What happened
It's 10:30 a.m. EST, and FTAC Olympus Acquisition Corp (FTOC) stock is up 9.8%. So raise your hand if you've ever heard of FTAC Olympus Acquisition Corp.
I'm not seeing many hands out there, and that's not surprising. Up until this morning, FTAC was just one of more than 200 new special purpose acquisition companies that had done an initial public offering (IPO), hoping to use its investor cash to buy itself a real company to bring public in a reverse merger. As of this morning, though, FTAC Olympus has found itself a target and announced plans to conduct its reverse-merger IPO before the end of the first half of 2021.
Image source: Getty Images.
So what
The next lucky company that will go public via a SPAC, then, is "Payoneer," which S&P Global Market Intelligence describes as a "cross-border payments platform that connects businesses, professionals, countries, and currencies worldwide" and was first founded in 2005.
In its press release on the transaction, FTAC Olympus advises that Payoneer "processed more than $44 billion in [payments] volume" in 2020, servicing "a broad ecosystem that connects marketplaces, sellers, freelancers, gig workers, manufacturers, banks, suppliers, buyers and more into an integrated global platform."
FTAC plans to bring Payoneer public with "an implied enterprise value at closing of approximately $3.3 billion." The acquirer says this represents a "7.6x multiple of 2021 expected revenue of $432 million."
Now what
Payoneer will come public with approximately $563 million in the bank, which will be comprised of the cash remaining to FTOC after its own IPO and redemptions by earlier investors, plus $300 million that's expected to be raised through a private investment for public equity (PIPE) transaction. Subtract this cash from FTOC's estimation of a $3.3 billion enterprise value for Payoneer, and FTOC appears to be promising investors a nearly $3.9 billion market capitalization for the combined company -- sometime within the next five months.
With FTOC's own stock currently selling for less than $1.4 billion, it's no wonder investors are excited about that prospect today.
