EdtechX Holdings Acquisition II today annoucned a merger agreement with zSpace, a provider of commercial augmented reality (“AR”) and virtual reality (“VR”) technology in the global education market. The business combination implies a pro forma enterprise value of $195 million.
If approved, zSpace Technologies would list on the Nasdaq under the new ticker symbol ZSPX.
zSpace is a provider of commercial augmented reality and virtual reality technology in the global education market. The company offers hardware along with immersive experiential learning software modules for K-12 science, technology, engineering, game design and mathematics (“STEM”) applications, as well as workforce-oriented career and technical education applications.
Terms call for zSpace investors to receive 13.1 million shares of common stock of the combined entity. Additionally, proceeds from the transaction, before the payment of certain transaction expenses, will comprise up to $117 million of cash held in EdtechX II’s trust before redemptions and $25 million in exchange for the retirement of an equal amount of existing debt from a fully committed PIPE. Certain zSpace investors will also have the right to receive their pro rata portion of (a) up to an aggregate of 3,694,581 earnout shares in three equal tranches if certain conditions are met prior to the fifth anniversary of the closing date of the merger and (b) new warrants exercisable for up to an aggregate of 1 million shares of common stock.
Two of the company’s existing securityholders, bSpace Investments and Kuwait Investment Authority, will enter into separate subscription agreements to purchase $25 million in shares of common stock of EdtechX II at $10.15 per share, in exchange for the retirement of an equal amount of indebtedness owed by the company to those investors, and the PIPE will occur concurrently with the proposed business combination.
The transaction will require satisfaction of a $24 million minimum cash condition after the repayment of primary debt and transaction costs. Read more.
