ION Acquisition Corp 2 Ltd.
PROPOSED BUSINESS COMBINATION: Innovid
ENTERPRISE VALUE: $1.3 billion
ANTICIPATED SYMBOL: CTV
ION Acquisition Corp 2 Ltd. proposes to combine with Innovid, the world’s largest independent ad delivery and measurement platform for connected TV.
Founded in 2008, Innovid is a leading independent software platform that provides critical technology infrastructure for the creation, delivery, and measurement of TV ads across CTV, mobile TV and desktop TV. As the only ad server purpose-built for TV, Innovid developed the first and still the most advanced CTV SDK on the market. Innovid’s SDK powers personalized and interactive experiences in CTV through direct integrations across over 50 apps, providing the infrastructure layer behind the advertising shown by some of the biggest names in streaming including Roku (ROKU) and Hulu.
The company has spent the past decade focused on building deep relationships across the CTV and OTT industry. Through this focus Innovid has achieved a growing list of industry firsts and key milestones including: the first and only ACR integration with Roku, the first and only buy-side ad server w/MRC certification for CTV measurement, the first and only platform delivering ads into NBCU’s Peacock, as well as serving the first and only interactive Super Bowl ad. The company has also actively worked to connect the different parts of the TV ad-tech ecosystem by launching a consortium with leading independent programmatic platforms The Trade Desk (TTD), Magnite (MGNI), and others to power advanced creative buying at scale across CTV. As the $200 billion dollar TV industry continues to shift to CTV, the company is positioned to take a leadership role in a significant and high growth market.
Additionally, over the past few years, Innovid has expanded its offering to encompass independent global ad serving, data-driven personalization, and new forms of measurement designed to connect all channels in a clean, comparable, and privacy-compliant manner. This offering gives marketers the option to consolidate CTV advertising with desktop TV, mobile TV, display, social and more, through Innovid’s proprietary omni-channel solutions. Furthermore, the open platform boasts a slew of workflows and integrations to seamlessly integrate ad delivery and optimization with preferred external providers. Of note, Innovid does not transact media and therefore has zero media buying conflicts, enabling it to work as a truly independent company across the entire advertising ecosystem.
Innovid at scale:
- Innovid serves a global client base of brands, agencies, and publishers through offices across the Americas, Europe, and Asia Pacific, delivering ads across a growing global footprint.
- Innovid currently serves over 40% of the top 200 U.S. TV advertisers, providing technology infrastructure to enable the creation, delivery, and measurement of TV ads across CTV, mobile TV and desktop TV.
- The Innovid ad serving platform grew impression delivery across CTV devices by more than 70% year-to-date 2021 over the same period in 2020.
- Named a leader in the Forrester Wave: Creative Ad Tech, Q4 2020 report, the technology powers the generation of personalized ad permutations as well as ad delivery across a footprint spanning over 75 million connected homes.
SUBSEQUENT EVENT – (LINK)
- On October 20, 2021, Innovid and ION today announced an additional $50 million private placement of common stock (“PIPE”) from a group of existing PIPE investors adding to initial commitments on the same terms as the initial PIPE financing in their recently announced business combination transaction.
- This brings the aggregate amount of PIPE commitments to $200 million.
TRANSACTION
- Innovid has entered into a definitive agreement to merge with ION Acquisition Corp. 2 Ltd., for an implied pro forma aggregate equity valuation of approximately $1.3 billion.
- The transaction is supported by approximately $150 million of PIPE financing anchored by top-tier institutional investors including Fidelity Management and Research Company LLC, Baron Capital Group, Vintage and others including funds affiliated with ION and Phoenix Insurance.
PIPE
- On October 20, 2021, Innovid and ION announced an additional $50 million private placement of common stock (“PIPE”) from a group of existing PIPE investors adding to initial commitments on the same terms as the initial PIPE financing in their recently announced business combination transaction.
- This brings the aggregate amount of PIPE commitments to $200 million.
- $150 million of PIPE financing at $10.00 per share
- Investors include Fidelity Management and Research Company LLC, Baron Capital Group, Vintage and others including funds affiliated with ION and Phoenix Insurance.
