S-1/A: Gesher Acquisition Corp. II Aims for $125 Million IPO, Targeting Israeli Tech

Gesher Acquisition Corp. II, a blank check company, is seeking to raise $125 million in an initial public offering to pursue a business combination, primarily focusing on technology businesses in Israel.

Summary

• Gesher Acquisition Corp. II is a newly formed blank check company planning an IPO to raise $125 million.
• The company intends to target businesses located in Israel, particularly those that conduct business internationally in Asia, Europe or North America, but will not target any entity that is incorporated, organized or has its principal business operations in China, Hong Kong or Macau.
• Each unit offered at $10.00 includes one Class A ordinary share and one-half of one redeemable warrant, with each whole warrant allowing the purchase of one Class A ordinary share at $11.50.
• The warrants will become exercisable 30 days after the completion of the initial business combination and will expire five years after the completion of the initial business combination.
• The underwriters have a 45-day option to purchase up to 1,875,000 additional units to cover over-allotments.
• Public shareholders have redemption rights upon completion of the initial business combination.
• The sponsor, Gesher Acquisition Sponsor II LLC, and BTIG have committed to purchase 522,500 private placement units at $10.00 per unit, totaling $5,225,000.
• Three institutional investors have expressed an interest to indirectly purchase an aggregate of 109,744 private placement units at a price of $10.00 per unit ($1,097,443 in the aggregate).
• The sponsor has purchased 5,513,483 Class B ordinary shares for $25,000, which will convert into Class A ordinary shares at the time of the initial business combination.
• The company has 21 months from the closing of the offering to complete an initial business combination.
• Approximately $125.375 million, or $10.03 per unit, will be placed into a U.S.-based trust account.

Sentiment

Score: 6

Explanation: The document is neutral in tone, providing factual information about the company's IPO and business plans. While it highlights potential risks, it also emphasizes the management team's experience and the attractiveness of the Israeli technology sector.

Positives

• Management has experience in mobility, electric vehicles, autonomy, robotics, Agtech, and fintech sectors.
• The company has access to Israeli companies where the management team's relationships are the deepest and they have a long-term track record of completing successful transactions.
• The company is able to offer public shareholders the opportunity to redeem their shares.

Negatives

• The sponsor's nominal purchase price for founder shares may result in significant dilution to the implied value of public shares.
• The company is dependent on its officers and directors and their loss could adversely affect the ability to operate.
• The company has a limited ability to assess the management of a prospective target business.
• The company may only be able to complete one business combination with the proceeds of this offering and the sale of the private placement units, which will cause the company to be solely dependent on a single business which may have a limited number of products or services.

Risks

• The company is a blank check company with no operating history and no revenues.
• Public shareholders may not have an opportunity to vote on the proposed initial business combination.
• The ability of public shareholders to redeem their shares for cash may make the company's financial condition unattractive to potential business combination targets.
• The requirement to complete the initial business combination within the completion window may give potential target businesses leverage over the company in negotiations.
• The non-managing sponsor investors have expressed an interest to purchase 25% of the units in this offering, which could reduce the trading volume, volatility and liquidity for the company's shares and adversely affect the trading price of the company's shares.
• Nasdaq may delist the company's securities from trading on its exchange, which could limit investors ability to make transactions in the company's securities and subject the company to additional trading restrictions.
• The company may be a passive foreign investment company, or PFIC, which could result in adverse United States federal income tax consequences to U.S. investors.
• The company's search for an initial business combination, and any target business with which the company ultimately consummate a business combination, may be materially adversely affected by current global geopolitical conditions resulting from the ongoing Russia-Ukraine conflict and the recent escalation of the conflict in the Middle East and Southwest Asia.

Future Outlook

The company intends to seek a business combination with one or more target businesses, primarily focusing on technology businesses in Israel. The company has 21 months from the closing of the offering to complete an initial business combination.

Industry Context

The document highlights the increasing number of SPACs seeking targets, leading to greater competition and potentially higher costs for acquisitions. It also notes Israel's prominence as a technology and innovation hub, making it an attractive region for business combination opportunities.

Comparison to Industry Standards

• The document mentions Gesher I Acquisition Corp., a special purpose acquisition company formed for substantially similar purposes as Gesher Acquisition Corp. II, which completed its initial public offering in March 2021 and consummated a Business Combination Agreement with Freightos Limited in January 2023.
• The document mentions Collective Growth Corporation, a Nasdaq-listed special purpose acquisition company that consummated an initial business combination with Innoviz Technologies, an Israeli based developer of LiDAR Sensors and Perception Software for Autonomous Driving.
• The document mentions Arbe Robotics Ltd. (NASDAQ: ARBE), an Israel based robotics company.

Related Party Transactions

• The sponsor purchased founder shares for a nominal price.
• The sponsor and BTIG are purchasing private placement units.
• The company will reimburse an affiliate of the sponsor for office space and administrative support.
• The sponsor may loan the company funds to finance transaction costs.

Stakeholder Impact

• Public shareholders will have the opportunity to redeem their shares upon completion of the initial business combination.
• The sponsor and management team have agreed to waive their redemption rights with respect to their founder shares and private placement shares.
• The company's success depends on the performance of the target business after the initial business combination.

Next Steps

• Complete the IPO and list the units on Nasdaq.
• Identify and evaluate potential target businesses for a business combination.
• Negotiate and execute a definitive agreement for a business combination.
• Obtain shareholder approval for the business combination, if required.
• Complete the business combination within 21 months.

Key Dates