- Transfix is on a path to transform the highly-fragmented $1
trillion total transportation & logistics sector with a focus
on reducing the massive amount of waste across the supply
chain
- Transfix utilizes proprietary technology, machine learning, and
artificial intelligence combined with world-class operations to
dynamically match thousands of freight transactions between
shippers and carriers, simultaneously
- Capacity-focused approach brings greater predictability,
revenue, and operational efficiency to truck owners & drivers
which in turn drives greater access, reliability, and savings to
shippers
- Asset-light business model has produced strong revenue growth,
expanding gross margin and exceptional operating leverage
- Grew revenues over 40% from $130 million in 2019 to $184
million in 2020 during the tumultuous impacts on freight logistics
due to COVID-19
- Transaction provides up to $405 million in gross cash proceeds
to be used to accelerate growth initiatives.
- In addition to the $345 million cash in trust, G Squared is
leading a commitment of an incremental $60 million under Forward
Purchase Agreements, plus up to another $50 million under G
Squared’s Forward Purchase Agreement to backstop redemptions from G
Squared Ascend I’s trust
- Anticipated transaction close in First Quarter 2022
- The combined company will list its shares of common stock on
the NYSE under the ticker symbol “TF”
Transfix Inc. (“Transfix”), a leading digital freight platform,
today announced it has entered into a definitive business
combination agreement with G Squared Ascend I, Inc. (“G Squared
Ascend I”) (NYSE: GSQD), a special purpose acquisition company
sponsored by affiliates of G Squared (“G Squared”), a growth-stage
venture capital fund manager focused on the technology sector. The
closing of the transaction is expected by the end of the first
quarter 2022. The combined company is expected to be listed on the
NYSE under the ticker symbol “TF."
Transfix’s digital freight platform - powered by its proprietary
technology, AI, and automation and underpinned with world-class
operations - is transforming the traditional and digital freight
sector, bringing together the world’s best shippers and carriers,
and delivering a transparent, trusted, and sustainable freight
ecosystem. Transfix works with some of the largest Fortune 500
companies as well as mid- and small sized shippers, and has built a
strong carrier community across the U.S.
Transfix’s asset-light business model has produced strong
revenue growth and a rapidly expanding gross margin with
exceptional operating leverage. This is demonstrated by the
company’s ability to grow revenue by over 40% in 2020, while gross
profit grew over 100%, despite a highly-tumultuous freight
environment caused by the global pandemic.
Lily Shen, Transfix CEO and President, said, “We are
thrilled to be partnering with G Squared on this significant
milestone. They have been incredible partners who share our
excitement about the opportunity ahead, and who bring invaluable
expertise in and knowledge of our rapidly growing sector. With this
transaction, Transfix is well-positioned to accelerate growth and
innovation to drive our impact at scale. We are at the beginning of
a new era for the freight industry.”
Drew McElroy, Transfix Co-founder and Chairman of the
Board, stated, “This announcement marks an important moment in
Transfix’s natural evolution to a public company. Our vision, since
day one, has been to build the world’s most connected and
intelligent freight platform. This marks the next important step in
advancing and accelerating toward that goal.”
Larry Aschebrook, Founder & Managing Partner, G Squared
and Chairman, G Squared Ascend I, commented, “Transfix’s
leadership team has built a best-in-class business with an
incredible team of freight industry and technology experts. The
company has consistently delivered impressive growth and margin
expansion and has demonstrated a clear path to profitability. We
are delighted to continue our support of Transfix's
industry-disruptive business as it raises the bar for the entire
sector to move goods more sustainably.”
Ward Davis, CEO, G Squared Ascend I, said, “Transfix
exceeds our many acquisition criteria for Ascend I. Impressively,
its team managed through the pandemic and its incredibly volatile
impact on freight with exceptional, industry-leading growth and
returns. The company’s consistently strong financial performance,
outstanding shipper spend retention, and growing list of top tier
enterprise accounts fuel our conviction in this business
combination.”
