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FG New America Acquisition Corporation

FG New America Acquisition Corporation

Oct 19, 2020 by Roman Developer


ENTERPRISE VALUE: $909 million

FG New America Acquisition Corp. (NYSE: FGNA) proposes to combine with Opportunity Financial, LLC (“OppFi”), a consumer fintech platform created to service the 60 million US consumers that lack access to mainstream financial products.

Founded in 2009, OppFi helps consumers who are turned away by traditional providers build a better financial path. To date, OppFi has facilitated the issuance of more than 1.5 million loans. Total loan issuance is more than $2.3 billion, with more than 2.5 million customer applications for credit from OppFi, with 80% of these applications generated through mobile. OppFi uses real-time AI to drive credit decisions for 75% of applications, providing significant benefits through automation.

The business combination is expected to close by the end of the second quarter of 2021

Key Takeaways

  • OppFi addresses a vast unmet need for U.S. consumers, as nearly 60 million consumers lack access to mainstream financial products
  • AI-enabled financial services platform is scalable and mobile
  • Over 66% revenue CAGR since 2017, achieving estimated revenue of $323 million in 2020
  • Consistent profitability, with estimated Adjusted Net Income* of $53 million in 2020 and an Adjusted Net Income margin* of 17%
  • The core customer is the median U.S. consumer, earning approximately $50,000 annually, employed and has a bank account, but is often locked out of traditional mainstream financial products
  • Significant scale, facilitating more than $2.3 billion in loan issuances covering over 1.5 million loans
  • Nationally recognized and awarded for its exceptional customer service, and a net promoter score of 84, coupled with its focus on financial education
  • Meaningful opportunity to expand products and services


The transaction implies an equity valuation at closing for the combined company of approximately $800 million and is expected to be fully funded through cash in trust. The equity value represents 12.2x and 9.1x projected 2021 and 2022 Adjusted Net Income, respectively.  It is estimated that 100% of net proceeds will be used to pay cash consideration to existing equityholders of OppFi. There is no PIPE at this time.

Existing OppFi equityholders will initially retain approximately 62% ownership in the pro forma company, assuming none of FGNA’s public stockholders elect to redeem their shares in connection with the closing of the transaction. Existing OppFi equityholders will have the potential to receive additional earn-out shares over three years if certain stock price targets are met.


  • (i) the Company, the Founder Holders and certain other parties will terminate the Registration Rights Agreement, dated as of September 29, 2020, entered into by them in connection with the Company’s initial public offering,
  • (ii) the Members’ Representative will have the right to nominate five directors to the board of directors of the Company, subject to certain independence and holdings requirements,
  • (iii) the Company will provide certain registration rights for the shares of Class A Common Stock held by the Members, the Sponsor, and certain other parties, and
  • (iv) a certain Founder Holder and the Members will agree not to transfer, sell, assign or otherwise dispose of the shares of Class A Common Stock and the OppFi Units held by such Founder Holder or such Members, as applicable, for twenty-four months and nine months, respectively, following the Closing

SUBSEQUENT EVENT – 7/15/2021 8-K Link

Waiver Letter

  • On July 15, 2021, the Company, OppFi, OFS and the Members’ Representative signed a letter agreement, OppFi agreed to waive the condition to Closing set forth
    • (i) The Business Combination Agreement, which requires there to be no less than $200,000,000 of Available Closing Cash at Closing, but only to the extent that Available Closing Date Cash is not less than $83,000,000, and to revise the Investor Rights Agreement to permit the additional equity in the Company and OppFi that will be issued in lieu of cash as a result of the foregoing waiver to be excluded from the lock-up provisions of the Investor Rights Agreement.
    • (ii) Buyer, the Company, OFS and the Members’ Representative agree to revise the Company A&R LLCA and Investor Rights Agreement to provide that an aggregate of 11,600,000 Retained Company Units shall not constitute Lock-Up Shares and shall not be subject to the Lock-Up Period, including with the respect to the rights to exchange such units into Class A Shares pursuant to the Company A&R LLCA.

Sponsor Forfeiture Agreement

  • In connection with the signing of the Waiver Letter, on July 15, 2021, FG New America Investors LLC entered into a sponsor forfeiture agreement with the Company and OppFi, pursuant to which the Sponsor agreed to forfeit:
    • (i) 2,500,000 shares of the Company’s Class B common stock
    • (ii) 1,600,000 warrants to purchase shares of the Company’s Class A common stock at an exercise price of $11.50
    • (iii) 600,000 warrants to purchase shares of the Company’s Class A Common Stock at an exercise price of $15.00, held by it, immediately prior to and contingent upon the Closing.


