Mercato Partners Acquisition Corporation *
PROPOSED BUSINESS COMBINATION: Nuvini
ENTERPRISE VALUE: $312 million
ANTICIPATED SYMBOL: NVNI
Nuvni Group Limited and Mercato Partners Acquisition Corporation announced that they have entered into a business combination.
Headquartered in São Paulo, Brazil, Nuvini is the leading private serial software business acquirer in Latin America. The Nuvini Group acquires software companies within SaaS markets in Latin America. It focuses on acquiring profitable “business-to-business” SaaS companies with a consolidated business model, recurring revenue, positive cash generation and relevant growth potential. The Nuvini Group enables its acquired companies to provide mission-critical solutions to customers within its industry or sector. Its business philosophy is to invest in established companies and foster an entrepreneurial environment that would enable companies to become leaders in their respective industries. The Nuvini Group’s goal is to buy, retain and create value through long-term partnerships with the existing management of its acquired companies. To date, Nuvini Group’s portfolio of SaaS companies consists of Effecti Tecnologia Web Ltda., Leadlovers Tecnologia Ltda., Ipê Tecnologia Ltda., Dataminer Dados, Informações e Documentos Ltda., OnClick Sistemas de Informação Ltda., Simplest Software Ltda. and SmartNX Tecnologia Ltda.
SUBSEQUENT EVENT – 9/27/23 – LINK
- The PIPE Investors agreed to buy 170,000 shares of Mercato Class A common stock for $10.00 per share, giving a total of $1.7 million
SUBSEQUENT EVENT – 9/25/23 – LINK
- The PIPE Investors agreed to buy 1,110,000 shares of Mercato Class A common stock for $10.00 per share, giving a total of $11.1 million.
- At the Closing, all existing Mercato Common Stock will be exchanged for newly issued New Nuvini Ordinary Shares according to the Business Combination Agreement.
TRANSACTION
- Combined company to have an enterprise value of approximately US$312 million.
- Proposed business combination expected to provide approximately US$43 million in gross proceeds.
- All existing Nuvini shareholders are expected to roll 100% of their equity holdings into the combined company.
- Nuvini shareholders will hold approximately 70% of the issued and outstanding ordinary shares of the combined company immediately following the consummation of the transaction.
- The proposed business combination is expected to close in the third quarter of 2023.
SPAC FUNDING
- PIPE Agreement
- The PIPE Investors agreed to buy 1,110,000 shares of Mercato Class A common stock for $10.00 per share, giving a total of $11.1 million.
- At the Closing, all existing Mercato Common Stock will be exchanged for newly issued New Nuvini Ordinary Shares according to the Business Combination Agreement.
- The PIPE Investors agreed to buy 170,000 shares of Mercato Class A common stock for $10.00 per share, giving a total of $1.7 million – LINK
- The PIPE Investors agreed to buy 1,110,000 shares of Mercato Class A common stock for $10.00 per share, giving a total of $11.1 million.
LOCK-UP
- Sponsor and Company
- One year following the Closing Date or if the share price eequals or exceed $12.00/Share for any 20/30 trading days at least 150 days after the Closing Date
- If the date that is one year from the Closing Date is scheduled to be during, or within five (5) trading days prior to, a period during which trading would not be permitted under New PubCo’s insider trading policy (the “Blackout Period”), the Lock-Up Period will end ten (10) trading days prior to such Blackout Period.
- The Sponsor Support Agreement also provides that up to fifty percent (50%) of the Lock-Up Shares may be sold prior to the end of 2023 to the extent a holder of Lock-Up Shares determines in good faith that such sale will provide such holder with net proceeds sufficient for such holder to cover any tax liabilities (including estimated tax liabilities) arising in connection with the transactions contemplated by the Business Combination Agreement.
