Proficient Alpha Acquisition Corp., a Nevada corporation
(“Proficient”) (NASDAQ:PAAC) and special purpose acquisition
company formed for the purpose of entering into a business
combination, and Lion Financial Group Limited, a British Virgin
Islands corporation (“Lion”) and Hong Kong-based diversified
financial services company, announced today they have entered into
a definitive business combination agreement (the “BCA”) for a
transaction valued at approximately $125 million.
Stephen Sze, Proficient’s CEO said “It’s my
great pleasure to announce today that Proficient and Lion Financial
Group will merge to create a premier financial services provider.
The combined company will have the passion and capabilities
to compete more effectively and profitably in the global
marketplace. The goal can be achieved as a result of
integration of our competitive advantages.”
“Since the founding of our company four years
ago, Lion has been a disruptive force and delivered
top-of-the-class tools and services to our clients.” said Mr. Jian
Wang, Chairman of Lion. “By becoming a public company, we
will be able to leverage our unique business model on a much larger
scale, catapulting our business into an exciting new phase of
growth toward a major brand name in the financial services
industry.”
Pursuant to the BCA, at the closing of the
transactions, a newly formed Cayman Islands holding company
(“Pubco”) will acquire 100% of the issued and outstanding shares of
Lion in exchange for newly issued shares of Pubco, and Proficient
will merge with a newly formed subsidiary of Pubco, pursuant to
which each Proficient securityholder will receive in exchange for
their Proficient securities a substantially equivalent security of
Pubco (the “Transaction”). Following the Transaction, each of
Proficient and Lion will become a wholly-owned subsidiary of
Pubco. The Transaction closing is subject to customary
conditions and is currently expected to occur in the second
calendar quarter of 2020.
The value of the Pubco shares to be issued to
the Lion shareholders at the closing will be based on an enterprise
value of Lion of $125 million, subject to adjustment based on
Lion’s net debt, transaction expenses and working capital as of the
closing. In the Transaction, certain Lion shareholders
currently owning approximately 75% of the issued and outstanding
capital shares of Lion will receive new Pubco Class B stock
entitling them to 10 votes per share. Assuming no redemption
by Proficient shareholders and no purchase price adjustments,
immediately following the closing, the current shareholders of Lion
and Proficient are expected to hold approximately 44% and 56% of
the economic value of the issued and outstanding shares of Pubco,
respectively. Holders of the Pubco Class B stock collectively
are expected to hold a majority of the voting power of Pubco
following the closing. As part of the transaction, 45% of the
Pubco shares being issued to Lion shareholders in the form of Pubco
Class B stock will be placed into escrow, with 15% to be used to
satisfy post-closing purchase price adjustments and indemnification
claims and 30% subject to vesting upon Lion satisfying certain net
income milestones. All cash remaining in Proficient at the
closing of the Transaction after paying off transaction expenses
and Proficient liabilities is expected to be used for Lion’s
growth.
Following the closing of the Transaction, the
Pubco will be led by Lion’s current management team, with Mr.
Wilson (Chunning) Wang as Chief Executive Officer, Mr. Hua Luo as
Chief Operating Officer, and Mr. Jian Wang as Chairman of the Board
of Directors. Lion will remain headquartered in Hong Kong.
Advisors
I-Bankers Securities, Inc. is acting as the
financial advisor to Proficient, Ellenoff Grossman & Schole LLP
is acting as Proficient’s U.S. legal advisors, Harneys is acting as
its Cayman Islands legal advisors and Han Kun is acting as its Hong
Kong legal advisors.
Kirkland & Ellis LLP is acting as U.S. legal
advisors to Lion, Ogier is acting as its Cayman Islands legal
advisors and O Tse & Co. is acting as its Hong Kong legal
advisors.
About Proficient Alpha Acquisition Corp.
Proficient Alpha Acquisition Corp. is a blank
check company formed for the purpose of entering into a merger,
share exchange, asset acquisition, stock purchase,
recapitalization, reorganization or other similar business
combination with one or more businesses or entities.
Proficient’s efforts to identify a prospective target
business will not be limited to a particular industry or geographic
region, although Proficient intends to focus its search on
companies which provide financial services in Asia, primarily
China.
About Lion Financial Group Limited
Lion operates state-of-the-art trading platforms
that offer a wide spectrum of products and services, with a focus
on Chinese investors. Lion’s products and services include (i)
contract-for-difference (CFD) trading service, (ii) insurance
agency service, (iii) futures brokerage service, (iv) securities
brokerage service and (v) asset management service. Lion enables
these services through a variety of applications available on iOS,
Android, PC and Mac platforms. Lion’s clients are concentrated on
well-educated and affluent Chinese investors residing inside and
outside the PRC (other than in the United States), as well as
institutional clients in Hong Kong that use its futures brokerage
service.