FORWARD PURCHASE
- The FPA Subscribers confirmed their intent to purchase, and ION agreed to sell to the FPA Subscribers, an aggregate of 5,0000,000 shares of ION Class A Common Stock for a purchase price of $10.00 per unit and an aggregate of $50 million.
SECONDARY SHARE PURCHASE AGREEMENTS
- At the closing, ION (the “Buyer”) will purchase and one or more Company Stockholders (the “Sellers”) will sell in accordance with the share purchase agreement (the “Purchase and Sale Agreement”) an aggregate amount of shares determined by the Company and for an aggregate purchase price determined by the Company (“Secondary Sale Amount”).
- The Secondary Sale Amount will be determined by the Company based on the amount of cash ION has on hand at the closing for the transaction minus $150,000,000; provided, however if the amount equals or is less than $150,000,000, the Secondary Sale Amount shall equal zero.
LOCK-UP
Sponsor
- The Private Placement Warrants held by the Sponsor after the Closing will be locked-up until 30 days after the date of the Closing.
- ION Class A Shares, ION Class B Shares or other equity securities of ION held by the Sponsor and the Insiders after the Closing will be locked-up until the earlier of:
- (i) the one year anniversary of the Closing date,
- (ii) the date on which the volume-weighted average price of shares of the Company equals or exceeds $12.00 per share for any twenty (20) trading days within any thirty (30) trading day period commencing at least one hundred fifty (150) days following the Closing, or
- (iii) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Company shareholders having the right to exchange their shares of the Company for cash, securities or other property (the earlier of (i), (ii), and (iii), the “Lock-Up Termination Date”).
Innovid
- The ION Domesticated Common Stock held by Innovid stockholders immediately following the First Effective Time will be locked-up for the earlier of
- (i) one hundred eighty (180) days following the Closing; or
- (ii) the Lock-Up Termination Date except that the Additional Stockholder Support Agreement provides for a lock-up period of one hundred eighty (180) days following the Closing.
NOTABLE CONDITIONS TO CLOSING
- The freely usable cash contained in ION’s trust account (after giving effect to ION shareholder redemptions and the payment of deferred underwriting commissions and taxes), together with the aggregate amount of proceeds from the PIPE Investment funded and remaining with ION (“Available Closing Cash”) equaling or exceeding $250,000,000 (“Minimum Cash Condition”)
NOTABLE CONDITIONS TO TERMINATION
- By either ION or Innovid, if the First Effective Time has not occurred by 11:59 p.m., New York City time, on December 24, 2021 (the “Termination Date”); provided, however, that if the SEC has not declared the Proxy Statement/Registration Statement effective on or prior to November 30, 2021, the Termination Date shall be automatically extended to February 24, 2022
ADVISORS
- Evercore LLC acted as sole financial and capital markets advisor to Innovid and also acted as a placement agent on the PIPE.
- Latham & Watkins LLP and FWMK Law Offices acted as legal counsel to Innovid.
- Morgan Stanley acted as sole financial advisor to ION and also acted as lead placement agent to ION on the PIPE.
- White & Case LLP and Goldfarb Seligman & Co. acted as legal counsel to ION.
- Debevoise & Plimpton LLP acted as legal counsel to the placement agents.
- Kost Forer, Gabbay & Kasierer, a member of Ernst & Young Global Limited, is acting as independent auditor.
MANAGEMENT & BOARD
Executive Officers
Gilad Shany, 44
Chief Executive Officer and Director
Since August 2020, Mr. Shany has also served as Chief Executive Officer and a director of IACA. In 2018, Mr. Shany co-founded ION Crossover Partners, an Israeli-based crossover fund, where he currently serves as the Managing Partner. Prior to co-founding ION Crossover Partners, Mr. Shany served as General Partner of Magma Venture Partners. He previously served as Vice President of Baron Capital, where he gained over 10 years of experience investing in innovative growth companies in public and private markets. He led investments with various international companies, including Tesla Inc. (NASDAQ: TSLA), Mobileye N.V. (NYSE: MBLY) (acquired by Intel Corporation (NASDAQ: INTC) $15.3BN), Mellanox Technologies (acquired by Nvidia $6.9BN), Varonis Systems Inc. (NASDAQ: VRNS), Fiverr (NYSE: FVRR), BlueVine Capital Inc. and Monday.com Ltd, among others. Prior to that Mr. Shany spent 14 years with the Israel Air Force and served as Head of Aerial Defense in the Israel Air Force from 2007 to 2008. Mr. Shany holds a B.S. in Physics, Astronomy and Philosophy from Tel Aviv University in Israel and an MBA from the Wharton School at the University of Pennsylvania in Philadelphia, Pennsylvania.
