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Tuesday, February 7, 2023

True Velocity (TV Ammo) To Merge With Breeze Holdings (BREZ) Stock in Meaningful SPAC Deal Shortly

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Joshua Rodriguez
Joshua Rodriguezhttps://cnafinance.com
Hey, Im Joshua, the founder of CNA Finance. I enjoy following the trends in the market and finding the catalysts that are making the moves. If you want to get in contact with me, leave a comment below or email me at [email protected].

Late last year, Breeze Holdings Acquisition Corp (NASDAQ: BREZ) announced that it would merge with TV Ammo (True Velocity) in a SPAC deal valued at $1.21 billion. Below, we’ll talk about the deal, what TV Ammo is, and why investors should be paying close attention as this deal comes to a close. 

The SPAC Deal Between TV Ammo and BREZ

As mentioned above, the deal was announced late last year. Under the deal, Breeze Holdings will merge with True Velocity Ammo in a deal valued at $1.21 billion. On top of that $1.21 billion valuation, the deal also includes up to $100 million in private placement financing. 

In the October announcement, the two companies said that the agreement was a definitive one and that the deal is expected to close in the first quarter of 2023. Considering that statement, the deal could close any time now since we’re squarely in the first quarter of the year. 

Following the merger, True Velocity Ammo will be the surviving company and Breeze Holdings will cease to exist. 

What Is a SPAC Deal

A Special Purpose Acquisition Company raises money through a public market IPO with one intention. That intention is to use the money it raises to acquire another company, essentially bringing that company public. 

That’s exactly the type of deal we’re seeing with Breeze Holdings and TV Ammo. 

Breeze Holdings began trading on November 23, 2020, in an attempt to raise funds to acquire another company. Today, the company has the funds it needs for the acquisition, targeted TV Ammo as the company it intends to acquire, and completed a definitive merger agreement that will result in the acquisition. 

What Is True Velocity Ammo

True Velocity Ammo is a company that has the potential to become a disruptive force in the ammunition industry. That’s because there’s a big problem in the industry. 

The vast majority of ammunition is created using brass cartridges that are packed with primers, gunpowder, and bullets. That system has worked for ages – but now it’s coming under pressure. You see, brass is a relatively expensive metal, and occasional shortages mixed with increasing gun ownership in the United States mean that many are having difficulty finding the ammunition they need to operate their firearms. 

That’s where TV Ammo comes in. 

The company developed proprietary technology that allows it to nix the brass cartridges needed for the development of ammunition. Not only does this ammunition give you the ability to hunt in any environment, but it also comes with a few other perks:

  • Lighter Load: True Velocity ammunition is about 30% lighter than traditional ammunition with brass cartridges. 
  • Improved Accuracy: The company explains on its website that it uses various proprietary technologies in the production of its ammunition. As a result, its ammunition is more accurate than traditional options. 
  • Reduced Heat Transfer: Many gun enthusiasts have felt the uncomfortable feeling of a hot barrel pressed up against an arm, leg, or another part of their body after target practice. TV Ammo helps to alleviate this issue too because the plastic cartridge leads to reduced heat transfer. 

Moreover, TV Ammo plans on producing several calibers, including .50, .338, 7.62, .308, 6.8, 6.5, and 5.56. 

A Huge Deal

Along with the announcement of the SPAC deal, True Velocity announced that it entered into a landmark partnership with Bass Pro Shops and Cabela’s. These partnerships are centered around a three-to-five-year agreement. 

As part of the agreement, Bass Pro Shops and Cabela’s will carry True Velocity ammunition across all of its retail channels. Moreover, this ammunition won’t just be in Bass Pro Shops and Cabela’s stores, customers will have the ability to sign up for a subscription service to have their ammunition regularly shipped to their front doors. 

A Massive Market Opportunity

True Velocity Ammo is still a relatively small fish in a vast ocean, but that presents an opportunity. I’m sure you’ve watched Shark Tank in the past. The show gives entrepreneurs the opportunity to pitch their ideas in front of venture capitalist Sharks. If the Sharks believe the product could be disruptive, they invest at a significant discount to what the company might be worth in the future if all goes well. 

TV Ammo is a Shark Tank-like opportunity. 

The company recently signed its landmark deals with Bass Pro Shops and Cabellas, leading to a national rollout of its product in big-box stores. Moreover, the company is likely to continue expanding its footprint across the United States and around the world thanks to proprietary technologies that make ammunition lighter, more accurate, and less conductive to heat transfer. 

So, how big is the market opportunity?

According to Verified Market Research, the ammunition market was worth about $22.35 billion in 2021. The industry is expected to grow at a compound annual growth rate (CAGR) of 5.42%. As a result, experts expect the ammunition market to be worth $35.94 billion by 2030. 

That’s a massive market, and when companies disrupt massive markets like this, the potential for growth is impossible to ignore. 

When Will the Deal Go Down

There are no public clues as to exactly what date the deal between Breeze Holdings and TV Ammo will take place. All we know is that the deal is expected to take place sometime in the first quarter of 2023. That’s good news considering it’s already January 25th. 

That means according to the time frame announced with the news, the deal is expected to close within the next two or so months – though, I expect that it may close sooner than that. 

The Bottom line

The bottom line here is simple. TV Ammo has the potential to disrupt the ammunition industry as we know it. With products already in Bass Pro Shops and Cabella’s stores, the company may be on the fast track to doing just that. 

If it’s capable of doing so, True Velocity will take its share of an industry that’s expected to be worth nearly $36 billion annually by 2030 – and continue to grow. 

Of course, investing in SPACs can be risky. It’s important to do your own research and form your own opinions. Nonetheless, BREZ is a stock to pay close attention to with the TV Ammo merger just around the corner. 

Article Resources

Disclosure – CNA Finance is not an investment advisor or broker-dealer. The author of the article holds no shares in any stock mentioned herein and has no intentions to open positions within the next 72 hours. CNA Finance doesn’t have a monetary relationship with any stock mentioned herein. This article represents the views of the author, but not necessarily the views of CNA Finance or its team. Investing and trading come with risk. Carefully consider these risks and consider speaking with a licensed professional before making investment decisions. This article is not intended to constitute financial advise and is not a solicitation to buy or sell equities. 

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