8-K: Teamshares to Go Public via Live Oak V SPAC Merger

Teamshares Inc., a tech-enabled acquiror of small-to-medium size enterprises, will list on Nasdaq through a business combination with Live Oak Acquisition Corp. V, supported by a $126 million PIPE investment.

Summary

• Live Oak Acquisition Corp. V (SPAC) has entered into a definitive merger agreement with Teamshares Inc., a tech-enabled acquiror of small-to-medium size enterprises (SMEs).
• The transaction values the combined company at a pro forma enterprise value of $746 million, based on a pre-money fully diluted equity valuation of $525 million.
• The business combination is expected to deliver up to $333 million in net proceeds, including a $126 million private placement (PIPE) of common stock at $9.20 per share, anchored by T. Rowe Price Investment Management, Inc. and other institutional investors.
• Existing Teamshares shareholders will roll 100% of their equity into the combined public company and are expected to maintain approximately 57% ownership.
• Teamshares security holders have the potential to receive up to 6,000,000 additional shares of Live Oak common stock (Earnout Shares) over a 5-year period, contingent on the stock meeting VWAP targets of $12.00, $15.00, and $20.00 per share.
• The SPAC sponsor will also allocate up to 1,700,000 founder shares to an earnout, vesting at $12.00 and $15.00 per share.
• The combined company will operate as Teamshares Inc. and is expected to be listed on Nasdaq under the ticker symbol TMS.
• A minimum cash condition of $120,000,000 is required at closing, including funds from the trust account and Transaction Financings.
• Teamshares is expected to deliver PCAOB-audited financial statements for fiscal years ended December 31, 2023, and December 31, 2024, within 30 days of the merger agreement date.

Sentiment

Score: 9

Explanation: The filing presents a highly positive outlook for the combined entity, emphasizing a large, underserved market, a scalable tech-enabled business model, strong growth projections, and significant capital infusion from the PIPE. Management alignment and an attractive entry valuation relative to peers further bolster the positive sentiment.

Positives

• The transaction is 100% primary, with net proceeds utilized to acquire new operating subsidiaries and drive compounding growth.
• Teamshares is positioned as a market leader in SME acquisitions, leveraging a scalable, tech-enabled platform for efficient sourcing, underwriting, and integration.
• The company targets durable businesses (average 35 years old) with strong cash flow conversion and significant industry/geographic diversification, mitigating single industry concentration risks.
• Management and existing shareholders are highly aligned, with Teamshares founders subjecting roll-over equity to a four-year lock-up (with early release conditions) and personally investing in the PIPE.
• The entry multiple of 11.2x 2027E Pro Forma Adjusted EBITDA is attractive compared to other programmatic acquirors, which trade at a median of 17.4x 2027E EBITDA.
• The platform's productivity is expected to scale, with a 2027 target of $3.5M+ incremental EBITDA per incremental platform-level employee hired.
• Organic EBITDA growth for companies owned over 12 months was 16% year-over-year in 1H 2025, demonstrating strong underlying business performance.
• Transaction proceeds are expected to fund acquisitions through mid-2028, with the company thereafter expected to be funded by cash flow and debt financing, accelerating its self-funding inflection point.

Negatives

• The filing does not explicitly state any 'negatives' but rather outlines 'risks' inherent in the transaction and business model.

