Sixth Street-backed AvePoint to go public via $2 billion merger

(Reuters) – AvePoint Inc, a cloud data management company backed by investment firm Sixth Street, will go public via a merger with blank-check company Apex Technology Acquisition Corp, in a deal valued at $2 billion, the companies said.

Apex shares were up more than 2% on Monday following the announcement.

AvePoint, the largest data management solutions provider for the Microsoft cloud, will receive $140 million in proceeds from a group of institutional investors, and will be listed on the Nasdaq under the ticker symbol “AVPT”..

Headquartered in Jersey City, New Jersey, AvePoint has about 7 million users. It expects to generate about $148 million in revenue in 2020, a roughly 26% increase from a year earlier.

AvePoint’s business has benefited from an uptick in adoption of Microsoft Cloud as more people move to work from home during the pandemic.

The company expects to expand it customer base to more small and medium-sized businesses and build out its vertical solutions for enterprise content management on cloud.

“The Microsoft Cloud ecosystem is a tidal wave sweeping through enterprises,” said Jeff Epstein, co-CEO of Apex and a former Oracle finance boss.

Blank-check firm Apex, founded by Epstein and former Goldman Sachs head of technology investment banking Brad Koenig, raised $305 million in September 2019.

A special purpose acquisition company (SPAC) is a shell company that uses IPO proceeds to buy another company, typically within two years, in a merger that will take the acquired company public. Investors are not notified in advance on what company the SPAC will buy.

SPACs have emerged as a popular IPO alternative for companies this year.

Tianyi Jiang, founder and chief executive of AvePoint, said the company had considered a traditional IPO, but he believed the operational expertise from Apex could help his 19-year-old company scale faster.

Epstein will join AvePoint’s board as a director and Koenig will join the board as an observer. Sixth Street, which led a $200 million growth equity investment in AvePoint in 2019, will continue as a shareholder in the combined company.

Evercore Group and Goldman Sachs are acting as financial adviser to AvePoint, while William Blair & Co is acting as a financial adviser to Apex.

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