LIV Capital Acquisition Corporation
PROPOSED BUSINESS COMBINATION: AgileThought, Inc.
ENTERPRISE VALUE: $482 million
ANTICIPATED SYMBOL: AGIL
LIV Capital Acquisition Corporation proposes to combine with AgileThought, Inc., a provider of digital transformation and consulting services solutions.
AgileThought is a pure play provider of agile-first software at scale, end-to-end digital transformation and consulting services to Fortune 1000 customers with diversity across end-markets and industry verticals.
Their solution architects, developers, data scientists, engineers, transformation consultants, automation specialists, and other experts located across the United States and across Latin America deliver next-generation software solutions that accelerate the transition to digital platforms across business processes.
AgileThought Investment Highlights
- $750 billion plus digital transformation services addressable market (as per Gartner estimates for 2022) with a long runway for growth
- Pure-play digital transformation provider across the entire client lifecycle
- Unique Agile / DevOps capabilities with Americas onshore and nearshore service delivery
- Culture of excellence drives strong talent acquisition and retention
- Proven business model with solid operating margins, cash flow generation, and substantial organic and inorganic growth opportunities
TRANSACTION
- The Transaction values the combined company at a proforma enterprise value of approximately $482 million, resulting in an implied enterprise value to revenue multiple of 2.6x 2021 and 2.0x 2022 estimated revenue of $184 million and $240 million, respectively.
- The Transaction is expected to deliver approximately $124 million primary gross proceeds, including $81 million of cash held in LIVK’s trust account (assuming no redemptions in connection with the Transaction), and a fully committed $43 million investment by PIPE investors and LIV Capital at $10.00 per share. The fully committed investment will, at funding, satisfy the minimum cash requirement to close the Transaction.
- In connection with the Transaction, the lenders under AgileThought’s second lien credit facility have agreed to convert approximately $38 million of principal and accrued interest outstanding under that facility into shares of Class A common stock of the combined company immediately prior to the closing of the Transaction, subject to customary conditions.
- All Transaction proceeds, after payment of expenses related to the Transaction, will be used to repay AgileThought first lien credit facility of approximately $97 million currently outstanding, until any additional repayments would result in AgileThought’s cash, plus any LIVK working capital funds, being less than $15 million, with any proceeds remaining after those uses being available for the combined company’s general corporate purposes.
- Existing AgileThought shareholders (including the lenders under AgileThought’s convertible second lien credit facility, after giving effect to the conversion) will rollover 100% of their equity stake and will remain majority owners of the combined company with approximately 70.7% of the combined company’s issued and outstanding shares of Class A common stock at closing, assuming no public shareholders of LIVK exercise their redemption rights.
- LIVK’s public shareholders and PIPE investors will own approximately 25.2%, and LIVK’s sponsor will own approximately 4.1% of the issued and outstanding shares of Class A common stock of the combined company at closing.
PIPE
- $43 million PIPE at $10.00 per share
- Investment by PIPE investors and LIV Capital at $10.00 per share.
- The Merger Agreement also provides that LIVK may enter into additional subscription agreements pursuant to which additional PIPE Investors will agree to purchase, in the aggregate, up to an additional $2,500,000 of LIVK’s Class A Ordinary Shares (or 250,000 shares of Class A Common Stock into which such shares will convert in connection with the Domestication) at a purchase price of $10.00 per share as part of the PIPE Financing.
ADDITIONAL PIPE FINANCING – LINK
- On August 13, 2021, LIV Capital Acquisition Corp. entered into subscription agreements with certain investors pursuant to which the Additional PIPE Investors agreed to subscribe for and purchase from LIVK, and LIVK agreed to issue and sell to the Additional PIPE Investors, in the aggregate, 110,000 LIVK Class A ordinary shares into which such shares will convert in connection with the domestication contemplated by the Merger Agreement at a purchase price of $10.00 per share and $1,100,000 in the aggregate (the “Additional PIPE Financing”)
LOCK-UP
The AT Support Agreement Equityholders also each agreed to a lock-up for a period ending on the earlier of
- (a) the date that is 180 days from the Closing and
- (b) the date on which the closing price of shares of Class A Common Stock on Nasdaq equals or exceeds $12.50 per share for any 20 trading days within a 30-trading day period following 150 days following the date of the Closing
Sponsor and each of the Insiders also agreed to a lock-up for a period ending on the earlier of
- (a) the date that is 180 days from the Closing and
- (b) the date on which the closing price of shares of Class A Common Stock on Nasdaq equals or exceeds $12.50 per share for any 20 trading days within a 30-trading day period following 150 days following the date of the Closing, with respect to any securities of Surviving Pubco that they will hold as of immediately following the Closing.
