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VPC Impact Acquisition Holdings

VPC Impact Acquisition Holdings

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Bakkt Holdings

ENTERPRISE VALUE: $2.1 billion
ANTICIPATED SYMBOL: BKKT

VPC Impact Acquisition Holdings proposes to combine with Bakkt Holdings, LLC, which operates a transformative digital asset marketplace launched in 2018 by Intercontinental Exchange, Inc. (“ICE”) and a marquee group of investors and strategic partners. 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 all types of digital assets.

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 succeeds David Clifton, Bakkt’s interim CEO, who will join the combined company’s Board of Directors at the closing of the business combination.

The transaction is expected to close in the second quarter of 2021.

SUBSEQUENT EVENT – 8-K Link

On September 29, 2021, VIH, Merger Sub and Bakkt entered into an amendment (the “Amendment”) to the Merger Agreement to extend the “Termination Date” under the Merger Agreement from September 30, 2021, to October 20, 2021.

TRANSACTION

The transaction values Bakkt at an enterprise value of approximately $2.092 billion.

The deal is expected to deliver up to $525 million of gross proceeds, including the contribution of up to $200 million of cash held in VIH’s trust account from its initial public offering in September 2020. [Note: the presentation shows $207M in trust, may be over-estimating the actual cash the SPAC can bring to the deal, even assuming no redemptions].

The transaction is further supported by a $325 million PIPE at $10.00 per share, which includes $50 million from Intercontinental Exchange, Inc. (“ICE”) and the remainder from other unnamed investors.

Bakkt will receive up to $475 million of net transaction proceeds after expenses. Existing shareholders will roll 100% of their equity into the new company.

PIPE

  • Investors have agreed to purchase on the closing date of the Transaction, inclusive of the Subscribed Shares, an aggregate amount of up to 32,500,000 shares of Class A Common Stock, for a $325M PIPE at $10.00 per share
    • Investors include Intercontinental Exchange, Inc. (“ICE”), subscribed for $50M
    • Remaining investors not disclosed

LOCK-UP

  • “Lock-up Periods” shall mean the Sponsor Lock-up Period, the Private Placement Lock-up Period and the Bakkt Equity Holder Lock-up Period, as the context requires it.
  • Except as permitted by Section 3.02, no Bakkt Equity Holder shall Transfer, or make a public announcement of any intention to Transfer, any Bakkt Equity Holders Lock-Up Shares during the period commencing on the Closing Date and continuing until the six (6)-month anniversary of the Closing Date

NOTABLE CONDITIONS TO CLOSING

Conditions to Bakkt’s obligations to consummate the Merger include, among others, that as of the Closing,

(i) the Domestication will have been completed, and

(ii) the amount of cash available following the extraordinary general meeting of VIH shareholders (the “Available Cash”) (x) in the trust account that holds the proceeds of VIH’s initial public offering (the “Trust Account”), after deducting the amount required to satisfy redemptions of VIH Class A Ordinary Shares, if any (but prior to payment of (a) deferred underwriting commissions and (b) transaction expenses of VIH or its affiliates), (y) outside of the Trust Account, and (z) from the gross proceeds of the PIPE Investment (as defined below), is at least $425,000,000.

NOTABLE CONDITIONS TO TERMINATION

  • If the Closing has not occurred on or before September 30, 2021.
  • On September 29, 2021, VIH, Merger Sub and Bakkt entered into an amendment (the “Amendment”) to the Merger Agreement to extend the “Termination Date” under the Merger Agreement from September 30, 2021, to October 20, 2021.

ADVISORS

  • PJ Solomon is serving as financial advisor to Bakkt.
  • 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.

 

VPC Impact Acquisition Holdings MANAGEMENT & BOARD

Executive Officers

John Martin, 60
Chairman and Chief Executive Officer

Mr. Martin maintains over thirty years of investment experience and is a Senior Partner at VPC. Martin served as managing partner and co-CEO of Antares Capital, LP, a private debt credit manager, until May 2019. He was a founding partner of the original Antares Capital in 1996, a startup business that provided acquisition financing capital to the portfolio companies of private equity firms across North America. Over the course of nine years, Antares grew to become one of the largest providers of acquisition capital to private equity sponsors in the middle market. Following the firm’s acquisition by GE Capital in 2005, Martin became President and CEO of the newly branded GE Antares Capital and helped to direct the strategic vision of the business. In addition, he presided over numerous acquisitions and divestitures, including the sale of the firm to The Canada Pension Plan Investment Board (“CPPIB”) for $12 billion in August 2015. Subsequently, Antares went on to raise more than $6.5 billion in the CLO market from a global investor base comprised of banks, pension funds, insurance companies and asset managers. Following the acquisition by CPPIB, Martin sat on the Antares Investment Committee throughout his tenure at the company and was a member of the board of directors. At the time of his retirement, the firm’s assets under management totaled more than $24 billion.