Forward-Looking Statements
This press release contains, and certain oral
statements made by representatives of Proficient, Lion and Pubco
and their respective affiliates, from time to time may contain,
“forward-looking statements” within the meaning of the “safe
harbor” provisions of the Private Securities Litigation Reform Act
of 1995. Proficient’s, Lion’s and Pubco’s actual results may differ
from their expectations, estimates and projections and
consequently, you should not rely on these forward-looking
statements as predictions of future events. Words such as “expect,”
“estimate,” “project,” “budget,” “forecast,” “anticipate,”
“intend,” “plan,” “may,” “will,” “could,” “should,” “believes,”
“predicts,” “potential,” “might” and “continues,” and similar
expressions are intended to identify such forward-looking
statements. These forward-looking statements include, without
limitation, Proficient’s, Lion’s and Pubco’s expectations with
respect to future performance and anticipated financial impacts of
the Transaction, the satisfaction of the closing conditions to the
Transaction and the timing of the completion of the Transaction.
These forward-looking statements involve significant risks and
uncertainties that could cause actual results to differ materially
from expected results. Most of these factors are outside the
control of Proficient, Lion or Pubco and are difficult to predict.
Factors that may cause such differences include, but are not
limited to: (1) the occurrence of any event, change or other
circumstances that could give rise to the termination of the BCA;
(2) the inability to complete the BCA, including due to failure to
obtain approval of the shareholders of Proficient or other
conditions to closing in the Transaction agreement; (3) delays in
obtaining or the inability to obtain any necessary regulatory
approvals required to complete the transactions contemplated by the
BCA; (4) the inability to obtain or maintain the listing of the
post-acquisition company’s ordinary shares on NASDAQ following the
Transaction; (5) the risk that the Transaction disrupts current
plans and operations as a result of the announcement and
consummation of the Transaction; (6) the ability to recognize the
anticipated benefits of the Transaction, which may be affected by,
among other things, competition, the ability of the combined
company to grow and manage growth profitably and retain its key
employees; (7) costs related to the Transaction; (8) changes in
applicable laws or regulations; (9) the possibility that Lion,
Pubco or the combined company may be adversely affected by other
economic, business, and/or competitive factors; and (10) other
risks and uncertainties to be identified in the proxy
statement/prospectus (when available) relating to the Transaction,
including those under “Risk Factors” therein, and in other filings
with the Securities and Exchange Commission (“SEC”) made by
Proficient, Lion and Pubco. Proficient, Lion and Pubco caution that
the foregoing list of factors is not exclusive. Proficient, Lion
and Pubco caution readers not to place undue reliance upon any
forward-looking statements, which speak only as of the date made.
None of Proficient, Lion or Pubco undertakes or accepts any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements to reflect any change
in its expectations or any change in events, conditions or
circumstances on which any such statement is based, subject to
applicable law.
No Offer or Solicitation
This press release is for informational purposes
only and shall not constitute an offer to sell or the solicitation
of an offer to buy any securities pursuant to the proposed
transactions or otherwise, nor shall there be any sale of
securities in any jurisdiction in which the offer, solicitation or
sale would be unlawful prior to the registration or qualification
under the securities laws of any such jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
No Assurances
There can be no assurance that the proposed
Transaction will be completed, nor can there be any assurance, if
the Transaction is completed, that the potential benefits of
combining the companies will be realized. The description of the
Transaction contained herein is only a summary and is qualified in
its entirety by reference to the definitive agreements relating to
the Transaction, copies of which will be filed by Proficient with
the SEC as an exhibit to a Current Report on Form 8-K.
Important Information about the Transaction and Where to
Find It
In connection with the transaction described
herein, Pubco and Proficient will file relevant materials with the
SEC, including Pubco’s Form F-4 that will include a proxy statement
of Proficient that constitutes a prospectus for Pubco and a
definitive proxy statement for Proficient’s shareholders. Promptly
after filing its definitive proxy statement with the SEC,
Proficient will mail the definitive proxy statement and a proxy
card to each shareholder entitled to vote at the special meeting
relating to the Transaction. INVESTORS AND SECURITY HOLDERS
OF PROFICIENT AND LION ARE URGED TO READ THESE MATERIALS (INCLUDING
ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT
DOCUMENTS IN CONNECTION WITH THE TRANSACTION THAT PUBCO OR
PROFICIENT WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PROFICIENT,
PUBCO, LION AND THE TRANSACTION. The preliminary proxy
statement/prospectus, the definitive proxy statement/prospectus and
other relevant materials in connection with the transaction (when
they become available), and any other documents filed by Proficient
with the SEC, may be obtained free of charge at the SEC’s website
(www.sec.gov) or by writing to Proficient Alpha Acquisition Corp.
at 40 Wall St., 29th Floor, New York, New York 10005.
Participants in Solicitation
Proficient, Lion and Pubco and their respective
directors, executive officers and employees and other persons may
be deemed to be participants in the solicitation of proxies from
the holders of Proficient ordinary shares in respect of the
proposed Transaction. Information about Proficient’s directors and
executive officers and their ownership of Proficient’s ordinary
shares is set forth in Proficient’s Annual Report on Form 10-K for
the year ended September 30, 2019 filed with the SEC, as modified
or supplemented by any Form 3 or Form 4 filed with the SEC since
the date of such filing. Other information regarding the interests
of the participants in the proxy solicitation will be included in
the proxy statement/prospectus pertaining to the proposed
Transaction when it becomes available. These documents can be
obtained free of charge from the sources indicated above.
For investor and media inquiries, please
contact:
Tracy LuoProficient Alpha Acquisition Corp.Info@paac-us.com
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