Profitable and Rapidly Growing Kaleyra to List on the New
York Stock Exchange Under the Ticker Symbol “KLR”
Company to be Managed by Current Kaleyra Chief Executive
Officer Dario Calogero and the Kaleyra Leadership Team
New Board of Directors to be Chaired by Dr. Avi Katz and
Include Equal Number of Members From Both Kaleyra and the
GigCapital Board of Directors
Transaction Expected to Close in the Second Half of
2019
GigCapital, Inc., (NYSE:GIG, GIG.U, GIG.RT, and GIG.WS)
(“GigCapital”) a Technology, Media and Telecom (TMT)
Private-to-Public Equity (PPE)™ corporation, today announced that
it has entered into a definitive agreement to combine with Kaleyra
S.p.A. (“Kaleyra”), a profitable and rapidly growing CPaaS
provider.
Following the combination, assuming no redemption by the
stockholders of GigCapital, the enterprise value for Kaleyra will
be approximately $192 million, or 1.5x estimated fiscal 2019
revenue. The combined company expects to utilize the available
capital for organic and strategic growth. The transaction closing
is not conditioned on any level of redemption by the stockholders
of GigCapital or minimum cash delivered by GigCapital at
closing.
The parties expect to close the proposed transaction in the
second half of 2019.
The transaction is subject to customary closing conditions,
including regulatory and stockholder approval. Upon consummation of
the proposed transaction, the combined company will be renamed
Kaleyra, Inc. (NYSE:KLR). It is anticipated that, upon the
consummation of the transaction and in case of no redemption of the
current cash in GigCapital’s trust account, Kaleyra’s current
shareholders and employees would own approximately 33% of the
combined company’s common stock and GigCapital stockholders would
own the remaining 67%.
“GigCapital is thrilled to partner with Kaleyra, our first
transaction using the Private-to-Public Equity (PPE)™ platform
methodology, where GigCapital brings its management’s
well-recognized and decades-long technology public-market
operational and entrepreneurial expertise to enable the successful
transition of a late-stage growth technology company like Kaleyra
to a US public-market traded entity. Dario and his management team
have consistently delivered innovative technology, product
leadership, global revenue growth and profitability over the last
several years. As a public company, Kaleyra will have a stronger
capital structure and greater latitude to excel and achieve its
projected accelerated financial growth by organic and strategic
means. The combination of Kaleyra and GigCapital brings unique,
attractive and promising opportunities to all shareholders, and we
are looking forward to working in concert with all to build a new
and advanced CPaaS industry leading company,” said Dr. Avi Katz,
Founder, Executive Chairman of the Board, and Chief Executive
Officer of GigCapital.
Mr. Dario Calogero, Kaleyra’s Founder and current Chairman of
the Board and Chief Executive Officer, commented: “I am personally
very proud of this transaction. This represents a significant
milestone for Kaleyra and will fuel our next phase of growth within
the consolidating Cloud Communications for Enterprises market.
Kaleyra is well positioned in this segment as the preferred partner
for both small and medium-sized businesses (SMBs) and larger
enterprises, offering a highly secure, compliant and integrated
mobile communication platform company, supporting FinTech,
e-commerce and enterprises in the communication of transactions and
interactions with their customers worldwide. Our product portfolio
will expand further in servicing the selected industries we
address, taking advantage of the public market expertise of
GigCapital Founders, Directors and Advisors, as we merge our
expertise in technology, marketing, strategy and finance. We look
forward to working with Avi and his excellent team in this next
stage for Kaleyra as a public company.”
Kaleyra Investment Highlights
Leveraging its 20-year history of innovation, Kaleyra is a
rapidly growing cloud communications software provider delivering
secure APIs and connectivity solutions in the API/CPaaS market.
Kaleyra’s solutions include identity authentication, mobile and
voice notifications on transactions, banking services
authorizations, most notably via different integrated mobile
channels through its platform.
Software and CPaaS are disrupting the telecom services market
leading to a dramatic shift from the traditional hardware-centric
marketplace approach. Kaleyra’s scalable cloud platform is at the
forefront of this evolution with a powerful combination of products
that are secure, flexible, fully redundant and feature-rich. By
providing the complete set of communications capabilities through
converged infrastructure APIs, Kaleyra has eliminated the concerns
over incompatible hardware components and network paradigms.
