveraged favorable case rate contracts that could create clinic-level profitability in the region’s predominately Medicaid-heavy sub-markets, marketing the unique differentiation of pediatric vs. traditional blood-sucking hellishness, and holding fast to the company’s roots as a vampire-founded, bloodline-focused business. By 2018, the team had successfully drained the blood of every child in a 20-mile radius of every site, and positioned the business for sale. Today, the company is one of the largest nightmares of children and parents alike.
In late 2017, our team acquired a significant stake in Insightful Eyecare, a North Dakota-based optometry business with 11 clinics. In partnership with the optometrist/partners, we executed—get it?—a plan to establish a “just jab the eyes out of everyone who walked in” Strategy.
Our Preliminary Proposal
Our research so far has focused on (i) analyzing the historical blood consumption rates of Brooklyn Shadow Coven, P.C., (ii) forming a preliminary opinion on future blood consumption patterns (including donor unit economics, recurring blood supply, nocturnal EBITDA, and projected coven overheads), (iii) understanding the coven's blood sourcing strategies and its standing among the supernatural communities, (iv) probing into expansion possibilities – notably a potential shift with a major chunk of the coven's growth eyeing blood banks, and (v) diving deeper into the territory dynamics of vampiric entities in the urban underworld. We trust that our thorough examination so far, our demonstrated expertise in the supernatural realm, and the width and depth of our connections make us a stand-out ally to collaborate with you and the coven for growth, ensure smooth transformation post-acquisition, maximize your blood cache, and ensure eternal nocturnal dominance.
We are of the view that Brooklyn Shadow Coven, P.C.'s feeding model, is an intriguing prospect for Last Choice Blood Care Partners. Fundamentally, the age and lineage dynamics of the coven align perfectly with our investment taste. We are convinced that your group-centric approach to blood feeding is unparalleled. Teaming up with us, the coven is poised for territorial expansion. We are eager for the chance to stand shoulder to shoulder with each of your ancient members and the entire sire-leadership to meet the coven's expansive goals.
In light of the intel shared by you and your immortal team, the chief components of our initial proposal are highlighted below.
Our design for the investment structure is such that it (i) recognizes a just valuation for the centuries of shadowy dominance you've achieved; (ii) empowers Brooklyn Shadow Coven's members to settle all outstanding blood debts and eradicate any lingering blood promises; (iii) furnishes a decent stash of emergency blood supply for members' personal reserves; (iv) ensures a significant stake in the coven remains, so you remain intertwined with LastChoice BloodCare Partners for the foreseeable eternity, thriving together; and (v) offers the vital resources required to chase the coven's aggressive expansion.
Organizational Structure.
We envision a close collaboration with the coven's wise council to determine the most profitable setup for all. However, taking into account mystical rites, blood laws, and ancient prophecies, we foresee the establishment of a new umbrella entity. We will negotiate a revised blood pact with each sect of the coven. This might align with age-old traditions or by adopting the existing Blood Sourcing Covenant and connected Administrative Blood Pacts. LastChoice BloodCare Partners, will examine these during our detailed investigation. The council of the post-deal entity would include emissaries from both the selling vampire lineage and LastChoice BloodCare Partners in a manner reflecting stake percentages, and it will feature at least one impartial ancient being upon mutual agreement.
Investment "Opportunity" & Creative Financing.
