Las Vegas-based Rimini Street, a provider of enterprise software support services, and GP Investments Acquisition Corp, GP Investments’ blank check company, have agreed to merge in a deal whose initial enterprise value is about $837 million. According to terms of the agreement, Rimini Street shareholders will receive 63.8 million shares of GPIAC common stock at $10 per share. At the close of the transaction, GPIAC will be renamed Rimini Street Inc and continue trading on the NASDAQ under a new ticker symbol “RMNI.” Citigroup served as financial and capital markets adviser to GPIAC while Cowen and Company did likewise for Rimini Street.
LAS VEGAS & NEW YORK–(BUSINESS WIRE)–Rimini Street, Inc. (“Rimini Street” or the “Company”) and GP Investments Acquisition Corp. (NASDAQ: GPIA; GPIAW; GPIAU) (“GPIAC”) have entered into a definitive merger agreement, which will result in the merger of Rimini Street with and into GPIAC. At closing of the transaction, GPIAC is expected to be renamed Rimini Street, Inc. and continue trading on NASDAQ under the new ticker symbol “RMNI.”
Rimini Street, founded in 2005, is the leading global provider of independent enterprise software support services. The Company provides subscription-based support services for software products licensed by Oracle Corporation, SAP SE and other software vendors. As of March 31, 2017, Rimini Street has reported annual run-rate revenues exceeding $196 million and has achieved a revenue CAGR of 37% since 2014. The Company employs approximately 900 professionals across 13 countries of operation, and currently serves over 1,200 clients – including nearly 100 of the Fortune 500 and Global 100.
GPIAC is a special purpose acquisition company (SPAC) created by GP Investments in May 2015 via an IPO that raised $172.5 million in proceeds for the purpose of investing in companies with long-term growth potential in the consumer and services sectors.
Upon transaction closing, Seth A. Ravin, founder, CEO and chairman of the board of directors of Rimini Street, will be appointed CEO and chairman of the board of directors of the combined entity. At closing, the board of directors of the combined entity is expected to consist of nine directors, of which seven (including Mr. Ravin) will be designated by Rimini Street and two will be designated by GPIAC.
“As a high-growth company capitalizing on a large, global addressable market, Rimini Street presents an attractive investment opportunity. The Company’s client value proposition, seasoned management team, track record of execution and years of consecutive growth are very compelling,” said Antonio Bonchristiano, CEO of GPIAC and GP Investments, Ltd. “Rimini Street is a proven innovator and market disruptor.”
“Rimini Street has delivered 45 consecutive quarters of revenue growth by providing value-driven, innovative support solutions and exceptional service that meet the global needs of enterprise software licensees. The combination with GPIAC will provide Rimini Street additional growth capital to expand service offerings and capabilities, strengthen our balance sheet and fund potential acquisitions,” said Mr. Ravin. “We believe that having a public company structure will further fuel our growth by facilitating additional sales opportunities and providing additional capital market access. We are pleased to enter into this transaction and work with GP Investments, Ltd. as a new investor and business partner with a proven track record of providing value to growth companies.”
Under the terms of the definitive agreement, the transaction will be funded via the issuance of approximately 63.8 million shares of GPIAC common stock at $10.00 per share to Rimini Street’s shareholders. Cash at closing in GPIAC’s trust account and cash proceeds from the issuance of up to 3.5 million shares of GPIAC common stock at $10.00 per share to an affiliate of GP Investments, Ltd. will provide required cash at closing used to pay certain transaction expenses, reduce net debt and provide additional balance sheet cash.
The anticipated initial enterprise value is approximately $837 million, implying a multiple of 2.8x 2018E revenue of $295 million, with a post-closing equity value of $854 million at $10.00 per share. At consummation of the transaction, a merger subsidiary of GPIAC will merge with and into Rimini Street, with Rimini Street as the surviving entity, which would then merge with and into GPIAC, which will move its jurisdiction of incorporation from the Cayman Islands to the State of Delaware prior to consummation.
After giving effect to the transaction and certain assumptions, current GPIAC shareholders are expected to own approximately 25% of the combined company on a fully-diluted basis, and current Rimini Street shareholders will exchange their Rimini Street shares for approximately 75% pro forma ownership of the combined company.
The transaction, which has been approved by the boards of directors of both companies, is subject to approval of GPIAC and Rimini Street shareholders and the satisfaction or waiver of customary closing conditions, including regulatory approvals.
Rimini Street shareholders representing a sufficient amount of Rimini Street’s capital stock necessary to approve the transaction have entered into a transaction support and voting agreement pursuant to which they have agreed to support and vote all of their shares in favor of the transaction. In addition, at its previously announced extraordinary general meeting to be held on May 23, 2017, GPIAC shareholders of record at the close of business on April 24, 2017 must approve certain proposals relating to the proposed extension from May 26, 2017 to November 27, 2017, the date by which GPIAC must consummate an initial business combination.
Assuming receipt of such shareholder approvals, government approvals and satisfaction of all closing conditions, the transaction is expected to close in the third quarter of 2017.
Citigroup served as financial and capital markets advisor to GPIAC. Cowen and Company served as financial and capital markets advisor to Rimini Street. Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to GPIAC, and Wilson Sonsini Goodrich & Rosati acted as legal advisor to Rimini Street.
Conference Call and Investor Presentation
GPIAC and Rimini Street will hold a conference call to discuss the transaction on Tuesday, May 16, 2017, at 10:00 a.m. EDT. The conference call can be accessed by dialing 1-855-327-6837 (domestic), or 1-631-891-4304 (international), and asking to join the GP Investments Acquisition Corp. conference call. Interested investors and other parties may also view the accompanying investor presentation filed today with the Securities and Exchange Commission, and which can be viewed on the SEC website at www.sec.gov. A replay of the call will be made available and can be accessed by dialing 1-844-512-2921 (domestic), or 1-412-317-6671 (international), and entering the conference ID number 10003036.
About Rimini Street, Inc.
Rimini Street is the global leader in providing independent enterprise software support services. The company has redefined enterprise support services since 2005 with an innovative, award-winning program that enables Oracle and SAP licensees to save up to 90 percent on total support costs. Clients can remain on their current software release without any required upgrades for a minimum of 15 years. Rimini Street currently serves more than 1,200 global Fortune 500, midmarket, public sector and other organizations from a broad range of industries as their trusted, independent support provider. To learn more, please visit http://www.riministreet.com, follow @riministreet on Twitter and find Rimini Street on Facebook and LinkedIn.
About GP Investments Acquisition Corp.
GP Investments Acquisition Corp. (GPIAC) was created by GP Investments in May 2015 via an IPO that raised $172.5 million in proceeds for the purpose of identifying attractive investment opportunities in the United States or Europe, with a focus on companies with long-term growth potential in the consumer and services sectors. The creation of GPIAC is consistent with GP Investments’ strategy of growing its assets under management via expansion into different geographies and asset classes, primarily in the form of permanent capital. The Company’s sponsor is GPIC, Ltd., a wholly owned subsidiary of GP Investments, Ltd.
About GP Investments, Ltd.
GP Investments, Ltd. is a leading alternative investments firm with more than 20 years’ experience in corporate investing. The company has a strong track record of successful equity capital market transactions, delivering strong returns and building long-lasting enterprises. Since its inception, the company has raised approximately $5 billion from international investors and has invested in more than 50 companies across 15 sectors. In May 2006, GP Investments, Ltd. completed its initial public offering (IPO), becoming the first listed private equity firm in Brazil. For more information, please see GP Investments Ltd.’s web site www.gp-investments.com.