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M&A: Financial Technology Services Provider Pico, SPAC Merge

Pico, a provider of technology and cloud services to financial customers, is going public through a SPAC merger with FTAC Athena Acquisition Corp. The deal's valuation is $1.75 billion.

A SPAC (Special Purpose Acquisition Company) or “blank check” company is designed to raise funds in an initial public offering (IPO) with the aim of acquiring a private business. That private company -- in this case, PICO -- then becomes public as result of the merger, Reuters notes.

This is M&A deal number 484 that ChannelE2E has covered so far in 2021.

Pico Technology Services for Financial Customers: A Closer Look

Pico, based in New York, provides cloud, data, and analytics solutions to major financial institutions, the seller says. Pico had been privately held. Key investors as of 2019 included Goldman Sachs, J.P. Morgan, UBS, and Wells Fargo. Those minority investors also are Pico customers.

Pico has M&A experience. The company in 2019 acquired Corvil, a Dublin, Ireland-based analytics firm. At the time, the combined Pico-Corvil business had 375 employees and a client base of over 400 banks, exchanges, asset managers, financial technology vendors, and trading firms operating across five continents, according to 2019 data from Pico.

More recently, founder Jarrod Yuster named Frank Troise as co-CEO in May 2020.

Pico, SPAC Merger: Executive Perspectives

In a prepared statement about the SPAC deal, Yuster said:

“Twenty-five years ago trading was in-person or over the phone, localized in each country. The world we live in today is electronic and multi-asset class; markets are global but fragmented, producing vast amounts of data that continue to grow. Through our global technology platform serving the financial industry, we modernize and simplify complex infrastructure, provide global data and electronic access to all markets for our clients in a seamless manner.

Added Betsy Cohen, chairman of FTAC Athena:

“Jarrod, Frank, and the outstanding Pico leadership team have deep domain expertise and have built a company that delivers exceptional value to their global commercial customers. Pico is at the frontier of modernizing the financial ecosystem by providing global connectivity and market insight solutions for its customers and we look forward to working together in order to build long-term value for our stockholders."

SPAC Market Size and Potential Investor Bubble

Meanwhile, the SPAC trend helped to fuel $63 billion of IPO fundraising worldwide in January 2021, more than five times the proceeds from the same period a year earlier, Bloomberg reports.

Still, some pundits believe we’re heading toward a SPAC bubble — which involves too much money potentially flowing to lower-quality companies that perhaps shouldn’t be publicly held.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.