Apex Technology Acquisition Corporation

Apex Technology Acquisition Corporation

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: AvePoint

ENTERPRISE VALUE: $1.74 million
ANTICIPATED SYMBOL: AVPT

Apex Technology Acquisition Corporation (NASDAQ:APXT) announced this morning that it has entered into a definitive business combination agreement with AvePoint that would give it an enterprise value of $1,738 million, or 9.0x 2021 estimated revenue.

AvePoint is the largest data management solutions provider for the Microsoft cloud. The combined entity is expected to remain listed on the Nasdaq and be traded under the symbol “AVPT” at the transaction’s close in 1Q-2021.


TRANSACTION OVERVIEW

In addition to the approximately $352 million held in Apex’s trust account as of September 30, 2020, assuming no redemptions by Apex’s public stockholders, the combined company will benefit from $140 million in proceeds from a group of institutional investors participating in the transaction through a committed private investment (“PIPE”). The transaction, valuing the combined company at an equity value of approximately $1,738 million on a pro forma basis after giving effect to the PIPE and assuming minimal Apex stockholder redemptions, is expected to close in Q1 of 2021. Upon completion of the proposed transaction, existing AvePoint shareholders are expected to own approximately 72% of the combined company, which is expected to have approximately $252 million of cash on the balance sheet assuming no redemptions by Apex’s public stockholders.

 

 

Approximately $257 million will be going towards shareholders exiting their AvePoint investment. Net of seller cash and transaction expenses, total cash to balance sheet is expected to be $252 million. Upon completion of the proposed transaction, existing AvePoint shareholders are expected to own approximately 72.0% of the combined company while Apex shareholders, PIPE investors, and Apex’s sponsor will own 17.6%, 7.0%, and 3.3%, respectively. Sixth Street, the global investment firm which led a $200 million growth equity investment in AvePoint in 2019, will continue as a shareholder in the combined company.


PIPE

  • $140M PIPE priced at $10.00 per share – 14,000,000 shares
    • Led by Federated Kaufmann and other institutional investors

EARNOUT

  • Sponsor agreed to deposit 2,916,700 shares of Apex Common Stock into escrow and that such shares will be subject to vesting upon either happening within 7 years: (i), the closing price of Apex Common Stock is greater than or equal to $15.00 (as adjusted for share splits, share capitalization, reorganizations, recapitalizations and the like) over any 20 trading days within any 30 trading day period; or (ii) Apex consummates a change of control transaction

LOCK-UP

  • Lock-up period until 180 days after the closing for certain “Key AvePoint Stockholders”
  • Apex Technology Sponsor, Jeff Epstein, and Brad Koenig agreed (“Insider Letter Agreement”) to a 12-month lock-up after closing
    • Additionally, they cannot sell 50% of their shares until 24 months after closing

SPONSOR SHARE CANCELLATION AGREEMENT

  • No shares forfeited or cancelled by sponsor.

NOTABLE CONDITIONS TO CLOSING

  • (ix) As a condition to AvePoint’s obligations, the total cash and cash equivalents of Apex at the Effective Time, after giving effect to the Merger and the Private Placements, being no less than $300 million

NOTABLE CONDITIONS TO TERMINATION

  • (i) Mutual written consent
  • (ii) Subject to certain cure periods, by either AvePoint or Apex, as applicable, if there has been a breach of any representation, warranty, covenant or other agreement made by either party
  • (iii) By either Apex or AvePoint if the Effective Time does not occur prior to the date that is 180 days after the date of the Business Combination Agreement

ADVISORS

  • Evercore Group L.L.C. (“Evercore”) is acting as financial advisor to AvePoint.
  • Citigroup Global Markets Inc. (“Citi”), Goldman Sachs & Co. LLC (“Goldman Sachs”), Evercore and Cowen Inc. are acting as capital markets advisors to AvePoint.
  • William Blair & Company is acting as a financial advisor to Apex.
  • Cantor Fitzgerald, L.P. is acting as a capital market advisor to Apex.
  • Goldman Sachs, Citi and Evercore are acting as private placement agents to Apex.
  • Cooley LLP is acting as legal counsel to AvePoint.
  • Latham & Watkins LLP is acting as legal counsel to Apex.

