425: Live Oak V to Take Teamshares Public in $750M SPAC Deal

Live Oak Acquisition Corp. V announced a 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 (LOKV) is combining with Teamshares Inc., a tech-enabled acquirer of high-quality small-to-mid-size enterprises (SMEs), in a business combination.
• The pro forma enterprise value of Teamshares will be approximately $750 million.
• Teamshares currently owns 87 businesses and expects to generate approximately $50 million in consolidated operating EBITDA on a pro forma basis by year-end 2025.
• Teamshares generally pays 4 to 6 times EBITDA for businesses, deploying capital at unlevered returns of 15% to 20%.
• The transaction is expected to generate up to $330 million in available capital from the de-SPAC after expenses, assuming no redemptions.
• A common equity PIPE of $126 million, anchored by T. Rowe Price Investment Management, has been secured.
• Existing Teamshares shareholders are rolling their equity, and management owners have a four-year lockup, subject to 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 aims to lower its cost of capital (debt and equity) through public listing to accelerate growth.
• Teamshares has grown from $1 million of pro forma operating EBITDA in 2020 to an estimated $60 million by year-end 2025.
• Teamshares sources 70,000 small businesses annually with its software, targeting those with $500,000 to $5 million in EBITDA.
• Teamshares achieved 16% year-over-year organic EBITDA growth from its operating subsidiaries in the first half of 2025.
• The transaction is valued at approximately 11.2x 2027 pro forma EBITDA, which is presented as a meaningful discount to other recognized programmatic acquirers.

Sentiment

Score: 8

Explanation: The filing outlines a strong growth trajectory, a proven acquisition model with attractive returns, and a significant capital infusion that addresses historical growth constraints. The company has reached an EBITDA positive inflection point and has strong institutional backing. While future execution and market conditions remain factors, the overall outlook presented is highly positive for growth and value creation.

Positives

• Teamshares has a proven model for programmatically acquiring high-quality businesses, currently owning 87, with a focus on durable, non-cyclical companies.
• The company generates strong unlevered returns of 15% to 20% on capital deployed for acquisitions, with a target return on equity of 40% with reasonable leverage.
• Significant growth in pro forma operating EBITDA from $1 million in 2020 to an estimated $60 million by year-end 2025.
• Strong forecast for consolidated pro forma EBITDA: $20 million in 2025, $60 million in 2026, and $100 million in 2027.
• Achieved 16% year-over-year organic EBITDA growth from operating subsidiaries in the first half of 2025.
• The business combination provides up to $330 million in capital, alleviating historical capital availability constraints and expected to fund acquisitions for at least the next two years without additional equity raises.
• Secured a $126 million PIPE, anchored by T. Rowe Price, demonstrating institutional investor confidence.
• Management and existing shareholders are rolling equity and have a four-year lockup, aligning interests with public shareholders.
• Teamshares has reached a critical inflection point, becoming EBITDA positive on a consolidated basis, with operating leverage allowing new subsidiary earnings to drop meaningfully to the bottom line.
• The company's tech-enabled platform efficiently evaluates thousands of businesses and supports thousands of operating subsidiaries at scale, with an ability to close five or more companies in a single month.
• High success rate (86% since 2023) in hiring presidents for acquired businesses.
• The model is designed for perpetual ownership, not dependent on unrealistic growth, synergies, or multiple expansion for returns.
• A diversified mix of industries and geographies (nearly 90 companies across 40 industries and 30 states) provides resilience against market shocks.

Negatives

• Teamshares has been operating with an expensive debt facility in the private markets, resulting in a lower existing ROE of 23% on an LTM basis for all companies.
• The success of the business combination and future growth relies on the ability to lower the cost of debt significantly in the public markets.
• The company describes itself as being in 'day one' of scaling towards thousands of businesses long-term, implying significant future execution risk.
• The valuation of 11.2x 2027 pro forma EBITDA is based on future projections and the full deployment of capital, which carries inherent uncertainty.

Risks

• The occurrence of any event, change, or circumstances that could give rise to the termination of the Merger Agreement with respect to the Business Combination.
• The outcome of any legal proceedings that may be instituted against the parties following the announcement of the Business Combination and definitive agreements with respect thereto.
• The inability to complete the Business Combination, including due to failure to obtain approval of the shareholders of Teamshares and Live Oak or other conditions to Closing.
• The inability to obtain or maintain the listing of the public company's shares on Nasdaq or another national securities exchange following the Business Combination.
• The ability of Live Oak to remain current with its SEC filings.
• The risk that the Business Combination disrupts current plans and operations as a result of the announcement and consummation of the Business Combination.
• The ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, the ability of Live Oak and Teamshares after the Closing to grow and manage growth profitably and retain its key employees.
• Costs related to the Business Combination.
• Changes in applicable laws or regulations.
• The inability of Teamshares to implement business plans, forecasts, and other expectations after the completion of the Business Combination.
• The risk that additional financing in connection with the Business Combination, or additional capital needed following the Business Combination to support Teamshares business or operations, 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.
• There may be additional risks that neither Live Oak nor Teamshares presently knows, or that Live Oak and/or Teamshares currently believe are immaterial, that could cause actual results to differ from those contained in the forward-looking statements.
• Past performance by Live Oak's or Teamshares' management teams and their respective affiliates is not a guarantee of future performance.

