Gavin Michael, former head of technology of Citi’s Global
Consumer Bank, joins Bakkt as CEO
Bakkt investors will roll their equity into the combined
company, with Intercontinental Exchange contributing an additional
$50 million in capital
Combined company valued at an enterprise value of approximately
$2.1 billion
Transaction accelerates Bakkt’s growth and the rollout of its
consumer application
Bakkt Holdings, LLC (“Bakkt”), the transformative digital asset
marketplace launched in 2018 by Intercontinental Exchange, Inc.
(“ICE”) and a marquee group of investors and strategic partners,
and VPC Impact Acquisition Holdings (NASDAQ: VIH) (“VIH”), a
special purpose acquisition company sponsored by Victory Park
Capital (“VPC”), today announced that they have entered into a
definitive agreement for a business combination that will result in
Bakkt becoming a publicly traded company with an enterprise value
of approximately $2.1 billion. The combined company will be renamed
Bakkt Holdings, Inc. and will be listed on the New York Stock
Exchange.
Since its founding nearly three years ago, Bakkt has been at the
forefront of new innovations enabling institutions and consumers to
buy, sell, store and spend digital assets. Bakkt’s differentiated
and disruptive platform, soon to be made widely available through
the new Bakkt App, will enable incremental consumer spending,
reduce traditional payment costs and bolster loyalty programs,
adding value for all key stakeholders within the payments and
digital assets ecosystem. In building its platform, Bakkt leveraged
ICE’s ability to create secure and regulated market infrastructure,
to make Bakkt a trusted platform for digital assets.
Leading Bakkt as CEO will be Gavin Michael, whose appointment
takes effect today. Michael, who served most recently as head of
technology for Citi’s Global Consumer Bank and led the strategic
planning, management and day-to-day operations of Citi’s global
technology organization, succeeds David Clifton, Bakkt’s interim
CEO, who will join the combined company’s Board of Directors at the
closing of the business combination. Earlier in his career, Michael
headed the digital team for Chase and served as Chief Technology
Innovation Officer at Accenture, among other roles with leading
financial services and technology firms.
“The average consumer holds a wealth of digital assets but
rarely tracks their value and lacks the tools to manage and utilize
them,” said Michael. “I’m excited to join the management team of a
company, at this important time in its expansion, whose vision is
to bring trust and transparency to digital assets through
innovation and technology and, through that process, unlock
trillions of dollars currently held in customer and loyalty
accounts and allow consumers to put them to work.”
Jeffrey C. Sprecher, Founder, Chairman and CEO of
Intercontinental Exchange, commented: “For the past 20 years, I’ve
been privileged to work with great people to bring one great
company to the public markets and watch it grow from there, and
today I’m equally proud to see another great idea born within ICE,
and shepherded by another great team, enter into a transaction that
will allow it to become publicly traded. I’m thrilled we were able
to partner with the fintech experts at VPC on this pathbreaking
deal and look forward to watching Gavin and his colleagues bring
Bakkt to the next level.”
Victory Park Capital, a global investment firm headquartered in
Chicago, has a long track record of executing debt and equity
financing transactions with some of the largest global fintech
companies. VPC Impact Acquisition Holdings completed its initial
public offering in September 2020.
“With VPC Impact Acquisition Holdings, our aim was to identify a
high-growth fintech company with competitive differentiation and
significant white space, and we are pleased to have found a great
match in Bakkt,” said John Martin, CEO of VPC Impact Acquisition
Holdings. “The company has a strong position in one of the most
well-funded and fastest growing areas of technological expansion,
as evidenced by its diversified revenue generation model and
pathway to near-term profitability. We thank Jeff, David and the
ICE team for their vision and look forward to working with Gavin
and the Bakkt team to grow its market-leading position in digital
assets.”
