Freightos to go public via merger with Gesher
Freightos reports 213% CAGR in gross booking value between Q12019 and Q12022 and over 60% gross margins
Freightos Limited, and Nasdaq-listee Gesher I Acquisition Corp. (GIAC), a special purpose acquisition company, announced they have entered into a definitive merger agreement that would result in Freightos being publicly listed on the Nasdaq under the ticker symbol FROS.
The combined entity, to be known as Freightos, with offices around the world, will have a pro forma enterprise value of approximately $435 million, according to a statement from Freightos.
The capital raised from the transaction will be invested to further scale the business, driving transaction value and improving margins, the statement added.
"Global freight moves the world," says Zvi Schreiber, Chief Executive Officer, Freightos Group. "Last year, $22 trillion worth of goods crossed borders, but we have all witnessed what happens when shipping doesn't run smoothly, creating inventory shortages and increasing prices that challenge businesses and consumers globally. This presents a massive opportunity to digitise one of the last large offline industries.
"Our combination with Gesher and access to public markets will allow Freightos to continue to aggressively scale our platform and lead as an international freight booking and payment tool of choice. This day represents new opportunities for the Freightos team around the world, whose diligence and dedication has made Freightos what it is today."
Ezra Gardner, Gesher's Chief Executive Officer, added: "Freightos is modernising the global shipping industry as a true innovator in the logistics space. It enjoys positive unit economics, high gross margins, an incredibly high growth rate, and impressive customer retention. It is distinguished by its proprietary technology, data analytics, and deep network of customers comprising some of the largest players in the global supply chain today.
"Following the combination, Freightos will be the only pure-play public global freight platform investment opportunity available, and we're excited to partner with Zvi and his team on this enormous market opportunity."
In addition to the proposed merger with Gesher, the combined entity has obtained $80 million in capital commitments, the statement said.
Global investment firms and strategic industry players that have made commitments include:
*Qatar Airways, the world's largest air cargo carrier, has agreed to invest another $10 million in the combined company.
*M&G Investments (£370 billion of assets under management) made a $60 million commitment to the company consisting of four million units of Gesher at $10 a share, waiving redemption rights with respect to approximately one million shares as well as providing an additional backstop commitment of up to $10 million; and
*Composite Analysis Group, an affiliate of Safer Logistics,, committed up to $10 million to backstop redemptions by shareholders of Gesher.
Existing shareholders in Freightos include FedEx Corporation, SGX Group (the Singapore Exchange), major airlines including Qatar Airways, IAG Cargo, the cargo division of International Airlines Group (a leading airline group whose brands include British Airways and Iberia), LATAM Airlines Group, Bob Mylod (Chairman of Booking Holdings) and leading financial investors such as Aleph and MoreVC.
As an expression of confidence in Freightos and long term commitment, the team and large existing and new Freightos shareholders have signed lockup agreements spanning two years.
Through its two core platforms – Freightos.com and WebCargo, Freightos facilitates the shift from manual pricing and spreadsheets to a seamlessly integrated digital platform. In addition, Freightos is the calculating agent of freight shipping price indexes like the daily 40' container index, the Freightos Baltic Index (FBX) with futures traded on the CME (Chicago Mercantile Exchange).
The business combination is projected to generate gross proceeds of at least $80 million (and up to $166 million depending on redemptions), which will be used to fund Freightos' growth plan.
The implied pro forma equity value of the combined company is expected to be at least approximately $500 million with a pro forma enterprise value of approximately $435 million.
Existing Freightos shareholders are expected to own up to 78 percent of the combined company after funding.
The Freightos management team will remain in place with Zvi Schreiber continuing to serve as Chief Executive Officer and Ran Shalev remaining as Chief Financial Officer.
The board of directors is expected to include Ezra Gardner, Chief Executive Officer of Gesher, Udo Lange, Chief Executive Officer of FedEx Logistics; Guillaume Halleux, Chief Cargo Officer of Qatar Airways; Bob Mylod, Chairman of Booking Holdings; and industry veteran and CEO of ToolsGroup Inna Kuznetsova.