  • Closing subject to the condition that the Company have at least $200,000,000 of Available Closing Date Cash at the Closing


  • Either party can terminate if the Closing has not occurred by the Outside Date (as defined in the Business Combination Agreement which has not yet been filed)


  • Moelis & Company is serving as exclusive financial advisor to Opportunity Financial, LLC
  • Needham & Company, ThinkEquity, a division of Fordham Financial Management, Inc., Piper Sandler & Co., and Northland Securities are serving as capital markets advisors to FG New America Acquisition Corp
  • DLA Piper LLP (US) is serving as legal advisor to Opportunity Financial, LLC
  • White & Case LLP is serving as legal advisor to FG New America Acquisition Corp


Executive Officers

Larry G. Swets, Jr., 45
Chief Executive Officer

Mr. Swets has over 25 years of experience within financial services encompassing both non-executive and executive roles. Mr. Swets founded Itasca Financial LLC, an advisory and investment firm, in 2005 and has served as its managing member since inception. Mr. Swets also founded and is also the President of Itasca Golf Managers, Inc., a management services and advisory firm focused on the real estate and hospitality industries, in August 2018. Mr. Swets has served as a director and the Chief Executive Officer of Itasca Capital Ltd. (TSXV: ICL) (formerly Kobex Capital Corp.), a publicly-traded investment firm since June 2016. In June 2020, Mr. Swets began serving as interim Chief Executive Officer of 1347 Property Insurance Holdings, Inc. (Nasdaq: PIH), which intends to operate as a diversified reinsurance, investment management and real estate holding company. Previously, he served as the Chief Executive Officer of Kingsway Financial Services Inc. (NYSE: KFS) from July 2010 to September 2018, including as its President from July 2010 to March 2017. Prior to founding Itasca Financial LLC, Mr. Swets served as an insurance company executive and advisor, including the role of director of investments and fixed income portfolio manager for Lumbermens Mutual Casualty, a/k/a Kemper Insurance. Mr. Swets began his career in insurance as an intern in the Kemper Scholar program in 1994. Mr. Swets has also served as a member of the board of directors of 1347 Property Insurance Holdings, Inc. since November 2013, Limbach Holdings, Inc. (Nasdaq: LMB), a company which provides building infrastructure services since July 2016, Insurance Income Strategies Ltd. since October 2017, Harbor Custom Development, Inc. since February 2020, Alexian Brothers Foundation since March 2018, and Unbounded Media Corporation since June 2019 Previously, he served as a member of the board of directors of Kingsway Financial Services Inc. from September 2013 to December 2018, Atlas Financial Holdings, Inc. (Nasdaq: AFH) from December 2010 to January 2018, FMG Acquisition Corp. (Nasdaq: FMGQ) from May 2007 to September 2008, United Insurance Holdings Corp. from 2008 to March 2012, and Risk Enterprise Management Ltd. from November 2007 to May 2012. He is a member of the Young Presidents’ Organization. Mr. Swets earned a Master’s Degree in Finance from DePaul University in 1999 and a Bachelor’s Degree from Valparaiso University in 1997. He also holds the Chartered Financial Analyst (CFA) designation.

