Microsoft 365 Cloud Partner AvePoint Merges at $2B Valuation
Apex Technology Acquisition Corporation has merged with AvePoint, a cloud solutions provider that supports more than 7 million Microsoft 365 users. The deal values AvePoint at $2 billion on a pro forma basis, and is expected to close in Q1 of 2021, the companies say.
This is M&A deal 485 that ChannelE2E has covered so far in 2020. See the full M&A deal list here.
Microsoft Corporate VP Gavriella Schuster said the deal affirms the power of Microsoft’s channel ecosystem and the business opportunities awaiting partners:
“AvePoint has partnered with Microsoft closely for nearly two decades in helping organizations maximize their Microsoft investments. AvePoint’s merger to become a public company demonstrates the power of Microsoft’s channel and the opportunity it provides our partners to flourish long-term.”
Apex-AvePoint Merger: More Financial Details
AvePoint expects to generate approximately $148 million for its fiscal year 2020, up 26 percent compared to 2019. The M&A valuation is therefore 13.5 times annual revenue.
AvePoint is a five-time Global Microsoft Partner of the Year. The company’s cloud services for Microsoft 365 include cloud backup, governance, consumption analytics, electronic records management, migration tools, security control and policy management capabilities.
AvePoint sells directly to large and mid-market enterprises, and its solutions are also available to managed services providers (MSPs) on more than 100 cloud marketplaces globally, the seller says.
Apex-AvePoint Merger: Executive Perspectives
Apex is led by former Oracle CFO Jeff Epstein and former Goldman Sachs Head of Technology Investment Banking Brad Koenig. Their combined experience includes more than 100 technology IPOs and mergers involving companies such as Microsoft, Oracle and Twilio, the buyer asserts.
After the deal closes, AvePoint will retain its name and will trade on the Nasdaq Stock Market under a new ticker symbol, “AVPT.” The combined company will be led by Dr. Tianyi Jiang, AvePoint’s co-founder and CEO. AvePoint co-founder Kai Gong will serve as executive chairman.
In a prepared statement about the deal, Jiang said:
“AvePoint provides critical data management solutions that enable organizations to make their digital collaboration systems more productive, secure and compliant. The impact of COVID-19 and the growth of Microsoft’s cloud solutions, including Microsoft 365 and Microsoft Teams, have accelerated demand for our products. And we were growing prior to COVID-19 as well. We have achieved eight quarters of impressive growth. We have positive free cash flow and are in line with the key ‘Rule of 40’ SaaS industry growth metric. Going public now gives us the ability to meet this demand and scale up faster across product innovation, channel marketing, international markets, and customer success initiatives.”
“We are thrilled to partner with AvePoint to help thousands of customers protect and manage their Microsoft cloud investments; Microsoft cloud is sweeping through the world’s enterprises. AvePoint is well-positioned to take advantage of this. Of over 200 public cloud companies, AvePoint is one of only five with 2020 estimated revenue in the $150 million range, 2020 estimated year-over-year growth above 25%, and 2020 estimated EBIT Margin over 10%.”
Apex-AvePoint Merger: More Financial Details
In addition to the approximately $352 million held in Apex’s trust account as of September 30, 2020, AvePoint will benefit from $140 million in proceeds from a group of institutional investors participating in the transaction through a committed private investment (“PIPE”), the buyer says. Sixth Street, a global investment firm that led a $200 million growth equity investment in AvePoint in 2019, will remain a shareholder in AvePoint.
Key advisors in the deal include:
- Evercore Group is acting as financial advisor to AvePoint.
- Citigroup Global Markets, Goldman Sachs, Evercore and Cowen are acting as capital markets advisors to AvePoint.
- William Blair & Company is acting as a financial advisor to Apex.
- Cantor Fitzgerald is acting as a capital market advisor to Apex.
- Goldman Sachs, Citi and Evercore are acting as private placement agents to Apex.
- Cooley LLP is acting as legal counsel to AvePoint.
- Latham & Watkins LLP is acting as legal counsel to Apex.
- Goodwin Procter LLP is acting as legal counsel to the private placement agents.