Israel Acquisitions p(US:ISRL)2024-03-28 20:40Business Combination Agreement - The company entered into a Business Combination Agreement with Pomvom Ltd. on January 2, 2024, focusing on experiential content for global amusement parks and attractions [15]. - The Business Combination Agreement includes a share split and equity exchange, with Pomvom equity holders expected to receive approximately $125 million in aggregate consideration [26]. - The completion of the transaction is contingent upon receiving various approvals, including Pomvom's equityholder approval and IAC's shareholder approval [32]. - The agreement allows for termination if the transactions are not consummated by September 30, 2024, with possible extensions under certain conditions [35]. - The Business Combination Agreement allows IAC and Pomvom to terminate the agreement for a Superior Proposal, with a termination fee of $10,000,000 payable within 30 days [39]. Initial Public Offering (IPO) - The Initial Public Offering (IPO) was completed on January 18, 2023, raising gross proceeds of $143.75 million from the sale of 14,375,000 units at $10.00 per unit [21]. - Following the IPO, $146.625 million was placed in a trust account, pending the completion of the initial business combination [23]. Investment Climate and Strategy - In 2023, Israeli tech companies raised approximately $6.9 billion through 392 deals, indicating a strong investment climate in Israel's tech ecosystem [19]. - The company aims to leverage its team's extensive network and expertise to identify and acquire high-growth Israeli technology companies [20]. - The company emphasizes the potential for high-growth technology investments in Israel, supported by the presence of over 100 Israeli companies listed on US exchanges with a combined market cap exceeding $150 billion [18]. - The company plans to focus on technology companies with significant Israeli connections, aiming to create long-term value for shareholders [16]. - The company targets businesses with enterprise values between $800 million and $1.5 billion, reflecting a discount to comparable public companies [90]. - The focus is on companies with double-digit revenue growth per annum over a minimum of 3 years, featuring disruptive technology and a large addressable market [90]. - The company aims to pursue businesses that generate over 50% of their revenue outside of Israel, targeting global players [90]. - The strategy includes identifying high-growth technology companies primarily in sectors such as cloud computing, cybersecurity, and fintech [85]. - The company believes there are hundreds of pre-IPO Israeli tech companies that could be potential acquisition candidates, with the number expected to grow [80]. - The Israeli tech sector has seen significant scale-up across various sectors, presenting strong growth opportunities [79]. Management Team - Ziv Elul, CEO, has 16 years of experience in high-growth technology businesses and led Fyber N.V. to profitability after its acquisition for $600 million [46][47]. - Sharon Barzik Cohen, CFO, previously served as CFO of Dell EMC's Storage Division and oversaw global finance teams, contributing to significant acquisitions in the tech sector [49]. - Izhar Shay, Chairman, has extensive experience in venture capital and technology investments, co-founding Canaan Partners Israel with approximately $2.0 billion in assets under management [50]. - Candice Beaumont has executed over $20 billion in merger and acquisition advisory assignments and is recognized as a Young Global Leader by the World Economic Forum [53]. - Peter Cohen, a board member, has advised on major transactions including the sale of the Los Angeles Dodgers and the acquisition of Dow Jones & Company [54]. Market Trends and Performance - In 2023, M&A capital proceeds in the Israeli high-tech sector totaled $9.77 billion, only 22% below the 2022 amount, with significant deals including the acquisition of Imperva by Thales for $3.6 billion [74]. - The number of public funding rounds in 2023 was 54, totaling $1.9 billion, representing a 27% reduction in rounds and a 40% reduction in total amount compared to the previous year [75]. - Between 2018 and 2021, Israel experienced a 303% increase in private funding, followed by a 73% decrease from 2021 to 2023, contrasting with the U.S. which saw a 134% increase and a 51% decrease in the same periods [73]. - The Israeli technology sector is transitioning from "Start-Up Nation" to "Scale-Up Nation," attracting billions in investments from foreign investors through M&A and IPOs [71]. - In 2023, only four Israeli high-tech companies went public, continuing the downtrend from 2022 [74]. - Israeli technology companies have generally followed Nasdaq trends since 2019, with performance peaking in early 2021 as Israel reopened faster after the pandemic [76]. - The Israeli technology sector is recognized for its high R&D expenditure per GDP, supported by a strong VC community and over 400 multinational corporations operating local R&D centers [67]. - The number of Israeli Unicorns has increased significantly, representing 10% of global Unicorns as of June 2021, with many growth-stage companies poised to