Kaleyra has a highly diversified global list of more than 3,000
customers. Target markets include FinTech, e-commerce and
logistics, travel, healthcare, retail and education.
For fiscal 2018, no customer accounted for more than 10% of
Kaleyra’s total revenue. The majority of its customers span Europe,
APAC, the Middle East and Latin America. Kaleyra’s small presence
in North America is an opportunity to penetrate this large market
as it looks to aggressively drive future revenue expansion.
Kaleyra has remained profitable for 10 consecutive years. Led by
a combination of organic and acquired growth, pro forma revenue has
nearly doubled over the last three years while pro forma adjusted
EBITDA has increased by 3x during the same period. With the total
addressable CPaaS market is forecasted to increase at a 30.4% CAGR
through the end of 2022(1), Kaleyra believes that through product
enhancements and market expansion, its revenue and profitability
growth rates over the next 3 years could match those achieved in
the recent 3-year period.
(1) Sourced – 451 Research
Leadership Team
Mr. Dario Calogero will continue to serve as the Chief Executive
Officer, supported by his current management team combined with
additional public market executives, and will remain a member of
the Board of Directors to oversee and lead the operation of the
business post-transaction. Dr. Avi Katz will assume the role of
Chairman of the Kaleyra Board of Directors, which will comprise a
total of seven members. Also joining the Board will be current
GigCapital Board members Neil Miotto and John Mikulsky, and current
Kaleyra Board members Simone Fubini and Matteo Lodrini, as well as
an additional independent industry expert to be unanimously named
by the other six members of the Board.
Transaction Details
Under the terms of the definitive agreement, GigCapital will
purchase all of the ordinary shares of Kaleyra from its
shareholders. The aggregate purchase price payable at the closing
of the proposed transaction (excluding transaction expenses and
subject to certain adjustments) will consist of (a) a mix of cash,
convertible promissory notes (with conversion to be based upon the
volume weighted average price of GigCapital common stock), or both
in the aggregate amount of $15 million, and (b) between 8,616,819
and 10,181,819 shares of GigCapital common stock, with the level of
redemption by the stockholders of GigCapital being used to
determine the exact number of such shares to be issued. In
addition, the Kaleyra shareholders will be entitled to receive up
to 4,292,272 shares of GigCapital common stock as an “earn-out”
based upon the post-combination company’s revenue and adjusted
EBITDA for 2019 and 2020. The cash component of the purchase
consideration, if any, is to be funded by cash in GigCapital’s
trust account established in connection with its initial public
offering, as well as the cash held by Kaleyra as of the Closing.
GigCapital has also agreed to adopt an equity incentive plan that
it will submit to its stockholders for approval. So long as such
equity incentive plan is adopted and approved, GigCapital has
agreed to issue to certain employees of Kaleyra or its subsidiaries
1,290,909 restricted stock units.
As part of the transaction, the sponsor investors in GigCapital
have agreed to defer vesting and subject to a risk of forfeiture
between 251,686 and 2,013,504 shares of GigCapital common stock
(the “Deferred Shares”), depending upon the level of redemption by
the stockholders of GigCapital, unless and until the Kaleyra
shareholders receive the earn-out.
The transaction has been approved by the boards of directors of
both GigCapital and Kaleyra, has been signed by all of the Kaleyra
shareholders and remains subject to the satisfaction of customary
closing conditions, including regulatory approval and the approval
of GigCapital’s stockholders. It is expected to close promptly
following GigCapital’s special stockholders’ meeting to approve the
transaction, subject to any regulatory requirements, and the
sponsor investors in GigCapital have agreed to vote all of their
shares in GigCapital in favor of the transaction.
GigCapital was advised on the transaction by Cowen and Company,
LLC as financial advisors, with Crowell & Moring LLP as legal
counsel. Kaleyra was advised by Northland Capital Markets and GCA
Altium as financial advisors, with Cooley LLP and Chiomenti as
legal counsel.
