Quinpario, Apollo's Novitex, HGM's SourceHOV To Combine In $2.8 Bln Deal

(RTTNews) - Quinpario Acquisition Corp. 2 (QPAC, QPACW, QPACU), a special purpose acquisition company, announced Wednesday that it has agreed to combine SourceHOV, LLC and Novitex Holdings, Inc. to form Exela Technologies in a deal valued at $2.8 billion.

Novitex, a provider of technology-driven managed services, is owned by certain funds managed by affiliates of Apollo Global Management, LLC (APO). SourceHOV is majority owned by HandsOn Global Management, LLC and affiliates.

The companies have entered into a definitive business combination agreement to create an industry-solutions provider for financial technology and business services.

The proposed transaction is expected to close during the second quarter of 2017.

The purchase price will be funded through a combination of $1.35 billion in new debt financing, cash from Quinpario, rollover equity and cash on hand at closing, including from equity financing.

Shareholders of SourceHOV and Novitex are rolling 100 percent of the current equity, and will be the majority shareholders of the combined company. All proceeds from the Quinpario equity capital contribution will be used for deleveraging, to pay fees and expenses for the transaction, and for general corporate purposes.

The combined company is expected to have approximately $1.5 billion in revenue in 2017. It will have a board of directors consisting of eight members, including three directors to be nominated by HGM, two directors to be nominated by Apollo and three independent directors.