D. Kyle Cerminara, 43

Mr. Cerminara has over 20 years’ experience as an institutional investor, asset manager, director, chief executive, founder and operator of multiple financial services and technology businesses. Mr. Cerminara co-founded Fundamental Global Investors, LLC, an SEC registered investment advisor that manages alternative investment funds, in 2012 and serves as its chief executive officer. Mr. Cerminara is also the co-chief investment officer of CWA Asset Management Group, LLC, a wealth advisor and multi-family office affiliated with Fundamental Global Investors, LLC, which position he has held since January 2013. Mr. Cerminara is a member of the board of directors of a number of companies focused in the reinsurance, investment management, real estate, technology and communication sectors, including BK Technologies Corporation (NYSE American: BKTI), a provider of two-way radio communications equipment, since July 2015, Ballantyne Strong, Inc. (NYSE American: BTN), a holding company with diverse business activities focused on serving the cinema, retail, financial and government markets, since February 2015, 1347 Property Insurance Holdings, Inc. (Nasdaq: PIH), which intends to operate as a diversified reinsurance, investment management and real estate holding company, since December 2016, Itasca Capital Ltd. (TSXV: ICL) (formerly Kobex Capital Corp.), a publicly-traded investment firm, since June 2016, and Firefly Systems Inc., a venture-backed digital advertising company, since August 2020. He was appointed chairman of 1347 Property Insurance Holdings, Inc. in May 2018 and served as its principal executive officer from March 2020 to June 2020. He was also appointed chairman of Itasca Capital Ltd. in June 2018. Mr. Cerminara has served as the chairman of Ballantyne Strong, Inc. since May 2015. He also previously served as its chief executive officer from November 2015 through April 2020. Mr. Cerminara was also the chairman of BK Technologies Corporation from March 2017 until April 2020. He also served on the board of directors of Limbach Holdings, Inc. (Nasdaq: LMB), a company which provides building infrastructure services, from March 2019 to March 2020; Iteris, Inc. (Nasdaq: ITI), a publicly-traded, applied informatics company, from August 2016 to November 2017; and Magnetek, Inc., a publicly-traded manufacturer, in 2015. He serves as a Trustee and President of StrongVest ETF Trust, which was an open-end management investment company that is in the process of being dissolved, since July 2016. He previously served on the board of directors of blueharbor bank, a community bank, from October 2013 to January 2020. Prior to these roles, Mr. Cerminara was a portfolio manager at Sigma Capital Management, an independent financial adviser, from 2011 to 2012, a director and sector head of the Financials Industry at Highside Capital Management from 2009 to 2011, and a portfolio manager and director at CR Intrinsic Investors from 2007 to 2009. Before joining CR Intrinsic Investors, Mr. Cerminara was a vice president, associate portfolio manager and analyst at T. Rowe Price (Nasdaq: TROW) from 2001 to 2007, where he was named amongst Institutional Investor’s Best of the Buy Side Analysts in November 2006, and an analyst at Legg Mason (NYSE: LM) from 2000 to 2001. Mr. Cerminara received an MBA degree from the Darden Graduate School of Business at the University of Virginia and a B.S. in Finance and Accounting from the Smith School of Business at the University of Maryland, where he was a member of Omicron Delta Kappa, an NCAA Academic All American and Co-Captain of the men’s varsity tennis team. He also completed a China Executive Residency at the Cheung Kong Graduate School of Business in Beijing, China. Mr. Cerminara holds the Chartered Financial Analyst (CFA) designation.

Hassan R. Baqar, 42
Chief Financial Officer

Mr. Baqar has over 20 years of experience within financial services focused on corporate development, mergers & acquisitions, capital raising, investments and real estate transactions. Mr. Baqar has served as the founder and managing member of Sequoia Financial LLC, a financial services and advisory firm, since January 2019. Mr. Baqar has also served as Chief Financial Officer of Insurance Income Strategies Ltd., a Bermuda based reinsurance company since October 2017, as a director and Chief Financial Officer of Itasca Capital Ltd. (TSXV: ICL) (formerly Kobex Capital Corp.), a publicly-traded investment firm since June 2016, as a director of Fundamental Global Reinsurance Ltd., a Cayman Islands reinsurance company since June 2020, and as a director and Chief Financial Officer of Unbounded Media Corporation since June 2019. Previously, he served as Vice President of Kingsway Financial Services Inc. (NYSE: KFS) (“Kingsway”) from January 2014 to January 2019 and as a Vice President of Kingsway’s subsidiary Kingsway America Inc. from January 2010 to January 2019. Mr. Baqar also served as Chief Financial Officer and director of 1347 Capital Corp., a special purpose acquisition company, from April 2014 to July 2016 when the company completed its initial business combination to form Limbach Holdings, Inc. (Nasdaq: LMB). Mr. Baqar served as a member of the board of directors of 1347 Property Insurance Holdings, Inc. (Nasdaq: PIH) from October 2012 to May 2015. By virtue of a management services agreement between 1347 Advisors LLC, a wholly owned subsidiary of Kingsway, and United Insurance Management, L.C., he also served as the Chief Financial Officer of United Insurance Holdings Corp. (Nasdaq: UIHC), a publicly held property and casualty insurance holding company, from August 2011 to April 2012. His previous experience also includes director of finance at Itasca Financial, LLC from 2008 to 2009 and positions held at Lumbermens Mutual Casualty, a/k/a Kemper Insurance Companies, a diversified mutual property-casualty insurance provider, from June 2000 to April 2008, where he most recently served as a senior analyst. Mr. Baqar earned a Master’s Degree in Business Administration from Northeastern Illinois University in 2009 and a Bachelor’s Degree in Accounting and Business Administration from Monmouth College in 2000. He also holds a Certified Public Accountant designation.


