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Software Acquisition Group Inc. III

Software Acquisition Group Inc. III

Feb 18, 2021 by Kristi Marvin

PROPOSED BUSINESS COMBINATION:  Nogin Inc. 

ENTERPRISE VALUE: $658 million
ANTICIPATED SYMBOL: NOGN

Software Acquisition Group Inc. III proposes to combine with Nogin Inc., a cloud-based headless enterprise eCommerce platform for brands and merchants.

  • Companies leveraging CaaS deliver enterprise-class eCommerce at scale without having to purchase, implement, manage, optimize, or support any of the underlying infrastructure.
  • The Nogin “Intelligent Commerce Platform” delivers all the technology, research and development, and optimization needed for merchants to keep pace with big retail without all the capital costs, technical staff, time, and risk of doing it themselves.

SUBSEQUENT EVENT – 8/18/22 – LINK

  • The SPAC intends to enter into an arrangement with a financial institution whereby the financial institution would use commercially reasonable efforts to purchase approximately 6 million shares of the Company’s Class A Common Stock, par value $0.001 per share (each share, a “Share”), at a price per Share equal to the amount for which each Share may be redeemed for cash from the Company’s trust account maintained by Continental Stock Transfer & Trust Company (the “Trust Account”).
  • The Company would pay the financial institution cash from the Trust Account immediately following closing of the Company’s business combination with Branded Online, Inc. dba Nogin in an amount equal to approximately 80% of the aggregate price of the Shares purchased by the financial institution.
  • The amount of the institution’s purchase price less the 80% payment is referred to as the “Standby Capital Support Amount.”
  • Tthe financial institution may sell the Shares in its absolute discretion in the four years plus one day following closing of the Business Combination.
  • Following the recoupment of the Standby Capital Support Amount by the financial institution, any subsequent sales of shares will be limited to
    • (i) 25% of daily volume of the Shares to the extent the Share price is at any time at or above $7.50 per Share and
    • (ii) the mutual agreement of the Company and the financial institution, to the extent the share price is below $7.50.
  • The financial institution will retain from subsequent sales of shares approximately 3.5% of the proceeds from the Trust Account that were paid to the financial institution.
  • In the event that the financial institution does not recoup the full Standby Capital Support Amount, the Company will be obligated to pay the institution in cash the Standby Capital Support Amount less the proceeds received by the institution from any sales of Shares and less certain other fees that may be earned under the arrangement.

SUBSEQUENT EVENT – 4/20/22 – LINK

  • On April 20, 2022, SWAG and Nogin, Inc. announced that the Company has obtained commitments for $60 million in convertible note financing (the “PIPE Financing”) led by funds managed by UBS Asset Management’s Hedge Fund Solutions business (“UBS”) including commitments from Tenor Capital Management and Jonathan Huberman, Chief Executive Officer of SWAG III.
  • Pursuant to the PIPE Financing, SWAG III will issue $60 million aggregate principal amount of 7.00% Convertible Senior Notes due in 2026 (the “Notes”), which may be increased by an additional $10 million pursuant to an “accordion feature” from UBS.
  • This PIPE Financing is anticipated to fund concurrently with the closing of the proposed business combination of Nogin and SWAG III, expected to take place in the second quarter of 2022.

TRANSACTION

  • The combined company will have an estimated post-transaction enterprise value of $658 million, assuming no redemptions by SWAG III public stockholders.
  • Cash proceeds from the transaction will consist of up to $211 million of cash held in SWAG III’s trust account (before redemptions and the payment of certain expenses).
  • The net proceeds from the transaction will be used as working capital to support continued growth and to fund the repayment of existing debt.
  • Nogin shareholders will roll 96% of their existing equity holdings into the combined company and are expected to own approximately 67% of the combined company on a non-fully diluted basis immediately following the closing of the business combination, assuming no redemptions by SWAG III’s public stockholders.

Software Growth Transaction Overview

PIPE

  • Subsequent Event – On April 20, 2022, SWAG III and Nogin, Inc. announced that the Company has obtained commitments for $60 million in convertible note financing (the “PIPE Financing”) led by funds managed by UBS Asset Management’s Hedge Fund Solutions business (“UBS”) including commitments from Tenor Capital Management and Jonathan Huberman, Chief Executive Officer of SWAG III.
  • Pursuant to the PIPE Financing, SWAG III will issue $60 million aggregate principal amount of 7.00% Convertible Senior Notes due in 2026 (the “Notes”), which may be increased by an additional $10 million pursuant to an “accordion feature” from UBS.
  • This PIPE Financing is anticipated to fund concurrently with the closing of the proposed business combination of Nogin and SWAG III, expected to take place in the second quarter of 2022.
  • There was previously no PIPE in this transaction.

