425: Investcorp AI Acquisition Corp. Announces Business Combination with Bigtincan Holdings Limited

Sentiment:

Merger Announcement 23 October 2024 6:39 AM

📋All filings for Investcorp Ai Acquisition CORP

Investcorp AI Acquisition Corp. will combine with Bigtincan Holdings Limited through a merger and scheme acquisition, aiming to create a publicly listed entity on Nasdaq.

Capital raisePubco may raise an aggregate amount of cash of at least US$15,000,000 that is able to be drawn by Pubco no later than the Business Day before the Implementation Date.Investcorp agreed to subscribe for and purchase, and Pubco agreed to issue and sell to Investcorp, substantially concurrently with the consummation of the Transactions, an aggregate of 1,250,000 Pubco Ordinary Shares at a purchase price of US$10.00 per Pubco Ordinary Share for aggregate gross proceeds of US$12,500,000.

Summary

Investcorp AI Acquisition Corp. (IVCA), a Cayman Islands-based SPAC, has entered into a business combination agreement with Bigtincan Holdings Limited, an Australian public company listed on the ASX.
The transaction involves a merger of IVCA with a subsidiary of Bigtincan Limited (Pubco), followed by Pubco's acquisition of Bigtincan Holdings through a scheme of arrangement.
Upon completion, the combined entity will be listed on Nasdaq.
IVCA shareholders will receive one ordinary share of Pubco for each IVCA share they hold.
Bigtincan Holdings shareholders will receive one Pubco ordinary share for every 30.97 Bigtincan Holdings shares, or US$0.16145 in cash per share if a cash election is made.
A cash election facility will be available if Pubco raises at least US$15 million in cash.
If cash elections exceed the available cash pool, shareholders with holdings as of 12:01 a.m. on the date of the agreement will receive cash for their first 5,000 shares, with remaining shares subject to a pro-rata cash distribution.
Shareholders not holding shares as of 12:01 a.m. on the date of the agreement will receive a pro-rata cash distribution.
Sponsor, ICE I Holdings Pte. Ltd., will forfeit certain SPAC Shares and is responsible for Outstanding SPAC Transaction Expenses exceeding $4,500,000.
Investcorp Cayman Holdings Limited, an affiliate of Sponsor, has agreed to subscribe for 1,250,000 Pubco Ordinary Shares at US$10.00 per share, totaling US$12,500,000.
The initial board of directors of Pubco will consist of six directors, with one designated by SPAC and five by Bigtincan Holdings.
The agreement includes customary representations, warranties, and covenants, including exclusivity provisions and conditions for termination.
The Company Break Fee and SPAC Break Fee are both US$2,750,000.

Sentiment

Score: 7

Explanation: The document outlines a complex financial transaction with both positive and negative aspects. The deal provides access to capital and a Nasdaq listing, but also carries risks and limitations. The sentiment is cautiously optimistic.

Positives

The business combination provides Bigtincan access to the U.S. public markets via Nasdaq.
Existing Bigtincan shareholders have the option to receive cash for their shares.
The transaction includes a US$12.5 million investment from Investcorp Cayman Holdings Limited, providing additional capital.
The Sponsor is incentivized to ensure the deal closes by agreeing to forfeit certain SPAC Shares and cover transaction expenses exceeding a specified cap.

Negatives

The cash election option for Bigtincan shareholders is subject to a cash pool limit, potentially resulting in a pro-rata distribution.
The Sponsor is responsible for Outstanding SPAC Transaction Expenses exceeding $4,500,000.
The transaction is subject to numerous conditions, including regulatory approvals and shareholder approvals, which could delay or prevent completion.

Risks

The transaction is subject to regulatory approvals, including FIRB approval in Australia, and court approvals.
The approval of the shareholders of both SPAC and Bigtincan Holdings is required.
The PIPE Investment may not be completed prior to the closing of the Transactions or at all.
The amount of redemption requests made by the SPACs shareholders or the amount of funds remaining in the SPACs trust account after the satisfaction of such requests.
The Company or the SPAC may be adversely affected by other economic, business, and/or competitive factors, economic uncertainty caused by the impacts from the conflict in Russia and Ukraine and rising levels of inflation and interest rates.

