Chaserg Technology Acquisition Corp. (CTAC), announced this morning that they have signed a definitive agreement to combine with Grid Dynamics International, Inc. (“Grid Dynamics'”). Grid Dynamics is a leader in driving enterprise-level digital transformation services for Fortune 1000 corporations.
Upon completion of the combination, Grid Dynamics will become a Nasdaq-listed public company, with an anticipated initial equity market capitalization of approximately $515 million based on a stock price of $10.00 per share. Immediately upon consummation of the transaction, ChaSerg will change its name to “Grid Dynamics Holdings, Inc.”
Drilling down a little further on the Grid Dynamics offering, they work with clients on “digital transformation initiatives that span strategy consulting, early prototypes and enterprise-scale delivery of new digital platforms.” Grid Dynamics applies emergent technologies such as artificial intelligence, data science, cloud computing, Big Data and DevOps to enable digital transformation across the enterprise.
Transaction Summary
Under the terms of the proposed transaction, Grid Dynamics will be acquired by a subsidiary of ChaSerg and become a publicly traded entity under the name “Grid Dynamics Holdings, Inc.” Assuming no redemptions by the public stockholders of ChaSerg, the balance of the approximately $224 million in cash held in ChaSerg’s trust account will be used to pay the existing Grid Dynamics shareholders.
- Cash consideration of $130 million.
- The remainder of the consideration payable will consist of approximately 25.5 million shares of ChaSerg common stock.
- Grid Dynamics is expected to add approximately $80 million of cash at close, net of transaction expenses and fees
The transaction has been approved by the boards of directors of both Grid Dynamics and ChaSerg. Completion of the transaction is subject to approval by stockholders and certain other conditions. The transaction is expected to close in the first quarter of 2020.
Quick takes: A presentation is available on the Chaserg website, but as of yet, a super 8-K has not been filed (presumably, post-conference call). However, based on the press release and the presentation, this looks like a pretty interesting company that’s stacks up well against the public comps and with impressive growth numbers to boot. We’ll have to wait for that super 8-k to dig in to the transaction details a little further, but on the face of it, this combination should be well received.
CONFERENCE CALL
11:00 AM ET on November 13, 2019
Domestic toll-free access number: 1-877-270-2148 (access code: “Grid Dynamics call”)
International callers: 1-412-902-6510 (access code: “Grid Dynamics call”)
A telephone replay will be available shortly after the call and can be accessed by dialing 1-877-344-7529 (access code: 10136718), or for international callers, 1-412-317-0088 (access code: 10136718).
A webcast of the call, along with this press release and the investor presentation, can be accessed at: https://chasergtechnology.com/
ADVISORS
- Cantor Fitzgerald and William Blair are acting as capital markets advisors to ChaSerg.
- Latham & Watkins LLP and Ellenoff, Grossman and Schole are serving as legal counsel to ChaSerg.
- Covington Associates LLC is acting as financial advisor to Grid Dynamics.
- Wilson Sonsini Goodrich & Rosati, P.C. are acting as legal counsel to Grid Dynamics.
- Reed Smith Richards Butler, LLP is serving as legal counsel to Automated Systems Holdings Limited.
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