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G Squared Ascend I Inc.

G Squared Ascend I Inc.

Jan 20, 2021 by Kristi Marvin

The below-announced combination was terminated on 10/11/22.  It will remain on the page for reference purposes only. Once a new combination is announced it will be added to the top of the page.

PROPOSED BUSINESS COMBINATION: Transfix Inc. [Terminated 10/11/22]

ENTERPRISE VALUE: $1.054 billion
ANTICIPATED SYMBOL: TF

G Squared Ascend I, Inc. proposes to combine with Transfix Inc. (“Transfix”), a leading digital freight platform – powered by its proprietary technology, AI, and automation and underpinned with world-class operations.

  • Transfix utilizes proprietary technology, machine learning, and artificial intelligence combined with world-class operations to dynamically match thousands of freight transactions between shippers and carriers, simultaneously.
  • The capacity-focused approach brings greater predictability, revenue, and operational efficiency to truck owners & drivers which in turn drives greater access, reliability, and savings to shippers.
  • The asset-light business model has produced strong revenue growth, expanding gross margin and exceptional operating leverage.
  • Transfix grew revenues over 40% from $130 million in 2019 to $184 million in 2020 during the tumultuous impacts on freight logistics due to COVID-19

SUBSEQUENT EVENT – 6/13/22 – LINK

  • The BCA Amendment amends the Business Combination Agreement to extend the Outside Date to November 3, 2022.
  • SPAC and the Sponsor have agreed to reduce the Committed Amount by the aggregate principal amount of up to $50 million under each Note that is converted in connection with the consummation of the Proposed Transactions into shares of Surviving Corporation Common Stock and Assumed SPAC Warrants in accordance with the Amended and Restated Note Purchase Agreement.
  • The Company and G Squared Fund have agreed that the Company shall issue and sell to G Squared Fund and its affiliates up to $50 million in principal amount of subordinated convertible promissory notes of the Company, as follows:
    • (a) at an initial closing that occurred on June 8, 2022 (the “Initial Note Closing”), the Company sold and issued to G Squared Fund a Note with a principal amount of $15 million
    • (b) following the Initial Note Closing, but in no event later than June 30, 2022 (the “Second Note Closing”), the Company shall sell and issue to G Squared Fund and its affiliates an aggregate of $10 million in principal amount of Notes
    • (c) following the Second Note Closing, but in no event later than August 15, 2022 (the “Third Note Closing”), the Company shall sell and issue to G Squared Fund and its affiliates an aggregate of $12.5 million in principal amount of Notes; and
    • (d) following the Third Note Closing, but in no event later than September 30, 2022, the Company shall sell and issue to G Squared Fund and its affiliates an aggregate of $12.5 million in principal amount of Notes.
  • The Company also ame3nded the minimum cash at closing condition to increase from $150 million to $200 million.

TRANSACTION

  • The transaction implies a pro forma enterprise value for Transfix of $1.054 billion.
  • Upon the closing of the transaction, existing Transfix shareholders are expected to own approximately 69% of the combined company, with G Squared Ascend I public stockholders owning approximately 24%, G Squared Ascend I’s sponsor has agreed that 50% of its Transfix shares will be subject to forfeiture depending on post-closing share performance.
  • In addition to the $345 million cash in trust, G Squared is leading a commitment of an incremental $60 million under Forward Purchase Agreements, plus up to another $50 million under G Squared’s Forward Purchase Agreement to backstop redemptions from G Squared Ascend I’s trust.
  • Following this transaction, Transfix is expected to have approximately $375 million of cash net of transaction expenses, assuming no redemptions by G Squared Ascend I’s public stockholders to accelerate its growth initiatives.
  • In May, Transfix closed on a $50 million, (5 year) senior secured revolver/credit facility with MidCap Financial.
  • Combining the large ABL facility with the cash to the balance sheet from this transaction provides Transfix with approximately $400 million in liquidity which will be used to accelerate growth initiatives by further investing in product innovation and technology, new partnerships, geographic expansion, and strategic and targeted acquisitions.
  • Key areas of focus will include alignment of drop and backhaul, and extending the platform into Less Than Truckload, and all areas of managed transportation and logistics.

