- Pro forma valuation of GCT of $661 million, which includes up
to 20.0 million performance-based earnout shares
- Transaction values GCT at a pro forma enterprise value of
approximately $461 million at closing
- Transaction is expected to provide GCT with up to $87 million
of gross proceeds to fund continued development of a full-band 5G
chipset portfolio and expansion into new markets
- Approximately $43 million to be funded via fully committed PIPE
and convertible note financing from both existing and new investors
of GCT
- All GCT existing stockholders will retain their equity holdings
through GCT’s transition into the publicly listed company at
closing
GCT Semiconductor, Inc. (“GCT Semiconductor” or “GCT”), a
leading fabless designer and supplier of advanced LTE, IoT and 5G
semiconductor solutions, and Concord Acquisition Corp III (NYSE:
CNDB) (“Concord”), a special purpose acquisition company, announced
today that they have entered into a definitive business combination
agreement that would result in GCT becoming a publicly traded
company. Upon closing of the proposed transaction, the combined
company will operate as GCT Semiconductor and is expected to be
listed on the NYSE under the ticker symbol “GCTS”. The proposed
transaction values GCT at an initial enterprise value of
approximately $461 million, with a total pro forma enterprise value
of $661 million, which includes 20.0 million performance-based
earnout shares. The transaction is expected to provide the combined
company with approximately $87 million of gross proceeds (assuming
no redemptions from Concord’s trust account) at closing to fuel its
continued growth.
“We are thrilled to partner with Concord who has a deep
understanding of our technology, customer base, and the timing and
potential of the 4G and 5G markets,” said John Schlaefer, President
and Chief Executive Officer of GCT. “We believe that this
transaction will strengthen GCT’s business operations and provide
the funding needed to fuel our 5G product development and
commercialization as the global markets transition from 4G to 5G.
We are very excited for the future and look forward to continuing
as a key supplier for the 5G ecosystem as customer volume and use
cases increase and expand.”
“This transaction represents an important milestone for GCT as
it continues its mission to innovate and develop market leading
wireless solutions in the semiconductor industry,” said Dr.
Kyeongho Lee, Chairman of the Board and Co-Founder of GCT. “We
believe this transaction will not only enable GCT to achieve the
next level of growth as a publicly traded company, but also bring
significant value to our stockholders and customers whose loyalty
and support have been critical to our success over the years.”
“GCT has developed an incredible amount of intellectual property
and expertise over many years, as evidenced by their impressive
roster of long-standing customers and partners,” said Jeff Tuder,
Chief Executive Officer of Concord. “We envision a significant
opportunity for GCT going forward as 5G wireless networks
proliferate worldwide and GCT continues to increase its share of
the market in the midst of a destabilized competitive environment.
We look forward to working with GCT to capitalize on this exciting
market opportunity.”
GCT Semiconductor Overview
GCT Semiconductor is a leading supplier of highly integrated 4G
LTE and 5G semiconductor solutions. GCT offers SoC solutions
integrating RF, baseband modem, digital signal processing and
protocol stack as a total solution, providing optimal form factors,
low power consumption, high performance, high reliability and cost
effectiveness. GCT works collaboratively with a variety of global
Tier 1 wireless operators, ODMs and OEMs to design differentiated
solutions for rapidly growing non-handset wireless broadband
applications. GCT has over 120 patents globally, engagements with
multiple 5G partners, and proprietary Multi-antenna Modem and
transceiver technology. The Company has successfully commercialized
single-chip 4G (CAT3/4) LTE solution, 4x4 MIMO 4.5G (CAT7) LTE
solution, and the 8RX 4.75G (CAT12) LTE solution. GCT is developing
one of the most competitive and cost-effective full-band and
full-features 5G chipset portfolio for global markets.
GCT Investment Highlights
- Scarcity value and significant barriers to entry: GCT is one of
only a handful of remaining companies worldwide with
commercially-proven 4G LTE & 5G solutions, leveraging
leading-edge multi-antenna modem tech to provide differentiated
solutions to operators
- Strong patent portfolio: GCT’s portfolio of over 120 patents
and proprietary multi-antenna transceiver and modem technology
promote long-term design relationships.
- Proven ability to support major wireless programs: GCT has a
proven history of supplying SoC and chipsets into major wireless
platforms spanning CAT-1/M1/NB IoT and 4G CAT3 to 4.75G CAT12
mobile router and CPE.
- 4G to 5G transition a boon to ASPs and margins: 4x improvement
in ASPs between 4G and 5G chipsets expected to drive significant
inflection in revenue and gross margins in 2024 and beyond.