Bakkt currently supports more than 30 loyalty program sponsors
and over 200 gift card merchants, and Starbucks has integrated
Bakkt Cash as a payment method for customers to reload their
Starbucks Card in the Starbucks app. The Bakkt App is currently
available on an invite-only basis, with over 400,000 consumers
currently signed up for early access. Bakkt is planning for the
widespread rollout of the app in March 2021. Before it is widely
available, users from approved jurisdictions who would like early
access to the Bakkt App may download it in the App Store or Google
Play Store.
Bakkt Highlights
- Unlocking a massive market by empowering monetization and
adoption of digital assets;
- Multiple advantages fueling competitive differentiation:
digital asset-native, unrivaled cost structure and regulatory
compliance;
- Transformative consumer marketplace with internet economics via
a combination of commerce enablement, payments and markets to
create an integrated platform;
- Superior economic model with scale, growth, profitability,
diversified revenue streams and path to positive cash flow, with no
additional capital required post-financing;
- Experienced, proven management team and backed by ICE, adding
market credibility and proven success, coupled with regulatory and
industry expertise.
Key Transaction Terms
The business combination values the combined company at an
enterprise value of approximately $2.1 billion and is expected to
result in over $500 million of cash on the combined company’s
balance sheet, reflecting a contribution of up to $207 million of
cash held in VPC Impact Acquisition Holdings’ trust account and a
$325 million concurrent private placement (PIPE) of Class A common
stock of the combined company, priced at $10.00 per share,
including a $50 million contribution from ICE.
As part of the transaction, Bakkt’s existing equity holders and
management will roll 100% of their equity into the combined
company. Assuming no shareholders of VIH exercise their redemption
rights, current Bakkt equity holders will own approximately 78%,
VIH public shareholders will own approximately 8%, VPC will own
approximately 2% and PIPE investors (a group that will include ICE)
will own approximately 12% of the combined company (through an Up-C
structure described below) at closing.
In connection with the business combination, VIH will change its
jurisdiction of incorporation from the Cayman Islands to the State
of Delaware. The business combination has been structured as an
“Up-C” where former Bakkt equity owners will retain their equity
interests in Bakkt and will receive non-economic voting shares of
the combined company at closing. The combined company will also
enter into a customary tax receivable arrangement with the current
equity holders of Bakkt, which will provide for the sharing of
certain tax benefits as realized by the combined company.
The proposed business combination has been unanimously approved
by the Boards of Directors of Bakkt and VIH, is subject to approval
by VIH’s shareholders, regulatory approvals and other customary
closing conditions. The business combination is expected to close
in the second quarter of 2021.
A more detailed description of the business combination terms
and a copy of the Agreement and Plan of Merger will be included in
a current report on Form 8-K to be filed by VIH with the United
States Securities and Exchange Commission (the “SEC”). VIH will
file a registration statement (which will contain a proxy
statement/prospectus) with the SEC in connection with the business
combination.
Advisors
PJ Solomon is serving as financial advisor and Shearman &
Sterling is serving as legal advisor to Bakkt. Jefferies and
Citigroup are serving as financial and capital markets advisors to
VPC Impact Acquisition Holdings and co-placement agents on the
PIPE. Jefferies is the lead capital markets advisor to VPC Impact
Acquisition Holdings. White & Case LLP is serving as legal
advisor to VPC Impact Acquisition Holdings.
Management Presentation
The management teams of Bakkt and VPC Impact Acquisition
Holdings will host an investor call on January 11, 2021 at 10:00 am
ET to discuss the proposed business combination and review an
investor presentation. The webcast can be accessed by visiting:
https://event.on24.com/wcc/r/2959229/E600241C03A604B52F811C86F9053E76.
A replay will be available.
For materials and information, visit
https://www.bakkt.com/newsroom for Bakkt and
https://www.victoryparkcapital.com/impact-acquisition-holdings/ for
VPC Impact Acquisition Holdings.
VPC Impact Acquisition Holdings will also file the presentation
with the SEC as an exhibit to a Current Report on Form 8-K, which
can be viewed on the SEC’s website at www.sec.gov.
