Business Context and Reporting Period
Bakkt Holdings, Inc. filed this Form 8-K on April 3, 2023, reporting events occurring on April 1, 2023. Bakkt completed its acquisition of all membership interests in Apex Crypto LLC from Apex Fintech Solutions Inc.
Transaction and Key Financial Terms
- Bakkt paid estimated closing consideration of approximately $67.2 million in cash, including the $55.0 million base purchase price, estimated cash held by Apex Crypto at closing, and other adjustments.
- The cash consideration remains subject to customary post-closing adjustments for transaction expenses, indebtedness, and net working capital.
- The seller may receive contingent consideration of up to $45.0 million in Bakkt Class A common stock based on Apex Crypto’s fourth-quarter 2022 profitability targets.
- The seller may receive up to an additional $100.0 million in Bakkt Class A common stock based on financial targets through 2025.
- On April 1, 2023, Bakkt and the seller entered into a registration rights agreement covering shares that may be issued as contingent consideration, including customary piggyback registration rights.
Material Changes Versus the Prior Comparable Period
The filing reports completion of the previously announced acquisition, originally agreed to on November 2, 2022. It does not provide comparative revenue, earnings, cash flow, margin, debt, liquidity, or operating results.
Guidance, Outlook, Risks, and Unusual Items
- The contingent stock consideration depends on specified profitability and financial targets; the filing does not state the likelihood or expected amount of any such issuance.
- Final cash consideration may change following post-closing adjustments.
- Bakkt is required, subject to stated restrictions, to register for resale shares that may be issued under the contingent consideration provisions. Any issuance could dilute existing shareholders.
- The filing states that financial statements for the acquired business and pro forma financial information will be filed by amendment within 71 calendar days after the filing deadline. The provided filing does not include those financial statements or pro forma results.
- The filing does not provide management guidance or detailed commentary on the acquisition’s expected revenue, earnings, synergies, financing impact, or liquidity effects.
Important Facts for Investors to Verify
- Final purchase consideration and all post-closing adjustments.
- Apex Crypto’s historical financial statements and Bakkt’s pro forma results after acquisition.
- Whether the contingent consideration targets are achieved and the resulting number of shares issued.
- The registration statement and resale activity for any contingent consideration shares.
- The acquisition’s effect on Bakkt’s cash balance, liquidity, leverage, revenue, profitability, and shareholder dilution.