SmartRent.com announced today it has entered into a definitive business combination agreement with Fifth Wall Acquisition I, a SPAC sponsored by an affiliate of Fifth Wall, the largest venture capital firm focused on the global real estate industry and proptech.
The equity value of the combined company is $2.2 billion, assuming no public shareholders of the SPAC exercise their redemption rights.
Post-merger, the company is expected to have up to approximately $513 million in cash, including $345 million held in the SPAC’s trust from its February IPO. The transaction is further supported by a $155 million PIPE at $10 per share from leading real estate companies, SmartRent customers, and institutional financial investors, including Starwood Capital Group, Lennar, Invitation Homes, Koch Real Estate Investments, Baron Capital Group, D1 Capital Partners, Long Pond Capital, and Conversant Capital.
After the merger, SmartRent’s existing shareholders are expected to own approximately 73 percent of the pro forma company at close.
SmartRent and Fifth Wall are also aligning long-term interests. The founder shares of Fifth Wall’s sponsor are locked up for periods of up to three years. Additionally, all shares held by SmartRent’s existing shareholders will be subject to a six-month lockup post-closing. No SPAC warrants have been issued, and as a result, the companies said shareholders will benefit from less dilution and a simpler capital structure. Read more.
