425: Investcorp AI Acquisition Corp. and Bigtincan Announce Webcast on Proposed Business Combination

Investcorp AI Acquisition Corp. and Bigtincan Holdings Limited release a joint press release announcing a question and answer webcast regarding their previously announced business combination agreement.

Summary

• Investcorp AI Acquisition Corp. (IVCA), a SPAC, and Bigtincan Holdings Limited (Bigtincan) have announced a webcast to discuss their proposed business combination.
• The business combination agreement (BCA) and scheme implementation deed (SID) were initially announced on October 21, 2024.
• The transaction aims to make Bigtincan a wholly-owned subsidiary of Pubco, with Pubco listing on Nasdaq.
• The closing of the business combination is expected in the first quarter of 2025.
• Investcorp is committing a US$12.5 million investment into Bigtincan's business when the transaction closes.
• Investcorp expects to own approximately 20% of Bigtincan on Nasdaq, at a cost per BTH share equivalent of roughly A$0.22.
• An AI Technology Development Centre is planned for Hobart, Tasmania, leveraging Bigtincan's existing resources.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. The announcement focuses on the potential benefits of the business combination, including Nasdaq listing and Investcorp's investment. However, it also includes cautionary statements about risks and uncertainties.

Positives

• The business combination aims to list Bigtincan on Nasdaq, potentially providing access to deeper capital pools and attracting talent.
• Investcorp's investment of US$12.5 million signals confidence in Bigtincan's potential.
• The establishment of an AI Technology Development Centre in Hobart could enhance Bigtincan's innovation capabilities.
• Investcorp believes that the current valuation of Bigtincan shares on the ASX is not reflective of the potential of the business.

Negatives

• The transaction is subject to shareholder approvals and other customary closing conditions.
• The closing is not guaranteed and is subject to various risks and uncertainties.
• The amount of redemption requests made by the SPACs shareholders could impact the funds available.
• The PIPE Investment may not be completed prior to the closing of the Transaction or at all.

Risks

• Legal proceedings could be instituted in connection with the transaction.
• Delays in obtaining regulatory approvals could occur.
• The transaction could disrupt current plans and operations.
• The anticipated benefits of the transaction may not be realized.
• Economic uncertainty and rising inflation and interest rates could adversely affect the companies.
• Shareholder approvals may not be obtained.
• The PIPE investment may not be completed or may not be sufficient to fund Pubco's business plan.
• Redemption requests from SPAC shareholders could reduce available funds.
• Bigtincan's and SPAC's ability to satisfy the conditions to closing of the Transaction.

Future Outlook

The companies anticipate that subsequent events and developments may cause their assessments to materially change and specifically disclaim any obligation to update or revise any forward-looking statements, except as required by law.

Management Comments

• Harsh Shethia of Investcorp stated that Bigtincan fits the profile of enterprise software businesses where Investcorp has been able to unlock value.
• Harsh Shethia believes that the current valuation of Bigtincan shares on the ASX is not reflective of the potential of the business.
• Harsh Shethia believes that a Nasdaq listing will provide access to a deeper capital pool, be more attractive for acquiring and retaining talent, and be a better reference point for gaining new customers globally.
• Harsh Shethia stated that Investcorp hopes to achieve favourable private equity style returns of around 3x on capital it deploys over the medium-term.

Industry Context

The transaction reflects the ongoing trend of companies seeking public listings via SPAC mergers, particularly in the technology sector, to access capital and accelerate growth.

Comparison to Industry Standards

• The document mentions the goal of incentivizing BTH employees to achieve a 'rule of 30', which is defined as revenue growth plus EBITDA margin of 30%, a common benchmark for high-growth SaaS companies.
• The document references similar listed peers in the U.S. as a benchmark for Bigtincan's potential valuation multiple uplift.

Stakeholder Impact

• Shareholders of both Investcorp AI Acquisition Corp. and Bigtincan will be impacted by the proposed transaction, requiring their approval.
• Employees of Bigtincan may be affected by the changes resulting from the business combination and the establishment of the AI Technology Development Centre.
• Customers of Bigtincan could benefit from enhanced AI capabilities and a broader range of services.
• The transaction could impact suppliers and creditors of both companies.

Next Steps

• Pubco intends to file a registration statement on Form F-4 with the SEC.
• SPAC will mail a definitive proxy statement/prospectus to its shareholders.
• SPAC will call an extraordinary general meeting for shareholders to vote on the proposed transaction.
• Bigtincan shareholders need to approve the transaction.
• The companies need to satisfy the conditions to closing of the Transaction.

Key Dates