 


APEX TECHNOLOGY ACQUISITION CORPORATION MANAGEMENT & BOARD


Executive Officers

Jeff Epstein, 63
Co-CEO, CFO & Secretary

Mr. Epstein has since 2011 been an operating partner with Bessemer Venture Partners, a venture capital firm, where he primarily works with chief executive and financial officers to create substantial operational improvements. From 2008 to 2011, Mr. Epstein was executive vice president and chief financial officer of Oracle Corporation (NYSE:ORCL), a global technology company. Prior to joining Oracle, he served as chief financial officer of several public and private companies, including DoubleClick (sold to Google), King World Productions (sold to CBS) and Nielsen’s Media Measurement and Information Group. Earlier in his career, he was an investment banker at The First Boston Corporation. Today Mr. Epstein leads the CFO Advisory Board at Bessemer where more than 100 portfolio company CFOs meet in person and online to help each other improve their effectiveness. Mr. Epstein specializes in marketplaces and B2B software companies and co-teaches the Lean Launchpad class at Stanford University’s Graduate School of Engineering. Within the last five years he has served on the boards of directors of Kaiser Permanente, a non-profit healthcare company, Booking Holdings (NASDAQ:BKNG), an online provider of travel services, Twilio (NYSE:TWLO), a cloud communications platform, Shutterstock (NYSE:SSTK), a stock photography and stock footage provider, and several private companies. Mr. Epstein holds an MBA from the Stanford University Graduate School of Business, and a BA from Yale College.


Brad Koenig, 60
Co-CEO and Director

Mr. Koenig co-founded and served as chief executive officer of FoodyDirect.com, an online specialty food marketplace, from 2011 until 2018 when the company was acquired by Goldbelly, Inc. Mr. Koenig has served as an independent director for Theragenics Corporation, a private medical device company serving the surgical products and prostate cancer treatment markets, since 2013 and as a director of Hercules Capital, a business development company focused on venture lending, where he serves on the Audit and Nominating and Corporate Governance Committees, since 2017. From 2009 to 2011, he was an advisor at Oak Hill Capital Management, a private equity firm. Previously, Mr.Koenig worked for over twenty years at Goldman Sachs. Mr. Koenig was the Head of Global Technology Investment Banking at Goldman Sachs from 1990 to 2005, and the Co-Head of Global Technology, Media and Telecommunications from 2002 to 2005. He started at Goldman Sachs in 1984. Mr. Koenig holds a B.A degree in Economics from Dartmouth College and M.B.A. from Harvard Business School.


 

Board of Directors

David Chao, 52
Director Nominee

Mr. Chao has since 1996 been a co-founder and general partner of the venture capital firm DCM. At DCM, he guides portfolio companies in formulating corporate and product marketing strategies, developing strong management teams and implementing domestic and international partnerships. He is also responsible for DCM’s investments in numerous public and private technology-related companies in the US, China and Japan. Mr. Chao has since 2000 been the chairman of the board of 51job (NASDAQ: JOBS), a human resources advertisement and outsourcing company in China. Mr. Chao also serves on the Advisory Board of Legend Capital in China. Mr. Chao was previously a co-founder of Japan Communications Inc. (TYO:9424), a provider of mobile data and voice communications services in Japan. Previously, he worked as a management consultant at McKinsey & Company in San Francisco, in marketing and product management at Apple Computer (NASDAQ:AAPL) and as an account executive for Recruit Co., Ltd., a Japanese provider of integrated human resources services. Mr. Chao holds a B.A. with high honors in East Asian Studies from Brown University, and an M.B.A from Stanford University.


Peter Bell, 55
Director Nominee

Mr. Bell has since 2018 been general partner of Amity Ventures, a venture capital and private equity fund. Mr. Bell has spent three decades starting, building, and investing in technology businesses. His thematic areas of focus include Machine Learning, Big Data, Cybersecurity, Internet of Things, Autonomous Logistics, Data Analytics, Cloud Computing, Personal/Mobile Commerce, FinTech, and Enterprise Software. Over the last five years he has served on the boards of several private technology companies including, most recently, Bromium, which focuses on virtual hardware seeking to reduce or eliminate endpoint computer threats like viruses, malware, and adware, LevelUp, an ordering, payments and loyalty experiences provider for restaurants, Turbonomic, an enterprise software company, WePay, an integrated payments provider affiliated with Chase bank, Qumulo, Inc., a hybrid cloud storage provider, GameClosure, a maker of messenger games and HTML 5 apps, and ENJOY, a provider of same day technology delivery and setup services. Mr. Bell began his career at Price Waterhouse in Boston. In 1986, he joined, EMC Corporation (now Dell EMC) an enterprise data company, and helped lead EMC initiatives in Silicon Valley. In 1998, Mr.Bell co-founded StorageNetworks, a pioneer in cloud computing. He led the company as its chief executive and completed an IPO in 2000. After stepping down in 2003, he formed his own investment firm, Stowe Capital, focusing on early stage investments in enterprise software, data center infrastructure, and consumer internet companies, where to this day he is managing director. In 2006, Mr. Bell joined Highland Capital Partners, a global venture capital firm, where he led investments in early and growth stage technology companies, eventually becoming the managing general partner of the firm. He stepped down from his day-to-dayresponsibilities at Highland in 2016 and continued to serve as a senior advisor to the firm through 2018. Mr.Bell holds a B.S. in Management from Boston College, an M.B.A. from the Harvard Business School, and an Honorary Doctorate from Babson College.


