Rimini Street, which provides third party maintenance for SAP and Oracle, will become a publicly traded company via a merger with an investment firm now on the Nasdaq.
The move is a bit unconventional, but gives Rimini capital for future acquisitions and expansion while accomplishing what an initial public offering would.
Specifically, Rimini Street is merging with GP Investments Acquisition Corp, which trades on the Nasdaq under the ticker GPIA. When the deal closes, the merged company will be renamed Rimini with CEO Seth Ravin leading it.
When the deal closes, Rimini Street will trade under the ticker RMNI. GP Investment Acquisitions Corp. went public in May 2015 and raised $172.5 million to fund investments. Ravin will be CEO and Chairman of the combined company. Rimini Street will designate 7 of 9 directors with GP Investments Acquisition Corp. getting two.
While the deal is a bit unconventional, Rimini Street accomplishes a few key goals. For instance, being a public company will help land more customers and make it easier to raise capital.
As for the financials, the GP Investments Acquisition Corp. will issue 63.8 million shares of its stock at $10 a share to Rimini Street Shareholders. Cash to GP Investments Acquisition Corp. will close the deal, cut debt and bolster the balance sheet. GP Investments Acquisition Corp. will hold 25 percent of Rimini Street shares.
Rimini Street said the enterprise value for the combined company will be about $837 million, or 2.8x estimated 2018 revenue of $295 million.
In the first quarter reported April 19, Rimini Street reported revenue of $49 million, up 42 percent from a year ago. Deferred revenue was $165 million, up 44 percent from a year ago.
The transaction is expected to close in the third quarter pending shareholder and regulatory approval.