Forge Global, Inc. (“Forge”), a leading global private securities marketplace, today announced it has entered into a definitive business combination agreement with Motive Capital Corp (NYSE: MOTV.U), a special purpose acquisition company sponsored by affiliates of Motive Partners, a financial technology specialized private equity firm.
Forge will become a publicly traded company upon the closing of the transaction, currently expected in the fourth quarter of 2021 or first quarter of 2022. The transaction reflects a $2.0 billion approximate valuation for the pro forma combined company. The transaction is subject to customary closing conditions, including approval by shareholders of Motive Capital Corp and Forge, the effectiveness of a registration statement to be filed with the Securities and Exchange Commission (the “SEC”) in connection with the transaction and the approval of the South Dakota Division of Banking for the change in control of Forge’s subsidiary trust company.
Company Overview
With liquidity solutions, exclusive data and insights and a vibrant marketplace, Forge’s goal is to power a global private market that is transparent, accessible and seamless for companies, their employees and investors. Through Forge, employees can sell their private shares, employers can reward shareholders with pre-IPO liquidity and individual and institutional investors can participate in private unicorn growth.
Forge's differentiated global marketplace addresses rising demand among individual and institutional investors for exposure to private company stocks and it is building a growing network effect with defensible competitive advantages. Private company coverage on the platform has continuously increased, with a 114% increase in distinct private companies traded in the period between January 1, 2018 and June 30, 2021. Similarly, its customer base has grown 225% in the same period.
The Forge marketplace has nearly 400,000 registered users, including over 123,000 accredited investors. Private shares have traded in more than 400 companies since inception, representing over $10 billion in volume across 19,000 transactions with buyers and sellers in 70 countries. Through its custody offering Forge Trust, the company has approximately $14 billion in assets under custody and about $600 million of cash across 1.9 million customers.
Motive Capital Corp Overview
Motive Capital Corp is sponsored by affiliates of Motive Partners, a specialist private equity firm renowned for its passionate focus on and track record in financial technology. With its deep expertise and network, Motive Partners intends to be a long-term strategic partner to Forge, accelerating growth and innovation together in a market with substantial tailwinds.
Management Comments
Kelly Rodriques, Chief Executive of Forge Global said:
“We firmly believe that everyone should be able to participate in the private markets, and we have strategically invested in the development of technology to operate what we believe to be an efficient and liquid market, connecting a large number of private companies, shareholders and investors. The confidence and commitment demonstrated by Motive Capital Corp, and other leading investors is a testament to our business model, the strength of our team and the huge market opportunity in front of us. With this transaction, we will be even better positioned to accelerate our mission and bring innovation to the private markets while delivering value to our shareholders.”
Blythe Masters, Chief Executive of Motive Capital Corp said:
“Forge lies at the confluence of several mega trends that are driving value in fintech: electronification and digitization of markets and services, the growth of tech-powered platform businesses, opening architectures in wealth management that are broadening access to new asset classes and rapid expansion of private capital. We found it hard not to love this story.”
Transaction Overview
Upon completion of the transaction, the combined company is expected to have a fully diluted equity value on a pro forma basis of approximately $2.0 billion, assuming redemptions are no greater than $90 million by existing Motive Capital Corp shareholders.
The transaction is expected to deliver approximately $532.5 million of gross proceeds to the combined company prior to the payment of transaction expenses and up to $100 million of cash consideration, including the contribution of up to $414 million of cash held in Motive Capital Corp’s trust account from its initial public offering in December 2020.
The combination is further supported by a $50 million commitment under Motive Partners’ Forward Purchase Agreement and a $68.5 million PIPE at $10 per share supported by ION Group, Temasek and Adit Ventures. Certain Motive Partners’ funds will provide up to an additional $90 million as a backstop via its Forward Purchase Agreement.
Existing Forge shareholders are expected to roll 90% of their equity into the combined company. Concurrent with closing, up to $100 million of the transaction proceeds will be paid to certain existing Forge shareholders as cash proceeds for a portion of their existing equity.
The transaction has been unanimously approved by the Boards of Directors of both Motive Capital Corp and Forge.
Additional information about the transaction, including a copy of the business combination agreement and investor presentation, will be included in a Current Report on Form 8-K to be filed by Motive Capital with the SEC and available at www.sec.gov. In addition, Motive Capital intends to file a registration statement on Form S-4 with the SEC, which will include a proxy statement/ prospectus, and will file other documents regarding the proposed transaction with the SEC.
Advisors
Financial Technology Partners and FTP Securities (FT Partners) served as financial advisors to Forge. JMP Securities LLC, Piper Sandler, Oppenheimer & Co. Inc., and William Blair & Company, LLC acted as capital markets advisors to Forge. Goodwin Procter LLP acted as legal advisor to Forge.
UBS Investment Bank is serving as financial advisor to Motive Capital Corp. Gibson, Dunn & Crutcher LLP acted as legal advisor and Oliver Wyman served as a strategic advisor to Motive Capital Corp. UBS Investment Bank and J.P. Morgan are serving as capital markets advisors and placement agents to Motive Capital Corp. Mayer Brown LLP acted as legal advisor to the placement agents.