Summary
Intercontinental Exchange, Inc. (ICE) announced on January 11, 2021, that its majority-owned subsidiary, Bakkt Holdings, LLC, has entered into a merger agreement with VPC Impact Acquisition Holdings (VIH), a special purpose acquisition company (SPAC). This transaction will result in Bakkt becoming a publicly listed company on the New York Stock Exchange under the name Bakkt Holdings, Inc. The transaction will be structured as an "Up-C" where Bakkt will hold the operating assets, and the public company will hold membership interests in Bakkt. This strategic move signifies a significant step towards unlocking value for Bakkt and potentially provides ICE with a more liquid investment in the digital asset ecosystem. Investors should note that upon the closing of the merger, ICE expects to reclassify Bakkt as an equity method investment, meaning Bakkt will no longer be consolidated into ICE's financial statements. Additionally, a PIPE investment of $325 million, including a $50 million commitment from ICEH, a subsidiary of ICE, will occur concurrently, strengthening Bakkt's balance sheet prior to its public debut.
Key Highlights
- 1Bakkt Holdings, LLC, a majority-owned subsidiary of ICE, will merge with a SPAC (VPC Impact Acquisition Holdings) to become a publicly listed company.
- 2The combined entity will be renamed Bakkt Holdings, Inc. and is expected to list on the New York Stock Exchange.
- 3The transaction involves an 'Up-C' structure, where Bakkt will house the operational assets.
- 4ICE anticipates reclassifying Bakkt as an equity method investment post-merger, leading to deconsolidation from ICE's financial statements.
- 5A Private Investment in Public Equity (PIPE) of $325 million is planned, with ICEH (a subsidiary of ICE) contributing up to $50 million.
- 6ICEH has entered into a support agreement to vote in favor of the merger and related transactions.