In a significant move within the e-commerce landscape, IWAC Holding Company Inc. (IWAC) has announced a merger with Btab Ecommerce Group, Inc. (Btab), valued at $250 million. The deal is structured to create a new public entity named Pubco, which will be formed through a series of mergers and reorganizations, effectively positioning Btab as a wholly-owned subsidiary.
**Details of the Transaction**: The merger will be executed in two principal steps. First, Purchaser Merger Sub will merge with IWAC, making IWAC a wholly-owned subsidiary of Pubco. Following that, Company Merger Sub will merge with Btab, where Btab will also become a wholly-owned subsidiary of Pubco. In this process, shareholders of Btab will receive a total of 25 million shares of Pubco, comprising 24.9 million Class A shares and 100,000 Class V shares, with an aggregate equity value of $250 million, translating to a $10.00 valuation per share.
**Strategic Rationale**: This merger is seen as a strategic move to consolidate market power and enhance operational efficiencies between the two companies. By combining resources, the new entity aims to leverage Btab's e-commerce capabilities alongside IWAC's financial acumen, creating a robust platform to capture a larger share of the growing online market.
**Timeline and Next Steps**: The transaction is anticipated to close on or before December 31, 2024. Prior to closing, IWAC will undergo a domestication process to transition from a Cayman Islands company to a Delaware corporation, ensuring compliance with regulatory frameworks. Following the merger, Pubco will rebrand itself as BTAB Ecommerce Holdings, Inc.
**Market Impact**: This merger could have significant implications for shareholders and employees. Existing shareholders of IWAC will convert their shares into Pubco shares, while Btab stakeholders will see their shares transformed into Pubco equity. The merger will also create a controlled company under Nasdaq regulations, with Binson Lau, the CEO of Btab, holding substantial voting power due to the newly created Class V shares, which carry 1,000 votes each.
**Regulatory Considerations**: The merger is subject to approval from IWAC's shareholders, and both companies are preparing for potential regulatory scrutiny under antitrust laws. The IWAC Board has received a fairness opinion validating the valuation of Btab, ensuring compliance with financial regulations.
Overall, this merger represents a pivotal step for both IWAC and Btab as they aim to enhance their market presence and operational efficiencies in the competitive e-commerce landscape.