The description of the transaction contained herein is only a
summary and is qualified in its entirety by reference to the
definitive agreement relating to the transaction, a copy of which
will be filed, alongside with the transaction presentation, by
GigCapital with the Securities and Exchange Commission (the “SEC”)
as an exhibit to a Current Report on Form 8-K.
Conference Call Information
At 8:00 a.m. EST on March 5, 2019, Kaleyra and GigCapital will
host a joint conference call to discuss the business combination
with the investment community. For those who wish to participate,
the domestic toll-free access number is 1-800-458-4148. The
international access number is 1-856-344-9290.
A replay of the call will also be available through March 12,
2019. To access the replay, the domestic toll-free access number is
1-844-512-2921. International callers may use 1-412-317-6671. The
conference ID number is 9067169.
SEC Filing
A Current Report on Form 8-K has been filed today with the SEC,
accompanied by this press release and a corporate presentation,
which can be accessed through the SEC’s website at www.sec.gov.
Disclaimer
This communication shall neither constitute an offer to sell or
the solicitation of an offer to buy any securities, nor shall there
be any sale of securities in any jurisdiction in which the offer,
solicitation, or sale would be unlawful prior to the registration
or qualification under the securities laws of any such
jurisdiction.
Additional Information About the Transaction and Where To
Find It
Additional information about the proposed business combination
and related transactions will be described in GigCapital’s Current
Report on Form 8-K and preliminary proxy statement relating to the
proposed business combination and the respective businesses of
GigCapital and Kaleyra, which GigCapital will file with the SEC.
The proposed business combination and related transactions will be
submitted to stockholders of GigCapital for their consideration.
GigCapital’s stockholders and other interested persons are advised
to read, once available, the preliminary proxy statement and any
amendments thereto and, once available, the definitive proxy
statement, in connection with GigCapital’s solicitation of proxies
for its special meeting of stockholders to be held to approve,
among other things, the proposed business combination and related
transactions, because these documents will contain important
information about GigCapital, Kaleyra and the proposed business
combination and related transactions. The definitive proxy
statement will be mailed to stockholders of GigCapital as of a
record date to be established for voting on the proposed business
combination and related transactions.
Stockholders may also obtain a copy of the preliminary or
definitive proxy statement, once available, as well as other
documents filed with the SEC by GigCapital, without charge, at the
SEC’s website located at www.sec.gov or by directing a
request to Tara McDonough, Vice President and Chief Financial
Officer, GigCapital, Inc., 2479 E. Bayshore Rd., Suite 200
Palo Alto, CA 94303, or by telephone at (650) 276-7040.
Participants in the Solicitation
Kaleyra, GigCapital and their respective directors and executive
officers and other persons may be deemed to be participants in the
solicitations of proxies from GigCapital’s stockholders in respect
of the proposed business combination and related transactions.
Information regarding GigCapital’s directors and executive officers
is available in its Form 10-K filed with the SEC on December
6, 2018. Additional information regarding the participants in the
proxy solicitation and a description of their direct and indirect
interests will be contained in the preliminary and definitive proxy
statements related to the proposed business combination and related
transactions when it becomes available, and which can be obtained
free of charge from the sources indicated above.
About GigCapital, Inc.
GigCapital, Inc. (NYSE: GIG, GIG.U, GIG.RT, and GIG.WS), is a
Private-to-Public Equity (PPE)™ company, (also known as a
Blank-Check or Special Purpose Acquisition Company (“SPAC”)),
sponsored by GigAcquisitions, LLC, and sole-managed by GigFounders,
LLC (www.gigfoundersglobal.com). All were founded in 2017 by Dr.
Avi Katz. The companies are led by an affiliated team of technology
industry experts, deploying its unique Mentor-Investors™
methodology to partner with exceptional privately-held technology
companies of dedicated solid entrepreneurs. The companies offer
financial, operational and executive mentoring in order to
accelerate their path from inception, privately-held entity into
the growth-stage as a publicly traded company. The partnership
continues through an organic and roll-up strategy growth post the
public offering. For more information, visit
www.gigcapitalglobal.com.
