Leading e-commerce focused point-of-sale
platform for nonprime consumers Transaction values Katapult at a
pro forma enterprise value of approximately $1 billion Transaction
includes a $150 million fully committed PIPE from investors led by
Tiger Global Management & Neuberger Berman Funds Joint investor
conference call and presentation on December 18, 2020 at 9:00am
ET
Katapult Holding, Inc. (“Katapult”), an e-commerce focused
financial technology company, and FinServ Acquisition Corp.
(NASDAQ: FSRV) (“FinServ”), a special purpose acquisition company,
today announced that they have entered into a definitive merger
agreement. Upon closing of the transaction, the combined company
(the "Company") will operate as Katapult and plans to trade on
Nasdaq under the new symbol “KPLT”. The transaction reflects an
implied pro forma combined enterprise value for the Company of
approximately $1 billion.
Katapult is a leading provider of e-commerce point-of-sale
(“POS”) purchase options for nonprime US consumers. Katapult’s
fully digital, next generation technology platform provides
consumers with a flexible lease purchase option to enable them to
obtain essential durable goods from Katapult’s network of top tier
e-commerce retailers. Katapult’s sophisticated end-to-end
technology platform provides both a seamless integration with
merchants and exceptional customer experiences.
Orlando Zayas, CEO of Katapult, stated, “Today’s announcement
marks the beginning of an exciting new chapter in our history and
we are delighted to be entering into this transaction with FinServ
to become a publicly traded company. Since our inception,
Katapult’s goal has always been to provide a clear, transparent,
and attractive transaction solution for nonprime consumers to
access the essential products they need for everyday living. Today,
we are serving over 150 merchants and 1.4 million consumers with
our leading technology platform and e-commerce POS solution. This
transaction will allow us to accelerate our growth opportunities
and continue to build the premier company that provides consumers
access to the goods they need and deserve through a flexible lease
purchase transaction. It is an honor to lead Katapult’s strategic
direction and my pleasure to continue to work with our great team
to continue to grow this business.”
Lee Einbinder, CEO of FinServ, stated, “After a comprehensive
search process, in which we examined numerous business combination
opportunities, Katapult emerged as the most impressive partner,
exceeding all of our criteria for a successful transaction.
Katapult has a differentiated and best-in-class technology
platform, with significant opportunities to continue its growth
trajectory by expanding its merchant and consumer base. We are
pleased to help facilitate Katapult’s listing on Nasdaq, and
excited to be partnering with their entire management team as they
continue to lead Katapult’s expansion as a publicly listed
company.”
Brian Hirsch, Co-founder & Managing Partner of Tribeca
Venture Partners and Director of Katapult, stated, “Katapult’s next
generation technology platform, which provides a seamless digital
experience for both consumers and merchants, ease of use and quick
integration, and sophisticated risk modeling has helped fuel the
company’s explosive growth over the past three years under
Orlando’s leadership. This transaction provides Katapult with an
even greater ability to strategically invest in its organic growth
based on the large addressable market they serve.”
Katapult Investment Highlights
- A leading e-commerce POS, lease purchase platform provider
focused on the estimated $50 billion of annual nonprime consumer
durable goods e-commerce spend
- Delivers a clear and compelling value proposition to both
consumers and merchants, transforming the way nonprime consumers
shop for essential goods and enabling merchant access to this
underserved segment
- Proprietary technology platform, purpose-built for e-commerce,
combining superior consumer and merchant experiences with powerful
risk management capabilities and scalability
- Established position in e-commerce ecosystem with significant
platform support from top-tier e-commerce retailers, leading
e-commerce platforms and lending partners
- Attractive, profitable financial profile with approximately
$250 million of projected revenue (+172% y/y) for 2020
- Proven and experienced management team, who will continue
leading the combined company
Transaction Summary
Under the terms of the proposed Transaction, FinServ will merge
with Katapult at a pro forma combined enterprise value of
approximately $1 billion and equity value of $962 million,
representing EV/EBITDA multiples of 14.1x and 6.6x projected EBITDA
for 2021 and 2022, respectively. Total consideration paid to
Katapult’s existing shareholders will be $833 million.
Cash proceeds of the transaction will fund up to $325 million of
cash consideration to Katapult’s existing shareholders and $50
million of cash to Katapult’s balance sheet. The cash components of
the transaction will be funded by FinServ’s cash in trust of $250
million (assuming no redemptions) as well as a $150 million private
placement of common stock at $10 per share from various
institutional investors, led by Tiger Global Management and
Neuberger Berman Funds, that will close concurrently with the
merger. The balance of the consideration to Katapult’s equity
holders will consist of equity in the Company. Existing Katapult
equity holders have the potential to receive an earnout for
additional shares of equity if certain price targets are met as set
forth in the definitive merger agreement. Katapult’s current equity
holders will own approximately 50% of the pro forma company,
assuming no cash redemptions.
