FiscalNote, the D.C. software and regulatory dashboard company that owns CQ-Roll Call, will go public via a special purpose acquisition company (SPAC) merger, the firm announced Monday.
The company will combine with Duddell Street Acquisition Corp., a blank-check company backed by Hong Kong hedge fund Maso Capital, in a deal that values FiscalNote at $1.3 billion, according to the announcement. Current FiscalNote shareholders, which include AOL and Revolution Growth co-founder Steve Case, Yahoo! co-founder Jerry Yang, billionaire entrepreneur Mark Cuban and New Enterprise Associates, will roll their stakes into the public company and retain a 76% ownership, according to a press release.
When the transaction is complete, FiscalNote will trade on the Nasdaq exchange under the ticker NOTE.
The SPAC transaction includes a $100 million, fully-committed private placement of stock whose buyers are led by Maso Capital. The deal is expected to yield gross proceeds of $275 million — the $100 million private stock sale and $175 million currently held in trust by Duddell Street Acquisition, according to the release. The deal is expected to close in the first quarter of 2022.
The funding will allow FiscalNote to "execute on significant near-term organic and inorganic growth opportunities globally as it continues to develop and deliver products to serve the regulated industries of the future," according to the release. The company is targeting $173 million in revenue in 2022 — including revenue from additional acquisitions that are currently in the works — and $256 million, with an expectation to become profitable, in 2023, according to an investor presentation released Monday.
FiscalNote, whose software helps clients such as Nestle, Blackstone, Northrop Grumman and others in the private, public and nonprofit sectors track and take action on laws and regulation, has been in growth mode for the past year, acquiring eight companies in 10 months. Those acquisitions expanded its reach into Europe, Australia and Asia, among other regions.
The 8-year-old company has had its eye on going public. Co-founder and CEO Tim Hwang told the Washington Business Journal's Sara Gilgore in October that the company had been "making a series of preparations internally" for a rollout on the public market. At the time, he noted that a SPAC transaction was on the table, as was a traditional IPO.
The company has 650 employees around the world and was hiring for up to 80 positions in early October. FiscalNote bought CQ-Roll Call in 2018, and Hwang subsequently led the company to raise several large funding rounds, culminating in $160 million in December that brought its total capital raised at that time to $347 million. Other investors include the fintech-focused Green Visor Capital of San Francisco, Winklevoss Capital of New York and S&P Global (NYSE: S&P)
Once the Duddell transaction closes, the company says that Hwang, 29, will be the youngest Asian American CEO on a major U.S. Stock exchange.
Duddell Street was formed in November 2020 with the goal of acquiring or merging with "global companies in telecom, media and technology, healthcare, fintech and consumer sectors with compelling Asian growth potential," according to a press release at the time. Its CEO is Manoj Jain, co-chief investment officer and founder of Maso; its CFO is listed as Allen Finnerty, who is Maso Capital's chief operating officer, according to LinkedIn. Its directors include Marc Holtzman, chairman of Rwanda's Bank of Kigali; Peter Lee Coker Jr., chairman and executive director of Hong Kong hospitality and engineering firm South Shore Holdings; and Bradford Allen, founder of NextVR, which was later acquired by Apple, and executive chairman of Vaunt, a sports and entertainment intellectual property company.
Jain is slated to become a director of FiscalNote once it goes public, and Maso Capital will also have the right to appoint a second director, according to the investor presentation.
J.P. Morgan acted as financial adviser to FiscalNote. Citi and BTIG, LLC acted as capital markets advisers to Duddell Street. Citi and J.P. Morgan served as joint placement agents for the private placement financing. Davis Polk & Wardwell LLP is serving as legal adviser to Duddell Street while Paul Hastings LLP is serving as legal adviser to FiscalNote.
