UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 8.01 | Other Events. |
On January 11, 2021, Intercontinental Exchange, Inc. (the “Company”) issued a press release announcing that Bakkt Holdings, LLC, a Delaware limited liability company and majority-owned indirect subsidiary of the Company (“Bakkt”), has entered into an Agreement and Plan of Merger (the “Merger Agreement”) with VPC Impact Acquisition Holdings, a special purpose acquisition company organized under the laws of the Cayman Islands (“VIH”), and Pylon Merger Company LLC, a Delaware limited liability company and wholly owned subsidiary of VIH (“Merger Sub”).
Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, VIH will domesticate and become a Delaware corporation (the “Domestication”) and be renamed “Bakkt Holdings, Inc.” (“Bakkt Pubco”) and, following the Domestication, Merger Sub will merge with and into Bakkt (the “Merger”), with Bakkt surviving the Merger. Upon the consummation of the Merger (the “Closing”), Bakkt Pubco will be organized in an “Up-C” structure in which substantially all of the assets and the business of Bakkt Pubco will be held by Bakkt and its subsidiaries, and Bakkt Pubco’s only direct assets will consist of its membership interests in Bakkt. Upon the Closing, Bakkt Pubco is expected to have a class of common stock listed on the New York Stock Exchange.
Also on January 11, 2020, following the entry into the Merger Agreement, Intercontinental Exchange Holdings, Inc. (“ICEH”), a wholly owned direct subsidiary of the Company and holder of a majority of the membership interests in Bakkt, entered into a support agreement with Bakkt and VIH, pursuant to which ICEH has agreed to vote in favor of the Merger and the other transactions contemplated by the Merger Agreement and against any competing transaction. Neither the Merger Agreement nor any transaction contemplated thereby, including the Merger, requires the approval of the stockholders of the Company.
The Merger Agreement contemplates that, at the Closing, ICEH, which is expected to own a majority of the common stock of Bakkt Pubco immediately following the Merger, will enter into a voting agreement with Bakkt Pubco (the “Voting Agreement”). Pursuant to the Voting Agreement, ICEH will agree to vote on any matter submitted to a vote or consent of the stockholders of Bakkt Pubco, for so long as ICEH owns at least 50% of the total voting power of Bakkt Pubco common stock, any shares of common stock of Bakkt Pubco owned by ICEH in excess of 30% of the outstanding voting power of Bakkt Pubco, in the same percentages, for and against the relevant matter, as votes were cast by all stockholders of Bakkt Pubco other than ICEH. As a consequence of the Voting Agreement and Bakkt Pubco’s other governance arrangements, following the Closing, the Company expects to reclassify Bakkt Pubco as an equity method investment of the Company and Bakkt will therefore cease to be consolidated with the Company’s financial statements.
Also on January 11, 2021, concurrently with the execution of the Merger Agreement, VIH entered into subscription agreements with certain investors (collectively, the “PIPE Investors”), pursuant to which, and on the terms and subject to the conditions of which, the PIPE Investors have collectively subscribed for additional equity in Bakkt Pubco for an aggregate purchase price equal to $325,000,000 (the “PIPE Investment”). The PIPE Investors include ICEH, which committed to purchase additional equity in Bakkt Pubco that would comprise up to $50,000,000 of the PIPE Investment. The PIPE Investment will be consummated immediately prior to the Closing.
A copy of the Company’s press release announcing Bakkt’s entry into the Merger Agreement and ICEH’s participation in the PIPE Investment is attached as Exhibit 99.1 and incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. |
Description | |
| 99.1 | Press Release dated January 11, 2021 | |
| 104 | The cover page from Intercontinental Exchange, Inc.’s Current Report on Form 8-K, formatted in Inline XBRL. | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be filed on its behalf by the undersigned hereunto duly authorized.
| INTERCONTINENTAL EXCHANGE, INC. | ||||||
| Date: January 11, 2021 | By: | /s/ Andrew J. Surdykowski | ||||
| Andrew J. Surdykowski | ||||||
| General Counsel | ||||||
Exhibit 99.1
Intercontinental Exchange Announces Bakkt to Become a Publicly Traded Company via Merger with VPC Impact Acquisition Holdings
ATLANTA and NEW YORK, January 11, 2021 – Intercontinental Exchange, Inc. (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, announced that Bakkt Holdings, LLC (“Bakkt”), the transformative digital asset marketplace launched in 2018 by ICE and a marquee group of investors and strategic partners, has entered into a definitive agreement to combine with VPC Impact Acquisition Holdings (NASDAQ: VIH), a special purpose acquisition company sponsored by Victory Park Capital (“VPC”).