Avrom Gilbert, 47
President and Chief Operating Officer
Since August 2020, Mr. Gilbert has also served as President and Chief Operating Officer of IACA. Mr. Gilbert has over 20 years of business experience as an operational leader, startup founder and equities analyst. Since November 2020, he has served as a director of GettaCar Inc. and GettaCar Ltd. In addition, Mr. Gilbert has served as a director since January 2019 and the Chief Operating Officer since October 2018 of Coin Sciences Ltd., a blockchain technology company. Prior to joining Coin Sciences Ltd., Mr. Gilbert served as the Chief Operating Officer of Similar Web from 2015 to 2018. He previously served as the Chief Operating Officer of Seeking Alpha from November 2008 to August 2014, where he worked with the marketing, growth, business development and technology teams to help drive the growth of the company. In addition, he previously held roles as a venture capitalist and equities analyst at investment banks, including UBS and Flemings (now J.P. Morgan). Mr. Gilbert holds a B.A. in Natural Sciences from the University of Cambridge in England.
Anthony Reich, 56
Chief Financial Officer
Since August 2020, Mr. Reich has also served as Chief Financial Officer of IACA. Mr. Reich has over 30 years of finance and business development experience. He has served as the Chief Financial Officer and Compliance Officer of ION Asset Management, an Israeli-based fund manager for approximately 15 years. Prior to joining ION Asset Management, Mr. Reich served as an independent consultant in the telecommunications, hi-tech and software sectors from 2000 to 2006. He previously held several key finance and business development roles at Cable & Wireless in London and Israel from 1990 to 2000. Mr. Reich holds a Bachelor of Commerce degree, a Graduate Diploma in Accounting and an Honours degree in Information Systems from the University of Cape Town in South Africa. He is a member of the South African Institute of Chartered Accountants.
Board of Directors
Jonathan Kolber, 58
Chairman of the Board of Directors
Since August 2020, Mr. Kolber has also served as Chairman of the Board of Directors of IACA. Mr. Kolber has extensive experience across the technology ecosystem in Israel and has served as Chairman, Chief Executive Officer and Director of over 80 public and private companies in Israel and North America. Mr. Kolber currently divides his time between managing his family office in Canada and serving as a Partner and Senior Advisor of Viola Growth, a technology buyout and growth capital (an affiliate of the Viola Group which has over $3.0BN under management and where he served as a General Partner of Viola Growth from 2008 to 2018). Additionally, Mr. Kolber currently serves as the Chairman of the board of directors of ION Asset Management, an Israeli investment management group, Panaxia Pharmaceutical Industries Ltd. and Panaxia Labs Israel Ltd. (TASE: PNAX). He also sits on the board of Itamar Medical Ltd. (NASDAQ: ITMR) and Optimax Investments Ltd. (known as GlassesUSA.com), both of which are Viola Group portfolio companies, as well as on the board of Fiverr International Ltd. (NYSE: FVRR). Mr. Kolber is an active angel investor and has invested in numerous Israeli tech companies, including Eyeclick Ltd., Vi Labs, REAL Matters Inc. (TSX: REAL) and Moon Active Ltd. In 1998, Mr. Kolber became Chief Executive Officer of Koor Industries (NYSE: KOR), one of Israel’s largest conglomerates, leading multiple mergers, acquisitions and divestitures, including the sale of Telrad Networks’s public switching systems to Nortel Networks, the acquisition of multiple companies by ADAMA Ltd. (formerly known as Makhteshim-Agan Chemicals) and the sale of Elisra Electronic Systems to Elbit Systems. While Chief Executive Officer of Koor Industries, he also led the privatization of Tadiran Communications (and subsequent sales of its subsidiaries to numerous private equity and industry buyers) and the sale of its stake in Sheraton Moriah Israel Ltd. Prior to that, working with the Canadian Bronfman family, Mr. Kolber founded and managed Claridge Israel from 1986 to 1998. For many years, Claridge Israel was the largest foreign private equity firm in Israel, having made a series of highly successful investments in Teva Pharmaceutical Industries Ltd. (NYSE: TEVA), ECI Telecom Group Ltd. (NASDAQ: ECI), Osem Investments Ltd. (TASE: OSEM) and Optrotech Ltd. (NASDAQ: ORBK). Mr. Kolber holds a B.A. in Near Eastern Language and Literature from Harvard University in Cambridge, Massachusetts.