Transaction Overview
The merger marks an exciting and significant next step in a
deep, multi-year partnership between Transfix and G Squared, a
growth-stage venture capital fund manager with significant focus on
the freight-tech sector. The relationship, which began in 2019, has
been underscored by diligence, expertise, sustainability, and
alignment. G Squared has been consistently impressed with the
company’s growth across all key metrics including revenue, new
partnerships, and a clear path to sustained profit.
The transaction implies a pro forma enterprise value for
Transfix of $1.1 billion. Upon the closing of the transaction,
existing Transfix shareholders are expected to own approximately
69% of the combined company, with G Squared Ascend I public
stockholders owning approximately 24%. G Squared Ascend I’s sponsor
has agreed that 50% of its Transfix shares will be subject to
forfeiture depending on post-closing share performance. By aligning
compensation incentives with management, this structure represents
G Squared’s long-term commitment to the investment. The Transaction
will also include a Minimum Cash Condition of $200 million.
In addition to the $345 million cash in trust, G Squared is
leading a commitment of an incremental $60 million under Forward
Purchase Agreements, plus up to another $50 million under G
Squared’s Forward Purchase Agreement to backstop redemptions from G
Squared Ascend I’s trust.
Following this transaction, Transfix is expected to have
approximately $375 million of cash net of transaction expenses,
assuming no redemptions by G Squared Ascend I’s public stockholders
to accelerate its growth initiatives. In May, Transfix closed on a
$50 million, (5 year) senior secured revolver/credit facility with
MidCap Financial. Combining the large ABL facility with the cash to
the balance sheet from this transaction provides Transfix
approximately $400 million in liquidity which will be used to
accelerate growth initiatives by further investing in product
innovation and technology, new partnerships, geographic expansion,
and strategic and targeted acquisitions. Key areas of focus will
include alignment of drop and backhaul, and extending the platform
into Less Than Truckload and all areas of managed transportation
and logistics.
The ability to leverage its public equity for recruiting,
M&A, and other strategic endeavors provides Transfix the
opportunity to generate value for our shareholders and accelerate
growth.
The boards of directors for both Transfix and G Squared Ascend I
have unanimously approved the proposed business combination, which
is expected to be completed in the first quarter of 2022, subject
to, among other things, the approval by G Squared Ascend I’s
stockholders of the merger; satisfaction of the conditions stated
in the definitive agreement and other customary closing conditions,
including that the U.S. Securities and Exchange Commission (the
“SEC”) completes its review of the proxy statement; the receipt of
certain regulatory approvals; and approvals to list the securities
of the combined company.
Lily Shen, Transfix’s Chief Executive Officer and President, and
Drew McElroy, Transfix’s Co-Founder & Chairman of the Board of
Transfix, will continue in their current roles along with the rest
of the Transfix executive team.
Additional information about the proposed transaction, including
a copy of the business combination agreement and investor
presentation, will be provided in a Current Report on Form 8-K to
be filed by G Squared with the Securities and Exchange Commission
and available at www.sec.gov.
Advisors
J.P. Morgan Securities LLC is serving as financial advisor to
Transfix. Latham & Watkins LLP, O’Melveny & Myers, LLP, and
McCarter & English, LLP are serving as legal counsel to
Transfix.
UBS Securities LLC is serving as capital markets advisor to G
Squared Ascend I. Goodwin Procter LLP is serving as legal counsel
to G Squared Ascend I.
Investor Webcast and Conference Call
G Squared and Transfix will host a joint investor conference
call to discuss the proposed transaction Tuesday, September 21,
2021 at 8:00AM ET. The conference call will be accompanied by a
detailed investor presentation.
A webcast of the call will be available here and can also be
accessed on the Transfix website here and on the G Squared Ascend I
website here. For those who wish to participate by telephone,
please dial 1-877-407-4018 (U.S.) or 1-201-689-8471 (International)
and reference the Conference ID 13723249. A replay of the call will
also be available via webcast here.