NOTABLE CONDITIONS TO CLOSING
- SPAC having at least $10,000,000 in SPAC Cash, defined as an amount equal to
- (a) the aggregate amount of cash contained in the Trust Account immediately prior to the Closing, plus
- (b) the aggregate amount of any cash of SPAC on hand immediately prior to the Closing, less
- (c) the Aggregate SPAC Stockholder Redemption Payments Amount, less
- (d) the aggregate amount of any amounts payable from the Trust Account as repayment of Working Capital Loans, reimbursement of expenses to directors, officers and shareholders of SPAC and any other Indebtedness of SPAC, if any, plus
- (e) the net amount of proceeds actually contributed by investors pursuant to the PIPE Investments in accordance with the terms and conditions of the PIPE Subscription Agreements, less
- (f) the aggregate amount of the Outstanding SPAC Transaction Expenses (but, in each case, excluding any Taxes required to be paid by SPAC in respect of the SPAC Extension Redemptions or the SPAC Stockholder Redemptions pursuant to the Inflation Reduction Act of 2022
NOTABLE CONDITIONS TO TERMINATION
- By either SPAC or Nuvini if the Merger has not occurred by July 8, 2023
ADVISORS
- Maxim Group LLC acted as exclusive financial advisor to Mercato in connection with the business combination.
- Latham & Watkins LLP served as Mercato’s U.S. legal counsel.
- Machado Meyer served as Mercato’s Brazilian legal counsel.
- Maples and Calder (Cayman) LLP served as Mercato’s Cayman legal counsel.
- Mayer Brown LLP advised the Nuvini Group as their U.S. legal counsel.
- Tauil & Chequer Advogados, an affiliate of Mayer Brown LLP, as Nuvini’s Brazilian legal counsel.
- Carey Olsen Cayman Limited, as Nuvini’s Cayman legal counsel.
EXTENSION – 2/8/23 – LINK
- The extension was approved and the time to complete a business combination was extended until July 8, 2023.
- After July 8, the company can extend month by month x5.
- 18,699,637 shares were redeemed.
LETTER OF INTENT – 1/10/23 – LINK
- The SPAC today announced that it has entered a non-binding letter of intent (“LOI”) for a business combination with Nuvini.
- They acquire and manages a portfolio of high-growth software-as-a-service companies.
MANAGEMENT & BOARD
Executive Officers
Greg Warnock, 61
Chief Executive Officer, Chair of the Board
Dr. Warnock brings public company experience, private equity investment, fund management and operational experience as well as his association with Mercato, where he serves as co-founder and managing director. His operating experience spans technology, consumer and biotechnology businesses. Dr. Warnock has sourced 32 Traverse investments and 14 other investments through his Mercato Partners practice, including Skullcandy, Fusion-io, Inc., Cradlepoint, Inc. and Galileo, Inc., and currently serves on the board of Stance Inc., a privately held branded consumer goods company. Prior to Mercato, Dr. Warnock was a co-founder of vSpring Capital, a regional investment firm targeting both early and growth-stage companies. As lead managing director, he assembled the team, secured a Small Business Investment Company license, developed and documented the investment practice and oversaw the administration of the firm. He led the investment committee and participated in over 50 financings in 32 companies. Previously, as an individual investor, Dr. Warnock financed over 30 small businesses, was principal in more than 20 merger and acquisition transactions and launched and operated several businesses. Including a handful of other investment firms and practices, his investing experience has funded and benefited over 150 different companies. Dr. Warnock received a B.S. in Computer Science and a Master of Human Resource Management from the University of Utah. Dr. Warnock completed a Ph.D. in Entrepreneurship and Venture Finance at the University of Utah’s David Eccles School of Business.
Scott Klossner, 64
Chief Financial Officer and Secretary
DMr. Klossner brings over 35 years of financial and operational experience to the team. His experience spans public offerings, private placements, Sarbanes-Oxley compliance, mergers and acquisitions, institutional negotiations, strategic growth and planning, productivity enhancement and team building. He previously served as chief financial officer of Kount Inc., an industry-leading digital fraud protection software-as-a-service company, which was recently acquired by Equifax Inc. (NYSE: EFX) in February 2021. Prior to Kount, Mr. Klossner served as chief financial officer for several fast-growth companies, including online retailer Backcountry.com, which was acquired in 2007 by Liberty Media Corporation (NASDAQ: LSXMB) for $120 million. During his tenure at Backcountry.com, the company’s revenue grew from $27 million in 2005 to over $325 million in 2012. Mr. Klossner received his B.S. in finance from the University of Utah and an MBA from the University of Southern California.
