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Boxed merged with SPAC to become public in a 900 million deal?

by LittleYouKnow

Online bulk food retailer Boxed Inc announced on Monday that it would go public through a merger with blank-check company Seven Oaks Acquisition Corp. The merged company’s shares would be valued at about $900 million as a result of the agreement.

Approximately $334 million in net cash proceeds are anticipated to be received by Boxed from the deal, including a $120 million private investment from partners including Brigade Capital Management, Avandia Investment Management, and Onex Credit.

What is Boxed?

The business offers bulk consumables to both consumers and businesses without requiring store memberships and has made money off its proprietary technology through a Software-as-a-Service (“SaaS”) offering by signing a multi-year SaaS cooperation agreement with Aeon Group, one of Asia’s biggest retail conglomerates.

A digital grocery shopping company called Boxed, also known as Giddy Inc., sells bulk commodities to homes and businesses. Boxed, which was founded in 2013, has been likened to Costco Wholesale Corp., but it lacks both that company’s membership model and its primary source of income. 

To make purchases, customers use the Boxed website or app. By providing bulk groceries, paper products, toiletries, hygiene products, and office supplies, Boxed serves both homes and businesses. The company frequently sells its goods for less per unit than other merchants since it buys in bulk. The business does, however, have a membership option that, in some areas, allows for same-day grocery delivery and has a lower free shipping threshold.

What is SPAC?

Seven Oaks is a special-purpose acquisition company based in New York City. It was established to form a business combination with one or more companies, and it has as its primary criteria businesses with strong environmental, social, and governance practices or the potential to materially improve practices. When it went public in December 2020, it raised $258.75 million. The securities are traded on Nasdaq under the tickers “SVOK,” “SVOKU,” and “SVOKW.”

Why Boxed decided to merge with SPAC?

  • Boxed will be able to use this money to build our distinctive SaaS company, third-party marketplace expansion, and business-to-business growth. Boxed is forward to collaborating with the knowledgeable Seven Oaks team as we benefit from their operations and public company expertise. When the business combination is finished, Gary Matthews, the chairman, and chief executive officer of Seven Oaks Acquisition Corp., will act as Boxed’s chairman of the board.
  • Additionally, this funding will enable boxed to support B2B expansion, third-party marketplace growth, and the advancement of their distinctive SaaS company. Boxed is eager to collaborate with the knowledgeable Seven Oaks team as it makes use of its operational and public company skills.
  • The transaction, which raised money through a combination of structured notes and stock, shows how SPAC sponsors are getting inventive with their funding sources to close deals despite a downturn in such funding on Wall Street. Markets are concerned that SPACs have listed numerous companies at inflated values, leaving investors nursing losses when rallies turned after share prices soared after the agreements were announced.
  • They are eager to move Boxed into our next stage of growth by taking this crucial step. Online wholesale retailer Boxed.com announced that it would go public through a combination with Seven Oaks Acquisition, a Special Purpose Acquisition Company (SPAC).

The corporation is thought to be worth roughly $900 million altogether. Following a spike in demand for delivery services during the COVID-19 pandemic, action was taken. Through the acquisition, Boxed will earn $334 million in cash and $887 million in stock. Due in part to existing investors rolling over 100% of their ownership in the transaction, Boxed investors will possess 62% of the newly public business at the transaction’s closing. PIPE investors will own 4%, SPAC investors will hold 29%, and the SPAC sponsor will hold 5%.

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