- BigBear.ai is a leader in data-driven decision dominance and
advanced analytics with roots in the national security and defense
community; rapidly expanding into the growing commercial
sector
- Provides end-to-end data analytics platform operationalizing
artificial intelligence (“AI”) and machine learning (“ML”) at
scale, delivering information superiority and decision support for
customers in defense, intelligence, and commercial sectors
- Global AI/ML market projected to grow from $58 billion in 2021
to $310 billion by 2026, at 40% CAGR
- Transaction values BigBear.ai at a pro forma enterprise value
of approximately $1.57 billion, implying 5.6x EV / FY2022E revenue
multiple
- Transaction expected to deliver approximately $330 million in
net cash to the BigBear.ai balance sheet at closing
- Proceeds will fuel commercial growth projects, expand sales and
marketing, and fund research and development to accelerate product
offerings and inorganic growth through accretive M&A
- Projected 2021 revenue of $182 million and 43% 2021E – 2025E
revenue CAGR, with positive and growing Adj. EBITDA and cash
flow
- Robust backlog of approximately $500 million contracted and
near-term opportunities providing substantial growth
visibility
- Transaction includes $200 million oversubscribed convertible
senior unsecured debt offering, convertible at $11.50/share, which
includes investments by funds managed by affiliates of Fortress
Investment Group, LLC (“Fortress”), Marathon Asset Management, LP
(“Marathon”), and certain funds managed by Highbridge Capital
Management, LLC (“Highbridge”)
- Investor call scheduled for Tuesday, June 8, 2021 at 8:30am
ET
BigBear.ai (“the Company”), a leading provider of artificial
intelligence, machine learning, cloud-based big data analytics, and
cyber engineering solutions, and GigCapital4, Inc. (“GigCapital4”;
Nasdaq: GIGGU, GIG, GIGGW), a private-to-public equity (PPE)TM
entity also known as special purpose acquisition company (“SPAC”),
announced today that they have entered into a definitive merger
agreement that will result in BigBear.ai becoming a publicly traded
company. The transaction is expected to be completed in the third
quarter of 2021, at which time the combined company will be named
BigBear.ai, Inc., and is expected to be listed on the Nasdaq. The
transaction values the Company, which had $140 million in revenues
in 2020, at an enterprise value of approximately $1.57 billion.
Mission-Critical Solutions for Decision Dominance:
BigBear.ai, fueled by machine-driven analytics, enables
decision-making dominance in real-time. The Company’s solutions
enable customers in the defense, intelligence, and commercial
sectors to ingest real-time data, generate actionable insights and
make informed decisions in complex situations. The Company’s suite
of products and capabilities is comprised of three agile modules
that can be used on their own or grafted onto a customer’s existing
technology: Observe (data ingestion and conflation), Orient
(composable machine learning at scale), and Dominate (visual
anticipatory intelligence and optimization).
Dr. Reggie Brothers, Chief Executive Officer of BigBear.ai,
said: “Our end-to-end data-driven decision dominance technology
provides clarity and insight in complex environments – we empower
customers to make the best decisions fast through exploratory
analytics and anticipatory intelligence. This is an absolutely
mission critical service for our defense and intelligence
customers, who trust BigBear.ai in situations where there is little
margin for error. We also see a ripe opportunity in the growing
commercial market, as companies dedicate their budget to technology
that allows them to harness the power of AI and ML for predictive
analytics and forecasting capabilities to manage risk and
capitalize on opportunities. In GigCapital4, we found a like-minded
strategic partner that shares our vision for the future of
data-driven decision dominance, and this business combination will
help us drive growth as a public company. We have momentum and
multiple paths for growth, and we are excited to be embarking on
this next chapter.”
“We are thrilled to partner with the BigBear.ai team to use our
unique TMT focused, Private-to-Public Equity (PPE)™ platform to
bring such an exceptionally strong company to the public markets,”
said Dr. Raluca Dinu, Founding Managing Partner of GigCapital
Global and CEO of GigCapital4. “As a public company, BigBear.ai
will have a stronger capital structure to invest in additional
technology development, expand commercial R&D and business
development teams, and accelerate growth both organically and
through acquisitions. The combination of BigBear.ai and GigCapital4
brings unique, attractive, and promising opportunities to all
stockholders and stakeholders, while substantiating our commitment
to support artificial intelligence and machine learning
technologies, which we believe is one of the highest-impact
technology verticals of our lifetime.”