become the next Unicorns [68]. - The Israeli high-tech sector showed resilience in 2023 despite challenges, including a significant decline in venture capital investments due to macroeconomic factors [72]. - The company may face intense competition from other entities with similar business objectives, which could limit its ability to acquire larger target businesses [162]. Financial Condition and Risks - As of December 31, 2023, the company had $671,628 in operating cash and a working capital deficit of $554,474 [188]. - The company has no operating history and no revenues, raising substantial doubt about its ability to continue as a going concern [188]. - The company is focused on pursuing acquisitions of Israeli technology companies, which may involve additional risks and burdens [188]. - The company may not be able to consummate an initial business combination by April 18, 2024, which could lead to liquidation [181]. - The company has identified a material weakness in internal control over financial reporting as of December 31, 2022, which continues to exist [184]. - The company is classified as an "emerging growth company" and a "smaller reporting company," allowing it to take advantage of reduced disclosure obligations [171][175]. - The company has incurred and expects to continue incurring significant costs in pursuit of an initial business combination [188]. - The company may face risks related to companies in the Israeli technology industry, impacting its operations and prospects [188]. - The company may complete its initial business combination without shareholder approval, even if a majority of shareholders do not support it [189]. - The company can extend the period to consummate its initial business combination up to 12 times by an additional month each time, with a minimum deposit of $50,000 or $0.02 per public share [191]. Shareholder Rights and Redemption - Shareholders will have the opportunity to redeem their Class A ordinary shares upon completion of the initial business combination [125]. - The company may conduct redemptions without a shareholder vote under certain conditions, but will seek approval if required by law or stock exchange rules [108]. - Public shareholders can redeem their shares regardless of their voting decision, and the redemption process will remain open for at least 20 business days following the announcement of the initial business combination [130]. - A public shareholder is limited to redeeming no more than 15% of the shares sold in the Initial Public Offering without prior consent from the company [135]. - If the initial business combination is not completed by April 18, 2024, the company will cease operations and redeem public shares at a per-share price of $10.20, subject to claims from creditors [144][149]. - The company has agreed to waive liquidation rights for founder shares if the initial business combination is not completed by the specified date [145]. - The redemption amount for shareholders upon dissolution is projected to be $10.20 per share, but actual amounts may vary due to creditor claims [149]. - The company will not proceed with any amendments that affect shareholder redemption rights without providing an opportunity for redemption at a per-share price equal to the trust account balance [146]. - The company plans to fund dissolution costs from remaining funds outside the trust account, estimated at $1,450,000, plus up to $100,000 from the trust account [147][148]. - The company will not complete the initial business combination if public shareholders tender more shares than the number offered for redemption [130]. - The company has established procedures for public shareholders to exercise their redemption rights, requiring timely delivery of share certificates [137]. - The trust account holds funds that may be reduced below $10.20 per public share due to claims by third parties, which could impact shareholder returns [151]. - The company has access to up to $1,450,000 following the Initial Public Offering to cover potential claims and expenses, estimated to be no more than $100,000 [152]. - Shareholders are entitled to receive funds from the trust account only if the initial business combination is not completed by April 18, 2024, or January 18, 2025, if extended [156]. - The redemption price for public shares is initially anticipated to be $10.20 per share, including interest earned on the funds held in the trust account [158]. Compliance and Regulatory Matters - The company has filed a registration statement with the SEC and is subject to the rules and regulations under the Exchange Act [169]. - The company has no current intention of suspending its reporting obligations under the Exchange Act prior to the consummation of its initial business combination [169]. - Compliance with Nasdaq's initial listing requirements is necessary post-initial business combination to maintain the listing [213]. - The company was approved to list its units on Nasdaq starting January 13, 2023, with Class A ordinary shares and warrants listed on February 28, 2023 [212]. - Nasdaq listing requires maintaining a minimum market capitalization of $50 million and at least 400 public holders [212].