North Atlantic Acquisition Corp. To Take TeleSign Public Via SPAC, Deal Valued At $1.3B

TeleSign, a Leader in Digital Identity and CPaaS Software Solutions for Global Enterprises, Intends to go Public at an Enterprise Value of $1.3 Billion via a Business Combination with North Atlantic Acquisition Corporation
Total capital raised to be up to approximately $487 million including proceeds from North Atlantic Acquisition Corporation and a $107.5 million PIPE

NEW YORK, Dec. 16, 2021 /PRNewswire/ --

• TeleSign is a pioneer and leader in connecting, protecting and defending the world's leading brands and their customers as they engage in the digital economy. TeleSign does this via its unique software platform developed over 15 years and continually enhanced via its machine learning algorithm
• TeleSign intends to go public via a business combination with North Atlantic Acquisition Corporation (NASDAQ:NAAC), a publicly traded special purpose acquisition company (SPAC), with $380 million in trust
• TeleSign has also secured $107.5 million in Private Investment in Public Equity (PIPE) financing from a group of investors including SFPI-FPIM as a key investor
• With this transaction, TeleSign expects to accelerate its investment and fund its growth. TeleSign is expecting to generate revenues of $391 million in 2021 with an expected increase to approximately $1.1 billion in 2026
• The transaction implies a pro forma enterprise value of approximately $1.3 billion for TeleSign
• The transaction is expected to close in Q2 of 2022 subject to SEC review, regulatory and NAAC shareholder approvals and other customary closing conditions
• Investor presentation and management remarks to be posted at 4:15 p.m. EST on December 16th, 2021 on the TeleSign investor page, www.telesign.com/investor

North Atlantic Acquisition Corporation ("NAAC") (NASDAQ:NAAC), a publicly traded special purpose acquisition company ("SPAC"), with $380 million in trust, today announces that it has entered into a definitive business combination agreement with TeleSign ("Telesign" or "the Company"), an industry pioneer with more than 15 years of operating history of connecting, protecting, and defending the world's leading brands and their customers as they engage in the digital economy. Upon closing of the transaction, the company will be named TeleSign, Inc., and shares of TeleSign's common stock are expected to trade on Nasdaq.

Founded in 2005, TeleSign provides solutions for security, authentication, fraud detection, compliance and reputation scoring through its easy-to-integrate APIs, combining digital identity with global communications capabilities to help enterprises connect, protect and engage with their customers, while assisting those customers in securely engaging with their preferred digital platforms. TeleSign is a trusted partner to global enterprises including eight of the 10 world's largest digital enterprises, providing services in virtually every country in the world.[1] TeleSign processes 21 billion transactions per year based on a proprietary behavior model with over 2,200 variables which provides accurate results instantaneously.

With today's transaction, TeleSign aims to accelerate its investment to further reinforce its position as a digital identity provider as well as build out its international organization. Beyond that, TeleSign intends to target new customer segments, including mid-market and SMB, and develop new use cases to expand its identity offering. TeleSign estimates its total addressable market will grow from $18 billion in 2019 to approximately $55 billion by 2024, a 24 percent compound annual growth rate.[2]

TeleSign has recorded an organic 42% compound annual revenue growth rate since 2018, driven by its state of the art technology platform and long-standing blue-chip customer base. For fiscal year 2021, TeleSign anticipates revenues of $391 million and is targeting revenues of approximately $1.1 billion in 2026.

Proximus Group, a leading European telecoms company, acquired TeleSign in 2017 through its then majority-owned subsidiary BICS. Since February 2021, Proximus has had sole ownership of TeleSign and helped the company in scaling globally, developing its industry leading digital identity access platform.

NAAC raised gross proceeds of approximately $380 million and listed on Nasdaq in January 2021, with the aim to combine with a leading corporate with global ambition. NAAC targeted opportunities in the technology sector in Europe and North America, and is delighted to achieve the signing of this transaction within one year of its listing on Nasdaq. The CEO of NAAC, Gary Quin, will join the board of the new combined company. Gary is an experienced TMT executive, having served in numerous senior roles at leading financial, corporate and public sector institutions. The company believes Gary's experience and background will be very valuable to the board.

"TeleSign empowers companies to transact, communicate and engage with their customers safely and securely. Building and maintaining continuous trust is our commitment to making the digital economy possible," said Joe Burton, CEO of TeleSign. "This transaction will allow us to increase our global trajectory and deliver our solutions where they are needed the most."

"The global digital economy has never been more integral to people's lives than today, and for it to expand, transactions of all kinds need to remain fast, safe and reliable," said Gary Quin, CEO of NAAC. "From fraud management, authentication and access management to secure CPaaS, TeleSign is a leader in these critical areas.  This is a great business combination, and by facilitating TeleSign's intended introduction to public equity markets we can accelerate its next phase of growth, addressing the underserved digital identity and engagement space. This combination fits perfectly with our stated objectives and I look forward to serving on the board of the combined operating entity and partnering with the teams at TeleSign and Proximus."

"Since its integration in the Proximus Group, TeleSign has evolved quickly to become a leading player in secure authentication and digital identity, and a trusted partner for many of the world's most renowned brands," said Guillaume Boutin, CEO of Proximus. "I am convinced that a  public market listing is the most logical route to leverage TeleSign's full potential and create additional value for Proximus shareholders. More broadly, I believe that, thanks to the unique characteristic of a global asset as part of a locally anchored group, Proximus Group can act as an accelerator of Belgium's digital agenda, generating attractive opportunities for local talent and bringing Belgium into a globally leading position in integrated digital identity. I have full confidence in Joe and his team to guide TeleSign to the next level on its impressive growth track."

Transaction Overview

The transaction implies a pro forma TeleSign enterprise value of $1.3 billion. It is estimated that post-transaction, TeleSign will have approximately $437 million in net cash on the balance sheet (assuming no redemptions of the ordinary shares held by NAAC's shareholders and after transaction expenses). This includes a fully committed PIPE of $107.5 million from a group of investors including SFPI-FPIM as a key investor, to fund TeleSign's growth plans. Proximus Group is not selling any of its shares in the transaction and will own 66.5 percent of the combined company upon completion of the transaction (assuming no redemptions of the ordinary shares held by NAAC's shareholders). 

The transaction, which has been approved by the boards of directors of TeleSign, Proximus Group and NAAC, is expected to close in Q2 2022, subject to, among other things, SEC review, approval of NAAC shareholders and regulatory approvals, and the satisfaction of other customary closing conditions. As part of the agreement, NAAC has agreed to relocate its country of incorporation to the US (Delaware), a firm condition which will be fully executed in conjunction with the closing of the transaction.

Upon closing, the combined operating entity will be renamed as "TeleSign, Inc." and will continue to be led by Mr. Burton as CEO, along with his experienced management team.

Investor Presentation

A copy of the investor presentation can be found by accessing the TeleSign Investor Page, www.telesign.com/investors.