Field service management software provider ServiceMax is merging with Pathfinder Acquisition Corporation, a SPAC (special purpose acquisition company). The deal values ServiceMax at $1.4 billion.
Moreover, ServiceMax is acquiring LiquidFrameworks for $145 million in cash. LiquidFrameworks is a Salesforce cloud partner that develops mobile field operations management solutions for the energy sector.
These are technology M&A deal numbers 423 and 424 that ChannelE2E has covered so far in 2021. See related content:
When the Pathfinder deal closes, ServiceMax will become a publicly traded company, and is expected to be listed on the Nasdaq Stock Exchange under the symbol "SMAX". ServiceMax CEO Neil Barua will continue to lead the business.
Existing ServiceMax investors Silver Lake, Salesforce Ventures and GE will retain their full equity ownership in ServiceMax, the companies say.
ServiceMax Ownership, Investor and Partner History
ServiceMax has had multiple owner and investor milestones in recent years. The timeline includes:
- 2016: GE acquired ServiceMax for $915 million.
- 2018: GE, struggling with its own core business and associated debt, sold a majority stake in ServiceMax to Silver Lake.
- 2020: Salesforce Ventures and Silver Lake invested $80 million in ServiceMax.
ServiceMax said it recorded a record year of growth in 2020, due to the shift toward remote work and digital-first customer engagement.
ServiceMax in June 2021 launched a partner program aimed at expanding the company’s reach and growing implementations of its ServiceMax Asset 360 for Salesforce solution.
What Is A SPAC (Special Purpose Acquisition Company)?
So why is privately held ServiceMax merging with a SPAC? The simple answer involves a fast-track path to becoming a publicly held company.
A SPAC or “blank check” company is designed to raise funds in an initial public offering (IPO) with the aim of acquiring a private business. That private company -- in this case, Pathfinder Acquisition Company -- then becomes public as result of the merger, Reuters notes. Or as Investopia puts it:
“The founder of a SPAC pools money from investors and he or she may contribute to the SPAC to form a blank check company with the sole purpose of acquiring another company—or companies. The money raised through the IPO of a SPAC is put into a trust. The funds are held until the SPAC successfully identifies a viable merger or acquisition opportunity to pursue with the invested funds.”
The SPAC trend helped to fuel $63 billion of IPO fundraising worldwide in January 2021, more than five times the proceeds from the same period a year earlier, Bloomberg reports.
Still, some pundits believe we’re heading toward a SPAC bubble — which involves too much money potentially flowing to lower-quality companies that perhaps shouldn’t be publicly held. We're not suggesting that's the case for ServiceMax, though we will continue to track the company's performance closely as it shifts to publicly held status.
