Photographer: Chuanchai Pundej / EyeEm / Getty Images
Photographer: Chuanchai Pundej / EyeEm / Getty Images
Thoma Bravo’s empty check firm has reached an agreement to take over the app software business ironSource public through a merger that values the joint venture at $ 11.1 billion.
Thoma Bravo Advantage, a special acquisitions company, or SPAC, will help finance the deal with $ 1.3 billion in new investment from a group of asset managers, including Tiger Global Management, Wellington Management and Seth Klarman’s According to a statement on Sunday, Baupost Group confirmed a Bloomberg report.
Under the agreement, ironSource shareholders will receive $ 10 billion, including $ 1.5 billion in cash and a majority stake in the combined company. IronSource is expected to have $ 740 million in cash.
Orlando Bravo, founder and managing partner of Thoma Bravo, the private equity giant behind the SPAC, will join the board of ironSource.
“As one of the fastest growing and most innovative platforms for building and scale businesses in the app economy, ironSource is well positioned for continued success as a public company,” said Bravo statement.
ironSource is unusual amid recent wave SPAC targets as it is already profitable; according to the statement, the company had earnings of $ 104 million before interest, taxes, depreciation and amortization in 2020.
The Tel Aviv-based company was founded in 2010 by eight founders and offers software used by app developers and telecommunications operators. It is expected that all the founders will remain after the agreement with Thoma Bravo Advantage and will own shares with a super vote, which according to the persons familiar with the matter, gives five-to-one ratio, who asked not to be identified be not, because the details are not public.
Trading structure
The structure of the transaction is consistent with Thoma Bravo’s private equity model.
Under Bravo, the firm built a reputation for buying cloud software companies, keeping existing management in place, and supporting them in a way more like venture capital. It is a lightweight model that goes against the traditional private equity wisdom of financial engineering to deliver better returns.
ironSource was in the advanced stages of the initial public presentation of the Roadshow when its CEO and co-founder, Tomer Bar Zeev, was introduced to Bravo in early February, people said. The two decided to continue the deal, abandoning ironSource from its IPO plans and Thoma Bravo Advantage to discuss discussions with other potential SPAC targets.
‘Despite our previous progress with a traditional scholarship, Thoma Bravo Advantage met us, and we found an alignment of the vision and were convinced of the long-term growth we can drive on ironSource, making them the perfect partner as we are taking the next step to grow our company, ”Zeev said in the statement.
In 2019, funds are managed by CVC Capital Partners acquired a minority stake in ironSource for more than $ 400 million.
Thoma Bravo Advantage raised $ 1 billion in an initial public offering in January. Bravo is the chairman of the SPAC and Robert “Tre” Sayle is the CEO.
This month, the private equity firm announced a $ 2.4 billion deal to embrace data integration and data integrity Talent SA is private and is nearly a $ 3.7 billion acquisition of Calypso Technology, a financial software industry, Bloomberg News reported.
The ironSource transaction is expected to close in the second quarter. Goldman Sachs Group Inc., Jefferies Financial Group Inc. and Citigroup Inc. advises ironSource on the transaction.
(Updates with the comments of the CEO of IronSource in the 11th paragraph.)