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United States securities and exchange commission logo
July 9, 2020
Scott G. Bruce
President
Digital Landscape Group, Inc.
660 Madison Avenue, Suite 1435
New York, NY 10065
Re: Digital Landscape
Group, Inc.
Draft Registration
Statement on Form S-4
Submitted June 12,
2020
CIK No. 0001810739
Dear Mr. Bruce:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-4
Unaudited Pro Forma Condensed Combined Financial Information, page 55
1. Please revise to
disclose how the pro forma financial statements reflect the following:
The contingent
payment upon the change in control relating to the DWIP and the
IWIP Plan as
disclosed in Note 15 on page F-29; and
The redemption of
the minority interest in AP WIP Investments, LLC, held by KKR
Investors, LP as
disclosed in Note 16 on page F-29.
Key Factors Affecting Financial Results, page 66
2. We note your
disclosures of potential adverse impacts from COVID-19. Please tell us
what consideration you
gave to providing expanded information regarding specific
Scott G. Bruce
FirstName LastNameScott G. Bruce
Digital Landscape Group, Inc.
Comapany
July 9, 2020NameDigital Landscape Group, Inc.
July 9,2 2020 Page 2
Page
FirstName LastName
impacts that your business has experienced from the COVID-19 pandemic
(e.g., impacts
on your workforce or your ability to complete transactions). Refer to
CF Disclosure
Guidance: Topic No. 9 and 9A.
EBITDA and Adjusted EBITDA, page 69
3. We note your disclosure in the footnote to the reconciliation that
Adjusted EBITDA
includes the impact of 100% of selling, general, and administrative
expense which appears
to be inconsistent with your exclusion of severance expense. Please
revise to correct this
discrepancy or explain to us why no revision is necessary.
4. We note your disclosure of your estimate of the historical selling,
general, and
administrative costs related to the acquisition of revenue producing
assets and the impact
on Adjusted EBITDA if such costs were excluded from the statement of
operations.
Please tell us why you believe this disclosure is appropriate and
provides useful
information to investors regarding your financial condition and
results of operations. In
your response please include a discussion of the frequency with which
you have acquired
revenue producing assets in the past, and whether you expect that
trend to continue in
future periods.
Acquisition Capex, page 70
5. Please expand on your discussion of this measure to explain the
specific reasons why you
believe it provides valuable additional information for users of the
financial statements.
In your response, please explain the nature of the "noncash investment
- under lease and
installment arrangements" and "future interest on noncash investments
- lease and
installment agreements" adjustments and explain to us why they are
necessary
adjustments to arrive at Acquisition Capex.
Ground Cash Flow, page 70
6. We note your disclosure that management believes the presentation of
Ground Cash Flow
provides valuable additional information for users of the financial
statements in assessing
your results of operations which implies that you are presenting this
measure as a
performance measure. Please explain to us in greater detail how this
measure is used by
management and whether it is used as a cash flow measure. To the
extent Ground Cash
Flow is used as a liquidity measure, please explain why you have not
described it as such
and reconciled it to a GAAP liquidity measure. Finally, please explain
to us whether there
are any differences between the definition of Ground Cash Flow and
Gross Profit, and if
not, clarify for us why you believe it is necessary to retitle the
measure within your filing.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Business
Annualized In-Place Rents, page 71
7. We note you present annualized in-place rents as a non-GAAP measure.
Please tell us
Scott G. Bruce
FirstName LastNameScott G. Bruce
Digital Landscape Group, Inc.
Comapany
July 9, 2020NameDigital Landscape Group, Inc.
July 9,3 2020 Page 3
Page
FirstName LastName
how you have met all the disclosure requirements of Item 10(e) of
Regulation S-K with
respect to this measure, including the requirement to reconcile the
measure to the most
comparable GAAP measure.
Exclusive Forum, page 151
8. Your forum selection provision identifies the Court of Chancery of the
State of Delaware
(or, if no state court located within the State of Delaware has
jurisdiction, the federal
district court for the District of Delaware) as the exclusive forum
for certain litigation,
including any derivative action. Please disclose whether this
provision applies to
actions arising under the Exchange Act. In this regard, note that
Section 27 of the
Exchange Act creates exclusive federal jurisdiction over all suits
brought to enforce any
duty or liability created by the Exchange Act or the rules and
regulations thereunder. You
also disclose that the federal district courts of the United States of
America will be the
sole and exclusive forum for the resolution of any complaint asserting
a cause of action
arising under the Securities Act. Please state that there is
uncertainty as to whether a court
would enforce such provisions. In that regard, note that Section 22 of
the Securities Act
creates concurrent jurisdiction for federal and state courts over all
suits brought to enforce
any duty or liability created by the Securities Act or the rules and
regulations thereunder.