Risks

• Live Oak may not obtain the required shareholder approval to consummate the Proposed Business Combination.
• Live Oak's sponsors, directors, and officers have potential conflicts of interest in recommending the Proposed Business Combination.
• The ability of Live Oak's public shareholders to exercise redemption rights could deplete the trust account, diminishing capital available to the combined company.
• Securities of companies formed through SPAC combinations may experience a material decline in price post-merger.
• Holders of Live Oak's founder shares may receive a positive return even if public shareholders experience a negative return.
• Due diligence may not identify all material issues or risks associated with Teamshares, its business, or industry.
• If the valuation attributed to Teamshares is not representative of its actual value, the trading price of combined company shares may suffer.
• Live Oak's shareholders will experience significant dilution from the Proposed Business Combination and related financings.
• The parties will incur significant transaction costs, which may exceed estimates and diminish available capital.
• The combined company may be subject to increased risk of securities class action litigation.
• There is no assurance the combined company will meet or comply with Nasdaq listing standards.
• Teamshares' principal revenues are expected to be earned in the future through subsidiaries, and it depends on operating companies for cash.
• Teamshares' recent growth rates may not be indicative of future growth.
• Future revenue and operating results will be harmed if Teamshares is unable to acquire new companies, retain existing companies, or expand its operating companies base.
• Revenues and profits generated through acquisition may be less than anticipated, and undisclosed liabilities of acquisition targets may exist.
• Teamshares may need to incur additional indebtedness or seek capital through new equity or debt financings to support growth.
• Failure to effectively source, acquire, and integrate companies could harm Teamshares' ability to increase its number of operating companies.
• Teamshares' acquisition cycle can be long and unpredictable, requiring considerable time and expense.
• If Teamshares is deemed an investment company under the Investment Company Act, it may face burdensome compliance requirements and restricted activities.
• A cyberattack, security breach, or other unauthorized access could disrupt business, harm reputation, or lead to significant liability.
• Teamshares relies on third-party data hosting and transmission services, and interruptions or poor service could impair platform delivery.
• Teamshares relies on third-party proprietary and open-source software, and inability to obtain licenses or errors could adversely affect the business.
• Changes to applicable tax laws and regulations or exposure to additional income tax liabilities could affect business and future profitability.

Future Outlook

Teamshares projects significant growth, driven by its programmatic acquisition model and tech-enabled platform. The company expects to generate meaningful and predictable earnings growth, with Pro Forma Adjusted Operating EBITDA forecasted to reach $155 million by 2027. Transaction proceeds are anticipated to fund acquisitions through mid-2028, after which the company expects to be self-funded by cash flow and debt financing. The public listing is seen as a strategic growth unlock, enabling faster and cheaper acquisition financing.

Management Comments

• Richard Hendrix, Chairman and CEO of LOKV, stated, 'We are proud to partner with Teamshares and look forward to supporting the Company as it accesses the public capital markets. As a tech-enabled acquiror of high-quality SMEs, Teamshares will benefit immediately from a lowered cost and more ready access to capital.'
• Hendrix also noted, 'The Teamshares business model allows them to reinvest free cash flow from their operating subsidiaries into attractively priced additional acquisitions providing a long-term compounding pathway that we believe will create tremendous shareholder value.'
• Co-founder & CEO Michael Brown commented, 'With family succession becoming rarer and not enough buyers, retiring owners face a 70% failure rate when trying to sell. Teamshares is a scalable platform that helps owners retire, businesses grow, and employees earn stock. We aim to be the permanent home for thousands of high-quality businesses going through ownership transitions.'
• Brown added, 'We are proud to partner with Live Oak and other investors to accelerate our entry in the public markets and scale as a market-defining leader.'

Industry Context

The announcement highlights a significant market opportunity in the U.S. small-to-medium enterprise (SME) sector, driven by the retirement of Baby Boomer owners. Many SME owners face challenges in selling their businesses, with a reported 70% failure rate. Teamshares positions itself as a unique, tech-enabled programmatic acquiror, differentiating from traditional private equity or individual buyers. This model allows for efficient, scaled acquisitions and integration, aiming to create a 'permanent home' for these businesses. The company's strategy aligns with the trend of consolidating fragmented industries through technology and centralized platforms, similar to other successful programmatic acquirors that have shown strong compounding annual returns.

Comparison to Industry Standards

• Teamshares' implied entry multiple of 11.2x 2027E Pro Forma Adjusted EBITDA is significantly below the median of 17.4x 2027E EBITDA for identified peer programmatic acquirors.
• Unlike many peers focused on one or two industries, Teamshares maintains a broad industry focus (over 40 industries) and geographic diversification (over 30 states) to maximize portfolio and cash flow diversification.
• Teamshares' tech-native platform for diligence, acquisition, and integration is designed for high pace, distinguishing it from more traditional acquirors.
• The company targets a 15-20% Unlevered Free Cash Flow Yield and 75-85% EBITDA to Unlevered FCF conversion, with historical results showing 30-40% of purchase price repaid at T+24 months (unlevered basis).
• Programmatic acquirors, as a group, have delivered over 20% compounding annual returns since January 2020, outperforming the S&P 500 by approximately 7% annually during this period, suggesting Teamshares operates in a high-performing segment.
• Compared to specific peers like Addtech, Indutrade, Lifco, Vitec Software Group, Constellation Software, Volaris Group, and Hexagon Composites, Teamshares' acquisition criteria (e.g., $0.5-5M EBITDA) and listing venue (Nasdaq US) are distinct, with some peers focusing on larger revenue targets or European exchanges.