LOCK-UP

Company Lock-Up:

  • Pursuant to the Lock-Up Agreement, with respect to the shares received as Merger Consideration, each Company Stockholder shall agree not to transfer any of its shares of SWAG Class A Common Stock until the earlier of:
    • (a) the twelve-month anniversary of the Closing.
    • (b) the date on which the Closing price of Edoc’s common stock equals or exceeds $12.00 per share for any 20 trading days within any 30 trading day period.

Sponsor Lock-Up:

  • The Sponsor has also agreed not to transfer any of its shares of SWAG Class B common stock (the “Founder Shares”) until the earlier of:
    • (i) the date that is the one-year anniversary of the Closing and;
    • (ii) the date on which the last reported sale price of the common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading day period commencing at least 150 days after the Closing Date of the Transactions.
  • The Sponsor Agreement parties have also agreed not to transfer any private placement warrants until 30 days after the Closing Date of the Transactions.
  • The Sponsor Agreement provides that as of immediately prior to the Closing, 1,710,590 (or 30%) of the Founder Shares held by the Sponsor as of the Closing, or 2,565,885 (or 45%) of the Founders Shares if, immediately prior to the Closing, holders of SWAG Class A common stock have validly elected to redeem a number of shares of SWAG Class A common stock (and have not withdrawn such redemptions) that would result in greater than 40% of the funds in the Trust Account being paid to such redeeming holders for such redemptions, will be subject to certain time and performance-based vesting provisions.
    • The Sponsor has agreed not to transfer any unvested Founder Shares prior to the date such securities become vested.
      • 50% of the unvested Founder Shares (the “First Tranche Shares”) will vest on any day following the Closing when the closing price of a share of SWAG Class A common stock on NASDAQ equals or exceeds $12.50 (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) and;
      • The remaining 50% will vest (along with any unvested First Tranche Shares) when the Closing Share Price equals or exceeds $14.50 (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like).

NOTABLE CONDITIONS TO CLOSING

  • The obligations of Nogin to consummate the Transactions contemplated by the Merger Agreement are subject to the aggregate cash proceeds plus proceeds received from any PIPE or similar investment, must be equal to or in excess of $50 million.

NOTABLE CONDITIONS TO TERMINATION

  • The Merger Agreement may be terminated if the Closing has not occurred on or prior to August 31, 2022 (the “Outside Date”).

ADVISORS

  • Stifel Financial Corp. is serving as exclusive strategic and financial advisor to Nogin.
  • Latham & Watkins LLP is acting as Nogin’s legal counsel.
  • Gateway Group is acting as investor relations advisor to Nogin.
  • Jaffe Communications is acting as its public relations advisor.
  • Jefferies LLC is serving as exclusive financial advisor and capital markets advisor to SWAG III.
  • Kirkland & Ellis is acting as SWAG III’s legal counsel.

MANAGEMENT & BOARD

Executive Officers

Jonathan S. Huberman, 55
Chairman, Chief Executive Officer and Chief Financial Officer

Mr, Huberman has over 25 years of high-tech business leadership experience. From 2019 through the present, he was the Chairman, Chief Executive Officer and Chief Financial Officer of Software Acquisition Group Inc. II (NASDAQ: SAII), a blank check company which raised an aggregate of $172.5 million in its initial public offering (including exercise of the over-allotment option) in September 2020, which in February 2021 announced that it had entered into a definitive agreement with respect to its initial business combination with Otonomo Technologies Ltd., a cloud-based software provider that captures and anonymizes vehicle data, which is currently expected to close in 2021. He was previously the Chairman, Chief Executive Officer and Chief Financial Officer of Software Acquisition Group Inc. (NASDAQ:SAQN), a blank check company which raised an aggregate of $149.5 million in its initial public offering (including exercise of the over-allotment option) in November 2019, which in August 2020 announced that it had entered into a definitive agreement with respect to its initial business combination with CuriosityStream, Inc., or CuriosityStream, a global streaming media service that provides factual content on demand, which closed in the fourth quarter of 2020. From 2017 to 2019 Mr. Huberman was Chief Executive Officer of Ooyala, a provider of media workflow automation, delivery and monetization solutions, which he and Mike Nikzad, our Vice President of Acquisitions and Director nominee, acquired from Telstra in 2018. Together with Mr. Nikzad, they turned around an underperforming company and sold Ooyala’s three core business units to Invidi Technologies, Brightcove (NASDA:BCOV) and Dalet (EPA: DLT), major players in the same sector. Previously, Mr. Huberman served as the Chief Executive Officer of Syncplicity, a SaaS enterprise data management company, which he sourced and acquired from EMC and engineered an exit to Axway (EPA: AXW). Prior to this, from 2013 to 2015, Mr. Huberman was the Chief Executive Officer of Tiburon, an enterprise software company serving the public safety sector which he sold to Tritech Systems, and before that he was the Chief Executive Officer at Iomega Corporation (NYSE: IOM), a consumer and distributed enterprise storage solutions provider. After Iomega was acquired by EMC Corporation in 2008, Mr. Huberman served as President of the Consumer and Small Business Division of EMC. In addition to his experience leading turnarounds and exits at five technology companies, Mr. Huberman spent nine years as an investor for the Bass Family interests where he led investments in private and public companies. He also had senior roles leading the operations of the technology investments of the Gores Group and Skyview Capital. In the last five years he has served as a director of Aculon, Inc., a privately held provider of easy-to-apply nanotech surface-modification technologies, as well as Venture Corporation Limited (SGX:V03) a high-tech design and manufacture firm based in Singapore. Mr. Huberman holds a Bachelor of Arts in Computer Science from Princeton University and an MBA from The Wharton School at the University of Pennsylvania.

