Photographer: Chuanchai Pundej / EyeEm / Getty Images
Photographer: Chuanchai Pundej / EyeEm / Getty Images
Thoma Bravo’s blank verification firm has reached an agreement to take over the application software company Public IronSource through a merger that values the combined business at $ 11.1 billion.
Thoma Bravo Advantage, a special purpose acquisition company or SPAC, will help fund the deal with a $ 1.3 billion new investment from a group of integrated asset managers Tiger Global Management, Wellington Management and Seth Klarman’s According to a statement on Sunday, Baupost Group confirmed a Bloomberg News report.
Under the terms of the deal, IronSource shareholders will receive $ 10 billion, including $ 1.5 billion in cash and most of the company’s combined shares. IronSource is expected to have $ 740 million in cash at the end.
Orlando Bravo, founder and managing partner of Thoma Bravo, the private equity giant behind SPAC, will join the ironSource board.
“As one of the fastest growing and most innovative platforms for building and scaling businesses in the application economy, IronSource is well positioned to continue to be successful as a public company,” Bravo told statement.
IronSource is unusual amid the recent wave of SPAC goals, as it is already profitable; according to the statement, the company made profits before interest, taxes, depreciation and amortization of $ 104 million in 2020.
The Tel Aviv-based company was established by eight founders in 2010 and provides software used by application developers and telecom operators. All the founders are expected to continue after the deal with Thoma Bravo Advantage and will have supervote shares, giving them a five to one ratio, according to people familiar with the matter, who asked not to be identified. because the details are not public.
Structure of the deal
The structure of the agreement is consistent with Thoma Bravo’s private equity model.
Under Bravo, the company has consolidated itself to buy cloud software companies, maintaining existing management and supporting them in a way more akin to venture capital. It is a light-touch model that goes against the traditional private capital wisdom of financial engineering for better returns.
IronSource was in the advanced stages of its public bidding presentation when its first executive and co-founder, Tomer Bar Zeev, was introduced to Bravo in early February, people said. The two decided to continue the deal, leaving IronSource to abandon its IPO plans and Thoma Bravo Advantage to hold discussions with other potential SPAC targets.
“Despite our previous advances in the search for a traditional IPO, when we met with Thoma Bravo Advantage, we found an alignment of the shared vision and conviction about the long-term growth we can drive at IronSource that it made them the perfect partner as we take this next step by growing our business, ”Zeev said in the statement.
In 2019, funds managed by CVC Capital Partners acquired a minority stake in IronSource for more than $ 400 million.
Thoma Bravo Advantage raised $ 1 billion in an initial public offering in January. Bravo is the president of the SPAC and Robert “Tre” Sayle is the CEO.
This month, the private equity firm announced a $ 2.4 billion deal to consolidate data integration and integrity Talend SA is private and is about a $ 3.7 billion acquisition of financial software business Calypso Technology, Bloomberg News reported.
The deal with IronSource will close in the second quarter. Goldman Sachs Group Inc., Jefferies Financial Group Inc. and Citigroup Inc. they advised IronSource on the transaction.
(Updates with the IronSource CEO comment in paragraph 11.)