The transaction is expected to close during the first half of
2021 and remains subject to approval by FinServ stockholders
representing a majority of the outstanding FinServ voting power,
the effectiveness of a registration statement to be filed with the
Securities and Exchange Commission (the “SEC”) in connection with
the transaction, the expiration of the HSR Act waiting period, and
other customary closing conditions. The Boards of Directors of both
Katapult and FinServ have unanimously approved the contemplated
transaction.
Advisors
PJT Partners is acting as financial advisor to Katapult. DLA
Piper LLP (US) is acting as legal counsel to Katapult. Barclays is
acting as financial advisor to FinServ. Kirkland & Ellis is
acting as legal counsel to FinServ.
Barclays and PJT Partners are acting as placement agents with
respect to the private placement. Barclays and Cantor Fitzgerald
are acting as capital markets advisors to FinServ. Paul Hastings
LLP is acting as placement agent counsel.
Conference Call and Presentation Information
Management of Katapult and FinServ will host an investor call on
December 18, 2020, at 10:30am ET to discuss the proposed
transaction. The conference call will be accompanied by a detailed
investor presentation.
For those who wish to participate, the domestic toll-free access
number is 1-877-407-0784 (Conference ID: 13714334), or for
international callers, 1-201-689-8560 (Conference ID: 13714334). A
telephone replay will be available shortly after the call and can
be accessed by dialing 1-844-512-2921 (Replay Pin Number:
13714334), or for international callers, 1-412-317-6671 (Replay Pin
Number: 13714334).
A webcast of the call, along with this press release and the
investor presentation are available in the “investor” sections of
FinServ’s website at https://finservacquisition.com and Katapult’s
website at https://go.katapult.com/investor_relations.
In addition, FinServ will file the investor presentation with
the SEC as an exhibit to a Current Report on Form 8-K prior to the
call, which will be available on the SEC’s website at
www.sec.gov.
About Katapult
Katapult is a next generation platform for digital and
mobile-first commerce for the nonprime consumer. Katapult provides
POS lease purchase options for consumers challenged with accessing
traditional financial products who are seeking to obtain everyday
durable goods. The Company has developed a sophisticated end-to-end
technology platform that enables seamless integration with
merchants, underwriting capabilities that exceed the industry
standard, and exceptional customer experiences.
About FinServ
FinServ is a special purpose acquisition company formed for the
purpose of acquiring or merging with businesses or entities in the
financial services industry or businesses providing technology
services to the financial services industry.
FinServ raised $250 million in its initial public offering in
November 2019 and is listed on Nasdaq under the symbol “FSRV”.
Forward-Looking Statements
Certain statements included in this Press Release that are not
historical facts are forward-looking statements for purposes of the
safe harbor provisions under the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements generally
are accompanied by words such as “believe,” “may,” “will,”
“estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,”
“would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,”
“outlook,” and similar expressions that predict or indicate future
events or trends or that are not statements of historical matters.
These forward-looking statements include, but are not limited to,
statements regarding estimates and forecasts of other financial and
performance metrics and projections of market opportunity. These
statements are based on various assumptions, whether or not
identified in this Press Release, and on the current expectations
of Katapult’s and FinServ’s management and are not predictions of
actual performance. These forward-looking statements are provided
for illustrative purposes only and are not intended to serve as,
and must not be relied on by any investor as, a guarantee, an
assurance, a prediction or a definitive statement of fact or
probability. Actual events and circumstances are difficult or
impossible to predict and will differ from assumptions. Many actual
events and circumstances are beyond the control of Katapult and
FinServ. These forward-looking statements are subject to a number
of risks and uncertainties, including changes in domestic and
foreign business, market, financial, political and legal
conditions; the inability of the parties to successfully or timely
consummate the proposed transaction, including the risk that any
required regulatory approvals are not obtained, are delayed or are
subject to unanticipated conditions that could adversely affect the
combined company or the expected benefits of the proposed
transaction or that the approval of the stockholders of FinServ or
Katapult is not obtained; failure to realize the anticipated
benefits of the proposed transaction; risks relating to the
uncertainty of the projected financial information with respect to
Katapult; risks related to the concentration of Katapult’s business
among a relatively small number of merchants; the effects of
competition on Katapult’s future business; the impact of the
COVID-19 pandemic on Katapult’s business; the ability of FinServ or
the combined company to issue equity or equity-linked securities or
obtain debt financing in connection with the proposed transaction
or in the future, and those factors discussed in FinServ’s final
prospectus dated October 31, 2019 and Annual Report on Form 10-K
for the fiscal year ended December 31, 2019, in each case, under
the heading “Risk Factors,” and other documents of FinServ filed,
or to be filed, with the Securities and Exchange Commission
(“SEC”). If any of these risks materialize or our assumptions prove
incorrect, actual results could differ materially from the results
implied by these forward-looking statements. There may be
additional risks that none of FinServ or Katapult presently know or
that FinServ or Katapult currently believe are immaterial that
could also cause actual results to differ from those contained in
the forward-looking statements. In addition, forward-looking
statements reflect FinServ’s and Katapult’s expectations, plans or
forecasts of future events and views as of the date of this Press
Release. FinServ and Katapult anticipate that subsequent events and
developments will cause FinServ’s and Katapult’s assessments to
change. However, while FinServ and Katapult may elect to update
these forward-looking statements at some point in the future,
FinServ and Katapult specifically disclaim any obligation to do so.
