HUB Announces $1.3B NASDAQ SPAC Deal Revealing Exciting Growth Potential

HUB Cyber Security (TASE:HUB.TA) is disrupting cybersecurity with its proprietary Confidential Computing hardware and the related services it provides to enterprises and governments. In this era of increased cyber aggression and global uncertainty, HUB is redefining tech security with its holistic approach to digital protection. Today HUB announced details of a $1.28 Billion acquisition that will provide HUB with up to approximately $200 million in additional cash and position the company as an industry leader, expanding the reach of its cutting-edge hardware and anti-tampering solutions.

HUB Security entered into a definitive business combination agreement (BCA) with Mount Rainier Acquisition Corp. (NASDAQ: RNER), a publicly-traded special purpose acquisition company. Once the transaction closes, the acquisition company will be acquired by HUB Security, and the Combined Company will be listed on NASDAQ.

The pro forma equity valuation of the Combined Company, following finalization of the transaction, is expected to be $1.28 Billion. The value was determined assuming no redemptions and cash on hand of $256 Million. Cash proceeds from the transaction are expected to be made up of $176 Million of cash in trust from Mount Rainier Acquisition Corp. and an additional $50 Million in equity and convertible notes from a fully committed Private Investment in Public Equity (PIPE), reducing the risks of transaction uncertainty.

Special purpose acquisition companies (SPACs), or blank check companies, operate by selling shares at a set price and depositing the funds in a trust account. The SPAC then seeks out a company to merge with, which will then become the publicly traded Combined Company. Business dealings with SPACs are a strategic tool used by many companies seeking resources to expedite growth or explore new technologies.

The SPAC being acquired by HUB Security, Mount Rainier Acquisition Corporation, is a blank check company that focuses on established, technology-focused businesses with aggregate enterprise values between $500 Million and $2 Billion.

HUB Security Ltd. was founded in Tel-Aviv by former members of Israeli elite intelligence units. The company develops and markets Confidential Computing solutions and associated professional services aiming to disrupt cybersecurity for enterprises and governments worldwide.

The proprietary hardware solutions from HUB protect sensitive data and provide a holistic cyber defense of data protection across all phases of the data lifecycle. The next-gen encryption solutions from the company include advanced quantum computing defense and meet U.S. security standards and the highest level of security for cryptographic modules.

HUB Security has built a successful business model operating in Confidential Computing, a rapidly growing market expected to reach $54 Billion by 2026. HUB expects to continue to see increased revenues in 2022 and has secured contracted orders that will likely double the revenue in 2023. A NASDAQ listing will propel the company towards the Fortune 500 arena, creating a unique investment opportunity.

The services and solutions provided by HUB, will be delivered to enterprise and government customers through a primarily recurring revenues and long-term contracts business model. The company also plans to expedite growth through strategic partnerships and M&A.

The SPAC deal is designed so that current HUB shareholders will roll 100% of their equity into the publicly traded combined company. The shareholders will continue to own 81% of the combined company on a pro forma basis immediately after the closing. Founder & CEO Eyal Moshe will continue to own approximately 6% of the company. No secondary sale of shares will be performed by HUB founders, shareholders, management, or employees.

The Combined Company will be listed on NASDAQ and will continue to be led by Eyal Moshe.

“We believe the U.S. to be our prime target market of growth and seek to expand our U.S operations significantly via this merger and by becoming a listed U.S. entity on NASDAQ. We are passionate and excited about this opportunity to continue our growth and global expansion”, Says Moshe.

This is a difficult market to begin trading in, but everything points to a significant opportunity for upside, as similar companies are currently trading on the NASDAQ at a fifteen-fold revenue multiple.