Management Changes

Corporate Governance

Related Party Transactions

• The Sponsor (Live Oak Sponsor V LLC) is serving as the SPAC Representative and has entered into a Sponsor Letter Agreement, subjecting up to 1,150,000 Founder Shares to forfeiture and earnout vesting based on share price targets ($12.00 and $15.00).
• The Sponsor may also use an additional 1,150,000 Founder Shares to incentivize investors or secure non-redemption/backstop arrangements in connection with Transaction Financing.
• The Insider Letter Agreement, involving the Sponsor and Live Oak V's directors and officers, has been amended to conform lock-up terms with the Significant Company Holder Lock-Up Agreements and add Teamshares as a third-party beneficiary.
• Certain Teamshares shareholders who are expected to be affiliates of Live Oak V immediately after the Closing, along with the Sponsor and Initial PIPE Investors, will enter into an Amended and Restated Registration Rights Agreement.

Stakeholder Impact

• **Shareholders (Live Oak V Public)**: Will experience significant dilution due to the merger and related financings, but gain exposure to Teamshares' growth potential in the SME acquisition market. Their redemption rights are a key consideration.
• **Shareholders (Teamshares Existing)**: Will roll 100% of their equity into the combined public company, maintaining a significant ownership stake (approx. 57%), and have the potential for additional Earnout Shares, aligning their long-term interests with the company's performance.
• **Management (Teamshares)**: Key executives will assume leadership roles in the combined public company and are subject to a four-year lock-up on their equity, demonstrating strong commitment and alignment.
• **Employees (Teamshares & Subsidiaries)**: Will benefit from the adoption of an equity incentive plan, providing opportunities for equity and equity-based awards, fostering alignment and retention.
• **Customers & Suppliers (Teamshares Subsidiaries)**: The merger aims to provide enhanced continuity and stability for acquired businesses, potentially leading to stronger relationships and improved services.
• **PIPE Investors**: Will acquire shares at $9.20 per share, providing significant capital to the combined entity and demonstrating confidence in the transaction and Teamshares' business model.

Next Steps

• Live Oak V will file a Registration Statement on Form S-4 with the SEC, including a proxy statement and prospectus.
• The Registration Statement needs to be declared effective by the SEC.
• Live Oak V shareholders will hold an Extraordinary General Meeting to approve the Business Combination and related matters.
• Teamshares stockholders will provide the Required Company Stockholder Approval.
• The combined company's common stock will be conditionally approved for listing on Nasdaq or NYSE.
• The Domestication of Live Oak V into a Delaware corporation will be consummated.
• The transaction is expected to close in the second quarter of 2026.
• Teamshares will deliver PCAOB-audited financial statements for 2023 and 2024 to Live Oak within 30 days of the merger agreement date.

Key Dates

Recommendation

The merger of Live Oak Acquisition Corp. V with Teamshares Inc. presents a compelling 'strong buy' opportunity. Teamshares operates in a large, underserved market of small-to-medium enterprise acquisitions, driven by the demographic trend of retiring Baby Boomer owners. Its tech-enabled platform provides a scalable and efficient model for sourcing, underwriting, and integrating these businesses, leading to predictable and repeatable growth. The company demonstrates strong unit economics, with 16% Y/Y organic EBITDA growth in 1H 2025 for established companies and a target of $3.5M+ incremental EBITDA per incremental platform employee by 2027. The transaction's implied entry multiple of 11.2x 2027E Pro Forma Adjusted EBITDA is attractive, significantly below the 17.4x median of comparable programmatic acquirors, suggesting substantial valuation upside. The $126 million PIPE, anchored by a reputable institutional investor, provides ample capital to fund acquisitions through mid-2028, accelerating the path to self-sustaining growth. Furthermore, the strong alignment of management and existing shareholders, evidenced by significant equity rollovers and long-term lock-up agreements, instills confidence in the company's long-term strategy and execution.

Keywords

SPAC, Merger, Acquisition, SME, Fintech, Nasdaq Listing, Teamshares, Live Oak Acquisition Corp. V, PIPE Investment, Earnout, Programmatic Acquiror, Small Business, Corporate Governance, Risk Management