Board of Directors
Greg Butterfield, 61
Director
He currently serves as the chairman, chief executive officer and co-founder of Lumio, Inc., a U.S. residential solar provider. Mr. Butterfield brings over 25 years of executive and investment experience to our team. Mr. Butterfield is the founder and current managing partner of SageCreek Partners LLC, and he also serves on the board of directors of Focus Universal, Inc. and Venafi, Inc, in which Thoma Bravo completed a majority investment to drive Venafi’s valuation to $1.15 billion. Prior to SageCreek, he fulfilled multiple executive level operating positions in technology related businesses taking two companies public as chief executive officer (Altiris and Vivint Solar). Vivint Solar was valued at $1.6 billion at its initial public offering in 2014, and Altritis was acquired by Symantec (now NortonLifeLock Inc. (NASDAQ: NLOK)) for $830 million in 2007. After joining Altiris in February 2000, Mr. Butterfield guided the company to eight consecutive years of revenue growth and profitability. In Mr. Butterfield’s first year with Altiris, annual revenues were $3 million; in 2007, annual revenues exceeded $300 million. During his time at Altiris, he assisted with the successful initial public offering in 2002 and was a driving force behind eleven acquisitions. Mr. Butterfield was inducted into the Utah Technology Hall of Fame in 2009 and was invited to the 2006 and 2007 World Economic Forum as a Technology Pioneer. He was also the winner of the 2002 Ernst and Young Entrepreneur of the Year award and served as the chairman of the board of the Utah Information Technology Association from 2003 to 2005. Mr. Butterfield spent several years as Board of Trustee member for Utah Valley University and Chairman of UVU Board of trustees. Mr. Butterfield received a B.S. in business administration, finance from Brigham Young University.
Joshua James, 47
Director
Mr. James adds over 25 years of public and private company operating experience having served as founder and chief executive officer of both Domo, Inc. (NASDAQ: DOMO), a software-as-a-service company, and Omniture, Inc., an online marketing and web analytics business. Before founding Domo in 2010, Mr. James was the chief executive officer of Omniture, which he co-founded in 1996 and took public in 2006. In 2009, Mr. James led Omniture through its $1.8 billion sale to Adobe. Mr. James has served on the board of directors of various privately held and public companies. He founded Silicon Slopes, an initiative with the mission to promote the interests of Utah’s high-tech industry and is a board member of Parity.org where he was a co-founder of the Parity Pledge initiative. Mr. James attended Brigham Young University for three and a half years and studied entrepreneurship.
Michael Rosen, 60
Director
Mr. Rosen brings over 35 years of investment, fund management and restaurant operational experience to our board. He currently serves as the co-chairman, chief executive officer and co-founder of Context Capital Management, LLC, an SEC registered investment advisory company with $730 million in assets under management that specializes in capital structure arbitrage. Mr. Rosen is also the owner of the San Diego-based restaurants Juniper and Ivy and the Crack Shack. Previously, Mr. Rosen was the co-principal owner of Rochester Capital Advisors, LP and FMC, Inc., the two investment advisers to The Rochester Funds, a mutual fund company specializing in the management of convertible securities and high-yield municipal bonds. From 1996 to 2000, Mr. Rosen served as a Portfolio Manager and President of the Rochester Division of OppenheimerFunds, Inc. BusinessWeek named Mr. Rosen the “Best Bond Fund Manager” in 1992. Mr. Rosen has served on the board of a variety of organizations including on the Board of Trustees for the University of Rochester, Entravision, Global Locate, Inc., Danskin, Inc. and Palmer R. Chitester Fund. He received a B.A. in Economics and an MBA in Finance and Marketing from the University of Rochester in 1981 and 1983, respectively. Mr. Rosen is also a Chartered Financial Analyst.