G Squared Transaction Overview

PIPE

  • There is no PIPE for this transaction.

LOCK-UP

  • Minimum one-year lock-up on shares and warrants.
  • Dilutive securities include:
    • 6.9mm public SPAC warrants
    • 7.1mm founder warrants
    • 1.2mm FPA warrants
  • All having a strike price of $11.50 per share.
    • 7.0mm founder shares with 3.6mm vesting immediately, and 1.1mm vesting at share prices $12.50, $15.00, and $17.50.

EARNOUT

  • During the six-year period following the Closing Date (the “Earnout Period”), the Surviving Corporation may issue, as additional consideration, to specified eligible holders of securities of the Company, up to an aggregate of 7,500,000 additional shares of Surviving Corporation Common Stock in the aggregate (the “Earnout Shares”).
  • Such Earnout Shares will be issued in three equal tranches, upon the satisfaction of certain price targets set forth in the Business Combination Agreement, which price targets will be based upon the daily volume-weighted average sale price of one share of Surviving Corporation Common Stock quoted on the New York Stock Exchange (the “NYSE”), or the exchange on which the shares of Surviving Corporation Common Stock are then traded, for any twenty (20) trading days within any thirty (30) consecutive trading day period within the Earnout Period.
  • All Earnout Shares not yet issued will be issued upon the occurrence of a “change of control”.
  • Earnout Shares issuable with respect to Company Options and Company RSU Awards will be issued at or as soon as practicable following the Acquisition Closing in the form of restricted Surviving Corporation Class A Common Stock, which will vest and the restrictions thereon will lapse based on the achievement of the same price targets.
  • In no event shall the specified eligible holders of securities of the Company, as of immediately prior to the Acquisition Merger Effective Time, be entitled to receive more than an aggregate of 7,500,000 Earnout Shares.

FORWARD PURCHASE AGREEMENT

  • Subsequent Event – 6/13/22 – SPAC and the Sponsor have agreed to reduce the Committed Amount by the aggregate principal amount of up to $50 million under each Note that is converted in connection with the consummation of the Proposed Transactions into shares of Surviving Corporation Common Stock and Assumed SPAC Warrants in accordance with the Amended and Restated Note Purchase Agreement.
  • The Company and G Squared Fund have agreed that the Company shall issue and sell to G Squared Fund and its affiliates up to $50 million in principal amount of subordinated convertible promissory notes of the Company, as follows:
    • (a) at an initial closing that occurred on June 8, 2022 (the “Initial Note Closing”), the Company sold and issued to G Squared Fund a Note with a principal amount of $15 million
    • (b) following the Initial Note Closing, but in no event later than June 30, 2022 (the “Second Note Closing”), the Company shall sell and issue to G Squared Fund and its affiliates an aggregate of $10 million in principal amount of Notes
    • (c) following the Second Note Closing, but in no event later than August 15, 2022 (the “Third Note Closing”), the Company shall sell and issue to G Squared Fund and its affiliates an aggregate of $12.5 million in principal amount of Notes; and
    • (d) following the Third Note Closing, but in no event later than September 30, 2022, the Company shall sell and issue to G Squared Fund and its affiliates an aggregate of $12.5 million in principal amount of Notes.
  • In addition to the $345 million cash in trust, G Squared is leading a commitment of an incremental $60 million under Forward Purchase Agreements, plus up to another $50 million under G Squared’s Forward Purchase Agreement to backstop redemptions from G Squared Ascend I’s trust.

NOTABLE CONDITIONS TO CLOSING

  • The obligations of SPAC and Merger Sub
    • Subsequent Event – 6/13/22 – The Company also ame3nded the minimum cash at the closing condition to increase from $150 million to $200 million.
    • As of the Acquisition Closing, after distribution of the funds in the Trust Account and deducting all amounts to be paid pursuant to the exercise of redemption rights of public shareholders and after giving effect to the sale of SPAC units pursuant to the Forward Purchase Agreements, SPAC having cash on hand equal to or in excess of $150,000,000 (without, for the avoidance of doubt, taking into account any transaction fees, costs and expenses paid or required to be paid in connection with the Proposed Transactions or the Forward Purchase Agreements).
  • Obligation of the Company – as of the Acquisition Closing, after distribution of the funds in the Trust Account and deducting all amounts to be paid pursuant to the exercise of redemption rights of public shareholders and after giving effect to the sale of SPAC units pursuant to the Forward Purchase Agreements, SPAC having cash on hand equal to or in excess of $200,000,000 (without, for the avoidance of doubt, taking into account any transaction fees, costs and expenses paid or required to be paid in connection with the Proposed Transactions or the Forward Purchase Agreements).