Jeffrey Hart, Principal at AE Industrial Partners, said: “In a
world where the complexity and variety of data is increasing
exponentially, the Company’s AI-powered technology allows its
customers to make sense of the world around them. With a truly
differentiated position and platform in the market, we believe this
transaction will provide the necessary resources for the team at
BigBear.ai to fully realize its vision and potential.”
Kirk Konert, Partner at AE Industrial Partners, said: “We are
excited to continue our partnership with the BigBear.ai team in
this next phase of their growth. As agencies and companies across
the world deal with the proliferation of data and cyber threats,
BigBear.ai will be able to leverage its deep customer intimacy and
technology to pursue an even broader range of contracts and
penetrate new targeted industry verticals.”
- Client-Focused, Specialized Management and Workforce:
The executive team will continue to be led by Dr. Reggie Brothers,
Chief Executive Officer. The BigBear.ai team has decades of
experience as science and technology innovators and deep public
sector experience in artificial intelligence, machine learning and
big data analytics. The team has direct experience working in high
pressure, critically important situations, with 92% of the
Company’s workforce possessing secret-level or higher U.S.
government security clearance levels, which has cemented the
Company’s position as a critical partner among the most vital
defense and intelligence organizations.
- Large and Rapidly Growing Addressable Market: BigBear.ai
has robust opportunities in the global AI/ML market, which is
projected to grow from $58 billion in 2021 to $310 billion by 2026.
The Company expects its addressable market to grow as it expands
into critical and high-growth adjacent market arenas. BigBear.ai is
targeting growth in select commercial verticals, including
infrastructure, energy, transportation and logistics in the near
term, followed by the media, healthcare and financial services
verticals. BigBear.ai will continue to consider M&A targets to
strategically build its capabilities and accelerate penetration
into target markets. Growth through M&A has not been factored
into the Company’s financial projections.
- Proven “Land and Expand” Customer Strategy: BigBear.ai
has executed a successful “land and expand” strategy with its
customers and has a proven record of growing customer relationships
with new products and solutions. With a 93% new business win rate
and a 100% recompete win rate, the Company’s existing contracts
provide secure growth and position BigBear.ai for future wins
through proven performance.
- Robust Backlog and Pipeline Driving Projected Growth;
Adjusted EBITDA and Cash Flow Positive: The Company’s current
contracted backlog is approximately $500 million, with a robust
pipeline of near-term opportunities of approximately $4.5 billion.
Revenue is projected to grow from $182 million in 2021 to $764
million in 2025, a 43% compound annual growth rate (“CAGR”).
Adjusted EBITDA is projected to grow from $23 million in 2021 to
$159 million in 2025, a 63% CAGR, driven by high margin commercial
revenue. Free cash flow is projected to grow from $18 million in
2021 to $120 million in 2025, a 60% CAGR.
Transaction Overview
Upon closing of the transaction, the Company is expected to have
approximately $330 million in cash, providing the capital
flexibility needed to support organic and inorganic growth.
The cash component of the purchase price to be paid to the
equity holders of BigBear.ai is expected to be funded by
GigCapital4's cash in trust (minus any redemptions by public
stockholders), and a $200 million convertible senior unsecured note
private placement with institutional investors including Fortress,
Marathon, and Highbridge. The 5-year unsecured convertible notes,
which shall bear interest at a rate of 6% per annum, are
convertible into common shares of the combined company at a
conversion price of $11.50.
Assuming no GigCapital4 public stockholders elect to redeem
their shares, existing BigBear.ai stockholders, including AE
Industrial Partners, an investment firm specializing in the
aerospace, defense & government services, space, power
generation, and specialty industrial markets, are expected to own
approximately 73% of the combined company, with GigCapital4
sponsors expected to own 6% and public stockholders 21% of the
combined company, respectively. AE Industrial Partners will remain
a significant stockholder in BigBear.ai following the completion of
the proposed merger.
The transaction, which has been unanimously approved by
GigCapital4’s Board of Directors, is expected to close in the third
quarter of 2021, subject to, among other things, the approval by
GigCapital4 stockholders, regulatory approvals, and the
satisfaction or waiver of other customary closing conditions,
including a minimum cash condition of $300 million.
Additional information about the proposed transaction, including
copies of the merger agreements and investor presentation, will be
provided in Current Reports on Form 8-K to be filed by GigCapital4
with the Securities and Exchange Commission and available at
www.sec.gov.
Investor Conference Call and Webcast
Management of BigBear.ai and GigCapital4 will host an investor
webcast and conference call on Tuesday, June 8, 2021, at 8:30am ET
to discuss the proposed transaction and review an investor
presentation. For those investors who wish to participate, the
conference call can be accessed by calling (800) 891-3968 or (785)
424-1675 and providing the Conference ID: 59513. The webcast can be
accessed by visiting https://www.gigcapital4.com or
https://bigbear.ai. For materials and information, visit
https://www.gigcapital4.com.
