Global Blockchain (NASDAQ:GBBK) has entered into a definitive agreement to combine with wealth management firm Cardea at an enterprise value of $175 million.
Atlanta-based Cardea provides wealth and asset management services to high-net-worth individuals, institutions and families with a specialization in cross-border advisory services.
The combined company is expected to trade on the Nasdaq once the deal is completed in the first quarter of 2024.
Transaction Overview
Global Blockchain has about $25.4 million in its current trust having just gone through an extension vote that left its trust reduced by 85.9%, but with the ability to extend up to May 12, 2024.
Cardea is to receive a number of shares implied by the $175 million enterprise value adjusted by its closing cash, debt and unpaid transaction expenses. Global Blockchain must receive a fairness opinion for Cardea’s valuation in order for the deal to close.
The parties have not yet filed their merger documents or an investor presentation, but Global Blockchain’s profile page will be updated once more information is made available.
Quick Takes: With this target, Global Blockchain is taking a slight detour from the blockchain-enabled businesses it sought out at IPO to a more traditional financial services play.
Cardea provides many straight-forward services but aside from having a cross-border bent to their business, they have dipped into several other niches as well. The firm also offers alternative investments including impact investing and other bespoke products.
The company forms its investment portfolios through an open infrastructure that allows clients to set their own asset allocation parameters and monitor their holdings while seeing new alternative and sustainable investment opportunities as they come available.
Much of this infrastructure has been put together as a result of a string of strategic acquisitions, and continuing that strategy appears to be the primary impetus for Cardea to go public. Its press release notes that proceeds will go towards integrating new innovations to its existing portfolio of acquisitions.
And, while it may swim in somewhat more traditional waters for now, Global Blockchain aims to apply some of its expertise post-merger to help the company get into blockchain, AI and tokenized assets to add to its alternative services.
There could be synergies for such an endeavor within the SPAC sponsor’s own portfolio. Global Blockchain Ventures backs the SPAC and it currently has 18 portfolio companies, the majority of which have generated their own tokens, cryptocurrencies, NFTs, and other digital assets.
The SPAC’s CEO Dr. Max Hooper has been a long-time theorist as well as an investor with the goal of mainstreaming blockchain. Its Board also includes Chris Ensey who formerly served as CEO and COO of Riot Blockchain.
If that ultimately is the play that Global Blockchain has in mind, it is perhaps a sensible one.
Crypto companies have come under increasing scrutiny over the past year, particularly following several high-profile collapses. For SPACs, that has typically meant longer review processes with the SEC for targets doing anything more complicated with crypto than mining it or selling out of an ATM.
With that in mind, Global Blockchain may have decided that it would be easier to partner with a crypto-curious, but otherwise traditional financial services player and guide them into that world over time rather than a company with active crypto operations in progress.
Regardless of what is to come following the deal’s close, at announcement, Cardea’s closest comp among recent de-SPACs would be AlTi Global (NASDAQ:ALTI), which Cartesian Growth took public in November 2022. It is an international wealth management firm that has similarly focused on alternative investments.
It last closed at $7.77, but hit a high of $28.49 within the past 52 weeks and generally trades at about 3.9x revenue.
On a larger scale, Altimar combined asset managers Owl Rock and Dyal Capital in May 2021 to form Blue Owl (NYSE:OWL). It last closed at $11.16 with a $15.3 billion market cap and trades at 4.4x revenue and about 15.5x EBITDA.
ADVISORS
- Company
- Ellenoff Grossman & Schole LLP is serving as U.S. legal counsel.
- SPAC
- ArentFox Schiff LLP is serving as legal advisor.
At the SPAC of Dawn The pace of new SPAC filings has not slackened as three new S-1s were filed on either end of Super Bowl weekend seeking a combined $500 million in IPO proceeds. All three are underwritten by Cohen & Company and feature anchor investors as well as promotes upsized to the equivalent...
Terms Tracker for the Week Ending February 7, 2025 Welcome to our weekly column where we discuss the findings from our IPO terms tracker based on the previous week’s pricings. This past week saw one new SPAC IPO price, bringing the year-to-date total to nine. K&F Growth Acquisition Corp. II successfully debuted and managed to...
Retail enthusiasm has been a lifeblood of many SPAC transactions through to the combined companies’ ongoing lives as public companies, and several have taken to buying up Bitcoin as a way of keeping sometimes fickle retail investors engaged. Enterprise software MicroStrategy (NASDAQ:MSTR) pioneered this tactic before spot Bitcoin ETFs were available to the general public....
At the SPAC of Dawn The markets may still be figuring out their way in careening the early decisions of the new presidential administration, but one de-SPAC decided to cash in on at least one of them yesterday. Rare earth miner Critical Metals (NASDAQ:CRML) raised $22.5 million in a private placement taking advantage of a...
At the SPAC of Dawn The market may have sighed in relief with the postponement of tariffs, but they may not have gone too far into the background as the US also reported a record high $98.4 billion trade deficit for December yesterday, which came in more than $2 billion deeper than expected. More signals...