About Transfix
Transfix is a market-leading, next-generation freight platform
transforming the traditional and digital freight sector while
bringing transparency, trust, and sustainability to the
transportation ecosystem. The company combines deep industry
expertise and a best-in-class carrier network with cutting edge
technology. The result? Competitive pricing, superior service and
reliability, and unmatched intelligence for optimizing the supply
chain from start to finish. Today, the world's most recognized
brands rely on Transfix's trusted carrier network, including six of
the top ten retailers and five of the ten largest food and beverage
brands in America. Transfix was named one of Forbes' "Next
Billion-Dollar Startups" and is headquartered in the heart of New
York City.
Visit Transfix online: transfix.io | Connect with Transfix on
social: Twitter LinkedIn Facebook
About G Squared
G Squared is a global venture capital firm that partners with
dynamic companies throughout their life cycles as a complete
capital solutions provider, working to create value for companies,
investors, employees, and other stakeholders. The firm focuses on
investments in growth-stage technology companies and has invested
in nearly 100 portfolio companies since it was founded in 2011. The
firm’s affiliate, G Squared Ascend, offers transformative private
companies a path to public markets via SPAC. For more information
on G Squared and its portfolio, visit: www.gsquared.com. For more information on G
Squared Ascend, visit: www.gsquaredascend.com.
Important Information and Where to Find It
In connection with the proposed business combination involving G
Squared Ascend I and Transfix, Transfix Holdings, Inc. (“Transfix
Holdings”) will file a registration statement on Form S-4 (the
“Registration Statement”) with the Securities and Exchange
Commission (the “SEC”). The Registration Statement will include a
proxy statement of G Squared Ascend I and a prospectus of Transfix
Holdings. Additionally, G Squared Ascend I and Transfix Holdings
will file other relevant materials with the SEC in connection with
the business combination. Copies may be obtained free of charge at
the SEC's website at www.sec.gov. Security holders of G Squared
Ascend I are urged to read the proxy statement/prospectus and the
other relevant materials when they become available before making
any voting decision with respect to the proposed business
combination because they will contain important information about
the business combination and the parties to the business
combination and related matters. The information contained on, or
that may be accessed through, the websites referenced in this press
release is not incorporated by reference into, and is not a part
of, this press release.
Participants in the Solicitation
G Squared Ascend I and its directors and officers may be deemed
participants in the solicitation of proxies of G Squared Ascend I’s
stockholders in connection with the proposed business combination.
Transfix and its officers and directors may also be deemed
participants in such solicitation. Security holders may obtain more
detailed information regarding the names, affiliations and
interests of certain of G Squared Ascend I’s executive officers and
directors in the solicitation by reading G Squared Ascend I’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2020, the final prospectus for its initial public offering filed
with the SEC on February 8, 2021, and the proxy
statement/prospectus and other relevant materials filed with the
SEC in connection with the business combination when they become
available. Information concerning the interests of G Squared Ascend
I’s participants in the solicitation, which may, in some cases, be
different than those of their stockholders generally, will be set
forth in the proxy statement/prospectus relating to the business
combination when it becomes available.
No Offer or Solicitation
This communication is for informational purposes only and is not
intended to and shall not constitute a proxy statement or the
solicitation of a proxy, consent or authorization with respect to
any securities in respect of the proposed business combination and
shall not constitute an offer to sell or the solicitation of an
offer to buy any securities or constitute a solicitation of any
vote or approval, nor shall there be any sale, issuance or transfer
of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction.
