SPAC WATCH: Nuvini will merge with Mercato and should go to Nasdaq
nuvini – a holding company of six B2B software as services companies – has reached a merger agreement with SPAC Mercato Partners Acquisition Corp. In the process, the Brazilian start-up will be listed on the Nasdaq.
As a condition of completing the deal, Nuvini will have to convert its auditing standards to Nasdaq requirements before the two companies can file with the SEC. Mercato Partners, a Salt Lake City-based growth company with nearly $2 billion under management, created SPAC about two years ago. Mercato’s founder is Greg Warnock, a tech entrepreneur who founded and sold his startup before turning to angel investing and starting his own management company.
SPAC raised $239 million at the time of the IPO and had 24 months to find a company. With the deadline about to expire, he will have to ask investors for an extension to finalize the deal with nuvini. The terms of the merger – the valuation and the amount that will go into the nuvini funds – will not become public until it is filed with the SEC.
Founded in 2020, nuvini was born from the mind of Pierre Schurmann, who spent the last 12 years as Partner and CEO of Bossa Nova Investimentos, Early Stage Manager.
nuvini’s thesis is to create a holding company for B2B SaaS businesses similar to what European Vitec Software Group and Canadian Constellation Software are doing in over 100 countries. “I’m not inventing the wheel,” Pierre told Brasil Journal. “It’s a thesis that has existed for decades in other countries, but not yet in Brazil.”
Basically, Nuvini buys companies in this field that already have positive cash generation and have been in business for at least ten years.
Since its inception, nuvini has acquired six companies with these characteristics, including SS Óticas, the market leader in ERP for optometrists in Brazil; Effecti, which operates a platform for small and medium-sized businesses to participate in tenders to sell products to municipalities, states and the federation; and Mercos, a platform that connects over 4,000 industries with independent sales representatives.
For the first acquisitions, Novene raised R$135 million through family offices and bond issues. Talks with Mercato began when Novene decided to seek new funding from venture capital funds. “Our idea was that they would invest in their growth fund, but they came up with the idea from SPAC and we loved it,” Pierre said.
The merger with Mercato Partners will give nuvini more firepower to make acquisitions at a time when the market favors those with cash. 2020 and 2021 have been very difficult years to find good companies at good prices. Now the ratings are rational again. Right now it’s great to have capital to invest.”