NOTABLE CONDITIONS TO TERMINATION

  • Subsequent Event – 6/13/22 – The BCA Amendment amends the Business Combination Agreement to extend the Outside Date to November 3, 2022.
  • By either party if the Acquisition Merger Effective Time has not occurred prior to May 3, 2022 (the “Outside Date”).

ADVISORS

  • J.P. Morgan Securities LLC is serving as financial advisor to Transfix.
  • Latham & Watkins LLP, O’Melveny & Myers, LLP, and McCarter & English, LLP are serving as legal counsel to Transfix.
  • UBS Securities LLC is serving as capital markets advisor to G Squared Ascend I.
  • Goodwin Procter LLP is serving as legal counsel to G Squared Ascend I.

MANAGEMENT & BOARD

Executive Officers

Ward Davis
Chief Executive Officer and Director

Mr. Davis joined G Squared in July 2019, bringing nearly three decades of public equity market research and portfolio management experience to the organization. He has led several investments at G Squared with emphasis on certain Mobility 2.0/Logistics and Online Marketplace sectors. Mr. Davis holds extensive proficiency in evaluating business plans, appraising management teams, dissecting industry competitive dynamics and scrutinizing financials of publicly traded companies across a multitude of consumer and technology sectors. Over a 26-year career as an equity analyst, portfolio manager and business founder, Mr. Davis successfully led investment management organizations and teams through a multitude of business and market cycles. Additionally, over this time he evaluated and participated in hundreds of initial public offerings. Prior to joining G Squared, Mr. Davis was the Founder and Chief Investment Officer of Caerus Investors, a hedge fund focused on the broad consumer sector that launched in 2009. From 2002 to 2009, he was the co-Founder and co-Chief Investment Officer at Trivium Capital, a hedge fund focused on technology and consumer equities. From 1998 to 2002, Mr. Davis was Managing Director at Chilton Investment Company where he headed the consumer sector team. He also served stints at Zweig DiMenna Associates and Massachusetts Financial Services as a senior equity analyst. Prior to his career in investment management, Mr. Davis spent five years at Matsushita Electric Industrial and was the first US employee working within the finance department at the company’s headquarters in Osaka, Japan. Mr. Davis holds an MBA from The Tuck School at Dartmouth College and a BA in East Asian Studies from Washington and Lee University.

Tom Hoban
Chief Financial Officer

Mr. Hoban joined G Squared in February 2020 as Chief Operating Officer after spending the prior 29 years in the hedge fund industry managing the non-investment operations of multiple firms. He brings extensive experience in operations, accounting, compliance and investor relations having built both institutional infrastructure for a number of start-up firms and run the back-office for multi-billion dollar established managers. Prior to joining G Squared, Mr. Hoban was a founding partner and the Chief Operating Officer at Aravt Global, a growth-focused long/short equity hedge fund. Prior to Aravt, from 1993 to 2013 Mr. Hoban held senior operating and finance roles for several asset management firms including Vinik Asset Management, Signpost Capital, Sursum Capital Management, PilotRock Investment Partners, Chilton Investment Company and Tudor Investments. He started his career at Ernst & Young auditing hedge funds and commodity trading firms, including Tudor and Commodities Corporation. Mr. Hoban graduated from Villanova University with a BS in Accountancy and is a registered CPA in New York State.