Mike Nikzad, 56
Vice President of Acquisitions and Director Nominee

Mr. Nikzad has over two decades of business leadership experience in software, technology and consumer electronics companies, where he has worked on numerous corporate turnarounds and exits. From 2019 through the present, he was an officer and director of Software Acquisition Group Inc. II (NASDAQ: SAII), a blank check company which raised an aggregate of $172.5 million in its initial public offering (including exercise of the over-allotment option) in September 2020, which in February 2021 announced that it had entered into a definitive agreement with respect to its initial business combination with Otonomo Technologies Ltd., a cloud-based software provider that captures and anonymizes vehicle data, which is currently expected to close in 2021. He was previously a director and officer of Software Acquisition Group Inc. (NASDAQ:SAQN), a blank check company which raised an aggregate of $149.5 million in its initial public offering (including exercise of the over-allotment option) in November 2019, which in August 2020 announced that it had entered into a definitive agreement with respect to its initial business combination with CuriosityStream, Inc., or CuriosityStream, a global streaming media service that provides factual content on demand, which closed in the fourth quarter of 2020. Mr. Nikzad was President and Chief Operating Officer at Ooyala from 2017 until its sale in 2019. Prior to Ooyala, in the last five years Mr. Nikzad has held C-suite positions and led company operations at Syncplicity, a SaaS enterprise data management company and NewNet Communication Technologies, a telecommunications company, as well as serving as an Operating Partner at SilverStream Capital. Prior to this, he also held management and executive positions in EMC Corp’s (NYSE: EMC) Consumer and Small Business division and at Iomega Corporation, a consumer and distributed enterprise storage solutions provider. Mr. Nikzad has a Bachelor of Science degree in Mechanical Engineering from Utah State University and has completed the Stanford GSB Strategic Marketing Management Program.

 

Board of Directors

Andrew K. Nikou, 44
Director Nominee

Mr. Nikou is the Founder and Chief Executive Officer of OpenGate, a global private equity firm specializing in the acquisition and operation of businesses to create new value through operational improvements, innovation and growth. To date, OpenGate, through its legacy and fund investments, has executed more than 30 acquisitions including corporate carve-outs, management buy-outs, special situations and transactions with private sellers across North America and Europe. As of March 31, 2020, OpenGate Capital Management, LLC (the firm’s registered investment advisor) managed approximately $1.1 billion in client assets on a discretionary basis. Prior to this, from 2001 to 2004, Mr. Nikou worked in business development for Platinum Equity, where he established their European Business Development operations in Paris, France. Of the nearly 20 pre-fund investments made by affiliates of OpenGate, a few were in distressed entities that subsequently filed for bankruptcy. Mr. Nikou has been named as a defendant in certain adversarial proceedings related to such bankruptcy cases alleging various claims, which Mr. Nikou vigorously disputes, believes to be meritless, and is aggressively contesting. From 2019 through the present, he was a director of Software Acquisition Group Inc. II (NASDAQ: SAII), a blank check company which raised an aggregate of $172.5 million in its initial public offering (including exercise of the over-allotment option) in September 2020, which in February 2021 announced that it had entered into a definitive agreement with respect to its initial business combination with Otonomo Technologies Ltd., a cloud-based software provider that captures and anonymizes vehicle data, which is currently expected to close in 2021, as well as several private companies. He was previously a director and officer of Software Acquisition Group Inc. (NASDAQ:SAQN), a blank check company which raised an aggregate of $149.5 million in its initial public offering (including exercise of the over-allotment option) in November 2019, which in August 2020 announced that it had entered into a definitive agreement with respect to its initial business combination with CuriosityStream, Inc., or CuriosityStream, a global streaming media service that provides factual content on demand, which closed in the fourth quarter of 2020. He is also a member of the XPRIZE Foundation Innovation Board. Mr. Nikou holds a Bachelor of Science in Finance from the Marshall School of Business at the University of Southern California.