About Bakkt
Bakkt is a provider of institutional and retail solutions for
digital assets. Bakkt provides a mobile application enabling
consumers to unlock the value of digital assets, including
cryptocurrency, loyalty points, in-game assets, and gift cards,
while giving merchants and loyalty program sponsors deeper customer
engagement and delivering cost savings to merchants. Bakkt was
founded in 2018 by Intercontinental Exchange, Inc. and is
headquartered in Atlanta, Georgia.
About VPC Impact Acquisition Holdings
VPC Impact Acquisition Holdings’ sponsor is an affiliate of
Victory Park Capital, a global investment firm with a long track
record of executing debt and equity financing transactions with
some of the largest global Fintech companies. The firm was founded
in 2007 and is headquartered in Chicago with additional resources
in New York, Los Angeles and San Francisco. Victory Park Capital is
privately held and a Registered Investment Advisor with the
SEC.
Additional Information and Where to Find It
In connection with the proposed transaction (the “Proposed
Transaction”), VPC Impact Acquisition Holdings (“VIH”) intends to
file a registration statement on Form S-4 that will include a proxy
statement/prospectus of VIH. This press release is not a substitute
for the proxy statement/prospectus, that will be both the proxy
statement to be distributed to holders of VIH’s ordinary shares in
connection with its solicitation of proxies for the vote by VIH’s
shareholders with respect to the Proposed Transaction and other
matters as may be described in the registration statement, as well
as the prospectus relating to the offer and sale of the securities
to be issued in connection with VIH’s change in its jurisdiction of
incorporation from the Cayman Islands to the State of Delaware.
This document does not contain all the information that should be
considered concerning the Proposed Transaction and is not intended
to form the basis of any investment decision or any other decision
in respect of the Proposed Transaction. VIH’s shareholders and
other interested persons are advised to read, when available, the
preliminary proxy statement/prospectus included in the registration
statement and the amendments thereto and the definitive proxy
statement/prospectus and other documents filed in connection with
the Proposed Transaction, as these materials will contain important
information about Bakkt, VIH and the Proposed Transaction.
INVESTORS AND SECURITY HOLDERS AND OTHER INTERESTED PARTIES ARE
URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT
DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS
ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR
WILL CONTAIN IMPORTANT INFORMATION ABOUT BAKKT, VIH, THE PROPOSED
TRANSACTION AND RELATED MATTERS.
When available, the definitive proxy statement/prospectus and
other relevant materials for the Proposed Transaction will be
mailed to shareholders of VIH as of a record date to be established
for voting on the Proposed Transaction. VIH’s shareholders will
also be able to obtain copies of the preliminary proxy
statement/prospectus, the definitive proxy statement/prospectus and
other documents filed with the SEC, without charge, once available,
at the SEC’s website at www.sec.gov. These documents (when they are
available) can also be obtained free of charge from VIH upon
written request to VIH by emailing vihinfo@victoryparkcapital.com
or by directing a request to VIH’s secretary at c/o Victory Park
Capital Advisors, LLC, 150 North Riverside Plaza, Suite 5200,
Chicago, IL 60606.
No Offer or Solicitation
This communication is for informational purposes only and is not
intended to and shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy or subscribe for any securities or a solicitation of any vote
of approval, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended, and otherwise in accordance with applicable law.
Participants in Solicitation
This communication is not a solicitation of a proxy from any
investor or securityholder. However, VIH, Bakkt, ICE and certain of
their respective directors and executive officers may be deemed to
be participants in the solicitation of proxies from VIH’s
shareholders in connection with the Proposed Transaction under the
rules of the SEC. Information regarding VIH directors and executive
officers may be found in its registration statement on Form S-1,
including amendments thereto, and other reports which are filed
with the SEC. Additional information regarding the participants
will also be included in the registration statement on Form S-4
that includes the preliminary proxy statement/prospectus, when it
becomes available. When available, these documents can be obtained
free of charge from the sources indicated above.
