US-based special purpose acquisition firm Proficient Alpha has entered into a business combination agreement with Lion Financial.
The merger transaction is valued at approximately $125m.
Under the terms of the deal, a newly formed holding company, dubbed Pubco, will acquire 100% shares of Lion in exchange for newly issued shares of Pubco.
The Pubco will issue 45% of shares in the form of Pubco Class B stock to Lion shareholders, which amounts to $125m based on an enterprise value of Lion.
Out of 45% of shares, 15% will be held to satisfy post-closing purchase price adjustments and 30% is subject to vesting upon Lion satisfying certain net income milestones.
Proficient, as per the agreement, will also merge into a newly formed subsidiary of Pubco. It shareholders will receive equivalent shares of Pubco in exchange for Proficient securities.
Lion shareholders currently own nearly 75% of the issued and outstanding capital shares of Lion.
Following the completion of the deal, shareholders of Lion and Proficient will own approximately 44% and 56% of the economic value of Pubco shares, respectively.
Both Proficient and Lion will become a wholly-owned subsidiary of Pubco.
Proficient CEO Stephen Sze said: “Proficient and Lion Financial Group will merge to create a premier financial services provider.
“The combined company will have the passion and capabilities to compete more effectively and profitably in the global marketplace.”
Lion chairman Jian Wang added: “Since the founding of our company four years ago, Lion has been a disruptive force and delivered top-of-the-class tools and services to our clients.
“By becoming a public company, we will be able to leverage our unique business model on a much larger scale, catapulting our business into an exciting new phase of growth toward a major brand name in the financial services industry.”
Subject to the receipt of regulatory approvals, the transaction is expected to be completed by the second quarter of 2020.