C. Matthew Olton, 54
Director Nominee

Mr. Olton has been Senior Vice President, Strategy and Corporate Development at Tenable Holdings, Inc. (NASDAQ:TENB), a cyber-exposure protection provider, since August 2019. Prior this, he was Senior Vice President, Corporate Development and Ventures, at Symantec Corporation (NASDAQ:SYMC). In this role, Mr. Olton oversaw Symantec’s global mergers and acquisitions activity and managed Symantec’s corporate venture investments. He also led Symantec’s integration management function. Prior to joining Symantec, he was Senior Vice President, Corporate Development at Dell Technologies Capital from 2016 to 2018, and was responsible for global mergers and acquisitions and related activity for the family of companies that comprise Dell Technologies including Dell, Dell EMC, Pivotal, RSA, Secureworks, Virtustream and Boomi. Prior to Dell Technologies Capital, Matt was Senior Vice President, Corporate Development at EMC Corporation from 1999 to 2016. Mr. Olton started his career as an M&A attorney at Skadden, Arps, Slate, Meagher & Flom. From 2019 through the present, he was a director of Software Acquisition Group Inc. II (NASDAQ: SAII), a blank check company which raised an aggregate of $172.5 million in its initial public offering (including exercise of the over-allotment option) in September 2020, which in February 2021 announced that it had entered into a definitive agreement with respect to its initial business combination with Otonomo Technologies Ltd., a cloud-based software provider that captures and anonymizes vehicle data, which is currently expected to close in 2021. He was previously a director and officer of Software Acquisition Group Inc. (NASDAQ:SAQN), a blank check company which raised an aggregate of $149.5 million in its initial public offering (including exercise of the over-allotment option) in November 2019, which in August 2020 announced that it had entered into a definitive agreement with respect to its initial business combination with CuriosityStream, Inc., or CuriosityStream, a global streaming media service that provides factual content on demand, which closed in the fourth quarter of 2020. He has a Bachelor of Arts from Wesleyan University, a J.D. from Boston University School of Law and an MBA from Northeastern University.

Stephanie Davis, 57
Director Nominee

Ms. Davis has since 2017 served as a Senior Client Partner at Korn Ferry where she leads the Private Equity/Technology practice in North America and is a member of the CEO & Board practices and the Global Technology Practice. She is an expert in executive talent and leadership and has spent over two decades working with Chief Executive Officers to build their leadership capabilities and teams. Ms. Davis works extensively with public and private company board of directors on succession and board recruitment. She is a frequent speaker on board governance and women in the boardroom. Since 2019, Ms. Davis has been a member of the board of directors of biopharmaceutical company, Athenex (NASDAQ:ATNX). Prior to joining Korn Ferry in 2017, Ms. Davis spent 17 years at Spencer Stuart where she was a member of the CEO & Board Practice. During her tenure, she co-founded the Business/ Technology Services practice, led the Software practice, and managed global private equity relationships. From 2019 through the present, he was a director of Software Acquisition Group Inc. II (NASDAQ: SAII), a blank check company which raised an aggregate of $172.5 million in its initial public offering (including exercise of the over-allotment option) in September 2020, which in February 2021 announced that it had entered into a definitive agreement with respect to its initial business combination with Otonomo Technologies Ltd., a cloud-based software provider that captures and anonymizes vehicle data, which is currently expected to close in 2021. He was previously a director and officer of Software Acquisition Group Inc. (NASDAQ:SAQN), a blank check company which raised an aggregate of $149.5 million in its initial public offering (including exercise of the over-allotment option) in November 2019, which in August 2020 announced that it had entered into a definitive agreement with respect to its initial business combination with CuriosityStream, Inc., or CuriosityStream, a global streaming media service that provides factual content on demand, which closed in the fourth quarter of 2020. Ms. Davis has a Bachelor of Science in Engineering from Princeton University and an MBA from Harvard Business School.