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements include, but are not limited to, statements
about future financial and operating results, our plans,
objectives, expectations and intentions with respect to future
operations, products and services; and other statements identified
by words such as “will likely result,” “are expected to,” “will
continue,” “is anticipated,” “estimated,” “believe,” “intend,”
“plan,” “projection,” “outlook” or words of similar meaning. These
forward-looking statements include, but are not limited to,
statements regarding Bakkt’s industry and market sizes, future
opportunities for VIH, Bakkt and the combined company, VIH’s and
Bakkt’s estimated future results and the Proposed Transaction,
including the implied enterprise value, the expected transaction
and ownership structure and the likelihood and ability of the
parties to successfully consummate the Proposed Transaction. Such
forward-looking statements are based upon the current beliefs and
expectations of our management and are inherently subject to
significant business, economic and competitive uncertainties and
contingencies, many of which are difficult to predict and generally
beyond our control. Actual results and the timing of events may
differ materially from the results anticipated in these
forward-looking statements.
In addition to factors previously disclosed in VIH’s reports
filed with the SEC and those identified elsewhere in this
communication, the following factors, among others, could cause
actual results and the timing of events to differ materially from
the anticipated results or other expectations expressed in the
forward-looking statements: (i) inability to meet the closing
conditions to the Proposed Transaction, including the occurrence of
any event, change or other circumstances that could give rise to
the termination of the definitive agreement; (ii) the inability to
complete the Proposed Transaction due to the failure to obtain
approval of VIH’s shareholders or Bakkt’s members, the failure to
achieve the minimum amount of cash available following any
redemptions by VIH’s shareholders or the failure to meet the
national stock exchange’s listing standards in connection with the
consummation of the Proposed Transaction; (iii) costs related to
the Proposed Transaction; (iv) a delay or failure to realize the
expected benefits from the Proposed Transaction; (v) risks related
to disruption of management time from ongoing business operations
due to the Proposed Transaction; (vi) the impact of the ongoing
COVID-19 pandemic; (vii) changes in the markets in which Bakkt
competes, including with respect to its competitive landscape,
technology evolution or regulatory changes; (viii) changes in the
markets that Bakkt targets; (ix) risk that Bakkt may not be able to
execute its growth strategies, including identifying and executing
acquisitions; (x) risks relating to data security; and (xi) risk
that Bakkt may not be able to develop and maintain effective
internal controls. The foregoing list of factors is not exhaustive.
You should carefully consider the foregoing factors and the other
risks and uncertainties described in the “Risk Factors” section of
VIH’s final prospectus dated September 22, 2020 relating to its
initial public offering, the registration statement on Form S-4 and
proxy statement/prospectus discussed above and other documents
filed by VIH from time to time with the SEC. These filings identify
and address, or will identify and address, other important risks
and uncertainties that could cause actual events and results to
differ materially from those contained in the forward-looking
statements.
Actual results, performance or achievements may differ
materially, and potentially adversely, from any projections and
forward-looking statements and the assumptions on which those
forward-looking statements are based. There can be no assurance
that the data contained herein is reflective of future performance
to any degree. You are cautioned not to place undue reliance on
forward-looking statements as a predictor of future performance as
projected financial information and other information are based on
estimates and assumptions that are inherently subject to various
significant risks, uncertainties and other factors, many of which
are beyond our control. All information set forth herein speaks
only as of the date hereof in the case of information about VIH and
Bakkt or the date of such information in the case of information
from persons other than VIH or Bakkt, and we disclaim any intention
or obligation to update any forward-looking statements as a result
of developments occurring after the date of this communication.
Forecasts and estimates regarding Bakkt’s industry and end markets
are based on sources we believe to be reliable, however there can
be no assurance these forecasts and estimates will prove accurate
in whole or in part. Annualized, pro forma, projected and estimated
numbers are used for illustrative purpose only, are not forecasts
and may not reflect actual results.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210111005532/en/
Bakkt
Rachel Ford Rachel.Ford@Bakkt.com 770-686-7419
VPC Impact Acquisition Holdings
Julia Sahin, Edelman Julia.Sahin@edelman.com 646.301.2968
VPC Impact Acquisition (NASDAQ:VIH)
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