Board of Directors

Larry Aschebrook
Chairman

Mr. Aschebrook is the Founder and Managing Partner of G Squared. He is a member of the G Squared Executive Group and G Squared Investment Committee. Under the leadership of Mr. Aschebrook, G Squared has deployed over $2 billion in total capital since inception across several flagship funds, co-investment funds and separate managed accounts. Mr. Aschebrook has led or co-led every major investment of G Squared including but not limited to current holdings of 23andMe, Auto1, Blend, Bolt, Brex, Convoy, Coursera, Fast, Flexport, Revolut, Toast, Turo, and WeFox, as well as now notable public companies such as Asana, Dropbox, Jamf, Lemonade, Lyft, Meituan, Palantir, Peloton, Pinterest, Postmates, Snap, Spotify, Twitter and Uber among others. Having previously served on the boards of directors of numerous VC-backed businesses, Mr. Aschebrook oversees many of G Squared’s close ties to other top-tier venture funds. Prior to founding G Squared, Mr. Aschebrook owned multiple businesses and previously served as a Vice President level administrator for five large academic institutions including Arizona State University, at the time the largest university in the U.S. by student population. Mr. Aschebrook’s primary responsibility in these positions was development activity, such as raising funds from private and corporate donors. Over the course of his career, Mr. Aschebrook was responsible for overseeing hundreds of millions of dollars in grants, donations and sponsorships. He was also responsible for multi-million-dollar projects such as stadium naming rights, television and radio rights, as well as all revenue generation activities for athletics as Associate Athletic Director. During the same period, Mr. Aschebrook launched his first private investment partnership. Mr. Aschebrook earned his MBA from the W.P. Carey School of Business at Arizona State University. Additionally, he earned a MS in Athletic Administration and a B.S. from the University of Wisconsin system.

Thomas Evans
Board Member

Thomas R. Evans serves as a director of Angie’s Home Services (NAS: ANGI) and Shutterstock, (NYSE: SSTK). Previously, Mr. Evans was the President and Chief Executive Officer of Bankrate, Inc. (NYSE: RATE), an internet publisher of consumer financial content and rate information from 2004 through 2013. In 2009, Mr. Evans took Bankrate through a $580 million go-private transaction with Apax Partners. Later, he led Bankrate through a $1.5 billion initial public offering. From 1999 to 2003, Mr. Evans served as Chairman and Chief Executive Officer of Official Payments Corp. From March 1998 to June 1999, he was President and Chief Executive Officer of GeoCities Inc. Mr. Evans holds a BA from Arizona State University.

Heather Hasson
Board Member

Heather Hasson is the Co-Founder and Co-CEO of FIGS. A serial entrepreneur with a background in design and luxury fashion, Heather has brought the healthcare workwear industry into the twenty-first century with technical products and an industry-shifting distribution model. Heather was selected as an Endeavor Entrepreneur in 2015. She won the Ernst and Young Entrepreneur of the Year Award for the Greater Los Angeles Region in 2018. She was recognized as one of the 100 Most Intriguing Entrepreneurs by Goldman Sachs’ Builders and Innovators Summit in 2018 and 2019 and was named Inc. Magazine’s Top 100 Female Founders in 2019. Heather received the RxArt Foundation’s Innovation Award in 2019 and sits on the RxArt Board. Heather received her B.A. in Political Science from Wisconsin University. Ms. Hasson attended the Business School at University of Oxford and holds a B.A. in Political Science from the University of Wisconsin-Madison.

Lauri M Shanahan
Board Member

Lauri M. Shanahan serves as a director of Deckers Brands (NYSE: DECK), Treasury Wine Estates (ASX: TWE) and Cedar Fair Entertainment Company (NYSE: FUN). She currently chairs Deckers’ Governance Committee and Cedar Fair’s Compensation Committee. Ms. Shanahan has over 25 years of executive, consulting and board leadership experience across a number of global consumer businesses as well as private, high-growth companies from a diverse array of industries. Ms. Shanahan was previously EVP, Chief Administrative Officer and Chief Legal Officer of Gap Inc., where she served on the Executive Leadership Team and was involved in leading the company’s domestic and global expansion. She was recognized as one of the “40 Most Influential People” of Gap Inc. during its first 40 years. Ms. Shanahan holds a BS in Finance from the University of Colorado and a JD from UCLA.

ByKristi Marvin