- Global leader in the digitization of movement and full-stack
provider of sensors, software and analytics that digitizes
movement, has achieved a strong presence in existing growth markets
of entertainment, health & sports, and automation &
mobility
- Well-positioned to leverage substantial growth opportunities as
a provider of critical enabling technology for emerging high growth
markets, including the Metaverse, next-generation gaming, and live
streaming applications
- Transaction values Movella at a pro forma enterprise value of
approximately $537 million1
- Francisco Partners affiliates providing $75 million of
committed financing
Pathfinder Acquisition Corporation (NASDAQ:
PFDR), a publicly traded special purpose acquisition company
sponsored by affiliates of HGGC and Industry Ventures
(“Pathfinder”), and Movella Inc. (“Movella” or “the Company”), a
leading full-stack provider of sensors, software, and analytics
that enable the digitization of movement, today announced they have
entered into a definitive business combination agreement that, upon
closing of the transaction will result in the combined company
being publicly listed on the Nasdaq Stock Market. The combined
entity, to be known as Movella Holdings, Inc., will have a pro
forma enterprise value of approximately $537 million. The capital
raised from the transaction will be primarily invested to further
scale and grow the business, which will continue to be led by
Movella President and CEO Ben Lee when the transaction is
completed.
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Movella’s advanced inertial sensor technology, together with its
software and analytics represent a highly differentiated full-stack
solution for the digitization of movement for customers in
entertainment, health & sports, and automation & mobility.
Longstanding customers include Electronic Arts, NBC Universal,
Daimler, and Siemens. The Company’s solutions are also a critical
enabler of real-time digitized movement in the emerging high-growth
areas of the Metaverse, next-generation gaming, live streaming and
other applications.
Movella has historically experienced high gross margins based in
part on its robust proprietary intellectual property portfolio
(including its patents, trade secrets, and know-how) and superior
operating capabilities, and is expected to achieve breakeven on an
Adjusted EBITDA basis2 as early as the third quarter of 2023 and
profitability on an Adjusted EBITDA basis2 as early as the fourth
quarter of 2023. Movella has been backed since inception by Kleiner
Perkins and also counts GIC and Columbia Threadneedle as core
investors.
“Combining with Pathfinder and accessing public markets will
allow Movella to continue to rapidly scale our platform and further
invest in our market-leading movement capture and digitization
solutions to better serve our customers,” said Ben Lee. “This
agreement is indicative of our Company’s bright future and will
unlock new opportunities for the Movella team, whose hard work and
dedication has made Movella what it is today.”
“Movella is uniquely positioned to provide critical enabling
technology for the Metaverse, next-generation gaming and other
high-growth emerging end markets and applications in addition to
the substantial growth it’s already achieved in its existing
markets,” stated David Chung, CEO of Pathfinder. “We view Movella
as an exciting long-term growth story, and believe the company’s
proprietary technology, scalable business model, and experienced
leadership team position Movella to extend its leadership position
and continue to deliver innovations that drive the industry.”
Transaction Overview
The business combination transaction values Movella at a pro
forma enterprise value of $537 million. Existing shareholders of
Movella, including Kleiner Perkins, GIC and Columbia Threadneedle,
will roll 100% of their ownership into the combined company.
Proceeds from the transaction will be used to fund organic and
inorganic growth, transaction fees and expenses and general
corporate purposes. The business combination, which has been
approved by the Boards of Directors of Movella and Pathfinder, is
expected to close in the first quarter of 2023, subject to approval
by shareholders of Pathfinder and other customary closing
conditions. There is no minimum cash condition in this
transaction.
The transaction is supported by $75 million of committed
financing from affiliates of Francisco Partners (“FP”), a leading
technology focused private investment firm with over $45 billion of
cumulative committed capital. Under the terms of the investment, up
to $75 million of Pathfinder common stock will be purchased by FP
prior to closing, which will be executed through a tender offer or
direct placement of Pathfinder stock. In exchange for a
non-redemption agreement for FP’s purchased stock, Movella will
issue to FP at closing a 5-year PIK note. Under the terms of the
financing, Movella will have the right to direct the sale of FP’s
purchased stock into the public market at any time following the
closing of the transaction until the repayment or prepayment of the
note, the proceeds of which will provide material credits against
the note balance at a repayment or refinancing event.
There are no provisions under which FP will be issued additional
shares (whether related to the Company’s stock price performance or
otherwise) post-closing. This flexible financing is designed to not
only ensure the Company has substantial cash resources at closing,
but also to allow Movella’s current and future shareholders to
benefit from the potential ability to reduce the future amounts due
under the FP note through share price appreciation.
Advisors
Pathfinder was advised by Kirkland & Ellis LLP, and Movella
was advised by Stifel (as exclusive financial advisor) and
Pillsbury Winthrop Shaw Pittman LLP in connection with the
transaction. Francisco Partners was advised by Latham & Watkins
LLP in connection with the transaction.
