In SPAC news this week, connected vehicle data company Wejo and Virtuoso Acquisition announced that they have entered into a definitive agreement for a business combination, while BigBear.ai said it is going public via merger with SPAC GigCapital4.

BIGBEAR SPAC DEAL

BigBear.ai, a provider of artificial intelligence, machine learning, cloud-based big data analytics, and cyber engineering solutions, and GigCapital4, (GIG), a special purpose acquisition company, or SPAC, announced 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 and is expected to be listed on the Nasdaq. The transaction values the company, which had $140M in revenues in 2020, at an enterprise value of approximately $1.57B. Upon closing of the transaction, the company is expected to have approximately $330M in cash.

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 $200M 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.

WEJO, VIRTUOSO MERGER

Wejo Limited, a connected vehicle data company, and Virtuoso Acquisition (VOSO), a special purpose acquisition company, announced that they have entered into a definitive agreement for a business combination. Upon completion of the transaction, the combined company will operate under the Wejo name. Pursuant to the transaction, Virtuoso will combine with Wejo at an enterprise value of $800 million, which implies an estimated $1.1B pro forma equity value. Wejo's existing shareholders are rolling 100% of their existing equity into the combined company and will own approximately 64% of the issued and outstanding shares immediately following closing of the business combination, assuming no redemptions by Virtuoso's public stockholders.

The transaction is expected to deliver approximately $330M of gross proceeds, composed of Virtuoso's $230M cash held in trust, assuming no redemptions by Virtuoso's public stockholders, and a fully committed $100M PIPE priced at $10.00 per share with participation from lead strategic investors including Palantir Technologies Inc. (PLTR) and General Motors (GM). Additional strategic investors have expressed interest in participating in the PIPE for up to an incremental $25M within the next 30 days and are in continuing negotiations with the parties. Cash proceeds from the transaction will fully fund Wejo's five-year plan and position the company to execute on all of its strategic objectives, including acceleration of OEM onboarding, continued rollout of new offerings and services for connected vehicle customers and further expansion into new geographies and in-demand marketplaces. The company will be well capitalized with an estimated $300M cash at closing and $32M of debt. The board of directors of Virtuoso and the board of directors of Wejo have each unanimously approved the proposed transaction, which is expected to close during the second half of 2021, subject to Virtuoso shareholder approval and customary closing conditions.

OVERSTOCK'S TZERO EXPLORING OPTIONS

Tokenized securities venue tZERO, the "crown jewel of Overstock's (OSTK) Medici Ventures," is in search of a buyer to "take the trading platform to the next level," CoinDesk's Ian Allison reported, citing two people familiar with the matter. According to tZERO VP of Investor Relations Michael Mougias, the goal is not to sell tZERO, but rather to find the right strategic partners. However, this could mean taking tZERO public via a special purpose acquisition company, or SPAC, or there "could be strategic buyers that perhaps want to take control of the business, or take up a majority stake in the business, which would result in a change of control, and that would technically be a buyer," Mougias reportedly said in an interview.