BigBear.ai, a provider of artificial intelligence, machine learning, cloud-based big data analytics, and cyber engineering solutions, and GigCapital4 announced today that they have entered into a definitive merger agreement.
The transaction values the combined company at $1.57 billion. BigBear.ai had $140 million in revenues in 2020.
The cash component of the purchase price to BigBear.ai is expected to be funded by GigCapital4’s cash in trust (minus any redemptions), and a $200 million convertible senior unsecured note private placement with institutional investors including Fortress, Marathon, and Highbridge. The 5-year unsecured convertible notes, which will bear annual interest of 6 percent, are convertible into common shares of the combined company at $11.50 for a share. GigCapital4 raised $312 million in a February IPO.
Assuming no GigCapital4 public stockholders elect to redeem their shares, existing BigBear.ai stockholders, including investment firm AE Industrial Partners, are expected to own approximately 73 percent of the combined company, with GigCapital4 sponsors expected to own 6 percent and public stockholders 21 percent. AE Industrial Partners will remain a significant stockholder in BigBear.ai following the completion of the proposed merger.
Pending regulatory and shareholder approvals, the transaction is expected to be completed in the third quarter, at which time BigBear.ai is expected to list on the Nasdaq. Read more.