Comparison of Stockholder Rights, page 153
9. You state that you are providing a summary of "certain" differences
between the rights of
the common shareholders of DLGI BVI and the stockholders of DLGI
Delaware. Please
clarify that you are providing a summary of the material differences
and briefly highlight
the most significant differences affecting shareholder rights. In
addition, please expand
your comparison to discuss the exclusive forum provision included in
the DLGI Delaware
Charter.
Material United States Federal Income Tax Consequences, page 163
10. You state that the discussion in this section is for "general
information only and is not
intended to be, nor should it be construed to be, legal or tax advice
to any holder or
prospective holder of the Class A Common Shares, Warrants or Series A
Founder
Preferred Shares." Investors are entitled to rely upon your disclosure
regarding the
material tax consequences of the transaction. Please revise. For
guidance, refer to Section
III.D.1 of Staff Legal Bulletin No. 19.
11. Please revise this section to clearly state that the disclosure in the
tax consequences
section is the opinion of Cravath as the named counsel and clearly
articulate the opinion of
counsel. For guidance, see Section III.B of Staff Legal Bulletin No.
19. In addition, we
note the statement that the domestication should qualify as an F
Reorganization and that
US shareholders "should not" recognize taxable gain or loss as a
result of the
domestication. Please explain why you cannot give a "will" opinion and
describe the
Scott G. Bruce
FirstName LastNameScott G. Bruce
Digital Landscape Group, Inc.
Comapany
July 9, 2020NameDigital Landscape Group, Inc.
July 9,4 2020 Page 4
Page
FirstName LastName
degree of uncertainty. Include risk factor or other appropriate
disclosure addressing the
risk to investors regarding uncertain tax treatment. For guidance, see
Section III.C.4 of
Staff Legal Bulletin No. 19.
Consolidated Statements of Operations, page F-4
12. We note your disclosure in the second paragraph of page 59 and
footnote (1) on page 69
relating to selling, general, and administrative costs related to
management compensation
and expenses that, prior to the Acquisition Closing Date and for the
periods presented,
were obligations of Associated Group Management and therefore excluded
from the
selling, general, and administrative expenses of the APW Group. Please
clarify to us
whether the financial statements of APW Group reflect all costs of
doing business and
how you considered SAB Topic 1B1 Questions 1 and 2.
Note 2. Basis of Presentation and Summary of Significant Accounting Policies
Revenue Recognition, page F-12
13. We note your disclosure that revenue is recorded as earned over the
term of the lease since
the operating lease arrangements are cancellable by both parties.
Please revise to provide
more details of when you considered that the revenue has been earned.
In your response,
tell us the typical contractual term of your operating leases, and
whether the leases tend to
include fixed rent escalations.
Financial Statements
AP WIP Investments, LLC and Subsidiaries
Note 3. Real Property Interests, page F-14
14. Please address the following with respect to your cell site leasehold
interests:
Please clarify for us the specific asset or contractual right
conveyed to you in your
transactions to acquire leasehold interests,
Tell us the specific accounting literature you relied on to
support your treatment of
the acquisition as the acquisition of an intangible asset,
Explain to us whether your arrangements with sellers of interests
include a set
contractual term, and if so, tell us how that term aligns with the
twenty-five year
useful life you use to amortize the related intangible asset,
Tell us the other factors you considered in determining that the
useful life of the
leasehold interests should be increased from fifteen to
twenty-five years, and
Clarify for us whether you believe that you will be required to
reassess these
arrangements under ASC Topic 842 to determine if a lease is
present upon the
acquisition of APW WIP Investments by Digital Landscape Group, Inc
and the basis
for your conclusion.
Financial Statements of Landscape Acquisition Holdings Limited, page F-32
15. Please tell us what plans you have, if any, to update the financial
information for
Scott G. Bruce
Digital Landscape Group, Inc.
July 9, 2020
Page 5
Landscape Acquisition Holdings Limited to address the transition period
created by the
change in fiscal year end from October 31 to December 31.
General
16. Please confirm that the Delaware corporation to be formed in the
domestication will file a
post-effective amendment adopting the Form S-4 registration statement as
its own and
update the disclosure as appropriate.
You may contact Jorge Bonilla at 202-551-3414 or Robert Telewicz at
202-551-3438 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Ruairi Regan at 202-551-3269 or Maryse Mills-Apenteng at 202-551-3457
with any
other questions.
Sincerely,
FirstName LastNameScott G. Bruce
Division of
Corporation Finance
Comapany NameDigital Landscape Group, Inc.
Office of Real
Estate & Construction
July 9, 2020 Page 5
cc: D. Scott Bennett, Esq.
FirstName LastName