- Multiple 5G development agreements demonstrate GCT’s importance
to the industry: Multiple development agreements with operators,
OEM and ODM partners position GCT as a valuable 5G silicon &
software provider.
- Strategic foundry relationship with Samsung for 8nm and below:
GCT and Samsung Foundry enjoy a mutually beneficial foundry
relationship providing secure access to leading-edge technology and
manufacturing capacity as GCT’s 5G business ramps.
- Strong growth driven by steady 4G business while 5G ramp is
anticipated: 4G base business expected to be supplemented by rapid
5G revenue ramp driven by volume demand from existing development
partners.
Summary of the Transaction
Concord has agreed to combine with GCT based on a $661 million
pro forma enterprise valuation, which includes 20.0 million
performance-based earnout shares to GCT stockholders.
The transaction is expected to deliver up to $87 million of
gross proceeds to the company, consisting of $43 million fully
committed common stock PIPE and convertible note financing and up
to approximately $43 million from Concord’s trust account that may
become available to the company at closing (assuming no redemptions
from Concord’s trust account).
The transaction has been unanimously approved by the boards of
directors of each of Concord and GCT and is subject to approval by
each party’s respective stockholders and other customary closing
conditions. The transaction is expected to close in the first
quarter of 2024.
At closing, GCT’s board of directors is expected to be comprised
of seven members, two of whom will be nominated by Concord’s
sponsor with the remainder nominated by GCT.
Upon completion of the transaction, the combined company is
expected to trade on the NYSE under the ticker symbol “GCTS”.
Additional information about the proposed transaction, including
a copy of the Business Combination Agreement and an investor
presentation, will be provided in one or more current reports on
Form 8-K to be filed by Concord Acquisition Corp III with the
United States Securities and Exchange Commission (the “SEC”) and
available at www.sec.gov.
Advisors
TD Cowen is acting as exclusive financial advisor and lead
capital markets advisor to Concord, and Cohen & Company Capital
Markets, a division of JVB Financial, LLC, is acting as a capital
markets advisor to Concord. B. Riley Securities, Inc. is acting as
the exclusive financial advisor to GCT. Greenberg Traurig, LLP is
acting as legal advisor to Concord. Morgan, Lewis & Bockius LLP
is serving as legal advisor to GCT. DLA Piper LLP (US) is acting as
legal advisor to TD Cowen and B. Riley Securities, Inc.
About GCT Semiconductor
GCT Semiconductor is a leading fabless designer and supplier of
advanced 5G and 4G LTE semiconductor solutions. GCT’s market-proven
solutions have enabled fast and reliable 4G LTE connectivity to
numerous commercial devices such as CPEs, mobile hotspots, routers,
M2M applications and smartphones, etc., for the world’s top
wireless carriers. GCT’s system-on-chip solutions integrate radio
frequency, baseband modem and digital signal processing functions,
therefore offering complete 4G and 5G platform solutions with small
form factors, low power consumption, high performance, high
reliability, and cost effectiveness. For more information, visit
www.gctsemi.com.
About Concord Acquisition Corp III
Concord Acquisition Corp III is a special purpose acquisition
company formed for the purpose of entering into a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses in the
financial services or financial technology industries. It is
sponsored by Concord Sponsor Group III LLC, an entity affiliated
with Atlas Merchant Capital LLC, an investment firm that offers
debt and equity investment strategies, seeking long-term value
through differentiated expertise in financial services and credit
markets.
Concord raised $345 million in its initial public offering in
November 2021 and is listed on the NYSE under the symbol "CNDB".
For more information visit: cndb.concordacquisitioncorp.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains certain forward-looking statements
within the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1955. These forward-looking
statements include, without limitation, Concord’s and GCT’s
expectations with respect to the proposed business combination
between Concord and GCT, including statements regarding the
benefits of the transaction, the anticipated timing of the
transaction, the enterprise valuation of GCT, market opportunities
for GCT’s products and technology, GCT’s projected future results
and anticipated industry trends, including the 4G and 5G markets.
