8-K: Live Oak V to Merge with Teamshares in $750M Deal

Live Oak Acquisition Corp. V announced a proposed business combination with Teamshares Inc., a tech-enabled acquirer of small businesses, valuing the combined entity at approximately $750 million.

Summary

• Live Oak Acquisition Corp. V (SPAC) is combining with Teamshares Inc., a tech-enabled platform that programmatically acquires high-quality small businesses from retiring owners.
• The proposed business combination values Teamshares at an enterprise value of approximately $750 million.
• Teamshares currently owns 87 businesses and generates approximately $50 million in consolidated operating EBITDA on a pro forma basis.
• The transaction is expected to provide approximately $330 million in available capital from the de-SPAC, assuming no redemptions, after expenses.
• A $126 million common equity PIPE, anchored by T. Rowe Price Investment Management, has been secured.
• All existing Teamshares shareholders are rolling their equity, and management owners have agreed to a four-year lockup, with early release at $25 per share.
• Teamshares forecasts consolidated pro forma EBITDA of $20 million in 2025, $60 million in 2026, and $100 million in 2027.
• The company targets acquiring businesses at 4x to 6x EBITDA, achieving unlevered returns of 15% to 20%.
• Teamshares has grown operating EBITDA from subsidiaries from $1 million in 2020 to an estimated $60 million by year-end 2025.
• The company has achieved 16% year-over-year organic EBITDA growth from its operating subsidiaries in the first half of 2025.
• The proceeds will primarily fund the acquisition of small businesses, alleviating historical capital constraints and aiming to lower the cost of debt.

Sentiment

Score: 9

Explanation: The filing outlines a highly strategic business combination with a company demonstrating strong historical growth, a proven scalable model, significant market opportunity, and robust future financial forecasts. The substantial capital raise, management alignment, and perceived undervaluation compared to peers contribute to a very positive outlook, despite inherent risks of any de-SPAC transaction.

Positives

• Teamshares has a proven, scalable model for acquiring small businesses with strong unit economics (15-20% unlevered returns, 40% target ROE).
• Significant market opportunity due to baby boomer retirements, with an estimated 70% failure rate for small businesses trying to sell.
• Strong historical growth, with operating EBITDA from subsidiaries increasing from $1 million in 2020 to an estimated $60 million by year-end 2025.
• Forecasted rapid consolidated pro forma EBITDA growth: $20 million (2025), $60 million (2026), $100 million (2027).
• The company has achieved an inflection point, becoming EBITDA positive at the corporate level, with operating leverage allowing new subsidiary earnings to drop meaningfully to the bottom line.
• The transaction provides substantial capital ($330 million net proceeds) to accelerate acquisitions and lower the cost of debt, which was a historical growth governor.
• Strong investor confidence demonstrated by an oversubscribed $126 million PIPE anchored by T. Rowe Price.
• Management's long-term alignment with public shareholders through equity roll-over, a four-year lockup, and direct PIPE investment.
• Diversified portfolio of nearly 90 companies across 40 industries and 30 states, reducing exposure to single industry or geographic shocks.
• High success rate (86% since 2023) in hiring experienced presidents for acquired businesses.

Risks

• The occurrence of any event, change, or circumstances that could lead to the termination of the Merger Agreement.
• Potential legal proceedings against the parties following the announcement of the Business Combination.
• Inability to complete the Business Combination due to failure to obtain shareholder approval from Teamshares and Live Oak, or other closing conditions.
• Risk of not obtaining or maintaining the listing of the public company's shares on Nasdaq or another national securities exchange after the Business Combination.
• Live Oak's ability to remain current with its SEC filings.
• Disruption to current plans and operations as a result of the announcement and consummation of the Business Combination.
• Inability to recognize the anticipated benefits of the Business Combination, potentially affected by competition, the ability to manage growth profitably, and retention of key employees.
• Costs related to the Business Combination.
• Changes in applicable laws or regulations.
• Inability of Teamshares to implement business plans, forecasts, and other expectations after the completion of the Business Combination.
• Risk that additional financing, either for the Business Combination or for future business support, may not be raised on favorable terms or at all.
• The evolution of the markets in which Teamshares competes.
• The ability of Teamshares to implement its strategic initiatives and continue to innovate its existing products and services.
• The level of redemptions of Live Oak's public shareholders.

Future Outlook

Teamshares anticipates steady, predictable growth primarily driven by programmatic acquisitions, leveraging its tech-enabled infrastructure to scale efficiently. The company expects to achieve consolidated pro forma EBITDA of $100 million by 2027, fueled by the capital raised in this transaction and internally generated free cash flow, which will be recycled into highly accretive acquisition opportunities without requiring additional equity raises for at least the next two years. The business combination is also expected to significantly lower the company's cost of debt, amplifying its return profile.

