Bakkt Holdings, LLC, a digital asset marketplace, and VPC Impact Acquisition Holdings (NASDAQ: VIH), a special purpose acquisition company sponsored by Victory Park Capital, entered into a definitive agreement for a business combination that will result in Bakkt becoming a publicly traded company with an enterprise value of approximately $2.1 billion.
The combined company will be renamed Bakkt Holdings, Inc. and will be listed on the New York Stock Exchange.
The proposed business combination has been unanimously approved by the Boards of Directors of Bakkt and VIH, is subject to approval by VIH’s shareholders, regulatory approvals and other customary closing conditions. The business combination is expected to close in the second quarter of 2021.
The business combination values the combined company at an enterprise value of approximately $2.1 billion and is expected to result in over $500m of cash on Bakkt’s balance sheet, reflecting a contribution of up to $207m of cash held in VPC Impact Acquisition Holdings’ trust account and a $325m concurrent private placement (PIPE) of Class A common stock of the combined company, priced at $10.00 per share, including a $50m contribution from ICE.
Founded in 2018 by Intercontinental Exchange, Inc., and led by CEO Gavin Michael, Bakkt is a provider of institutional and retail solutions for digital assets. The company provides a mobile application enabling consumers to unlock the value of digital assets, including cryptocurrency, loyalty points, in-game assets, and gift cards, while giving merchants and loyalty program sponsors customer engagement and delivering cost savings to merchants. It currently supports more than 30 loyalty program sponsors and over 200 gift card merchants. Starbucks has integrated Bakkt Cash as a payment method for customers to reload their Starbucks Card in the Starbucks app. The new app is currently available on an invite-only basis, with over 400,000 consumers currently signed up for early access. Bakkt is planning for the widespread rollout of the app in March 2021.
Michael, whose appointment takes effect today, served most recently as head of technology for Citi’s Global Consumer Bank and led the strategic planning, management and day-to-day operations of Citi’s global technology organization. He succeeds David Clifton, Bakkt’s interim CEO, who will join the combined company’s Board of Directors at the closing of the business combination. Earlier in his career, Michael headed the digital team for Chase and served as Chief Technology Innovation Officer at Accenture, among other roles with leading financial services and technology firms.