BY Fraser Tennant
In a $2bn deal that takes it from private to public ownership, global Microsoft strategic cloud partner AvePoint is to merge with publicly traded special purpose acquisition company (SPAC) Apex Technology.
The combined company will benefit from $140m in proceeds from a group of institutional investors participating in the transaction through a committed private investment (PIPE).
Furthermore, Sixth Street, the global investment firm which led a $200m growth equity investment in AvePoint in 2019, will continue as a shareholder in the combined company, which will be led by AvePoint’s co-founder and chief executive Dr Tianyi Jiang, with AvePoint co-founder Kai Gong serving as executive chairman.
Upon completion of the proposed transaction, existing AvePoint shareholders are expected to own approximately 72 percent of the combined company, which is expected to have approximately $252m in cash on the balance sheet.
Headquartered in Jersey City, New Jersey, AvePoint has grown to serve the largest software-as-a-service (SaaS) userbase in the Microsoft 365 ecosystem, with more than 7 million cloud users and an estimated market of $33bn by 2022 according to the International Data Corporation (IDC).
“AvePoint provides critical data management solutions that enable organisations to make their digital collaboration systems more productive, secure and compliant,” said Dr Jiang. “The impact of coronavirus (COVID-19) and the growth of Microsoft’s cloud solutions, including Microsoft 365 and Microsoft Teams, have accelerated demand for our products.
“And we were growing prior to COVID-19 as well,” he continued. “We have achieved eight quarters of impressive growth. We have positive free cash flow and are in line with the key ‘Rule of 40’ SaaS industry growth metric. Going public now gives us the ability to meet this demand and scale up faster across product innovation, channel marketing, international markets and customer success initiatives.”
The merger has been approved by the board of directors of Apex, as well as the board of directors of AvePoint, and is subject to the satisfaction of customary closing conditions, including the approval of the shareholders of Apex and AvePoint and the receipt of any required regulatory approvals.
Gavriella Schuster, corporate vice president at Microsoft, said: “AvePoint’s merger to become a public company demonstrates the power of Microsoft’s channel and the opportunity it provides our partners to flourish long-term.”
News: Sixth Street-backed AvePoint to go public via $2 billion merger