- Bakkt Holdings, a digital asset marketplace launched in 2018 by Intercontinental Exchange (NYSE:ICE) and a group of investors, will become a publicly traded company through a merger with VPC Impact Acquisition Holdings (VIH), a special purpose acquisition company sponsored by Victory Park Capital.
- The business combination between Bakkt and VIH values the combined company at an enterprise value of ~$2.1B.
- The transaction is expected to result in more than $500M of cash on the new company's balance sheet, reflecting a contribution of up to $207M of cash held in VPC Impact Acquisition Holdings' trust account and a $325M concurrent private investment in public equity of class A common stock of the combined company, priced at $10.00 per share, including a $50M 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.
- Assuming no shareholders of VIH exercise their redemption rights, current Bakkt equity holders, including ICE, will own ~78%, VIH public shareholders will own ~8%, VPC will own 2%, and PIPE investors (a group that will also include ICE) will own ~12% of the issued and outstanding common stock of the combined company at closing.
- Following completion of the business combination, which is expected to be in Q2 2021, ICE is expected to have a 65% economic interest and a minority voting interest in the combined company.
- ICE's net revenue related to Bakkt is expected to be ~$9M in Q4 2020 and ~$7M in Q1 2021; non-GAAP operating expenses related to Bakkt are expected to be $22M in Q4 2020 and $23M in Q1 2021.
- VIH gains 0.7% in premarket trading, while ICE falls 0.5%.
- VPC Impact Acquisition debuted in its IPO in September, selling 20M units at $10.00 each.