“Private-to-Public Equity (PPE)” and “Mentor-Investor” are
trademarks of GigFounders, LLC, used pursuant to agreement.
About Kaleyra
Kaleyra is a global group specializing in providing mobile
messaging services for financial institutions and multiple other
types of enterprises of all sizes. Through its proprietary
platform, Kaleyra manages multi-channel integrated communication
services on a global scale, comprising messages, push
notifications, e-mail, instant messaging, voice services and
chatbots. Kaleyra’s technology today makes it possible to manage
huge volumes of messages, with some 2 billion notifications a
month. For more information: www.kaleyra.com
Non-GAAP Financial Measure and Related Information
This communication includes reference to adjusted EBITDA, a
financial measure that is not prepared in accordance with U.S.
generally accepted accounting principles (“GAAP”). Adjusted EBITDA
is defined as of any date of calculation, the consolidated pro
forma earnings of Kaleyra and its subsidiaries, before finance
income and finance cost (including bank charges), tax, depreciation
and amortization calculated from the audited consolidated financial
statements of such party and its subsidiaries (prepared in
accordance with local GAAP), plus (i) transaction expenses of
Kaleyra and GigCapital, (ii) without duplication of clause (i),
severance or change of control payments, (iii) any expenses related
to company restructuring, (iv) any compensation expenses relating
to stock options, restricted stock units, restricted stock or
similar equity interests as may be issued by the post-combination
company or any of its subsidiaries to their employees and (v) any
provision for the write down of assets. The pro forma earnings of
Kaleyra, which is an Italian company, and its subsidiaries, which
include subsidiaries outside of the U.S., may not be prepared in
conformance with Article 11 of Regulation S-X of the SEC. Adjusted
EBITDA is being used to determine whether conditions have been
achieved that would result in the issuance of the earn-out and the
vesting of the Deferred Shares. GigCapital management believes that
this non-GAAP measure of Kaleyra’s financial results will provide
useful information to management and investors regarding certain
financial and business trends relating to Kaleyra’s anticipated
financial condition and results of operations. Investors should not
rely on any single financial measure to evaluate Kaleyra’s
anticipated business.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of U.S. federal securities laws regarding the proposed
transactions and GigCapital. Such forward-looking statements
include, but are not limited to, statements regarding the closing
of the combination and the expectations, hopes, beliefs,
intentions, plans, prospects or strategies regarding the business
combination and future business plans of the Kaleyra and GigCapital
management teams. Any statements contained herein that are not
statements of historical fact may be deemed to be forward-looking
statements. In addition, any statements that refer to projections,
forecasts or other characterizations of future events or
circumstances, including any underlying assumptions, are
forward-looking statements. The words “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intends,” “may,”
“might,” “plan,” “possible,” “potential,” “predict,” “project,”
“should,” “would” and similar expressions may identify
forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking. The forward-looking
statements contained in this press release are based on certain
assumptions and analyses made by the management of GigCapital
and/or Kaleyra in light of their respective experience and their
perception of historical trends, current conditions and expected
future developments and their potential effects on Kaleyra and
GigCapital as well as other factors they believe are appropriate in
the circumstances. There can be no assurance that future
developments affecting Kaleyra or GigCapital will be those
anticipated. These forward-looking statements involve a number of
risks, uncertainties (some of which are beyond the control of the
parties) or other assumptions that may cause actual results or
performance to be materially different from those expressed or
implied by these forward-looking statements, including that the
GigCapital stockholders will approve the transaction, the ability
of the post-combination company to meet the NYSE listing standards,
and that Kaleyra will have sufficient capital upon the approval of
the transaction to operate as anticipated. Should one or more of
these risks or uncertainties materialize, or should any of the
assumptions being made prove incorrect, actual results may vary in
material respects from those projected in these forward-looking
statements. We undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws.
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version on businesswire.com: https://www.businesswire.com/news/home/20190226005706/en/
GigCapital:Darrow Associates, Inc.Jim Fanucchi+1 (408)
404-5400ir@gigcapitalglobal.com
Kaleyra:Marco LastricoBarabino & Partners USA, LLC+1
212 308 8710m.lastrico@barabinousa.com
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