SPONSOR LETTER AGREEMENT
- Sponsor and the Insiders also agreed that, in the event that the amount of Available Cash is less than $50,000,000, then up to 20% of the Sponsor Shares will be deemed to be “Deferred Sponsor Shares.”
- The Sponsor Letter Agreement also provides that, for so long as Sponsor and its affiliates and their respective permitted transferees continue to own, directly or indirectly, securities of the Surviving Pubco representing more than 4% of the combined voting power of the Surviving Pubco’s then outstanding voting securities, Sponsor will be entitled to nominate one director designee to serve on the board of directors of Surviving Pubco.
NOTABLE CONDITIONS TO CLOSING
AT’s obligations to complete the proposed business combination are contingent upon:
- (i) the amount of cash available to be released from LIVK’s trust account (after giving effect to all payments to be made as a result of the completion of any redemptions), plus
- (ii) the net amount of proceeds actually received by LIVK pursuant to the PIPE Financing, plus
- (iii) $20,000,000, representing the amount of proceeds actually received by AT from certain investment funds affiliated with LIVK’s sponsor (the “LIV Capital Funds”) pursuant to that certain Equity Contribution Agreement dated as of February 2, 2021 by and among such persons and AT (collectively, “Available Cash”) being greater than or equal to $40,000,000 (the “Minimum Cash Condition”).
- Under the Merger Agreement, if LIVK fails to meet the Minimum Cash Condition, AT may waive such Minimum Cash Condition.
NOTABLE CONDITIONS TO TERMINATION
- By either party if the Closing has not occurred on or before the date that is six (6) months from the date on which the preliminary proxy statement/prospectus contemplated to be filed by the Merger Agreement is initially filed by the parties with the SEC
ADVISORS
- EarlyBirdCapital, Inc. acted as financial and capital markets advisor to LIVK.
- Davis Polk & Wardwell LLP is serving as legal counsel to LIVK.
- William Blair is serving as capital markets advisor to AgileThought.
- Cooley LLP is serving as legal counsel to AgileThought.
MANAGEMENT & BOARD
Executive Officers
Alexander R. Rossi, 51
Chairman & Chief Executive Officer
Since 2006, Mr. Rossi has served as Managing Partner of LIV Capital Group, a leading private investment firm in Mexico. From 1996 to 2006, Mr. Rossi served as Managing Director of Communications Equity Associates, LLC (“CEA”), a merchant and investment bank specializing in the media, communications and technology sectors. Prior to joining CEA, Mr. Rossi held position at Bancomer Securities International, a Mexican Investment Bank, Smith Barney International and PaineWebber Incorporated. Mr. Rossi currently serves on the board of several Mexican companies. Mr. Rossi has an MBA from New York University’s Stern School of Business (1995) and a BA in Economics and Art History from Williams College (1990).
Alejandro Jesus Perez Alvarez, 38 (added 3/10/20), (resigned 9/30/20)
Deputy Chief Executive Officer – resigned
Mr. Perez Alvarez, 38, was a director of 414 Capital, a corporate finance advisory firm, from 2017 to 2020. From 2016 to 2017, Mr. Perez Alvarez served as a director of a representative office in Mexico of Mitsubishi UFJ Financial Group, Inc. (“MUFG”), a global financial institution. Prior to joining MUFG, from 2012 to 2015, Mr. Perez Alvarez was a director at HSBC Securities (USA) Inc., another global financial institution. Mr. Perez Alvarez has an MBA from the London Business School (2011) and a BA in Financial Administration from ITESM in Mexico City (2004).