Words such as “believe,” “project,” “expect,” “anticipate,”
“estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,”
“may,” “should,” “will,” “would,” “will be,” “will continue,” “will
likely result,” and similar expressions are intended to identify
such forward-looking statements. Forward-looking statements are
predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a
result, are subject to significant risks and uncertainties that
could cause the actual results to differ materially from the
expected results. Most of these factors are outside Concord’s and
GCT’s control and are difficult to predict. Factors that may cause
actual future events to differ materially from the expected
results, include, but are not limited to: the risk that the
transaction may not be completed in a timely manner or at all,; the
risk that the transaction may not be completed by Concord’s
business combination deadline, even if extended; the failure to
satisfy the conditions to the consummation of the transaction,
including stockholder approval of the transaction; the occurrence
of any event, change or other circumstance that could give rise to
the termination of the business combination agreement; the effect
of the announcement or pendency of the transaction on GCT’s
business relationships, performance, and business generally; the
inability to recognize the anticipated benefits of the business
combination, which may be affected by, among other things,
competition and the ability of the post-combination company to grow
and manage growth profitability and retain its key employees; costs
related to the business combination; the outcome of any legal
proceedings that may be instituted against GCT or Concord following
the announcement of the proposed business combination, the
inability to meet and maintain the listing of Concord or the
combined company on NYSE; the ability to implement business plans,
forecasts, and other expectations after the completion of the
proposed business combination, including the growth of 5G market;
the risk of economic downturns that affects GCT’s business
operation and financial performance; the risk that GCT may not be
able to develop and design its products acceptable to its
customers; actual or potential conflicts of interest of the
Company’s management with its public stockholders; and other risks
and uncertainties indicated from time to time in the registration
statement on Form S-4, including the proxy statement/prospectus
contained therein, to be filed relating to the business
combination, including those under the “Risk Factors” section
therein and in Concord’s other filings with the SEC. The foregoing
list of factors is not exhaustive. Forward-looking statements speak
only as of the date they are made. Readers are cautioned not to put
undue reliance on forward-looking statements, and GCT and Concord
assume no obligation and do not intend to update or revise these
forward-looking statements, whether as a result of new information,
future events, or otherwise.
Additional Information and Where to Find It
In connection with the proposed business combination and related
transactions contemplated in connection therewith, Concord intends
to file with the SEC a registration statement on Form S-4, which
will include a preliminary proxy statement/prospectus of Concord in
connection with the transaction and related matters. After the
registration statement on Form S-4 is declared effective, Concord
will mail a definitive proxy statement/prospectus and other
relevant documents to its stockholders. This communication does not
contain any information that should be considered by Concord’s
stockholders concerning the transaction and is not intended to
constitute the basis of any voting or investment decision in
respect of the transaction or the securities of Concord. Concord’s
stockholders and other interested persons are advised to read, when
available, the preliminary proxy statement/prospectus, and
amendments thereto, and definitive proxy statement/prospectus in
connection with Concord’s solicitation of proxies for its
stockholders’ meeting to be held to approve the transaction and
related matters because the proxy statement/prospectus will contain
important information about Concord, GCT and the Transactions.
The definitive proxy statement/prospectus will be mailed to
stockholders of Concord as of a record date to be established for
voting on the transaction and related matters. Stockholders may
obtain copies of the registration statement, proxy
statement/prospectus and all other relevant documents filed or that
will be filed with the SEC by Concord, when available, without
charge, at the SEC’s website at www.sec.gov or by directing a
request to: Concord Acquisition Corp III, Attn: Corporate
Secretary, 477 Madison Avenue, 22nd Floor, New York, NY 10022.
Investment in any securities described herein has not been
approved or disapproved by the SEC or any other regulatory
authority nor has any authority passed upon or endorsed the merits
of the business combination or the accuracy or adequacy of the
information contained herein. Any representation to the contrary is
a criminal offense.
Participants in Solicitation
Concord, GCT and their respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from Concord’s stockholders in connection with the
transaction. Information about the directors and executive officers
of Concord is set forth in Concord’s Annual Report on Form 10-K
filed with the SEC on February 27, 2023. Additional information
regarding the participants in the proxy solicitation and the
interests of those persons may be obtained by reading the proxy
statement/prospectus regarding the transaction when it becomes
available. When available, you may obtain free copies of these
documents as described above.
No Offer or Solicitation
This communication is for informational purposes only and shall
not constitute a proxy statement or solicitation of a proxy,
consent or authorization with respect to any securities or in
respect of the transaction, neither is it intended to nor does it
constitute an offer to sell or purchase, nor a solicitation of an
offer to sell, buy or subscribe for any securities, nor is it a
solicitation of any vote in any jurisdiction pursuant to the
transactions or otherwise, nor shall there be any sale, issuance or
transfer of securities in any jurisdiction in contravention of
applicable law. No offer of securities shall be deemed to be made
except by means of a prospectus meeting the requirements of Section
10 of the Securities Act of 1933, as amended, or an exemption
therefrom.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231103648074/en/
For Media: Sophie Heerinckx, GCT Semiconductor,
sophieh@gctsemi.com
For Investors: Cosette Gastelu, Penta Group
cosette.gastelu@pentagroup.com John Schlaefer, GCT Semiconductor,
jschlaefer@gctsemi.com
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