Forward Looking Statements
The information in this press release, and oral statements made
from time to time by representatives of G Squared Ascend I and
Transfix may contain statements that are not historical facts but
are “forward-looking statements'' within the meaning of Section 27A
of the Securities Act of 1933, as amended, Section 21E of the
Securities Exchange Act of 1934, as amended, and within the meaning
of “safe harbor” provisions under the United States Private
Securities Litigation Reform Act of 1995. All statements, other
than statements of present or historical fact included in this
press release, regarding G Squared Ascend I’s proposed business
combination with Transfix, G Squared Ascend I’s ability to
consummate the transaction, the benefits of the transaction and the
combined company's future financial performance, as well as the
combined company's strategy, future operations, estimated financial
position, estimated revenues and losses, projected costs,
prospects, plans and objectives of management are forward-looking
statements. When used in this press release, the words “could,”
“should,” “will,” “may,” “believe,” “anticipate,” “intend,”
“estimate,” “expect,” “project,” the negative of such terms and
other similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
such identifying words. These forward-looking statements are based
on management's current expectations and assumptions about future
events and are based on currently available information as to the
outcome and timing of future events. Except as otherwise required
by applicable law, G Squared Ascend I and Transfix disclaim any
duty to update any forward-looking statements, all of which are
expressly qualified by the statements in this section, to reflect
events or circumstances after the date of this press release. G
Squared Ascend I and Transfix caution you that these
forward-looking statements are subject to numerous risks and
uncertainties, most of which are difficult to predict and many of
which are beyond the control of either G Squared Ascend I or
Transfix. In addition, G Squared Ascend I and Transfix caution you
that the forward-looking statements contained in this press release
are subject to the following factors: (i) the occurrence of any
event, change or other circumstances that could delay the business
combination or give rise to the termination of the agreements
related thereto; (ii) the outcome of any legal proceedings that may
be instituted against G Squared Ascend I or Transfix following
announcement of the transactions; (iii) the inability to complete
the business combination due to the failure to obtain approval of
the shareholders of G Squared Ascend I, or other conditions to
closing in the transaction agreement; (iv) the risk that the
proposed business combination disrupts G Squared Ascend I’s or
Transfix’s current plans and operations as a result of the
announcement of the transactions; (v) Transfix’s ability to realize
the anticipated benefits of the business combination, which may be
affected by, among other things, competition and the ability of
Transfix to grow and manage growth profitably following the
business combination; (vi) costs related to the business
combination; (vii) changes in applicable laws or regulations;
(viii) rollout of Transfix’s business and the timing of expected
business milestones, (ix) the effects of competition on Transfix’s
business, (x) supply shortages in the materials necessary for the
production of Transfix’s products, (xi) risks related to original
equipment manufacturers and other partners being unable or
unwilling to initiate or continue business partnerships on
favorable terms, (xii) the termination or reduction of government
clean energy and electric vehicle incentives, (xiii) delays in the
construction and operation of production facilities, (xiv) the
amount of redemption requests made by G Squared Ascend I’s public
stockholders, (xv) changes in domestic and foreign business,
market, financial, political and legal conditions, and (xvi) the
possibility that Transfix may be adversely affected by other
economic, business, and/or competitive factors. Should one or more
of the risks or uncertainties described in this press release, or
should underlying assumptions prove incorrect, actual results and
plans could different materially from those expressed in any
forward-looking statements. You should carefully consider the risks
and uncertainties described in the “Risk Factors” section of G
Squared Ascend I’s final prospectus filed on February 8, 2021,
Quarterly Report on Form 10-Q for the quarter ended March 31, 2021,
and Quarterly Report on Form 10-Q for the quarter ended June 30,
2021, in each case, under the heading “Risk Factors,” and other
documents of G Squared Ascend I filed, or to be filed, including
the proxy statement/prospectus, with the SEC. Additional
information concerning these and other factors that may impact the
operations and projections discussed herein can be found in G
Squared Ascend I 's periodic filings with the SEC, including G
Squared Ascend I’s final prospectus for its initial public offering
filed with the SEC on February 8th 2021. G Squared Ascend I’s SEC
filings are available publicly on the SEC's website at
www.sec.gov.
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Transfix: Investors: investors@transfix.io
Media: media@transfix.io
G Squared ascend@gsquared.com
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