Luis Rodrigo Clemente Gamero, 49
Chief Financial Officer
From 2016 to present, Mr. Gamero has served as Chief Financial Officer of LIV Capital. From 2014 to 2016, Mr. Gamero served as Chief Financial Officer of Grupo Diagnostico Proa, a leading medical diagnosis and clinical analysis laboratories company in Mexico. Mr. Gamero has been working in finance for 26 years and has acted as Chief Financial Officer in several industries, such as entertainment, retail, gaming, medical diagnosis and clinical analysis laboratories and private equity firms. He has also served on the board of directors and executive committees of several companies including Administradora Mexicana de Hipódromo, S. A de C. V., Impulsora de Centros de Entretenimiento las Américas, S.A.P.I. de C.V., Promociones Recreativas Mexicanas, S.A. de C.V., Calle de Entretenimiento de las Américas, S. A. de C. V., Entretenimiento Recreativo, S. A. de C. V., Entretenimiento Virtual, S. A. de C. V., Hotel de Entretenimiento de las Américas, S. A. de C. V., Centro de Convenciones las Américas, S. A. de C. V., Impulsora Recreativa de Entretenimiento AMH, S. A. de C. V., Juegamax de las Américas, S. A. de C. V., Servicios Administrativos del Hipódromo S. A. de C. V., Servicios Compartidos en Factor Humano Hipódromo S. A. de C. V., Comercializadora de Sortijuegos, S. A. de C. V. Mr. Gamero holds a CPA from Universidad de Guadalajara in Jalisco Mexico and an MBA from ITAM in Mexico City.
Board of Directors
Humberto Zesati, 51
Director
Since 2006, Mr. Zesati has served as Managing Partner of LIV Capital Group. From 1999 to 2006, Mr. Zesati served as Managing Director of Latin Idea.com, LLC, the predecessor of LIV Capital. Prior to founding Latin Idea.com, LLC, Mr. Zesati was Managing Director of Grupo Infinitti, S.A. de C.V., a Mexican real estate company focused on tourism. Mr. Zesati currently serves on the board of several Mexican companies. Mr. Zesati has an MBA from New York University’s Stern School of Business (1996) and a BA in Economics from Universidad Iberoamericana (1992).
Miguel Ángel Dávila, 54
Director
Since 2009, Mr. Dávila has served as Managing Partner of LIV Capital. Mr. Dávila founded Cinemex, the largest capitalized venture start-up in Mexican history and a leading Mexican chain of cinemas, in 1993 and served as its Chief Executive Officer until 2008. Prior to founding Cinemex, Mr. Dávila was a Business Analyst of McKinsey & Company, an American worldwide management consulting firm. Mr. Dávila currently serves on the board of several Mexican companies and Endeavor México, a not-for-profit organization leading the high-impact entrepreneurship movement around Mexico and the world. Mr. Dávila has an MBA from Harvard Business School (1993) and a CPA from Instituto Tecnológico Autónomo de México (1989).
José Antonio Solano Arroyo, 63
Director Nominee
Since January 2002, Mr. Solano has been general director and shareholder of Diseño y Gestión Empresarial S.C., a company that provides consulting services in Mexico. From January 2002 to April 2016, Mr. Solano served as director and shareholder of Recuperación Crediticia de Mexico S.C., a collection agency. From June 2000 to November 2001, Mr. Solano was the Chief Executive Officer of retail operations at Citibank, Grupo Financiero. From 1992 to May 2000, Mr. Solano acted as Chief Executive Officer of retail operations at Grupo Financiero Serfin, which provides commercial banking services and other financial services to individuals and businesses, and which was later merged into Grupo Financiero Santander Mexicano. From 1990 to 1992, Mr. Solano acted as executive director of private banking investments at Operadora de Bolsa S.A. de C.V., a securities brokerage company. As of the date hereof, Mr. Solano serves on the board of directors and executive committees of several other companies including Central de Corretajes S.A.P.I. de C.V., Industrial and Commercial Bank of China (ICBC) and Concrédito (Fin U?til, S.A. de C.V. SOFOM ENR). During his career, Mr. Solano has also served on the board of directors and executive committees of several other companies including BEPENSA S.A. de C.V., Fondo Nacional de Infraestructura, Grupo Financiero Intercam S.A., Grupo Financiero Interacciones S.A., Buró de Crédito de México SA de C.V., Total System Services de México, S.A. de C.V., Visa International México, S.A. de C.V. and Impulsora del Fondo Mexico, S.C. Mr. Solano received an MA in economics from the University of Boston in 1980, an MA in economic policy from the University of Boston in 1981, and a PhD in Economics from the University of Boston in 1982.