Board of Directors

Joseph H. Moglia, 71

Mr. Moglia is the Chairman of the Board at TD Ameritrade, Chairman of Fundamental Global Investors and Capital Wealth Advisors and Chair of Athletics and Executive Advisor to the President at Coastal Carolina University. In 1984 Mr. Moglia entered the MBA Training Program at Merrill Lynch, where there were 26 people. 25 MBA’s and 1 football coach. By 1988, he was Merrill Lynch’s Number One Producer in the World. By the time he left, he had been a member of both the Institutional and Private Client Executive Committees, and his final responsibilities were all Investment Products, the Insurance Company, the 401(k) Business and the Middle Market Business. Prior to that, he was head of Global Fixed Income Institutional Sales and ran the firm’s Municipal division. Mr. Moglia became the CEO of TD Ameritrade in 2001, and when he stepped down in 2008, shareholders had enjoyed a 500% return. In 2009 he became Chairman of the Board. TD Ameritrade just announced that they would be acquired by Charles Schwab. The combined company with synergies should be worth $100 BILLION and has client assets of? $5 TRILLION. When Mr. Moglia arrived, these numbers were $700 million and $24 Billion. He has served on the Boards of AXA Financial (2002?– 2011) and the Chicago Board Options Exchange (1997?– 2002). Mr. Moglia has also been a Football Coach for 25 years, but it’s not been a traditional 25 years. He began his career as a coach for 16 years, moved to the business world for over 20, and back to coaching in 2009. In his last 11 years of college coaching, he has been a part of 8 championship teams, and as a head coach has a winning percentage of? .718. In 2020, he was named to the 2010?–?2019 Big South Football All-Decade Team, one of 10 Coastal Carolina Chanticleers — the most by any school on the All-Decade Team. He was the fastest coach in Big South history to 30 overall wins (30-8) and 40 overall wins (40-11) and has the most FCS Playoff appearances by a head coach in Big South history. He has also received multiple Coach of the Year honors, including the Eddie Robinson National Coach of the Year award, was a recipient of the Vince Lombardi Award, and was also inducted into the Lombardi Hall of Fame. Mr. Moglia has received the Ellis Island Medal of Honor and the Sharp Trophy for Leadership. He has been honored by the National Italian American Foundation, the Columbus Citizens Foundation, the American Institute for Stuttering and the Stuttering Association for the Young. He has been inducted into seven Halls of Fame, is a member of the National Economics Society and is the recipient of three Honorary Doctorates. Mr. Moglia has already had a book written about his life, and he is the only author in the world that has written two books published on both investing and football. He earned his degree of economics from Fordham University and his masters from the University of Delaware.

Nicholas S. Rudd, 37

Mr. Rudd is a financial services executive with a broad background in capital markets, insurance and insurance technology, investing, digital product development, and sports entertainment. Mr. Rudd has spent the past five years with a deep focus on the digital economy. From September 2017 to August 2020, Mr. Rudd worked at Two Sigma Insurance Quantified (“TSIQ”), where he was most recently responsible for partnerships. During his time at TSIQ, he worked in partnerships, business operations, corporate development and business development. From February 2017 to September 2017, he was the business lead for Chubb’s Innovation Center. Mr. Rudd started his career at Banc of America Securities, the predecessor to BofA Securities, in July 2005. From BofA, Mr. Rudd moved into the sports and entertainment space, where he worked in a variety of functions for the executive leadership team of the United Football League (“UFL”) from August 2009 to April 2011. In April 2011, Mr. Rudd joined TD Ameritrade as the Chief of Staff to the Chairman, Joseph Moglia. Mr. Rudd has been a member of the board of managers of Brightline Partners, an advertising technology business since September 2016. He also serves on the board of trustees of Madison Square Boys & Girls Club, which provides after-school programming for young people ages 6 to 18 across six clubhouses (located in the Bronx, Brooklyn, and Harlem). Mr. Rudd earned his B.A. in History from Columbia University’s Columbia College, and was an inaugural member of Cornell University’s Cornell Tech MBA program.

Robert C. Weeks, 36

Mr. Weeks has a background in investing, capital markets, investment banking and financial product development. Mr. Weeks has served as Chief of Staff to the Chairman of the board at TD Ameritrade Holding Corporation (Nasdaq: AMTD) since May 2014. Mr. Weeks has also served as an advisor to a private charitable foundation, where he has responsibility for all aspects of the foundation’s endowment and charitable operations since May 2014. Previously, from February 2010 to May 2014, Mr. Weeks worked at Merrill Lynch, where he developed financial products using commodity, equity, foreign exchange and interest rate derivatives. Mr. Weeks began his career at Merrill Lynch as an investment banker focused on capital markets where he completed debt financings for companies in the technology, real estate, transportation and electric utility sectors. He also represented international financial institutions on structured note offerings. Mr. Weeks has served on the board of managers of Brightline Partners, an advertising technology business since September 2016. He has also served as a board observer at aWhere, Inc., an agronomic big data analytics company, since April 2017. He has also served on the board of directors of the Olympic Club Foundation since January 2020. Mr. Weeks earned a B.A. in Economics and M.S. in Finance from Washington University in St. Louis.