Advisors
William Blair is serving as exclusive financial advisor,
Kirkland and Ellis LLP is serving as legal counsel, and Grant
Thornton is serving as auditor to BigBear.ai. Oppenheimer & Co
Inc. is serving as Capital Markets Advisor and Placement Agent, and
BMO Capital Markets is serving as Exclusive Financial Advisor, DLA
Piper LLP (US) is serving as legal counsel, and BPM LLP is serving
as auditors to GigCapital4. Mayer Brown LLP is serving as legal
counsel to Oppenheimer & Co Inc., BMO Capital Markets and
William Blair.
About BigBear.ai
A new leader in decision dominance, BigBear.ai is
operationalizing artificial intelligence and machine learning at
scale through our end-to-end data analytics platform. We deliver
superior information and decision support to customers in the
private and public sectors through our modular suite of big data
analytics and solutions. Each of our three products can be used on
its own or together, including in conjunction with a customer’s
existing technology: Observe (data ingestion and conflation),
Orient (composable machine learning at scale), and Dominate (visual
anticipatory intelligence and optimization).
BigBear.ai’s customers, which include the U.S. Intelligence
Community, Department of Defense and U.S. Federal Government, as
well as commercial customers across verticals such as
infrastructure, energy, maritime transportation and logistics, rely
on BigBear.ai’s advanced technology solutions to analyze
information, identify and manage risk, and optimize solutions to
complex problems, leading to better decision making. Headquartered
in Columbia, Maryland, BigBear.ai has additional locations in
Virginia, Massachusetts, Michigan, and California.
About GigCapital4
GigCapital4 is a Private-to-Public Equity (PPE)™ company, also
known as a blank check company or special purpose acquisition
company (SPAC), focusing on the technology, media and
telecommunications (TMT) and sustainable industries. It was
sponsored by GigAcquisitions4, LLC, which was founded by
GigFounders, LLC, each a member entity of GigCapital Global, and
formed for the purpose of entering into a merger, share exchange,
asset acquisition, stock purchase, recapitalization, reorganization
or similar business combination with one or more businesses.
“Private-to-Public Equity (PPE)” is a trademark of GigFounders,
LLC, an affiliate GigCapital4, and is used pursuant to
agreement.
About AE Industrial Partners
AE Industrial Partners is a private equity firm specializing in
Aerospace, Defense & Government Services, Space, Power
Generation, and Specialty Industrial markets. AE Industrial
Partners invests in market-leading companies that can benefit from
its deep industry knowledge, operating experience, and
relationships throughout its target markets. AE Industrial Partners
is a signatory to the United Nations Principles for Responsible
Investing. Learn more at www.aeroequity.com.
Additional Information and Where to Find It
In connection with the proposed business combinations,
GigCapital4 intends to file with the SEC a preliminary proxy
statement under the rules of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”). GigCapital4 will subsequently mail
a definitive proxy statement relating to the proposed business
combination to its stockholders. This press release does not
contain all the information that should be considered concerning
the proposed business combination and is not intended to form the
basis of any investment decision or any other decision in respect
of the business combination. Additional information about the
proposed business combinations and related transactions will be
described in GigCapital4’s Current Report on Form 8-K and proxy
statement relating to the proposed business combination and the
respective businesses of GigCapital4 and BigBear.ai, which
GigCapital4 will file with the Securities and Exchange Commission
(the “SEC”). The proposed business combination and related
transactions will be submitted to stockholders of GigCapital4 for
their consideration. GigCapital4’s stockholders and other
interested persons are advised to read, when available, the
preliminary proxy statement and the amendments thereto and the
definitive proxy statement and other documents filed in connection
with GigCapital4’s solicitation of proxies for its special meeting
of stockholders to be held to approve, among other things, the
proposed business combination and related transactions, because
these materials will contain important information about
BigBear.ai, GigCapital4 and the proposed business combination and
related transactions. When available, the definitive proxy
statement and other relevant materials for the proposed business
combination will be mailed to stockholders of GigCapital4 as of a
record date to be established for voting on the proposed business
combinations and related transactions.
Stockholders may also obtain a copy of the preliminary or
definitive proxy statement, once available, as well as other
documents filed with the SEC by GigCapital4, without charge, at the
SEC’s website located at www.sec.gov or by directing a request to
Brad Weightman, Vice President and Chief Financial Officer,
GigCapital4, Inc., 1731 Embarcadero Rd., Suite 200, Palo Alto, CA
94303, or by telephone at (650) 276-7040.
