Mexican banking and digital services fintech Covalto announced on Thursday that it will be listed on the Nasdaq through the merger with a SPAC-type company, the first time a Mexican fintech is listed on the US stock market.
The banking and digital services platform said in a conference call of senior executives that it expects to complete its deal to list on the New York Stock Exchange’s Nasdaq in the first quarter of 2023.
SPACs (specific purpose companies for the acquisition of companies), also known as blank check companies, are companies that are financed by going public, but that do not have operations and their objective is to merge with real companies. At the time this happens, the real company begins trading on the Stock Exchange, skipping the entire traditional process of an Initial Public Offering (IPO).
This deal puts the firm, formerly known as Credijusto, with an implied pro forma enterprise value of $547 million and could generate up to $177 million of capital before expenses, it said in a statement.
The transaction will be accompanied by committed financing of $60 million, half of which had been previously announced, it added. The other 30 million dollars will be financed by LIV Capital, the parent company of LIVB, the SPAC with which Covalto will merge its business.
Covalto recently became the first Mexican fintech to acquire a regulated bank. He now estimates loan grants to reach about $270 million this year and $400 million by 2023.
In July, Covalto was part of the special, which seeks to recognize those startups with the potential to reach a valuation of 1,000 million dollars or more in 12 months.
Simpson Thacher & Bartlett and Davis Polk & Wardwell are acting as legal advisors to Covalto and LIVB, respectively, in the transaction.
With information from Reuters.
