8-K: Investcorp AI Acquisition Corp. Announces Business Combination with Bigtincan Holdings Limited

Investcorp AI Acquisition Corp. has entered into a business combination agreement with Bigtincan Holdings Limited, paving the way for Bigtincan to become a publicly traded company on the Nasdaq.

Summary

• Investcorp AI Acquisition Corp. (IVCA), a special purpose acquisition company, has agreed to merge with Bigtincan Holdings Limited, an Australian software company listed on the ASX.
• The transaction involves a merger of IVCA with a subsidiary of Bigtincan Limited (Pubco), a newly formed Cayman Islands company, and the acquisition of Bigtincan Holdings by Pubco through a scheme of arrangement.
• Upon completion, Bigtincan will become a publicly traded company on the Nasdaq.
• IVCA shareholders will receive shares in Pubco, and Bigtincan shareholders will have the option to receive either Pubco shares or cash.
• A cash election facility will be available to Bigtincan shareholders, with a potential cash pool of at least $15 million.
• The cash consideration is set at $0.16145 per Bigtincan share, subject to a scale-back mechanism if cash elections exceed the available pool.
• The transaction is subject to various conditions, including regulatory approvals, shareholder approvals, and court approval.
• The deal includes a break fee of $2.75 million payable by either Bigtincan or IVCA under certain circumstances.
• Investcorp, an affiliate of the SPAC sponsor, has agreed to purchase $12.5 million of Pubco shares in a concurrent private placement.

Sentiment

Score: 7

Explanation: The document is generally positive, outlining a strategic merger with potential benefits for both companies. However, it also acknowledges risks and uncertainties, which tempers the overall sentiment.

Positives

• Bigtincan will gain access to public markets and potentially raise additional capital.
• The transaction provides liquidity options for both IVCA and Bigtincan shareholders.
• The cash election facility offers flexibility to Bigtincan shareholders.
• The deal is supported by a significant investment from Investcorp.

Negatives

• The cash consideration for Bigtincan shareholders is subject to a scale-back mechanism.
• The transaction is subject to numerous conditions, which could delay or prevent its completion.
• The deal includes a break fee, which could be costly if the transaction is terminated.

Risks

• The transaction may not close if regulatory approvals are not obtained or if shareholder approvals are not secured.
• The cash election facility may not be fully available if the cash pool is insufficient.
• The value of Pubco shares may fluctuate after the merger.
• The integration of the two companies may present challenges.
• The PIPE investment may not be completed prior to the closing of the Transactions or at all.

Future Outlook

The document includes forward-looking statements regarding the completion of the transaction and the future performance of the combined company, but these are subject to various risks and uncertainties.

Management Comments

• The respective boards of directors of each of the SPAC, the Company, Pubco and Merger Sub unanimously approved the Business Combination Agreement and the Scheme Implementation Deed.
• The Company Board has unanimously resolved that the Company seek the approval of the Company Shareholders of the Scheme Acquisition.
• The Pubco Board has unanimously determined that it is advisable for Pubco to enter into this Agreement and each of the Ancillary Agreements.
• The Merger Sub Board has unanimously determined that it is advisable for Merger Sub to enter into this Agreement, the Plan of Merger and each of the other Ancillary Agreements.
• The SPAC Board has unanimously determined that it is advisable for SPAC to enter into this Agreement, the Plan of Merger and each of the other Ancillary Agreements.

Industry Context

This announcement reflects a trend of software companies seeking public listings through mergers with special purpose acquisition companies (SPACs). It also highlights the growing interest in the software sector and the potential for growth in the SaaS market.

Comparison to Industry Standards

• The transaction structure is similar to other SPAC mergers, involving a combination of stock and cash consideration.
• The break fee of $2.75 million is within the typical range for deals of this size.
• The lock-up agreements for Sponsor Members and Company Shareholders are standard practice in SPAC transactions.
• The valuation of Bigtincan is not explicitly stated in the document, but the implied valuation can be derived from the cash consideration and the number of shares to be issued.
• The PIPE investment of $12.5 million is a common feature of SPAC mergers, providing additional capital for the combined company.

Management Changes

Related Party Transactions

• Investcorp, an affiliate of the SPAC sponsor, has agreed to purchase $12.5 million of Pubco shares in a concurrent private placement.

Stakeholder Impact

• Shareholders of IVCA will receive shares in Pubco.
• Shareholders of Bigtincan will have the option to receive either Pubco shares or cash.
• Employees of both companies may experience changes in their roles and responsibilities.
• Customers of both companies may benefit from the combined resources and capabilities.
• Suppliers and creditors of both companies may be affected by the merger.

Next Steps

• Obtain regulatory approvals from the Commonwealth of Australia.
• Obtain approval of the SPAC Shareholder Proposals by the SPAC Shareholders.
• Obtain approval of the Scheme by the Company Shareholders.
• Obtain approval of the Scheme by the Supreme Court of New South Wales.
• Complete the PIPE Investment.
• Complete the merger of SPAC with Merger Sub.
• Implement the Scheme of Arrangement.
• Delist Bigtincan from the ASX and list Pubco on the Nasdaq.

Key Dates

Keywords

business combination, merger, acquisition, SPAC, Bigtincan, Investcorp, Nasdaq, ASX, software, cash election, shareholders, PIPE investment