YouTube Rival Rumble Agrees to SPAC Deal with Cantor Fitzgerald’s CF Acquisition Corp. VI
Posted on 12/02/2021
Rumble Inc. pitches itself as the neutral video platform to compete against YouTube, which is owned by Alphabet’s Google. Among its creators and users, YouTube is known for its arbitrary process of removing content and closing accounts, which can take creators years to develop. Rumble claimed to have 44 million monthly active users in August 2021.
Rumble signed a deal with CF Acquisition Corp. VI (Nasdaq: CFVI), a special purpose acquisition company sponsored by Cantor Fitzgerald, to go public. After closing, which is expected in the second quarter of 2022, the combined company will be called Rumble Inc. and expects to be publicly listed on Nasdaq. Shares will trade on Nasdaq under the symbol CFVI until the closing of the transaction. The Board of Directors of each of Rumble and CFVI have unanimously approved the transaction. The transaction will require the approval of the stockholders of each of CFVI and Rumble. The Rumble stockholders have agreed to support the transaction. Upon the closing of the transaction, Chris Pavlovski, the Founder and Chief Executive Officer of Rumble, will retain voting control to facilitate execution of Rumble’s neutral mission on behalf of all stakeholders.
The transaction values Rumble at an initial enterprise value of $2.1 billion, with current Rumble shareholders having the ability to earn additional shares of the combined company if the stock reaches price hurdles of $15.00 and $17.50 per share. This amount is calculated following the closing of the Transaction for any 20 out of 30 trading days during the 5-year period post-closing. Results in an aggregate valuation of up to approximately $3.15 billion if the additional shares are earned in full. The transaction is expected to provide approximately $400 million in proceeds to Rumble (assuming no redemptions by CFVI’s public stockholders and prior to payment of transaction expenses and stock repurchase), including a fully committed PIPE of $100 million at $10.00 per share and $300 million of cash held in the trust account of CFVI.
Chris Pavlovski, the Founder and Chief Executive Officer of Rumble, said in the press release, “Rumble is designed to be the rails and independent infrastructure that is immune to cancel culture. We are a movement that does not stifle, censor, or punish creativity and believe everyone benefits from access to a neutral network with diverse ideas and opinions. We are on a mission to restore the internet to its roots by making it free and open once again. The transaction we announced today will provide Rumble with the additional capital necessary to continue to scale our business and carry out our mission.”
Advisors
Cantor Fitzgerald & Co. is acting as financial and capital markets advisor to CFVI. Hughes Hubbard & Reed LLP and Bennett Jones LLP are acting as legal advisors to CFVI.
Guggenheim Securities, LLC is acting as the exclusive financial advisor to Rumble. Willkie Farr & Gallagher LLP and DLA Piper Canada LLP are acting as legal advisors to Rumble.
Cantor Fitzgerald & Co. and Guggenheim Securities, LLC served as placement agents for the PIPE financing.