These forward-looking statements should not be relied upon as
representing FinServ’s and Katapult’s assessments as of any date
subsequent to the date of this Press Release. Accordingly, undue
reliance should not be placed upon the forward-looking statements.
Certain market data information in this Press Release is based on
the estimates of Katapult and FinServ management. Katapult and
FinServ obtained the industry, market and competitive position data
used throughout this Press Release from internal estimates and
research as well as from industry publications and research,
surveys and studies conducted by third parties. Katapult and
FinServ believe their estimates to be accurate as of the date of
this Press Release. However, this information may prove to be
inaccurate because of the method by which Katapult or FinServ
obtained some of the data for its estimates or because this
information cannot always be verified due to the limits on the
availability and reliability of raw data, the voluntary nature of
the data gathering process.
Non-GAAP Financial Measures
This document includes certain non-GAAP financial measures that
are not prepared in accordance with accounting principles generally
accepted in the United States (“GAAP”) and that may be different
from non-GAAP financial measures used by other companies. FinServ
Acquisition Corp. and Katapult believe that the use of these
non-GAAP financial measures provides an additional tool for
investors to use in evaluating ongoing operating results and trends
of Katapult. These non-GAAP measures should not be considered in
isolation from, or as an alternative to, financial measures
determined in accordance with GAAP. Additionally, to the extent
that forward-looking non-GAAP financial measures are provided, they
are presented on a non-GAAP basis without reconciliations of such
forward-looking non-GAAP measures due to the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliation.
Important Information for Investors and Stockholders and
Where to Find It
In connection with the proposed transaction, FinServ intends to
file a registration statement on Form S-4, including a proxy
statement/prospectus (the “Registration Statement”), with the
Securities and Exchange Commission (the “SEC”), which will include
a preliminary proxy statement to be distributed to holders of
FinServ’s common stock in connection with FinServ’s solicitation of
proxies for the vote by FinServ’s stockholders with respect to the
proposed transaction and other matters as will be described in the
Registration Statement, and a prospectus relating to the offer of
the securities to be issued to Katapult’s stockholders in
connection with the proposed transaction. After the Registration
Statement has been declared effective, FinServ will mail a
definitive proxy statement/prospectus, when available, to its
stockholders and Katapult’s stockholders. Investors and security
holders and other interested parties are urged to read the proxy
statement/prospectus, and any amendments thereto and any other
documents filed with the SEC when they become available, carefully
and in their entirety because they contain important information
about FinServ, Katapult and the proposed transaction. Investors and
security holders may obtain free copies of the preliminary proxy
statement/prospectus and definitive proxy statement/prospectus
(when available) and other documents filed with the SEC by FinServ
through the website maintained by the SEC at
http://www.sec.gov.
No Offer or Solicitation
This press release does not constitute an offer to sell or a
solicitation of an offer to buy, or the solicitation of any vote or
approval in any jurisdiction in connection with a proposed
potential business combination among Katapult and FinServ or any
related transactions, nor shall there be any sale, issuance or
transfer of securities in any jurisdiction where, or to any person
to whom, such offer, solicitation or sale may be unlawful. Any
offering of securities or solicitation of votes regarding the
proposed transaction will be made only by means of a proxy
statement/prospectus that complies with applicable rules and
regulations promulgated under the Securities Act of 1933, as
amended (the “Securities Act”) and Securities Exchange Act of 1934,
as amended or pursuant to an exemption from the Securities Act or
in a transaction not subject to the registration requirements of
the Securities Act.
Participants in the Solicitation
FinServ and Katapult and their respective directors and certain
of their respective executive officers and other members of
management and employees may be considered participants in the
solicitation of proxies with respect to the proposed transaction.
Information about the directors and executive officers of FinServ
in its Annual Report on Form 10-K, filed with the SEC on March 27,
2020. Additional information regarding the participants in the
proxy solicitation and a description of their direct interests, by
security holdings or otherwise, will be set forth in the
Registration Statement and other relevant materials to be filed
with the SEC regarding the proposed transaction. Stockholders,
potential investors and other interested persons should read the
Registration Statement carefully before making any voting or
investment decisions. These documents, when available, can be
obtained free of charge from the sources indicated above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201218005404/en/
Katapult Media Contact Brian Ruby ICR for Katapult 203-682-8268
Katapult-PR@icrinc.com
Katapult Investor Contact William Maina ICR for Katapult
646-277-1236 Katapult-IR@icrinc.com
FinServ Investor Contact FinServ-IR@icrinc.com
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