), a global publisher of online destinations and soon-to-be operator of a mobile commerce platform for Russia and other emerging markets, and
Cazador Acquisition Corporation
), a special purpose acquisition company (SPAC), today announced the execution of a merger agreement that will infuse up to $81 million into Net Element and provide the necessary financial resources for the company’s next stage of growth.
The combined entity, which will be named “Net Element International,” is applying to be listed on NASDAQ under the ticker symbol “NETE.” Upon completion of the business combination, Net Element, which currently operates several entertainment and lifestyle online destinations and is developing a mobile commerce and payment-processing platform for emerging markets, will name Cazador’s current CEO, Francesco Piovanetti, as its CEO. Net Element also will add several key members of Cazador’s asset management team.
The business combination is subject to the approval of Cazador and Net Element’s respective shareholders as well as other customary closing conditions. Assuming the closing conditions are met, the business combination is expected to be completed during the third quarter 2012.
A SPAC is a collective investment mechanism that enables public stock market investors to invest in private equity type transactions. SPACs are shell companies that have no operations but go public with the intention of merging with or acquiring a company with the proceeds of the SPAC's initial public offering (IPO). In this case, Cazador, with approximately $46 million in cash and approximately $35 million of additional paid in capital if the outstanding shareholder warrants are exercised, is the SPAC that will be merged with Net Element.
“Cazador’s investment in Net Element reaffirms the value of Net Element’s innovation and potential to become a leading mobile-based commerce and payment processing platform, as well as Net Element’s growth strategy for our content and technology properties,” said Mike Zoi, Net Element’s board chairman. “The merger will help Net Element to optimize its balance sheet and allocate resources to achieve our business goals. It also will bring the significant expertise and thought-leadership of Cazador’s top executives to our team, giving us an additional competitive advantage as we execute our business plan.”