Future Outlook

The document includes forward-looking statements regarding the completion of the transaction in the third quarter of the Companys fiscal year 2025, the ability to recognize the anticipated benefits of the transaction, and the growth and management of the surviving company.

Industry Context

The announcement reflects the ongoing trend of SPACs seeking merger targets, particularly in the technology sector. The combination with Bigtincan, a company listed on the ASX, demonstrates a cross-border transaction strategy to access U.S. capital markets.

Comparison to Industry Standards

Comparable transactions in the SPAC market often involve similar deal structures, including mergers and scheme acquisitions.
The financial metrics, such as the purchase price per share and break fees, are generally within the range observed in similar transactions.
The lock-up agreements and registration rights are standard provisions to incentivize key shareholders and facilitate future liquidity.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Directors of Pubco	Directors of Pubco as of immediately prior to the SPAC Merger Effective Time	One director designated by SPAC and five directors designated by Bigtincan Holdings	SPAC Merger Effective Time	As set forth in the Business Combination Agreement
Officers of Pubco	Officers of Pubco as of immediately prior to the SPAC Merger Effective Time	Individuals set forth in Section 2.01(c)(iii) of the Company Disclosure Letter	SPAC Merger Effective Time	As set forth in the Business Combination Agreement
Directors and officers of SPAC	Directors and officers of SPAC as of immediately prior to the SPAC Merger Effective Time	Individuals set forth in Section 2.01(c)(iv) of the Company Disclosure Letter	SPAC Merger Effective Time	As set forth in the Business Combination Agreement
Directors and officers of Merger Sub	Directors and officers of Merger Sub as of immediately prior to the SPAC Merger Effective Time	Individuals set forth in Section 2.01(c)(iv) of the Company Disclosure Letter	SPAC Merger Effective Time	As set forth in the Business Combination Agreement
Directors and officers of the Company	Directors and officers of the Company as of immediately prior to the Scheme Acquisition Effective Time	Individuals set forth in Section 2.02(c) of the Company Disclosure Letter	Scheme Acquisition Effective Time	As set forth in the Business Combination Agreement

Related Party Transactions

Investcorp Cayman Holdings Limited, an affiliate of Sponsor, has agreed to subscribe for 1,250,000 Pubco Ordinary Shares at US$10.00 per share, totaling US$12,500,000.

Stakeholder Impact

Shareholders of Investcorp AI Acquisition Corp. will receive ordinary shares of Pubco.
Shareholders of Bigtincan Holdings Limited will receive ordinary shares of Pubco or elect to receive cash consideration.
Employees of Bigtincan Holdings Limited may be affected by the integration process following the merger.
The combined company will aim to grow and manage growth profitably with customers and suppliers and retain key employees.

Next Steps

Obtain regulatory approvals, including FIRB approval in Australia.
Seek approval from the shareholders of both SPAC and Bigtincan Holdings.
File the Registration Statement with the SEC and obtain its effectiveness.
Complete the PIPE Investment.
Implement the Scheme of Arrangement and the SPAC Merger.

Key Dates

Date	Description
May 9, 2022	Date of SPAC's amended and restated memorandum and articles of association.
May 9, 2022	Date of SPAC's Investment Management Trust Agreement with Continental Stock Transfer & Trust Company.
May 12, 2022	Date of SPAC's initial public offering (SPAC IPO).
August 3, 2024	Date of the Mutual Non-Disclosure Agreement between SPAC and Bigtincan Holdings Limited.
October 21, 2024	Date of the Business Combination Agreement, Scheme Implementation Deed, Sponsor Support Agreement, Sponsor Lock-Up Agreement, and Sponsor Affiliate Subscription Agreement.
Third quarter of the Companys fiscal year 2025	Anticipated closing of the Transactions.

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