Participants in Solicitation
BigBear.ai, GigCapital4 and their respective directors and
executive officers and other persons may be deemed to be
participants in the solicitations of proxies from GigCapital4’s
stockholders in respect of the proposed business combination and
related transactions. Information regarding GigCapital4’s directors
and executive officers is available in its final prospectus
prepared and filed with the SEC on February 10, 2021 under Rule
424(b)(4) promulgated by the SEC pursuant to the Securities Act of
1933, as amended (the “Securities Act”) and related to its
previously filed Registration Statement on Form S-1. Additional
information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests will be
contained in the preliminary and definitive proxy statements
related to the proposed business combination and related
transactions when it becomes available, and which can be obtained
free of charge from the sources indicated above.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act, and Section 21E
of the Exchange Act. Forward-looking statements may be identified
by the use of words such as “estimate,” “plan,” “project,”
“forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,”
“seek,” “target” or other 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 and market share. These statements are based on various
assumptions, whether or not identified in this press release, and
on the current expectations of management of the Company 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 the Company. 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 business combination, 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 business combination or that the approval of
stockholders is not obtained; failure to realize the anticipated
benefits of the proposed business combination; risks relating to
the uncertainty of the projected financial information with respect
to the Company; risks related to the rollout of BigBear.ai's
business and the timing of expected business milestones; the
effects of competition on the Company's future business; the amount
of redemption requests made by GigCapital4's public stockholders;
the ability of GigCapital4 or the combined company to issue equity
or equity-linked securities in connection with the proposed
business combination or in the future. If any of these risks
materialize or the Company’s assumptions prove incorrect, actual
results could differ materially from the results implied by these
forward-looking statements. Additional factors that could cause
actual results to differ are discussed under the heading “Risk
Factors” and in other sections of GigCapital4’s filings with the
SEC, and in GigCapital4’s current and periodic reports filed or
furnished from time to time with the SEC. There may be additional
risks that neither GigCapital4 nor the Company presently know or
that they 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 GigCapital4 and BigBear.ai’s expectations, plans or
forecasts of future events and views as of the date of this press
release, based on information available to GigCapital4 and
BigBear.ai as of the date hereof. GigCapital4 and the Company
assume no obligation to update any forward-looking statement,
whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws. While
GigCapital4 and the Company may elect to update these
forward-looking statements at some point in the future, GigCapital4
and the Company specifically disclaim any obligation to do so.
These forward-looking statements should not be relied upon as
representing GigCapital4's and the Company'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.
Non-GAAP Financial Measure and Related Information
The financial information and data contained in this press
release is unaudited and does not conform to Regulation S-X
promulgated under the Securities Act. Accordingly, such information
and data may not be included in, may be adjusted in or may be
presented differently in, any proxy statement to be filed by
GigCapital4 with the SEC. Some of the financial information and
data contained in this press release, such as Adjusted EBITDA, have
not been prepared in accordance with United States generally
accepted accounting principles ("GAAP"). Adjusted EBITDA is defined
as of any date of calculation, the consolidated pro forma earnings
of the Company and its subsidiaries, before finance income and
finance cost (including bank charges), tax, depreciation and
amortization calculated from the audited consolidated financial
statements of such party and its subsidiaries (prepared in
accordance with GAAP), transaction fees and other non-recurring
costs. Similar excluded expenses may be incurred in future periods
when calculating these measures. GigCapital4 and BigBear.ai believe
these non-GAAP measures of financial results provide useful
information to management and investors regarding certain financial
and business trends relating to the Company’s financial condition
and results of operations. GigCapital4 and BigBear.ai believe that
the use of these non-GAAP financial measures provide an additional
tool for investors to use in evaluating projected operating results
and trends in and in comparing BigBear.ai’s financial measures with
other similar companies, many of which present similar non-GAAP
financial measures to investors. Management does not consider these
non-GAAP measures in isolation or as an alternative to financial
measures determined in accordance with GAAP. The principal
limitation of these non-GAAP financial measures is that they
exclude significant expenses and income that are required by GAAP
to be recorded in the Company's financial statements. In addition,
they are subject to inherent limitations as they reflect the
exercise of judgments by management about which expense and income
are excluded or included in determining these non-GAAP financial
measures.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210604005419/en/
For BigBear.ai: Reevemark Paul Caminiti/Delia Cannan/Pam
Greene 212-433-4600 bigbear.ai@reevemark.com
For GigCapital4: ICR Brian Ruby Brian.ruby@icrinc.com
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