- With the support from SPAC, IronSource plans to go public without launching an IPO.
- The PIPE includes investors like Tiger Global Management, Morgan Stanley, Nuveen, Hedosophia, Wellington Management, The Baupost Group, and certain funds offered by Fidelity Investments Canada.
IronSource says it would raise $2.3 billion in cash proceeds for both shareholders and the company through transactions. It will also include both the proceeds from SPAC and an additional private investment known as PIPE or private investment in public equity. SPAC has become a widely used path for fast-moving companies to go public without the hassle of traditional IPO. SPACs are set up by managers to raise money in a blind shell public company. Also, the investors don’t know where they are investing.
The SPAC finds an appropriate company to conduct a merger thereby taking a private company public. In this way it is quicker compared to the initial public offering process. SPAC deals are often blended with PIPEs to raise money from known investors to increase confidence in the deal.
IronSource will merge with Thoma Bravo Advantage, a SPAC, to develop a platform for the app economy. The company becomes the second major game-related company from Israel to reach public markets after social casino game maker Playtika raised $1.9 billion at an $11.4 billion valuations in an IPO in December. IronSource says that its mobile monetization platform powers up more than 87% of the top 100 mobile games.
Company financials:
The company has not declared its entire financial results yet but it surely revealed enough to offer a large picture of the company’s performance. IronSource said that it recorded a revenue of $332 million in 2020 and adjusted earnings before interest, taxes, depreciation, and amortization of $104 million. Compared to 2019 the revenue shot up by 83% by 2020. It has adjusted EBITDA margins of 31% already. The company takes pride in serving over 2.3 billion monthly active users across its global customer base.
IronSource says that its core addressable market plans to grow to as much as $41 billion by 2025. The transaction will bring up to $2.3 billion in cash proceeds. It includes an oversubscribed PIPE of $1.3 billion and $1 billion of cash held in the trust account of Thoma Bravo Advantage with an assumption of no redemptions by public shareholders.
After giving effect to the transaction the company expects to have about $740 million of unrestricted cash. An affiliate of Thoma Bravo LP has committed $300 million to the PIPE; Orlando Bravo plants to join IronSource’s board for the closing of the deal.
Investors under PIPE:
The PIPE includes investors like Tiger Global Management, Counterpoint Global (also known as Morgan Stanley), Nuveen, Hedosophia, Wellington Management, The Baupost Group, and certain funds offered by Fidelity Investments Canada.
“Joining forces with Thoma Bravo Advantage to bring IronSource to the public markets presents an opportunity to partner with the world’s leading software investor to achieve the next level of growth,” said IronSource CEO Tomer Bar Zeev in a statement. “Despite our previous progress pursuing a traditional IPO, when we met with Thoma Bravo Advantage we found an alignment of vision and shared conviction about the long-term growth we can drive at IronSource that made them the perfect partner as we take this next step in growing our company, and the market as a whole.”