Israeli digital intelligence company Cellebrite has announced that it will list on Nasdaq through a SPAC merger with TWC Tech Holdings II Corp. (Nasdaq: TWCT), at a company valuation of $2.4 billion. The Petah Tikva-based company provides digital intelligence solutions to law enforcement agencies and governments.
Special purpose acquisition companies (SPACs) are blank check companies without any operations of their own, which raise money solely in order to merge with a target company. Since December mergers by Israeli tech companies with SPACs have amounted to companies with valuations of more than $40 billion, most of which have yet to be completed.
$580 million in cash will be available to Cellebrite on completing the SPAC merger, comprised of TWC Tech Holdings' cash held in trust, assuming no redemptions by public stockholders. Upon closing, TWC Tech Holdings' shareholders will receive a combination of cash and stock in Cellebrite. The transaction includes a private investment of approximately $300 million in Cellebrite ordinary shares that will be purchased directly from existing shareholders of Cellebrite, who are primarily from early investors in the company, and which are expected to close concurrently with the merger of TWC Tech Holdings with a subsidiary of the company. Leading institutional investors, including Light Street Capital and Makena Capital, and strategic investor Axon Enterprise, Inc., participated in the private investment.
Cellebrite was founded in 2001 by Yaron Baratz, Yuval Aflalo and Avi Yablonka and is managed by CEO Yossi Carmil. In 2007, Japan's Sun Corp. acquired Cellebrite for just $17 million. Carmill has told "Globes" in the past why the company was sold for such a small amount. "The main shareholders, the three founders, wanted to sell. We were sold very cheaply for a company which had grown without raising any external capital. We are a rare story."
In 2019, Israel Growth Partners (IGP) led a $110 million in Cellebrite at a company valuation of $440 million, which was in fact the company's first-ever financing round. As part of the SPAC merger, IGP's Haim Shani will become Cellebrite's chairman Ryusuke Utsumi will step down but remain on the board.
BofA Securities and J.P. Morgan Securities LLC are acting as placement agents to Cellebrite, and TWC Tech Holdings. BofA Securities is also serving as capital markets advisor to TWC Tech Holdings. White & Case LLP and Meitar Law Offices are serving as legal advisors to Cellebrite, while Herzog Fox Neeman will support the SPAC.
Carmil said, "Cellebrite's vision is to provide industry-leading technology and a holistic DI solution that enables our customers to transform and digitize their entire investigative process. Today marks an exciting step for our company and team, and will put us in an even better position to capture the opportunities ahead. As a result of the transaction, we will seek to build upon our leadership position by making strategic, targeted investments to expand our capabilities, deepen our position in the public sector and attract new customers in the growing private sector market. At Cellebrite, we are most passionate about the positive, meaningful outcomes our work enables for the powerless, threatened and underserved. Importantly, we recognize the immense responsibility that comes with operating a business that partners with law enforcement agencies but protects the privacy of citizens. To that end, Cellebrite and our Board have a deep commitment to creating a safer world and to operating in a lawful and ethical manner that is unwavering."
TWC Tech Holdings CEO Adam Clammer said: "At True Wind Capital we are focused on investing in leading technology companies, and the Cellebrite opportunity ticks all the boxes on our wish list for a long-term investment in a public company. Cellebrite empowers public and private sector customers to drive digital transformation of the investigative workflow through its advanced technology. Importantly, Cellebrite's technology helps bring justice to victims of crimes, including cases of child exploitation, violent crimes such as homicide and sexual assault, drug and human trafficking, fraud and financial crime. We are proud to be partnering with a company that is having a real impact on these issues."
Published by Globes, Israel business news - en.globes.co.il - on April 8, 2021
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