EdtechX Holdings Acquisition II in an 8-K filing included an investor presentation highlighting its proposed merger 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 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.
Announced in May, 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 include up to $117 million in EdtechX II’s trust — less any 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 closing of the business combination.
The deal requires a $24 million minimum cash condition after the repayment of primary debt and transaction costs. Read more.