Carlos Alberto Rohm Campos, 47 (added 3/10/20)
Director
Mr. Rohm, 47, has been Chief Executive Officer of LCA Capital, a leading family office with ties to Mexico, since 2007. From 2004 to 2007 Mr. Rohm served as Chief Executive Officer of HSM Americas which provides business management services. Prior to joining HSM Americas, Mr. Rohm was Principal of JPMorgan Partners, a company that provides investment opportunities. From 1995 to 1997, Mr. Rohm currently was an analyst of Chase Manhattan Bank, a consumer and commercial bank. Mr. Rohm serves on the board of directors of several Mexican companies, including Grupo Aeroportuario del Pacifico (GAP), an airport operator in Mexico, and FIBRA Storage, a real estate developer that develops and manages self, storage facilities and mini warehouses. Mr. Rohm has a Bachelor’s in Business Administration from Universidad de San Andrés, Argentina (1994).
Guillermo González Guajardo, 55 (added 3/10/20)
Director
Mr. González Guajardo, 55, has been a Partner of Taller de Empresa, S.C., a not-for-profit organization dedicated to the promotion of projects in the education sector, since 2000. From 1988 to 2000, Mr. González served as Chief Executive Officer of ECE, S.A. de C.V., a corporate conglomerate of companies with business units in the restaurant and retail sectors. Prior to joining ECE, Mr. González was a money market trader of Operadora de Bolsa, S.A. de C.V., a brokerage services firm. Mr. González currently serves on the board of directors of Kimberly Clark de México, S.A.B. de C.V., the Mexican subsidiary of American corporation Kimberly-Clark. Mr. González has a Bachelor of Economics from Instituto Tecnológico Autónomo de México (1988).
Juan Marco Gutiérrez Wanless, 60 (added 3/10/20)
Director
Mr. Gutiérrez, 60, has been Managing Director of Anteris Capital, a venture lending fund since May 2015. From 2004 to 2014, Mr. Gutiérrez served as Chief Executive Officer and Chief Corporate Officer of Grupo Kuo, an industrial conglomerate of companies with business units divided in the chemical, automotive and consumer sectors. Prior to joining Grupo Kuo, Mr. Gutiérrez served as Deputy General Director of Telefónica Móviles México, S.A. de C.V. (Telefónica), which provides radiotelephone communication services. From 1998 to 2002, Mr. Gutiérrez was General Director of Pegaso PCS, a provider of two-way radiotelephone communication services. From 1997 to 1998, Mr. Gutiérrez acted as Managing Director of PROMECAP, a Mexican private equity firm. From 1992 to 1997, Mr. Gutiérrez currently served as Chief Financial Officer of Grupo Financiero Invermexico (Banco Mexicano, S.A.), a Mexican group of banking and financial institutions. From 1985 to 1991, Mr. Gutiérrez was Chief Financial Officer of Casa de Bolsa Inverlat, a brokerage services firm. As of the date hereof, Mr. Gutiérrez serves on the board of directors and executive committees of several Mexican companies, including Qualitas, S.A.B. de C.V., UNIFIN, S.A.B. de C.V. and Central de Corretajes, S.A.P.I. de C.V. Mr. Gutiérrez has Bachelor of Science degree in Mechanical Electrical Engineering from Universidad Anahuac (1981).