Steven Guggenheimer, 55
Director Nominee

Mr. Guggenheimer is a former Microsoft Executive and now serves as an advisor and non-executive director to a variety of organizations. Currently Mr. Guggenheimer is a non-executive board member of HSBC Holdings plc (OTC:HBCYF) since May 2020, Forrit Technology Ltd., a private cloud technology company, since 2019, an advisor to Tensility Venture Partners, a seed stage venture capital firm, since 2017 as well as an advisor to the 5G Open Innovation Lab since May 2020. Over his 26 years at Microsoft, Mr. Guggenheimer held leadership positions in a broad range of key business areas which includes close to a decade helping manage Microsoft’s hardware and software ecosystems as the head of the Developer & ISV Evangelism (DPE/DX) and OEM divisions. He also spent his last 3 years working with customers and partners on the adoption of Artificial Intelligence and helping ISV’s migrate to SaaS based offerings. Mr. Guggenheimer received a Bachelor’s degree in Applied Physics from the University of California, Davis, and a Master’s Degree in Engineering Management from Stanford University. From 2019 through the present, he was a director of Software Acquisition Group Inc. II (NASDAQ: SAII), a blank check company which raised an aggregate of $172.5 million in its initial public offering (including exercise of the over-allotment option) in September 2020, which in February 2021 announced that it had entered into a definitive agreement with respect to its initial business combination with Otonomo Technologies Ltd., a cloud-based software provider that captures and anonymizes vehicle data, which is currently expected to close in 2021. He was previously a director and officer of Software Acquisition Group Inc. (NASDAQ:SAQN), a blank check company which raised an aggregate of $149.5 million in its initial public offering (including exercise of the over-allotment option) in November 2019, which in August 2020 announced that it had entered into a definitive agreement with respect to its initial business combination with CuriosityStream, Inc., or CuriosityStream, a global streaming media service that provides factual content on demand, which closed in the fourth quarter of 2020. Mr. Guggenheimer received a Bachelor’s degree in Applied Physics from the University of California, Davis, and a Master’s Degree in Engineering Management from Stanford University.

Dr. Peter H. Diamandis, 59
Director Nominee

Mr. Diamandis has been the Chief Executive Officer of PHD Ventures, Inc., which is his personal holding company for his writing, speaking, and consulting activities, since 1993. He is the Founder and Executive Chairman of the XPRIZE Foundation, a non-profit foundation which, since 1996, has designed and operated large-scale incentive competitions for the benefit of humanity. In 2014, Dr. Diamandis founded and served as Vice-Chairman of Human Longevity, Inc., an advanced health diagnostic company committed to delivering data driven health diagnostics; he resigned from the board of directors in 2018 and remains a shareholder. He is also the Executive Founder of Singularity University, a graduate-level Silicon Valley institution founded in 2008 that counsels the world’s leaders on exponentially growing technologies. He is the Vice Chairman and co-Founder of Celularity Inc., founded in 2017, a commercial-stage cell therapeutics company delivering allogenic cellular therapies engineered from the postpartum human placenta. Dr. Diamandis is also a founder and board member of Fountain Therapeutic Services Inc., which was formed in 2018 to increase lifespan and optimize healthspan by harnessing regenerative medicine technologies and integrating extensive wellness solutions. In March 2020 Dr. Diamandis co-Founded and is the Vice-Chairman of Covaxx, Inc., a pharmaceutical company that has developed a COVID-19 lgG antibody test and which has a vaccine candidate in clinical trials. As an entrepreneur, Dr. Diamandis has started over 20 companies in the areas of longevity, space, venture capital and education. Dr. Diamandis also co-founded BOLD Capital Partners, a venture fund investing in exponential technologies, in 2015, and is a New York Times Bestselling author. He earned degrees in Molecular Engineering and Aerospace Engineering from MIT and holds an M.D. from Harvard Medical School. From 2019 through the present, he was a director of Software Acquisition Group Inc. II (NASDAQ: SAII), a blank check company which raised an aggregate of $172.5 million in its initial public offering (including exercise of the over-allotment option) in September 2020, which in February 2021 announced that it had entered into a definitive agreement with respect to its initial business combination with Otonomo Technologies Ltd., a cloud-based software provider that captures and anonymizes vehicle data, which is currently expected to close in 2021. He was previously a director and officer of Software Acquisition Group Inc. (NASDAQ:SAQN), a blank check company which raised an aggregate of $149.5 million in its initial public offering (including exercise of the over-allotment option) in November 2019, which in August 2020 announced that it had entered into a definitive agreement with respect to its initial business combination with CuriosityStream, Inc., or CuriosityStream, a global streaming media service that provides factual content on demand, which closed in the fourth quarter of 2020.

 

ByKristi Marvin