Advisors

Alex Vieux

Mr. Vieux is the chief executive officer of Herring International, a Belgian corporation. Over the last 35 years, he has worked with and engaged C-suite executives from five continents, scouting disruptive companies later embraced by the markets. Red Herring has ranked the most prominent startups in the global technology industry and featured them in its publication since 1993. Many of the Red Herring “Top 100” end up being acquired or going public. Mr. Vieux started his career at Arthur Andersen/Accenture. Then he co-founded two technology companies, C•ATS Software and Renaissance Software, both fintech startups that either went public or were sold in the 1990’s. He also founded ETRE, The European Technology Roundtable Exhibition a yearly forum assembling 800 technology world leaders. He was elected on the board of directors of Tandem Computers and Computer Associates (listed on NYSE) Checkpoint Software, Commerce One, Computer Associates and Qualys (listed on NASDAQ) as well as dozens of private companies. He serves as an advisor to Chaserg Technology Acquisition Corp. (NASDAQ: CTAC), a special purpose acquisition company searching for a target business in the technology industry. A graduate of the Institute d’Etudes Politiques and the French business school HEC, Mr. Vieux also holds a law degree from the Universite de Paris and an M.B.A. from Stanford University, where he was a Fulbright Scholar.


Steven Fletcher

Mr. Fletcher advised numerous technology companies on mergers, acquisitions and other strategic transactions in his 24 year career as an investment banker. Mr. Fletcher worked in the Investment Banking Division at Goldman Sachs for more than eight years, where he held a number of leadership roles including head of Information Technology Services banking, head of Systems and Storage banking and head of the Private Placement Group. In 2003, he helped to start a new investment bank, GCA (formerly known as Savvian LLC), which has grown to over 400 professionals. Mr. Fletcher was a member of GCA’s U.S. management committee and head of the software group and co-head of the digital media group. Mr. Fletcher has worked on transactions with companies including some of the biggest names in the technology industry as well as hundreds of growth and middle-market technology companies. He serves as an advisor to Chaserg Technology Acquisition Corp. (NASDAQ: CTAC), a special purpose acquisition company searching for a target business in the technology industry. He holds a B.A. in Economics from UCLA and an M.B.A. in Finance from The Wharton School of the University of Pennsylvania.


Ken Goldman

Mr. Goldman has served as the president of Hillspire, LLC, the family office of Eric Schmidt, former Google executive chairman, since 2018. In this role, he has been responsible for financial and administrative functions, along with real estate, aviation and maritime activities. Mr. Goldman is the former chief financial officer of Yahoo! (formerly NASDAQ:YHOO). Mr. Goldman joined Yahoo! in 2012 and throughout his five year tenure was responsible for Yahoo!’s global finance functions including financial planning and analysis, controllership, tax, treasury and investor relations. Prior to joining Yahoo! Mr. Goldman served as chief financial officer at Fortinet, Inc, (NASDAQ:FTNT) a provider of unified threat management solutions, from 2007 to 2012. Mr. Goldman also served as chief financial officer of Siebel Systems, Inc. (formerly NASDAQ:SEBL) from 2000 to 2006. During a professional career spanning over 40 years, Mr. Goldman has served as chief financial officer of multiple public and private companies and as such has helped take three companies public. In addition, his experience includes board director, audit committee chairman and financial advisory roles at more than 40 corporate boards, of which over 10 have gone public while he was a board member. Mr. Goldman currently serves on the board of directors of NXP Semiconductors N.V. (NASDAQ:NXPI), TriNet (NYSE:TNET) a cloud-based professional employer organization for small and medium-sized businesses, RingCentral (NYSE:RNG), a provider of cloud-based communications and collaboration solutions for businesses, Zuora (NYSE:ZUO), an enterprise software company that creates and provides software for businesses to launch and manage their subscription-based services, GoPro, Inc. (NASDAQ:GPRO), a manufacturer of action cameras that develops its own mobile apps and video-editing software, and the Sustainability Accounting Standards Board (SASB) Foundation. Mr. Goldman was appointed in 2015 to a three-year term to the Public Company Accounting Oversight Board’s (PCAOB’s) Standing Advisory Group (SAG). From 1999 to 2003, Mr. Goldman served on the Financial Accounting Standards Advisory Council (FASAC). Mr. Goldman holds a B.S. in Electrical Engineering from Cornell University and an M.B.A. from the Harvard Business School.