The business combination between Bakkt and VIH values the combined company at an enterprise value of approximately $2.1 billion and is expected to result in over $500 million of cash on the combined company’s balance sheet, reflecting a contribution of up to $207 million of cash held in VPC Impact Acquisition Holdings’ trust account, and a $325 million concurrent private placement (PIPE) of Class A common stock of the combined company, priced at $10.00 per share, including a $50 million commitment from ICE. The newly combined company will be renamed Bakkt Holdings, Inc. and will be listed on the New York Stock Exchange.
As part of the transaction, Bakkt’s existing equity holders and management will roll 100% of their equity into the combined company. Assuming no shareholders of VPC Impact Acquisition Holdings exercise their redemption rights, current Bakkt equity holders, including ICE, will own approximately 78%, VPC Impact Acquisition Holdings public shareholders will own approximately 8%, VPC will own 2%, and PIPE investors (a group that will also include ICE) will own approximately 12% of the issued and outstanding common stock of the combined company at closing.
Additional details on the impact to ICE’s financials are below:
Transaction Impact on ICE Financials
| • | ICE’s fourth quarter 2020 net revenues related to Bakkt are expected to be approximately $9 million while GAAP and adjusted non-GAAP operating expenses related to Bakkt are expected to be approximately $39 million and $22 million, respectively. First quarter 2021 net revenues related to Bakkt are expected to be approximately $7 million while GAAP and adjusted non-GAAP operating expenses related to Bakkt are expected to be approximately $25 million and $23 million, respectively. |
| • | Following completion of the business combination, which is expected to be in the second quarter of 2021, ICE is expected to have a 65% economic interest and a minority voting interest in the combined company. Prior to the closing, Bakkt revenues and operating expenses will continue to be reported within ICE’s consolidated net revenues and operating expenses. |
| • | In addition, beginning with ICE’s first quarter 2021 financial results, the impact of equity method investments will be excluded from ICE’s adjusted non-GAAP results. The non-cash contribution from ICE’s equity method investments are currently reported in ICE’s non-operating income and include ICE’s 40% stake in the OCC. Following the closing of the proposed business combination with Bakkt, ICE will have a minority voting interest in the combined company and the combined company will be reclassified as an equity method investment of ICE and will therefore not be consolidated within ICE’s financial statements. |
About Intercontinental Exchange
Intercontinental Exchange (NYSE: ICE) is a Fortune 500 company and provider of marketplace infrastructure, data services and technology solutions to a broad range of customers including financial institutions, corporations and government entities. We operate regulated marketplaces, including the New York Stock Exchange, for the listing, trading and clearing of a broad array of derivatives contracts and financial securities across major asset classes. Our comprehensive data services offering supports the trading, investment, risk management and connectivity needs of customers around the world and across asset classes. As a leading technology provider for the U.S. residential mortgage industry, ICE Mortgage Technology provides the technology and infrastructure to transform and digitize U.S. residential mortgages, from application and loan origination through to final settlement.
Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located at http://www.intercontinentalexchange.com/terms-of-use. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 – Statements in this press release regarding ICE’s business that are not historical facts are “forward-looking statements” that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE’s Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 6, 2020.
ICE Media Contact:
Damon Leavell
Damon.Leavell@theice.com
212-323-8587
ICE Investor Contact:
Warren Gardiner
Warren.Gardiner@theice.com
770-835-0114
Document and Entity Information |
Jan. 11, 2021 |
|---|---|
| Cover [Abstract] | |
| Amendment Flag | false |
| Entity Central Index Key | 0001571949 |
| Document Type | 8-K |
| Document Period End Date | Jan. 11, 2021 |
| Entity Registrant Name | INTERCONTINENTAL EXCHANGE, INC. |
| Entity Incorporation State Country Code | DE |
| Entity File Number | 001-36198 |
| Entity Tax Identification Number | 46-2286804 |
| Entity Address, Address Line One | 5660 New Northside Drive |
| Entity Address, Address Line Two | Third Floor |
| Entity Address, City or Town | Atlanta |
| Entity Address, State or Province | GA |
| Entity Address, Postal Zip Code | 30328 |
| City Area Code | (770) |
| Local Phone Number | 857-4700 |
| Security 12b Title | Common Stock, $0.01 par value per share |
| Trading Symbol | ICE |
| Security Exchange Name | NYSE |
| Written Communications | false |
| Soliciting Material | false |
| Pre Commencement Tender Offer | false |
| Pre Commencement Issuer Tender Offer | false |
| Entity Emerging Growth Company | false |