About Movella
Movella is a leading full-stack provider of sensors, software,
and analytics that enable the digitization of movement. Movella
serves the entertainment, health & sports, and automation &
mobility markets. Our innovations enable our customers to
capitalize on the value of movement by transforming data into
meaningful and actionable insights. Partnering with leading global
brands such as Electronic Arts, EPIC Games, NBC Universal, Netflix,
Daimler, Siemens, and over 500 sports organizations, Movella is
creating extraordinary outcomes that move humanity forward. To
learn more, visit www.movella.com.
About Pathfinder Acquisition Corporation
Pathfinder Acquisition Corporation (NASDAQ: PFDR) is a
purpose-built partnership between affiliates of two investment
firms, HGGC and Industry Ventures, with a strong record of success
as investors in technology and tech-enabled businesses.
Pathfinder’s corporate objective is to identify and execute a
business combination with a high quality, growth-oriented private
company in the tech sector that Pathfinder believes can succeed as
a public company and generate attractive returns for shareholders
over the long term. Pathfinder has $325 million of cash in trust
and 1/5 warrant coverage.
Additional Information and Where to Find It
In connection with the transaction, Pathfinder intends to file a
registration statement on Form S-4 (the “Registration Statement”)
with the Securities and Exchange Commission (the “SEC”), which will
include a preliminary proxy statement to be distributed to holders
of Pathfinder’s ordinary shares in connection with Pathfinder’s
solicitation of proxies for the vote by Pathfinder’s shareholders
with respect to the transaction and other matters as described in
the Registration Statement, as well as the prospectus relating to
the offer of the securities to be issued to Movella’s shareholders
in connection with the transaction. After the Registration
Statement has been filed and declared effective, Pathfinder will
mail a definitive proxy statement to holders of its ordinary shares
as of the record date to be established for voting on the
transaction. Investors and security holders and other interested
parties are urged to read the proxy statement/prospectus, any
amendments thereto and any other documents filed with the SEC
carefully and in their entirety when they become available because
they will contain important information about Pathfinder, Movella,
and the transaction. Investors and security holders may obtain free
copies of the Registration Statement, preliminary proxy
statement/prospectus and definitive proxy statement/prospectus
(when available) and other documents filed with the SEC by
Pathfinder through the website maintained by the SEC at
http://www.sec.gov. The documents filed by Pathfinder with the SEC
also may be obtained free of charge at Pathfinder’s website at
www.pathfinderacquisition.com or upon written request to Pathfinder
at 1950 University Avenue, Suite 350, Palo Alto, CA 94303.
Participants in Solicitation
Pathfinder and Movella and their respective directors and
certain of their respective executive officers and other members of
management and employees may be considered participants in the
solicitation of proxies with respect to the transaction.
Information about the directors and executive officers of
Pathfinder is set forth in its Annual Report on Form 10-K for the
fiscal year ended December 31, 2021. Additional information
regarding the persons who may, under the rules of the SEC, be
deemed participants in the proxy solicitation of the shareholders
of Pathfinder and a description of their direct and indirect
interests in Pathfinder, by security holdings or otherwise, will be
included in the proxy statement/prospectus and other relevant
materials to be filed with the SEC regarding the transaction when
they become available. Shareholders, potential investors and other
interested persons should read the proxy statement/prospectus
carefully when it becomes available before making any voting or
investment decisions. When available, these documents can be
obtained free of charge from the sources indicated above.
No Offer or Solicitation
This press release is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the potential transaction between Movella and
Pathfinder. This press release does not constitute an offer to sell
or exchange, or the solicitation of an offer to buy or exchange,
any securities of Pathfinder or Movella, nor shall there be any
sale of securities in any jurisdiction in which such offer, sale or
exchange would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offering of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the U.S. Securities Act of 1933,
as amended.
