Alpha Capital is the first Latin American-focused technology SPAC to merge with a target company
Latin America’s first fully integrated data software platform is expected to have a market capitalization of approximately $1 billion
Semantix expects to have a net revenue compound annual growth rate of 57% between 2019 and 2023, and increase its current customer base of 300 companies in over 15 countries
Semantix, Latin America’s first fully integrated data software platform, announced that it has entered into a definitive agreement to merge with Alpha Capital, a special purpose acquisition company (“SPAC”) focused on technology. The announcement marks the first time a Latin American-focused technology SPAC has merged with a target company.
Semantix will have an implied equity value of approximately $1 billion, assuming a $10.00 per share price and no trust redemptions, and is expected to trade on the Nasdaq Capital Market under the ticker symbol STIX. In connection with the transaction, institutional investors have committed approximately $94 million in subscriptions to a private placement in public equity (“PIPE”), which is expected to be funded at the merger’s closing. Innova Capital, one of Alpha Capital’s largest existing investors, has committed not to redeem $23 million of Alpha Capital’s publicly traded Class A ordinary shares. Together with the current PIPE commitments, this represents sufficient capital to satisfy the minimum cash condition to complete the transaction. The merger is expected to close in the first half of 2022, subject to shareholder approvals and other customary closing conditions.
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“We founded Alpha Capital to give some of Latin America’s best entrepreneurs new access to late-stage capital so they can unlock the full potential in their ideas, accelerate growth and become a global player”
Semantix’s current management team will continue to oversee the business and use the transaction’s proceeds to grow its share of the $89 billion addressable market opportunity in data software, storage and integration. It targets its services to a range of companies in industrial, finance, retail, telecommunications, healthcare and other sectors, from small businesses to large enterprises.
Founded in 2010 by CEO Leonardo Santos, Semantix expects to earn nearly $73 million in 2022 from more than 300 customers in over 15 countries. Headquartered in Sao Paulo, Brazil, Semantix’s customers already include all of that country’s top finance companies and nationwide telecommunications service providers. In addition, a global automaker relies on Semantix artificial intelligence and analytics services to monitor potential production disruptions and identify the problem’s source. A global electronics company also uses Semantix’s software for full data integration and optimization of its e-commerce ecosystem in Latin America. Similarly, a global financial institution uses Semantix artificial intelligence models to support its payments and anti-fraud systems, and enhance credit risk management tools.
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“Businesses need Semantix’s frictionless, end-to-end platform to capitalize on the power of data, and technologies like artificial intelligence that are transforming industries globally,” said Leonardo Santos, the company’s founder and CEO.
“Leonardo and his team have made Semantix a leader atop more than 20,000 technology companies in Latin America, and we believe it can become a global force,” said Alec Oxenford, Alpha Capital’s Chief Executive Officer and Chairman. “Both Alpha Capital’s sponsors and PIPE investors recognize this opportunity and the potential for exponential growth.”
“We founded Alpha Capital to give some of Latin America’s best entrepreneurs new access to late-stage capital so they can unlock the full potential in their ideas, accelerate growth and become a global player,” added Alpha Capital’s President and Director, Rafael Steinhauser.
“This deal puts Semantix in an even stronger position to scale internationally by leveraging its profitability and Latin American foothold,” said Veronica Allende Serra, Innova Capital’s Founding Partner.
Transaction Overview
The combined company will have a pro forma enterprise value of $693 million, assuming a $10.00 per share price and no shareholder redemptions. The transaction is funded with $324 million, including $230 million from the Alpha Capital trust (assuming no redemptions). A $94 million PIPE has already been committed by top institutional investors and existing Semantix shareholders, including Inovabra Ventures (a fully owned subsidiary of Bradesco, one of Brazil’s leading financial institutions), Crescera, FJ Labs, Oxenford, Steinhauser and others. Innova Capital, one of Alpha Capital’s largest existing shareholders, has also committed not to redeem $23 million of Alpha Capital’s publicly traded shares. The approximately $117 million of committed capital will satisfy, when funded at closing, the minimum cash of $85 million required in the definitive merger agreement. Semantix expects to receive the $324 million in primary proceeds, with $309 million cash available on its post-business combination balance sheet (post transaction expenses), assuming no redemptions.
Assuming no redemptions, ownership structure following the transaction is expected to be 62.5% existing Semantix shareholders, 9.4% PIPE investors, 23.2% Alpha Capital shareholders, and 4.9% Alpha Capital sponsors. Current Semantix management will also participate in an earnout based on future share price performance.
The transaction, which has been approved by the boards of directors of Semantix and Alpha Capital, is expected to close by the second quarter of 2022.
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