Gabriel Seligsohn, 54
Director
Since October 2020, Mr. Seligsohn has also served as a director of IACA. Mr. Seligsohn has served as a board member of Radware Ltd. (NASDAQ: RDWR) since May 2020, PubPlus since August 2019 and DSP Group, Inc. (NASDAQ: DSPG) since July 2013. In addition, Mr. Seligsohn has served as a board member of Kornit Digital Ltd. (NASDAQ: KRNT), a technology company specializing in digital printing on textiles, since March 2015. Mr. Seligsohn led Kornit’s successful IPO in 2015 while serving as Kornit’s Chief Executive Officer from April 2014 until August 2018. During his tenure, Kornit grew from a successful startup with revenues of $50MM to a highly profitable company with revenues of approximately $150MM. Prior to that, Mr. Seligsohn served as the President and Chief Executive Officer of Nova Measuring Instruments Ltd. (NASDAQ: NVMI), a designer, developer and producer of optical metrology solutions, from August 2006 to August 2014. In 2010, Mr. Seligsohn was voted Chief Executive Officer of the year by the Israeli Institute of Management for hi-tech industries in the large company category. Mr. Seligsohn holds an LL.B. from the University of Reading in England. Mr. Seligsohn is well qualified to sit on our board due to his comprehensive operational and capital markets experience in the hi-tech sector.
Rinat Gazit, 51
Director
Since October 2020, Ms. Gazit has also served as a director of IACA. Ms. Gazit has over 20 years of experience in private equity investments, mergers and acquisitions and international capital markets. Since 2015, she has served as head of mergers and acquisitions at Ormat Technologies Inc. (NYSE: ORA). While at Ormat, Ms. Gazit gained broad international experience working with large international investment groups on large cross-border transactions in the natural resources, renewable energy, water, technology and homeland security sectors. Prior to that, Ms. Gazit served as a vice president at Poalim Capital Markets from January 2008 to February 2010. Over the past 12 years, Ms. Gazit has also served as a board member for several public and private companies including Delta Galil Industries Ltd., Excellence Investment House Ltd., Melisron Ltd., Ratio Petroleum Energy Ltd., Aeronautics Ltd. and companies affiliated with the Caesarea Edmond Benjamin de Rothschild Development Asset Corp. Ms. Gazit holds an MSc. from the Coller School of Management — Leon Recanati Graduate School of Business Administration at Tel Aviv University in Israel and a B.A. in Political Science and B.A. in Sociology and Anthropology from Haifa University in Israel.
Lior Shemesh, 51
Director
Since October 2020, Mr. Shemesh has also served as a director of IACA. Mr. Shemesh has served as Chief Financial Officer at Wix since March 2013. Since July 2012, Mr. Shemesh has served as a member of the board of directors, compensation committee and financial statements committee, as well as chairman of the audit committee of Aspen Group Ltd., a real estate company traded on the Tel-Aviv Stock Exchange. From December 2010 to January 2013, he served as Chief Financial Officer at Alvarion Ltd., a provider of optimized wireless broadband solutions. From October 2008 to December 2010 he served as Alvarion’s Vice President of Finance. From May 2003 to October 2008, Mr. Shemesh served as Vice President of Finance at Veraz Networks Inc., a provider of softswitch, media gateway and digital compression solutions. Prior to this, Mr. Shemesh served as Controller, and later as Associate Vice President of Finance of the Broadband division, for ECI Telecom Ltd., a network infrastructure provider. Mr. Shemesh holds a B.A. in Accounting and Economics and an MBA from Bar-Ilan University in Israel.