Photographer: Chuanchai Pundej / EyeEm / Getty Images
Photographer: Chuanchai Pundej / EyeEm / Getty Images
Thoma testing company Thoma Bravo has reached an agreement to take over the application software company ironSource public 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 $ 1.3 billion new investment transaction from a group of blue-chip asset managers, including Tiger Global Management, Wellington Management and Seth Klarman’s Baupost Group, according to a statement on Sunday, confirming 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 expects to have $ 740 million in cash upon completion.
Orlando Bravo, founder and administrative partner of Thoma Bravo, the private equity giant behind SPAC, will join ironSource’s board of directors.
“Being one of the fastest and most innovative platforms for building and scaling business in the application economy, ironSource is well positioned for continued success as a public company,” Bravo said in statement.
ironSource is unusual against the background of the recent wave of SPAC objectives, as it is already profitable; the company had earnings before interest, taxes, amortization and amortization of $ 104 million in 2020, according to the statement.
The Tel Aviv-based company was founded by eight founders in 2010 and offers software used by application developers and telecommunications operators. All the founders are expected to remain after the agreement with Thoma Bravo Advantage and will hold supervoting 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.
Transaction structure
The structure of the transaction is in line with Thoma Bravo’s private equity model.
Under Bravo, the company has built a reputation for buying cloud software companies, maintaining existing management and supporting them in a more capital-like way. It is a lightweight model that contradicts the traditional private equity wisdom of financial engineering to provide better returns.
IronSource was in the advanced stages of its initial public offering when chief executive and co-founder Tomer Bar Zeev was introduced to Bravo in early February, people said. The two decided to continue the business, leaving ironSource to drop its IPO plans and Thoma Bravo Advantage to discuss with other potential SPAC targets.
“Despite our previous progress in pursuing a traditional IPO, when we met with Thoma Bravo Advantage, we found an alignment of vision and a shared belief in the long-term growth we can drive at IronSource, which “He made the perfect partner as we take this next step in growing our company,” Zeev said in a statement.
In 2019, the 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 SPAC, and Robert “Tre” Sayle is the CEO.
This month, the private equity firm announced a $ 2.4 billion deal to make data integration and integrity firm Talend SA is private and is close to a $ 3.7 billion acquisition of Calypso Technology’s financial software business, Bloomberg News reported.
The IronSource agreement is due to end in the second quarter. Goldman Sachs Group Inc., Jefferies Financial Group Inc. and Citigroup Inc. advised IronSource about the transaction.
(Updates to the ironSource CEO’s comment in paragraph 11.)