Bakkt to merge with VPC Impact Acquisition Holdings
Operator of global exchanges and clearing houses and provider of mortgage technology, data and listing services Intercontinental Exchange Inc (NYSE:ICE) has just announced that digital asset marketplace Bakkt Holdings, LLC has entered into a definitive agreement to combine with VPC Impact Acquisition Holdings (NASDAQ:VIH), a special purpose acquisition company sponsored by Victory Park Capital (VPC).
The business combination between Bakkt and VIH values the combined company at an enterprise value of approximately $2.1 billion and is expected to result in over $500 million of cash on the combined company’s balance sheet. This reflects a contribution of up to $207 million of cash held in VPC Impact Acquisition Holdings’ trust account, and a $325 million concurrent private placement (PIPE) of Class A common stock of the combined company, priced at $10.00 per share, including a $50 million commitment from ICE.
The newly combined company will be renamed Bakkt Holdings, Inc. and will be listed on the New York Stock Exchange.
As part of the transaction, Bakkt’s existing equity holders and management will roll 100% of their equity into the combined company. If no shareholders of VPC Impact Acquisition Holdings exercise their redemption rights, current Bakkt equity holders, including ICE, will own approximately 78%, VPC Impact Acquisition Holdings public shareholders will own approximately 8%, VPC will own 2%, and PIPE investors (a group that will also include ICE) will own approximately 12% of the issued and outstanding common stock of the combined company at closing.
ICE expects its net revenues related to Bakkt for the fourth quarter of 2020 to be approximately $9 million while GAAP and adjusted non-GAAP operating expenses related to Bakkt are expected to be approximately $39 million and $22 million, respectively. First quarter 2021 net revenues related to Bakkt are expected to be approximately $7 million while GAAP and adjusted non-GAAP operating expenses related to Bakkt are expected to be approximately $25 million and $23 million, respectively.
Following completion of the business combination, which is expected to be in the second quarter of 2021, ICE is expected to have a 65% economic interest and a minority voting interest in the combined company.