According to a release, Katapult Holding Inc. is preparing for an IPO after the digital commerce Fintech revealed on December 18, 2020, that it made an agreement to merge with special purpose acquisition company or SPAC (or “blank-check” company) FinServ Acquisition Corp. (NASDAQ:FSRV).
The deal implies an enterprise value for the combined firm of around $1 billion. The deal reportedly includes a $150 million private investment in public equity (PIPE) from investors that include Tiger Global Management and Neuberger Berman Funds. After the deal has been finalized (around H1 2021), the company will operate as Katapult and the stock may trade on the Nasdaq under the KPLT ticker symbol.
Orlando Zayas, CEO of Katapult, remarked:
“Today’s announcement marks the beginning of an exciting new chapter in our history and we are delighted to be entering into this transaction with FinServ to become a publicly traded company. … we are serving over 150 merchants and 1.4 million consumers with our leading technology platform and e-commerce POS solution. This transaction will allow us to accelerate our growth opportunities and continue to build the premier company that provides consumers access to the goods they need and deserve through a flexible lease purchase transaction.”
Lee Einbinder, CEO of FinServ, noted:
“After a comprehensive search process, in which we examined numerous business combination opportunities, Katapult emerged as the most impressive partner, exceeding all of our criteria for a successful transaction. …We are pleased to help facilitate Katapult’s listing on Nasdaq, and excited to be partnering with their entire management team as they continue to lead Katapult’s expansion as a publicly listed company.”
The proposed deal is subject to several conditions including the approval of FinServ investors that represent a majority of FinServ’s voting power, the “effectiveness of a registration statement” to be filed with the US Securities and Exchange Commission (SEC) “in connection with the transaction, the expiration of the HSR Act waiting period, and other customary closing conditions.” The Boards of Directors of Katapult and FinServ have “unanimously” approved the planned transaction.
The reverse merger agreement has come when the Renaissance IPO ETF IPO has jumped 33.8% during the last 3 months, meanwhile, the Global X Fintech ETF FINX has surged 27.3% and the S&P 500 SPX is up 12.1%.
As noted in the announcement, PJT Partners is serving as financial advisor to Katapult. DLA Piper LLP (US) is the legal counsel to Katapult. Barclays is the financial advisor to FinServ. Kirkland & Ellis is legal counsel to FinServ.
Barclays and PJT Partners are serving as placement agents “with respect to the private placement.” Barclays and Cantor Fitzgerald are serving as capital markets advisors to FinServ. Paul Hastings LLP is serving as placement agent counsel.
Management of Katapult and FinServ conducted an investor call on December 18, 2020, (at 10:30am ET) in order to go over the planned transaction. The conference call “will be accompanied by a detailed investor presentation,” the release confirmed.
For more information on this announcement, check here.