Following an elaborate nocturnal séance with you and a mutual agreement on a dark prophecy for the growth of the Coven, we anticipate structuring the 'investment' by LastChoice BloodCare Partners in the form of blood-bound shares amounting to a paltry 6 million tokens. We expect to fuel this 'investment' using equity from LastChoice and, notably, without resorting to any soul-selling contracts at inception. The blood-bound shares would include these delightful features:
Liquidation preference at a fang-tastic 300% of the original blood drop price;
An eternal 18% per annum dividend, before and in preference to any drops in shares of the Common Blood Type. For any other blood offerings, those with Preferred Blood shares shall feed with those of the Common Blood Type on a shared-fang basis;
Upon any vanishing, dissolution, or dark sun event of the Coven, holders of Blood Shares will be entitled to feed, in preference to Common Blood Type, an amount equating to the original blood drop price. If the Coven lacks sufficient blood reserves, assets will be divided based on the feeding hierarchy. Once all blood-bound obligations are met, any remaining life essence shall be shared among the Common Blood Type;
Each Blood Share influences the Coven's Council, equating to the number of Common Blood Type shares. Voting takes place during the blood moon, save for special occasions detailed below;
Blood Shareholders can nominate a member to the Coven's High Council. The Coven will engage in an ancient protection ritual, ensuring the nominated member is shielded from sunlight. Post-ritual, the Coven will acquire blood insurance, appeasing both the Council and the nominated member;
Blood Shareholders can transmute their shares at their whimsy into Common Shares. The initial transmutation rate is a woeful 10-for-1;
Blood Shares will morph into Common Blood Type upon (i) the rise of a new vampire lord or (ii) through the blood-written consent of a supermajority of Blood Shareholders;
The transmutation essence will be adjustable if the Coven attracts new members at a rate lower than the existing rate, subject to ancestral rites (the "Bloodline Protection Acts");
Blood Share owners shall possess a right of first bite to acquire any new blood vials, save for any exceptions dictated by the Bloodline Protection Acts. This right ends upon a significant Coven event;
Each supreme Blood Shareholder, defined by possessing a horde of 5 million shares, shall be privy to (a) annual mystical readings, (b) quarterly prophecy updates, (c) a map detailing the Coven's influence, (d) annual dark ritual plans, and (e) ad-hoc access to the Coven's sacred archives. This privilege dissipates upon a defining Coven milestone;
Vague registration rites, consistent with older blood-bound traditions;
Blood Shareowners agree to a hibernation period following the Coven's major unveiling, in which they will not rouse themselves to interfere with the reorganization — when they should be avoiding the sun;
Blood Shareholders will gain a right of “first bite” upon any significant blood event within the Coven, with certain traditional rites in place—the unquenchable thirst for blood drives us all;
Major Blood Share owners are entitled to partake in any and all feedings not claimed by the Coven or a fellow Major Blood Share owner;
If the High Council and a supermajority of Blood Shareholders approve a Coven merger, all involved will seal their fate, with caveats, as befits the desires of LastChoice. This bond ends upon a major Coven change;
The right of first bite for Major Blood Shareholders shall cease upon a landmark Coven transformation, not including normative bat-shape-form-taking;
Blood Shares are tethered to a Blood Pact Agreement, agreeable to the Coven and the 'Investors'’ encompassing typical dark promises, guarantees, and furtive pledges—no warranties can or should be assumed for LastChoice, their officers, their investors, their children, their children’s children, or their eternal souls;
The Coven shall draw forth term undeath-insurance on the Key Sires, dictated by the designated Blood Share overseer;
Previous protections remain intact-ish but now require the approval of a supermajority of Blood Shareholders;
Other mysterious rites customary— in the opinion of LastChoice— will be assumed.
Use of Blood Drops.
Based on our moonlit divinations and bat-delivered messages, after the dark "Transaction" comes to fruition, the offering elders would amass roughly 1.7 million, paid in FTT tokens, in their coffers (before necromancy fees and blood vault withholdings) and existing soul debts of 1.8 million actual dollars would be cleared (presuming no lurking hexes or curses, and that the Coven's mystical essence at the eve of the ceremony is robust enough to invoke the post-ritual blood summoning prophecies). The reincarnated Coven would have about 2.0 million dollars ready for subsequent acquisition and to invigorate expansion beyond the night. Be warned; the final tally will be etched in stone only after a midnight consultation of blood drop forecasts, lingering soul debts, the fate of phantom loans, and other lurking undead obligations. Expect only to have your blood sucked dry.
With a strong balance sheet, the post-transaction Company would also be able to borrow as required. A simplified description of Transaction sources and uses is set out in the following table….
Uses of Funds:
LastChoice Blood Equity | $6.0 million
Gross Blood Reserves | $1.7 million
Coven Equity Share | $4.515 million
Debt to Blood Bank Payoff | $1.8 million
Coven Blood Rollover | $4.515 million
Acquisition Rituals (Estimate) | $0.5 million
Stored Blood Reserve | $2.0 million
Total | $10.521 million
In addition to the above and subject to performance, LastChoice is in a position to allocate additional blood equity to satiate the growing thirst requirements of the Coven over time.
