Local technology company Xurpas Inc. on Monday said it has paved the way for the eventual take-over of Los Angeles-based venture capital management firm Wavemaker Partners US.
The company said its board of directors has approved the transaction which will use a reverse-takeover scheme in which Xurpas will acquire Wavemaker.
Previously, Xurpas board has allowed Wavemaker’s general partners Frederick Manlunas, Benjamin Paul Santos and James Jordan to acquire some 1.7 billion in new common shares of Xurpas at a mere P0.10 per share. The said shares are equivalent to about 48 percent of Xurpas.
The said deal will all require stockholders’ approval.
“This acquisition significantly expands Xurpas’ technology base and gives Filipino shareholders and investors access to an entire portfolio of promising venture-backed early-stage companies in the United States. Through Wavemaker US, Xurpas shareholders can now participate in the significant potential upside from investments in the early-stage technology space,” Nico Jose S. Nolledo, the company’s chairman, said.
Wavemaker US will appoint Eric Manlunas and Buck Jordan to the Xurpas Board after closing of the deal.
Primeiro Partners acted as the sole financial advisor on the transaction.
Under the deal, Xurpas will acquire 100 percent of Wavemaker Group Inc., a newly formed holding company that consolidates interests of the General Partners in Wavemaker’s US business. The local company will pay some P170.7 million in cash for the US venture capitalist.
Wavemaker Group Inc. has rights and title to the following companies: 56.50 percent of the membership interests of Siemer Ventures; 63.67 percent of the membership interests of Wavemaker Partners; 95 percent of the membership interests of WMP GP V; 100 percent of the Manager Units of Wavemaker Global Select; and 95 percent of the membership interests of Wavemaker Management.
The deal is expected to be completed by the fourth quarter of 2020.
“Xurpas considers Wavemaker Partners US as a strategic partner that will help improve Xurpas’ long-term outlook. Equity ownership in the holding company that will consolidate all of the General Partners rights in Wavemaker Partners US will give Xurpas access to high- value, emerging, innovative and disruptive technologies and platforms for its enterprise business and shareholders,” Xurpas said.
Wavemaker Partners US is managed by Manlunas, Santos and James Jordan.
After a couple of successful exits of his own as a technology startup founder, Malunas, a Filipino-born entrepreneur turned venture capitalist, founded Wavemaker US as an early-stage venture capital fund in Los Angeles in 2003.
“Together, the acquisition of Wavemaker US and the subscription of outstanding shares will not impact the cash position of Xurpas post-transaction. This transaction does not include Wavemaker’s Southeast Asia practice. Wavemaker SEA will remain independent and wholly-owned by the management of Wavemaker SEA,” it said.
Wavemaker US is one of the most active venture capital firms in Southern California, and also represents Southern California within the Draper Venture Network, a leading venture collective, founded by venture capitalist Tim Draper, with 24 funds across four continents with over $2 billion of assets under management.