Gordon Watson, 41
President and Chief Operating Officer

Mr. Watson joined VPC in 2014 and is currently a Partner. Gordon is a member of VPC’s investment committee and helps lead our Fintech investing team. Gordon is the Investment Manager for VPC Specialty Lending Investments PLC (LSE: VSL), a VPC managed UK publicly listed investment trust focused on opportunities in the Fintech market. Previously, Gordon was a portfolio manager focused on distressed debt at GLG Partners, a London-based 31 billion multi-strategy hedge fund that concentrates on a diverse range of alternative investments. He joined GLG when it purchased Ore Hill Partners, a credit focused hedge fund where Gordon was a partner.

Olibia Stamatoglou, 41
Chief Financial Officer

Ms. Stamatoglou is the Chief Financial Officer and Chief Compliance Officer of VPC. Previously, Olibia served as vice president of finance at Valor Equity Partners where she managed firm and fund finance activities. Prior to Valor, she served as chief operating officer and chief financial officer of First National Assets, a specialty finance private equity group specializing in tax lien purchases and real estate owned ventures. She joined First National Assets from Aurora Investment Management where she progressed hrough several accounting roles. Mrs. Stamatoglou was recognized as one of Crain’s Notable Women in Finance for 2019.

 

Board of Directors

Adrienne Harris, 39 [Resigned 9/7/21]
Director

Ms. Harris is currently a Professor of the Practice and a Gates Foundation Senior Research Fellow with the Center for Finance, Law and Policy at the University of Michigan. Ms. Harris advises fintech companies, incumbent financial institutions and large venture capital firms, and currently serves on the Board of Directors of Financial Health Network, Beneficial State Bank, and Homie, Inc. From 2017 to 2019, Ms. Harris served as Chief Business Officer and General Counsel at States Title, Inc., where she currently serves as Advisor. From 2015 to 2017, Ms. Harris served as Special Assistant to the President for Economic Policy at the National Economic Council, where she spearheaded the development of the administration’s fintech strategy, chairing both the Interagency Fintech Working Group and the Administration’s Distributed Ledger Technology Task Force. From 2013 to 2015, Ms. Harris served as Senior Advisor to the Deputy Secretary at the U.S. Department of the Treasury. From 2008 to 2013, Ms. Harris was an Associate at Sullivan & Cromwell LLP. Ms. Harris received an M.B.A. from NYU Stern School of Business, a J.D. from Columbia University Law School, where she was a member of the Columbia Law Review, and a B.A. from Georgetown University, where she was a John Carrol Scholar and graduated with honors.

Kai Schmitz, 51
Director

Mr. Schmitz is currently a Partner at Amadeus Capital, where he focuses on growth stage investments in Emerging Markets, secondaries and Fintech investments. Mr. Schmitz currently serves on the Board of Directors of Koin (online point of sale financing), Minka (financial services cloud), Movii (digital bank), and RS2 (SaaS payment platform). From 2012 to 2019, Mr. Schmitz was Investment Lead Fintech and Regional Head Latin America at IFC, the World Bank’s private sector investment bank, where he was instrumental in building the Fintech portfolio to $600 million. From 2010 to 2012, Mr. Schmitz was a Senior Advisor at the World Bank’s Payment Systems Development Group, where he advised Central Banks and other government agencies on payment market infrastructure and regulation. Previously, Mr. Schmitz co-founded two companies, a remittance company in London and a financial services business with operations in the U.S. and Latin America. Mr. Schmitz has also worked at law firms in Hamburg and London. Mr. Schmitz received a J.D. equivalent from University of Hamburg and an MBA from Henley Management College in the UK.

Kurt Summers, 41
Director

Mr. Summers has twenty years of experience in both private and public sector finance. Mr. Summers is currently a Senior Advisor at both Blackstone and Ullico, where he provides insight and strategic direction around various investment opportunities and existing holdings. From 2014 to 2019, Mr. Summers served as Treasurer of the City of Chicago, where he managed the city’s more than $8 billion investment portfolio and served as a trustee or fiduciary of five local pension boards with nearly $25 billion under management. As Treasurer of Chicago, Mr. Summers and his team more than tripled the returns on the city’s portfolio, which now generates more than $100 million of incremental revenue to Chicago’s taxpayers, bondholders and other stakeholders each year. From 2012 to 2014, Mr. Summers served as Senior Vice President at Grosvenor Capital Management where he helped lead the firm’s strategy and business development efforts and served as a member of the Office of the Chairman. From 2010 to 2012, Mr. Summers served as Chief of Staff to the Cook County Board President where he was the architect of a turnaround of the second largest county in the country. From 2009 to 2010, Mr. Summers served as Managing Director at Ryan Specialty Group, an international specialty insurance organization. Mr. Summers began his career at McKinsey & Company, a preeminent global strategy-consulting firm, and also worked as an investment banker at Goldman Sachs. Mr. Summers received a BSBA in Finance and International Business with high honors from Washington University and an MBA from Harvard Business School.

ByRoman Developer