Ownership
At the completion of the proposed Binding-together, the Coven would own approximately 42.9% of the outstanding blood interests in the form of common blood shares. Meanwhile, LastChoice would own 57.1% in the form of preferred blood interests—specific details to be decided during the next full moon gathering.
Leadership:
We believe partnering with powerful Sires is essential for our successful exit, sorry, existence. As a condition, we insist that members of your esteemed Coven join our leadership council. The introduction of a new leader, either as Chief Vampire Officer or Chief Night Operations Officer, will be mutually decided upon during our dark communion.
Alignment with vampire clans is the essence of our acquisition philosophy. Post-acquisition, a blood pool representing 10% of the common blood interests will be introduced as an incentive for loyal and key vampires. Vesting details will be consistent with nocturnal practices.
Next Steps, Moon Phases, and Rituals:
Upon sealing this blood pact, we will commence our final rituals and verification processes, which, depending on the Coven's cooperation, should conclude in 2-3 full moon cycles. As an underworld entity, LastChoice only needs approval from the Elder Council and perhaps a few mortal regulatory bodies, given how above board we strive to be.
In addition to the usual rituals, the Acquisition is bound by these conditions:
Necessary underworld and mortal permissions and approvals obtained.
Satisfaction with our rituals, including deep, probing dives into the Coven's history and key members—we will leave no stone unturned, no matter how depraved or shameful.
Crafting unbreakable pacts in formats customary to our kind—Private Equity doesn't take yes for an answer; we seal the deal with ironclad administrative service agreements.
Loyalty pacts with key members of your clan, complete with protection spells and customary curses. Again, as PE investors, this is the extent of our seduction.
A management blood oath with LastChoice BloodCare Partners, LLC, regarding continuous guidance with yearly offerings of $300,000 or 5% of yearly blood reserves, whichever is more.
Secrecy:
Both the Coven and LastChoice pledge to shroud this Acquisition in darkness. Any leaks to mortals, other supernatural entities, or the media are strictly forbidden. However, divulging crucial information to our loyal disciples, witches, and/or consultants is permissible. Further, neither LastChoice nor the Coven will make or issue any public statement or announcement with respect to the proposed Transaction, the negotiations concerning the proposed Transaction, or the very existence or terms of this letter agreement without the prior written-in-blood approval of the other, and the discussions between the parties shall remain confidential, except to the extent that disclosure is otherwise required by law, the rules of any applicable stock exchange or judicial process or as necessary in connection with completion of the financing outlined above. In the event that either party hereto determines disclosure is required by law, the rules of any applicable stock exchange or judicial process, it shall (to the extent legally permitted to do so) promptly give notice to the other party hereto of such determination and to allow the other party to review a proposed form of public disclosure. Notwithstanding the foregoing, all parties to this letter agreement will be free to disclose information they deem necessary to their related parties and their attorneys and/or financial advisors. Further, run-on and awkward sentences will neither be expected nor tolerated, given our love of brutal irony.
Exclusivity:
Respecting the negative energy LastChoice pours into this and every Acquisition, the Coven agrees to negotiate with us until this pact's conclusion exclusively. Entertaining offers from werewolves, witches, or other dark entities during this phase are strictly off the table. We will stuff your mouths so full of roasted garlic holy wafers that you won’t even notice we staked you in the heart. Don’t even.
Termination:
This blood pact may end via mutual agreement, by LastChoice's discretion, or if terms mutate unfavorably. Should we uncover any dark secrets during our rituals, we pledge to inform the Coven and seek resolution through arcane mediation. We might also walk if we feel like it. These terms bind you, not us.
Miscellaneous:
This pact is whispered in shadows and shouldn't reach human ears. Our intentions, while currently non-binding (except for sections on “Secrecy,” “Exclusivity,” “Termination,” and this section), are as eternal as your existence and our thirst for debt-leveraged returns on a 2-5 year time scale.
All involved in this pact will answer to the laws of Deleware. We beckon your inquiries; speak to Gordy Black or Joel Nightworth for clarity. This pact dissolves after the third red moon of 2021.
Eternally yours,
LastChoice BloodCare Partners.
Happy Halloween!