Semantix’s Merger with Alpha Capital

Skadden, Arps, Slate, Meagher & Flom acted as legal advisor, and Pinheiro Neto Advogados as legal advisor on Brazilian matters to Semantix. Davis Polk & Wardwell served as legal advisor to Alpha Capital, and Mattos Filho as legal advisor on Brazilian matters.

Semantix, Latin America’s first fully integrated data software platform, has entered into a definitive agreement to merge with Alpha Capital, a special purpose acquisition company focused on technology. The announcement marks the first time a Latin American-focused technology SPAC has merged with a target company. Semantix will have an implied equity value of approximately $1 billion, assuming a $10.00 per share price and no trust redemptions. In connection with the transaction, institutional investors have committed approximately $94 million in subscriptions to a private placement in public equity (“PIPE”), which is expected to be funded at the merger’s closing.

The combined company will have a pro forma enterprise value of $693 million, assuming a $10.00 per share price and no shareholder redemptions. The transaction is funded with $324 million, including $230 million from the Alpha Capital trust (assuming no redemptions). A $94 million PIPE has already been committed by top institutional investors and existing Semantix shareholders, including Inovabra Ventures (a fully owned subsidiary of Bradesco, one of Brazil’s leading financial institutions), Crescera, FJ Labs, Oxenford, Steinhauser and others. Innova Capital, one of Alpha Capital’s largest existing shareholders, has also committed not to redeem $23 million of Alpha Capital’s publicly traded shares. The approximately $117 million of committed capital will satisfy, when funded at closing, the minimum cash of $85 million required in the definitive merger agreement. Semantix expects to receive the $324 million in primary proceeds, with $309 million cash available on its post-business combination balance sheet (post transaction expenses), assuming no redemptions.

Credit Suisse served as exclusive financial advisor to Semantix. Citibank served as capital markets advisor to Alpha Capital. 

Semantix is Latin America’s first fully integrated data software platform, with expected 2022 revenue of nearly $73 million. More than 300 clients in over 15 countries use Semantix software and services. The company was founded in 2010 by CEO Leonardo Santos.

Alpha Capital (Nasdaq: ASPC) is a special purpose acquisition company (“SPAC”) that has planned to combine its business with a Latin American-focused technology company since its $230 million initial public offering on Nasdaq in February 2021. The firm’s founders and sponsors are Alec Oxenford, CEO and Chairman, and Rafael Steinhauser, President and Director. 

Founded in 2010 by Veronica Allende Serra, Innova is a reference in Private Equity and Growth equity capital investments, focused on innovation and based out of São Paulo.

Inovabra Ventures (Semantix’s investor since 2017) is the Corporate Venture Capital Fund of Bradesco, one of the largest financial groups in Brazil.

Founded in 2008, Crescera Capital (Semantix’s investor since 2019) is an independent asset management firm focused on Private Equity and Venture Capital.

The Skadden team included M&A partners Paola Lozano (Picture; New York) and Filipe B. Areno (São Paulo), and counsel Ralph E. Pérez (Chicago); and corporate counsel Lauren Bennett (São Paulo) and associate Jairo C. Lamatina (São Paulo).

The Davis Polk corporate team included partners Daniel Brass and Derek Dostal, counsel Elliot M. de Carvalho and associates W. Soren Kreider IV, Malik M. Khalil, Alex S. Burger and Amber Leary. Partner Ethan R. Goldman provided tax advice. Partner Travis Triano provided executive compensation advice. Partner Frank J. Azzopardi provided intellectual property advice. 

Involved fees earner: Frank Azzopardi – Davis Polk & Wardwell; Daniel Brass – Davis Polk & Wardwell; Alex Burger – Davis Polk & Wardwell; Elliot de Carvalho – Davis Polk & Wardwell; Derek Dostal – Davis Polk & Wardwell; Ethan Goldman – Davis Polk & Wardwell; Malik Khalil – Davis Polk & Wardwell; Soren Kreider – Davis Polk & Wardwell; Amber Leary – Davis Polk & Wardwell; Travis Triano – Davis Polk & Wardwell; Filipe Areno – Skadden Arps Slate Meager & Flom; Lauren Bennett – Skadden Arps Slate Meager & Flom; Jairo Lamatina – Skadden Arps Slate Meager & Flom; Paola Lozano – Skadden Arps Slate Meager & Flom; Ralph Perez – Skadden Arps Slate Meager & Flom;

Law Firms: Davis Polk & Wardwell; Skadden Arps Slate Meager & Flom;

Clients: Alpha Capital Acquisition Company; Semantix Tecnologia em Sistema da Informação S.A.;