Management Comments

• Teamshares is a programmatic acquirer of high-quality businesses that has built a tech-enabled platform to drive predictable, repeatable growth.
• Teamshares has built a holding company and back office ready to be public, and their business will be quickly enhanced by lowering their cost of capital from both the debt and equity perspective and allowing for more ready access to capital.
• Teamshares model is to consistently and programmatically acquire high-quality businesses from retiring owners that generate $500,000 to $5 million in EBITDA annually.
• We launched operations in 2020 and have grown from $1 million of pro forma operating EBITDA that year to an estimated $60 million by year-end 2025. The proceeds from the transaction will allow us to accelerate growth in the coming years, driven by continued investment in the acquisition of small businesses.
• Its still day one of Teamshares as we scale toward thousands of businesses long-term.
• Our acquisition-based business model aims to drive predictable, repeatable growth and scales through our financial technology.
• We reached a critical inflection point earlier this year as EBITDA from operating subsidiaries eclipsed corporate overhead, driving us into positive EBITDA territory on a consolidated basis.
• Our historical governor on growth has been capital availability, which is alleviated with this transaction.
• Because acquisition financing is the raw material of Teamshares business model, getting access to public capital markets should result in cheaper capital and faster capital over time than the private markets.

Industry Context

The announcement positions Teamshares as a significant player in the fragmented small-to-mid-size enterprise (SME) acquisition market, addressing a critical need for succession planning among retiring baby boomer business owners. Its tech-enabled, programmatic approach differentiates it from traditional private equity or individual buyers, who often struggle with the scale and efficiency required to acquire numerous smaller businesses. The company's focus on non-cyclical, durable businesses across diverse industries provides a defensive posture against market shocks, contrasting with more concentrated industry roll-ups.

Comparison to Industry Standards

• Teamshares' target acquisition multiple of 4x to 6x EBITDA and unlevered returns of 15% to 20% are attractive, especially given the perceived "meaningful discount" at which the transaction is valued (11.2x 2027 pro forma EBITDA) compared to other recognized programmatic acquirers.
• While specific U.S. small-cap programmatic acquirers are scarce, the company references European comparables that have achieved over 20% annual growth and traded at high EBITDA multiples. Teamshares believes it can outperform this group due to the larger U.S. market and its faster acquisition pace.
• The 80% close rate on signed LOIs for Teamshares significantly outperforms the industry average for small business sales, where "some brokers and industry experts suggest its well north of half the time" that LOIs fall through.
• Teamshares' 16% year-over-year organic EBITDA growth from operating subsidiaries in H1 2025 demonstrates strong internal value creation beyond acquisitions, which is a positive indicator compared to pure acquisition-driven models.

Stakeholder Impact

• Shareholders (Live Oak): Will vote on the business combination and become shareholders of the combined entity, with potential for significant value creation based on growth forecasts.
• Shareholders (Teamshares): Existing shareholders are rolling their equity, demonstrating long-term commitment and belief in the public market strategy.
• Employees (Teamshares acquired businesses): Will be aligned with company stock, fostering continuity and resilience.
• Retiring Business Owners: Teamshares provides a credible and efficient solution for business succession, addressing a significant market pain point.
• Creditors: The transaction is expected to lower the cost of debt for Teamshares, potentially improving its financial health and credit profile.

Next Steps

• Live Oak and Teamshares intend to file a Registration Statement with the SEC, including a proxy statement for Live Oak shareholders and a prospectus.
• After the Registration Statement is declared effective, the definitive proxy statement/prospectus will be mailed to Live Oak shareholders.
• Live Oak shareholders will vote on the Business Combination.
• The combined company aims to obtain or maintain its listing on Nasdaq.
• Teamshares plans to deploy the raised capital into further acquisitions to accelerate growth.

Key Dates

Recommendation

Teamshares presents a compelling investment opportunity with a proven, scalable business model addressing a vast and underserved market of retiring small business owners. The company has demonstrated strong historical growth, is at an inflection point of corporate profitability, and has aggressive yet seemingly achievable growth forecasts for consolidated EBITDA. The significant capital infusion from the de-SPAC and oversubscribed PIPE, coupled with management's strong alignment and the potential for a lower cost of capital, positions the company for accelerated compounding returns. The valuation at 11.2x 2027 pro forma EBITDA appears attractive, especially when compared to the growth rates and multiples of similar programmatic acquirers. While de-SPAC transactions carry inherent risks, the fundamental business strength and strategic positioning suggest a strong upside potential for long-term investors.

Keywords

Teamshares, Live Oak Acquisition Corp V, SPAC, Business Combination, Merger, Acquisition, Small Business, SME, EBITDA Growth, PIPE, Nasdaq Listing, Financial Technology, Succession Market, Programmatic Acquirer, De-SPAC