India-based car sharing platform Zoomcar announced Wednesday $10 million financial investment in connection with the merger with Innovative International Acquisition Corp, a United States-listed special purpose acquisition company.
Zoomcar said in a statement both parties have entered into a definitive merger agreement that will result in Zoomcar becoming a publicly listed company.
The transaction values the combined company at an implied pro forma enterprise value of approximately $456 million.
Upon closing, the combined company will be renamed Zoomcar Holdings, Inc. and expects to list its common stock on Nasdaq.
In addition and simultaneously with the execution of the Merger Agreement on October 13, Ananda Small Business Trust, a Nevada Trust, an affiliate of Innovative’s Sponsor, Innovative International Sponsor I LLC, invested an aggregate of $10 million in Zoomcar in exchange for a convertible promissory note issued by Zoomcar to Ananda Trust.
Under the deal, upon consummation of the proposed business combination between Innovative and Zoomcar, Zoomcar’s repayment obligation will be offset against the obligations of Ananda Trust under a concurrently executed subscription agreement entered into by Ananda Trust and Innovative to subscribe for 1 million newly issued shares of Innovative at a purchase price of $10 per share.
The subscription agreement includes registration rights obligations on the part of Innovative and is conditioned, among other customary closing conditions, upon the consummation of the business combination.
In the event that the business combination is not consummated, the note issued by Zoomcar in consideration of the Investment will be exchanged for a Zoomcar convertible promissory note and the subscription agreement will terminate automatically.
Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC, is acting as exclusive financial advisor and exclusive capital markets advisor to Zoomcar; Ellenoff Grossman & Schole LLP is acting as US legal advisor to Zoomcar.
Lincoln International is acting as financial advisor to the special committee of the board of directors of Innovative.
McDermott Will & Emery LLP is acting as US legal advisor to Innovative. Morris, Nichols, Arsht & Tunnell LLP is acting as legal advisor to the Special Committee. DLA Piper LLP (US) is acting as legal advisor to Cohen & Company Capital Markets.
Founded in 2013 and headquartered in Bengaluru, Zoomcar is the leading marketplace for car sharing across India, Southeast Asia and the Middle East and North Africa (MENA) region, with over 25,000 cars currently available to guests using its platform.
The Zoomcar community connects vehicle owners with guests, who choose from a selection of cars for use at affordable prices, promoting sustainable, smart transportation solutions in growing markets.
Uri Levine, the Co-Founder of mobility unicorns Waze and Moovit, currently serves as Chairman of Zoomcar’s Board of Directors.
Innovative is a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.
Its management, comprises of Dr. Mohan Ananda, Madan Menon and Elaine Price, along with a board of directors that builds on its ability, experience and network with cross border transactions and strategic growth, sought to partner with a technology company that had a global footprint with a focused global growth strategy.
Innovative conducted a successful initial public offering (IPO) in October of 2021, in which it raised $235 million.
Its investment thesis was to find a company which had a history of positive growth, a clear path to profitability, a strong defensible market position coupled with a culture of inclusion, diversity, and environmental responsibility.