Future Outlook

Teamshares expects to accelerate growth significantly in the coming years, primarily driven by continued investment in small business acquisitions, leveraging the capital raised from the transaction. The company forecasts consolidated pro forma EBITDA of $20 million in 2025, $60 million in 2026, and $100 million in 2027. Teamshares anticipates lowering its cost of debt meaningfully in the first few years as a public company, which will amplify its return profile. The programmatic acquisition model is expected to allow for recycling internally generated capital into highly accretive opportunities, creating a compounding growth effect without requiring additional equity raises to hit growth targets for at least the next two years.

Management Comments

• Rick Hendrix: "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."
• Rick Hendrix: "Teamshares can and will compound capital at very high rates of return for many years to come."
• Michael Brown: "This transaction isn't an exit. It's about getting Teamshares access to public company capital to properly unlock our growth potential."
• Michael Brown: "It's still day one of Teamshares as we scale toward thousands of businesses long-term."
• Michael Brown: "Our acquisition-based business model aims to drive predictable, repeatable growth and scales through our financial technology."
• Michael Brown: "Our model provides attractive and continuous capital allocation at 15% to 20% unlevered cash returns that are rare to find in most asset classes."
• Michael Brown: "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."
• Brian Gaebe: "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."
• Brian Gaebe: "Our historical governor on growth has been capital availability, which is alleviated with this transaction."

Industry Context

The announcement highlights a significant market opportunity in the U.S. small-to-mid-size enterprise (SME) succession market, driven by baby boomer retirements and a high failure rate (70%) for small businesses attempting to sell. Teamshares positions itself as a scaled, differentiated market leader addressing this pain point, targeting businesses too small for traditional private equity but too large for most individual buyers. The company's tech-enabled, programmatic acquisition model aims to institutionalize a fragmented, founder-driven asset class, contrasting with typical industry roll-ups by focusing on non-cyclical, resilient businesses and perpetual ownership.

Comparison to Industry Standards

• The transaction valuation of approximately 11.2x 2027 pro forma EBITDA is presented as a meaningful discount to other recognized programmatic acquirers.
• Comparable programmatic acquirers in Europe have generated significant growth (over 20% per year on average over the last five years) and consistently traded at relatively high EBITDA multiples.
• Teamshares believes it can outperform this group due to operating in a larger market and demonstrating a faster pace of acquisitions.

Legal Proceedings

• The outcome of any legal proceedings that may be instituted against the parties following the announcement of the Business Combination and definitive agreements with respect thereto is a potential risk.

Stakeholder Impact

• Shareholders: Live Oak shareholders will vote on the business combination and will receive important information via proxy statement/prospectus. Existing Teamshares shareholders and management are rolling their equity and subject to lockups, aligning interests with public shareholders.
• Employees: Teamshares aligns employees with company stock in acquired businesses, potentially leading to better long-term outcomes, continuity, and resilience for the companies.
• Retiring Owners: Teamshares provides a solution for retiring small business owners facing a high failure rate when trying to sell their businesses, offering a credible transaction and transition partner.
• Investment Professionals: The transaction provides a new public investment opportunity in a programmatic acquirer with a unique, tech-enabled model addressing a large market.

Next Steps

• Live Oak and Teamshares intend to file a Registration Statement with the SEC, which will include a proxy statement to Live Oak shareholders and a prospectus.
• After the Registration Statement is declared effective by the SEC, the definitive proxy statement/prospectus and other relevant documents will be mailed to the shareholders of Live Oak for voting on the Business Combination.
• Shareholders and other interested persons are advised to read these materials (including any amendments or supplements thereto) and any other relevant documents when available.
• Live Oak and Teamshares management look forward to speaking directly with many investors in the coming weeks and months.

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 transaction provides substantial capital, alleviating historical growth constraints and enabling accelerated acquisitions at attractive unlevered returns of 15-20%. The company has reached an EBITDA positive inflection point and forecasts aggressive growth, with consolidated pro forma EBITDA projected to reach $100 million by 2027. The valuation at 11.2x 2027 EBITDA is presented as a meaningful discount to comparable programmatic acquirers, suggesting significant upside potential. Strong institutional investor backing via the PIPE and management's equity roll-over and lockup demonstrate high confidence and alignment. The ability to lower the cost of capital in public markets is expected to further amplify returns, making this a strong long-term compounding story.

Keywords

SPAC, Business Combination, Acquisition, SME, Small Business, Fintech, Holding Company, EBITDA, Public Listing, Live Oak Acquisition Corp. V, Teamshares