GigCapital4 filed a preliminary proxy statement outlining terms of its proposed merger with BigBear.ai, a provider of artificial intelligence, machine learning, cloud-based big data analytics, and cyber engineering solutions.
The transaction values the combined company at $1.57 billion. BigBear.ai had $140 million in revenues in 2020. A shareholder vote date has not been published, although the deal is expected to close in the third quarter.
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. Read more.