- W3BCLOUD provides the underlying physical (compute and storage) infrastructure needed to support the growth of the Web3 ecosystem, which favors developers, content creators, and consumers.
- The transaction values the combined company at an enterprise value of $1.25 billion.
- Social Leverage Acquisition Corp I has expertise in growing and guiding disruptive companies, which will help W3BCLOUD continue to scale rapidly and support the growth of the Web3 ecosystem.
- W3BCLOUD expects to use transaction proceeds to significantly accelerate its investments in storage and compute infrastructure, which includes expanding its data center footprint and investing in the Web3 developer ecosystem.
- Approximately 85% of W3BCLOUD’s data centers’ current energy consumption is renewable.
- The Investor Presentation can be found on the W3BCLOUD investor page, https://investors.w3bcloud.com/.
SCOTTSDALE, Ariz.–(BUSINESS WIRE)–Publicly traded special purpose acquisition company, Social Leverage Acquisition Corp I, with $345 million in trust, today announced that it has entered into a definitive business combination agreement with W3BCLOUD Holdings, a leading storage and compute infrastructure provider for Web3. Upon closing of the transaction, the company will be named W3BCLOUD, and shares of W3BCLOUD’s common stock are expected to trade on a national exchange.
Founded in 2018, W3BCLOUD provides storage and compute infrastructure to power Web3’s decentralized economy. With today’s transaction, W3BCLOUD aims to accelerate its investment in its platform to drive adoption by the blockchain developer community. Additionally, the company expects to benefit from emerging Web3 use cases such as Web3-enabled gaming, NFTs, DeFi, and the Metaverse, to further reinforce its position as a leading Web3 infrastructure provider and diversify revenue.
In contrast to the current internet, the next evolution of the internet, Web3, is underpinned by decentralized infrastructure based on blockchain technology which favors developers, content creators, and consumers with more closely aligned economics. By building a next-generation platform to support Web3 developers, W3BCLOUD expects to help bring this vision to fulfillment. Specifically, W3BCLOUD’s flexible architecture is designed to scale with Web3’s explosive growth and is supported by leading-edge hardware and software expertise from AMD and ConsenSys.
SLAC raised gross proceeds of $345 million in its initial public offering and was listed on the NYSE on February 12, 2021, with the aim to combine with a high-growth technology company capitalizing on a large opportunity. SLAC is sponsored by Social Leverage, an early-stage technology-focused venture capital firm that has invested in over 400 founder-led teams including many leading Web3 companies. Social Leverage and the SLAC team have built a successful track record of investing in highly innovative companies led by exceptional entrepreneurs based on their significant public company experience, broad relationships, strategic expertise and capital raising ability.
“W3BCLOUD is building the next generation infrastructure to support the Web3 economy, transitioning more control and ownership into the hands of developers and customers across industries spanning finance, digital storage, media and entertainment,” said Sami Issa, CEO of W3BCLOUD. “This transaction allows us to expand our support to Web3 developers and scale with the Web3 economy’s anticipated significant growth. I could not be more excited by the depth of experience and knowledge Social Leverage will bring to our company. With the added benefit of SLAC’s expertise and continued technical support from AMD and ConsenSys, I believe that W3BCLOUD will emerge as the leading dedicated platform to support the Web3 economy.”
“With its proprietary architecture, experienced management team, and large market opportunity, W3BCLOUD is well positioned as the ‘picks and shovels’ play to leverage the secular shift to a decentralized Internet,” said Howard Lindzon, CEO of SLAC. “The key to building world class companies is having a management team with passion, vision and deep domain experience, which perfectly describes this team. Sami and his team have already proven their ability to execute in an emerging and dynamic market. We are eager to help W3BCLOUD continue to execute on this vision and build the next great technology company.”
“We are in the early days of the establishment of a new trust foundation enabled by decentralized protocols which undergird Web3 and its many applications. This technology is powering a paradigm shift from the Age of Silos to the Age of Community,” said Joseph Lubin, founder of ConsenSys and co-founder of Ethereum and W3BCLOUD board member. “W3BCLOUD is pioneering a next-generation decentralized hardware/software compute and storage platform for Web3 to better serve the developer community and end users, by advancing decentralization of the hardware layers of Web3 upon which the software innovations of the past decade are critically reliant.”
Transaction Overview
The transaction values the combined company at an enterprise value of $1.25 billion. The company will receive up to $345 million in proceeds from SLAC’s cash in trust (assuming no redemptions). Additionally, W3BCLOUD has received commitments for $40 million from ConsenSys, SK Inc. and others for new investments in connection with the transaction and has an agreement with AMD for an additional equity investment of $10 million, each of which is subject to certain conditions. The parties intend to raise additional capital of up to $100 million post-announcement, though there is no guarantee that such funds will be able to be raised on favorable terms or at all. It is estimated that through this transaction, W3BCLOUD will receive approximately $445 million in cash to its balance sheet assuming $100 million of additional capital raised post-announcement, no redemptions of shares of common stock held by SLAC’s shareholders and after estimated transaction expenses.
Existing W3BCLOUD shareholders will roll 100% of their equity in the transaction and are expected to own approximately 66% upon transaction close (assuming no redemptions). W3BCLOUD shareholders have the potential to receive an earnout of additional shares of common stock of the combined company if certain stock price targets are met as set forth in the definitive business combination agreement.
The transaction, which has been unanimously approved by the boards of directors of W3BCLOUD and SLAC, is expected to close in the fourth quarter of 2022, subject to, among other things, SEC review, approval of SLAC shareholders, regulatory approvals, and the satisfaction of other customary closing conditions. Additional information regarding the terms of the transactions can be found in a Current Report on Form 8-K filed today by SLAC.
Upon closing, the combined operating entity will continue to be led by Sami Issa as CEO and Wael Aburida as CFO, along with an experienced management team. Joseph Lubin, founder of ConsenSys and co-founder of Ethereum, will remain on W3BCLOUD’s Board of Directors. Mr. Lubin has established himself as a guiding force in the blockchain industry and a powerful advocate of decentralized technology. The Chairman of SLAC, Paul Grinberg, will join the board of the new combined company. Mr. Grinberg has 35 years of experience in M&A and advising, running, and serving on the boards of numerous public and private companies. He currently serves as the Chairman of Axos Financial, Inc., the holding company for Axos Bank, a digital-first bank that provides consumer and commercial banking products through its low-cost distribution channels and affinity partners. Sami Issa and Wael Aburida will join the Board of Directors.
Investor Presentation
A copy of the investor presentation can be found by accessing the investor relations section of W3BCLOUD’s website, https://investors.w3bcloud.com/.
Advisors
Perella Weinberg Partners is acting as exclusive financial advisor to W3BCLOUD.
Barclays is acting as exclusive M&A advisor to SLAC. Barclays and B. Riley Securities are acting as capital markets advisors and joint placement agents to SLAC. Blueshirt Capital Advisors is serving as an investor relations advisor to W3BCLOUD.
Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to W3BCLOUD. Ropes & Gray LLC is acting as legal counsel to SLAC. Latham & Watkins LLP is acting as legal advisor to Barclays and B. Riley Securities.
About W3BCLOUD
W3BCLOUD provides the compute and storage infrastructure to power the decentralized application layer for Web3 protocols. Founded in 2018, W3BCLOUD is a joint venture among AMD, ConsenSys, and the company’s founders.
About Social Leverage Acquisition Corp I
Social Leverage Acquisition Corp I is a blank check company, also commonly referred to as a SPAC, formed for the purpose of effecting a business combination with a company, with a primary focus on innovative and mission-driven businesses in the financial technology, enterprise software, or consumer technology sectors.