Cautionary Statement Regarding Forward Looking
Statements
This press release contains “forward-looking statements”
regarding Pathfinder, Movella, and the combined company. Statements
in this press release that are not historical in nature may
constitute forward-looking statements. In addition, any statements
that refer to Pathfinder’s, Movella’s, or the combined company’s
future expectations, beliefs, plans, objectives, financial
conditions, assumptions, performance, projections, forecasts, or
estimates, including with respect to financial or other performance
or valuation metrics or market size or opportunity, or other
characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking statements. These
statements are based on various assumptions, whether or not
identified in this press release, and on the current expectations
of Pathfinder’s or Movella’s management and are not predictions of
actual performance. These forward-looking statements are provided
for illustrative purposes only and are not intended to serve as,
and must not be relied on by any investor as, a guarantee, an
assurance, a prediction or a definitive statement of fact or
probability. The words “anticipate,” “believe,” “continue,”
“could,” “enable,” “estimate,” “expect,” “extend,” “future,”
“intend,” “may,” “might,” “opportunity,” “outlook,” “plan,”
“position,” “possible,” “potential,” “predict,” “project,” “see,”
“seem,” “should,” “will,” “would,” and similar expressions, or the
negative of such expressions, may identify forward-looking
statements, but the absence of these words does not mean that a
statement is not forward-looking. Forward-looking statements in
this press release include, but are not limited to, statements
regarding the following: Pathfinder’s or Movella’s management
team’s expectations, hopes, beliefs, intentions or strategies
regarding the future; the potential impact of the transaction on
Movella and the combined company, including allowing Movella to
continue to rapidly scale its platform and further invest in
market-leading movement capture and digitization solutions; the
ability of Movella’s solutions to enable real-time digitized
movement in the emerging high-growth areas of the Metaverse,
next-generation gaming, live streaming and other applications; the
anticipated use of capital raised from the transaction to further
scale and grow the business; the expectation that Movella and the
combined company, as applicable, may achieve breakeven on an
Adjusted EBITDA basis2 as early as the third quarter of 2023 and
profitability on an Adjusted EBITDA basis2 as early as the fourth
quarter of 2023; the belief that Movella’s proprietary technology,
scalable business model, and experienced leadership team will
position Movella to extend its leadership position and continue to
deliver innovations that drive the industry; the anticipated or
potential features, benefits, and applications for Movella’s
products and technology and timing thereof; the market opportunity
for Movella’s products and technology; the anticipated timing of
the closing of the transaction; and the anticipated gross proceeds
the transaction, including the Francisco Partners financing, is
expected to deliver to the combined company. These forward-looking
statements involve a number of risks, uncertainties (some of which
are beyond Pathfinder’s or Movella’s control) or other assumptions
that may cause actual results or performance to be materially
different from those expressed or implied by these forward-looking
statements. Although each of Pathfinder and Movella believes that
it has a reasonable basis for each forward-looking statement
contained in this communication, each of Pathfinder and Movella
caution you that these statements are based on a combination of
facts and factors currently known and projections of the future,
which are inherently uncertain. These risks and uncertainties
include, but are not limited to, the following: (i) Pathfinder’s
and Movella’s ability to complete the transaction, including the
Francisco Partners financing, during the anticipated timeframe or
at all; (ii) Movella’s success in retaining or recruiting, or
changes required in, officers, key employees, or directors
following the transaction; (iii) the funds in the trust account
being available to Pathfinder or the combined company; (iv)
Pathfinder’s or the combined company’s ability to obtain additional
financing to complete the transaction; (v) Pathfinder’s public
securities’ liquidity and trading and those of the combined
company; (vi) the lack of a market for Pathfinder’s or the combined
company’s securities; (vii) the use of funds not held in the trust
account or available to Pathfinder from interest income on the
trust account balance; (viii) the trust account not being subject
to claims of third parties; (ix) general economic conditions and
Movella’s financial performance; (x) the impact of the COVID-19
pandemic, macroeconomic conditions, and geopolitical crises; (xi)
the number of Pathfinder shareholders voting against the business
combination proposal; (xii) the occurrence of any event, change or
other circumstances that could give rise to the termination of the
definitive merger agreement; (xiii) the ability to achieve and
maintain the listing of the combined company’s shares on a national
securities exchange following the business combination; (xiv)
changes adversely affecting the businesses in which Movella is
engaged; (xv) management of growth; (xvi) Movella’s ability to
execute on its business strategy and plans; (xvii) the result of
future financing efforts; and (xviii) risks related to regulatory
matters, as well as the factors described under the heading “Risk
Factors” in Pathfinder’s Annual Report on Form 10-K for the year
ended December 31, 2021, Pathfinder’s registration statement on
Form S-1 (File No. 333-252498), the registration statement on Form
S-4 discussed below, and other documents filed by Pathfinder from
time to time with the SEC. If any of these risks materialize or the
underlying assumptions prove incorrect, actual results could differ
materially from the results implied by these forward-looking
statements. There may be additional risks that neither Pathfinder
nor Movella presently know or that Pathfinder and Movella currently
believe are immaterial that could also cause actual results to
differ from those contained in the forward-looking statements. In
addition, forward-looking statements reflect Pathfinder’s and
Movella’s expectations, plans or forecasts of future events and
views as of the date of this press release. Pathfinder and Movella
anticipate that subsequent events and developments will cause
Pathfinder’s and Movella’s assessments to change. However, while
Pathfinder and Movella may elect to update these forward-looking
statements at some point in the future, Pathfinder and Movella
specifically disclaim any obligation to do so, except to the extent
required by applicable law. These forward-looking statements should
not be relied upon as representing Pathfinder’s and Movella’s
assessments as of any date subsequent to the date of this press
release. Accordingly, undue reliance should not be placed upon the
forward-looking statements.
1 Enterprise Value is calculated as the sum of Movella’s equity
value and net debt. The pro forma enterprise value incorporates an
assumption that the $75 million in aggregate principal amount
incurred through the debt financing facilities with FP remains on
the balance sheet in its full amount, and thus includes an
approximately $75 million net debt adjustment for such aggregate
principal amount remaining outstanding at the closing of the
transaction.
2 Adjusted EBITDA is a non-GAAP financial measure that
represents Movella’s net loss adjusted to exclude (1) depreciation
and amortization; (2) stock-based compensation expense; (3)
interest income (expense), net; (4) other income (expense), net;
(5) provision for income taxes; and (6) the impact of the Qingdao
Hygealeo Technology Co. Ltd. joint venture.
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Tom Faust 6465023513 tfaust@stantonprm.com
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