Apex Clearing to go public via US$4.7 bil deal with Ledecky's SPAC

Apex Clearing to go public via US$4.7 bil deal with Ledecky's SPAC
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BENGALURU (Feb 22): Apex Clearing Corp, a clearing firm and a custodian for digital assets, said on Monday that it will go public through a merger with a blank-check firm backed by New York Islanders co-owner Jon Ledecky, in a deal that values the combined entity at US$4.7 billion.

The deal with Northern Star Investment Corp II is expected to fetch Apex US$850 million in gross cash proceeds including a private investment of US$450 million anchored by Fidelity Management & Research Company LLC and Baron Capital Group.

Apex is a financial technology firm that provides clearing services, digital custody, cryptocurrency solutions and fractional share trading, among others, to its clients.

It was the clearing provider for trading app Robinhood until it launched its own trade-clearing system in 2018.

Northern Star, led by Ledecky and former Cosmopolitan magazine editor-in-chief Joanna Coles, last month raised US$400 million in an initial public offering.

Another Ledecky- and Coles-backed SPAC, Northern Star Acquisition Corp, agreed to take pet services firm Barkbox Inc public for US$1.6 billion in December.

Apex is owned by fintech firm Peak6 Investments LLC and its customers include Firstrade Securities Inc and Social Finance Inc (SoFi), the company's website showed.

SoFi is also going public through a merger with Social Capital Hedosophia Holdings Corp V, a blank-check firm backed by venture capital investor Chamath Palihapitiya.

SPACs are shell companies that raise funds through an IPO to take a private company public. They have gained immense popularity as they provide more certainty over achievable valuation and require less scrutiny than traditional IPOs.

Apex will be listed on the New York Stock Exchange after the merger and will trade under ticker symbol "APX".

Citigroup was the financial adviser to Northern Star, and J.P. Morgan Securities to Apex.