Sagard Holdings, the alternative investment arm of Power Corporation and manager of Portage Ventures, is launching a blank cheque company, or SPAC, focused on FinTech acquisitions.
SEC filings show the new company, Portage Fintech Acquisition, is planning to list on the Nasdaq and raise $200 million USD through an initial public offering (IPO).
The SPAC is being led by CEO Adam Felesky, the co-founder and CEO of Portage Ventures, and Ajay Chowdhery, a partner at Sagard Holdings. Its board of directors also includes Paul Desmarais III, senior VP of Power Corp. and Power Financial, and executive chairman of Portage.
A Special Purpose Acquisition Company, it will pursue acquisitions in the FinTech space with an eye to key verticals such as wealth and asset management, consumer and SME finance, insurance, payments, information services, and FinTech infrastructure. A spokesperson for the company declined to provide additional comment on the SPAC, referring BetaKit to the SEC filings.
“While we may pursue an acquisition opportunity in any business, industry, sector or geographical location, we intend to focus on industries that complement our team’s background and capitalize on our ability to source and acquire a business in the financial technology (“FinTech”) or financial services ecosystem,” the company stated in its prospectus filing.
Its focus is on acquiring companies “that will benefit from our expertise in developing and executing value creation plans in those areas, thereby positioning a target company for compounding growth over the long-term.” Portage Fintech Acquisition plans to make the majority of its investments in the United States and may also explore deals in Western Europe and Canada.
Through its IPO, the company is offering 20 million units at $10 per unit, which each consisting of one share of common stock and one-third of a warrant, exercisable at $11.50. The deal could bring Portage Fintech Acquisition’s market value to around $230 million. Goldman Sachs, BTIG, Scotiabank, and SoFi Securities are the joint bookrunners for the deal.
Portage Fintech Acquisition stated it does not currently have any acquisition targets and has not had any “substantive discussions” with companies about a deal. The company plans to make an acquisition deal within 24 months from the closing of its IPO and said, if it does not, it will return capital raised to shareholders.
Portage Fintech Acquisition is looking to acquire FinTech businesses that leverage technology “to create a unique value proposition compared to incumbents or to re-architect legacy financial infrastructure.” Its criteria also include a business with a large addressable market, a compelling value proposition in their respective industry, ones that are already generating compelling margins and quick customer payback, and can be acquired at a reasonable valuation.
The move from Sagard comes as reports from earlier this year point to funding for SPAC deals drying up. After billions of dollars have been invested into SPACs over the last year, institutional investors have reportedly been overwhelmed by the volume of transactions and put off by rising valuations.
“We believe our strategic benefits differentiate us from the large number of special purpose acquisition company [SPAC] sponsors that bring solely financial engineering,” the company argued in its filing.
“As an ecosystem, we have a track record of forming long-term strategic partnerships with private and publicly traded businesses and continuing to deliver value after the close of a successful investment,” Portage Fintech Acquisition added. “For example, after assembling the founding team for Dialogue Health Technologies, our affiliates helped hire the first 100 employees and fast-tracked connections to our network of corporate investors to help the company land early partners and customers. We have historically committed our team, network, and FinTech experts and we believe we have helped companies improve their operations and enable access to capital.”
Sagard plays an important role within the Power network of investments. Its business units include its venture arm, Portage Ventures and Diagram Ventures, which co-creates and investments in innovative startups. Through its holdings, Sagard’s portfolio includes significant investments in the FinTech and healthtech sectors, spanning Wealthsimple, Borrowell, Koho, League, and Dialogue.