425: dMY Squared Technology Group and Horizon Quantum Computing Announce Non-Binding Letter of Intent for Business Combination

dMY Squared Technology Group and Horizon Quantum Computing have signed a non-binding letter of intent for a potential business combination, aiming to create a publicly listed company focused on quantum software development tools.

Summary

• dMY Squared Technology Group, Inc. and Horizon Quantum Computing Pte. Ltd. have entered into a non-binding letter of intent for a potential business combination.
• The combined company is expected to be publicly listed.
• Horizon Quantum's pre-money equity value in the transaction is approximately $500 million.
• The definitive agreement is expected to be executed in the second quarter of this year, with closing anticipated before year end.
• The combined company will be led by Horizon Quantum's current management team, with Dr. Joe Fitzsimons serving as CEO.
• Harry L. You has been appointed as Chief Executive Officer of dMY Squared Technology Group, effective February 26, 2025, while continuing to serve as Chief Financial Officer and Chairman.
• Niccolo de Masi resigned as Chief Executive Officer and a member of the Board of Directors of dMY Squared Technology Group, effective immediately, to pursue another opportunity.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the potential for growth in the quantum computing sector and the experience of the management teams involved. However, the non-binding nature of the agreement and the risks associated with the transaction temper the overall sentiment.

Positives

• The business combination aims to create a publicly listed company focused on quantum software development tools.
• Horizon Quantum's technology is expected to simplify and expedite the process of developing software for quantum computers.
• The combined company will benefit from the experience of both the Horizon Quantum and dMY teams.
• Harry You's extensive experience as CFO of Oracle and Accenture, as well as his board positions at IonQ, Coupang, and Broadcom, bring significant financial and operational expertise to the company.

Negatives

• The letter of intent is non-binding, and there is no assurance that a definitive agreement will be reached or that the proposed transaction will be consummated.
• The transaction is subject to various conditions, including due diligence, negotiation of a definitive agreement, board and equity holder approval, and regulatory approvals.
• Niccolo de Masi's resignation as CEO could create uncertainty in the short term.

Risks

• The failure to successfully negotiate and enter into a definitive agreement could prevent the business combination from occurring.
• Delays in obtaining necessary approvals or satisfying other conditions could postpone or prevent the closing of the transaction.
• The combined company may face challenges in integrating the operations and cultures of the two companies.
• The quantum computing market is still in its early stages, and there is no guarantee that Horizon Quantum's technology will be commercially successful.
• The forward-looking statements in the press release are subject to significant risks and uncertainties that could cause actual results to differ materially from expectations.

Future Outlook

The combined company aims to be a publicly listed entity focused on developing software tools for quantum computers, with the expectation of completing the business combination before the end of the year.

Management Comments

• Dr. Fitzsimons, Founder and CEO of Horizon Quantum, stated that the partnership with dMY is exciting because of their experience in enterprise hardware and software as well as their success as pioneers in the quantum computing industry.
• Harry You, Chairman of dMY Squared, stated that they are pleased to work with Joe and his team at Horizon Quantum, who are working to create a common software platform across different quantum computing hardware approaches.

Industry Context

This announcement reflects the growing interest and investment in the quantum computing industry, particularly in the development of software tools to bridge the gap between hardware capabilities and real-world applications. The potential business combination positions the combined company to compete with other players in the quantum software space.

Comparison to Industry Standards

• IonQ, where Harry You serves on the board, is a direct competitor in the quantum computing space, focusing on hardware development.
• Other companies like Rigetti Computing and Quantum Computing Inc. are also developing quantum computing solutions, but Horizon Quantum's focus on software tools differentiates it.
• The $500 million pre-money valuation is comparable to other SPAC deals in the technology sector, but the ultimate success will depend on the combined company's ability to execute its business plan and achieve commercial success.

Management Changes

Stakeholder Impact

• Shareholders of dMY Squared Technology Group will have the opportunity to vote on the proposed business combination.
• Employees of Horizon Quantum Computing and dMY Squared Technology Group may experience changes in their roles and responsibilities as a result of the transaction.
• Customers of Horizon Quantum Computing may benefit from the combined company's increased resources and capabilities.
• The transaction could create new opportunities for suppliers and partners of both companies.

Next Steps

• Negotiation and execution of a definitive agreement for the business combination.
• Completion of due diligence by both parties.
• Obtaining board and equity holder approval for the transaction.
• Securing necessary regulatory approvals.
• Filing a registration statement, including a proxy statement/prospectus, with the SEC.
• Mailing the proxy statement/prospectus to dMY's shareholders.
• Closing the business combination before the end of the year.

Key Dates