Alpha Star Acquisition Corporation Enters into Definitive Business Combination Agreement with XDATA

Rhea-AI Summary

Alpha Star Acquisition (NASDAQ: ALSA) has announced a definitive business combination agreement with XDATA, an Estonia-based financial technology solutions company. The transaction, approved by both companies' boards, is expected to close in late 2024, subject to regulatory and shareholder approvals. Key points include:

1. ALSA will incorporate a Cayman Islands exempted company (PubCo).
2. ALSA will merge with PubCo in a Reincorporation Merger.
3. PubCo and XDATA shareholders will undergo a Share Exchange.
4. Post-closing, XDATA will operate through PubCo, which will be publicly traded on Nasdaq.

The deal is contingent on SEC approval of PubCo's Form F-4 registration statement and Nasdaq's approval of XDATA's listing application. Han Kun Law Offices LLP and Ogier (Cayman) LLP are advising ALSA, while Loeb & Loeb LLP is acting as U.S. securities legal advisor to XDATA.

Positive

• Potential expansion into the fintech sector through merger with XDATA
• Access to public markets for XDATA via NASDAQ listing post-merger
• Unanimous approval from both companies' boards of directors

Negative

• Transaction subject to regulatory and shareholder approvals, introducing uncertainty
• Potential dilution for existing ALSA shareholders
• Integration risks associated with merging two distinct companies

Financial Analyst

This business combination between Alpha Star Acquisition and XDATA marks a significant development in the fintech sector. As a SPAC merger, it provides XDATA with a faster route to going public compared to traditional IPOs. The transaction's structure, involving a Cayman Islands exempted company, suggests potential tax optimization strategies. However, investors should note that the deal is subject to shareholder and regulatory approvals, which introduces uncertainty. The lack of financial details, such as valuation or projected revenues, makes it challenging to assess the immediate impact on Alpha Star's stock. Investors should closely monitor the upcoming Form F-4 filing for important financial information and growth projections to evaluate the potential of this merger.

Legal Expert

The business combination agreement between Alpha Star and XDATA presents several legal considerations. The multi-step transaction structure, including a reincorporation merger and share exchange, adds complexity but is not uncommon in SPAC deals. The involvement of a Cayman Islands entity suggests potential offshore structuring benefits. Investors should pay attention to the regulatory approval process, particularly from the SEC and Nasdaq. The pending Form F-4 filing will be important for transparency and compliance. The engagement of reputable law firms like Han Kun and Loeb & Loeb indicates a thorough legal approach. However, shareholders should carefully review the forthcoming proxy materials to understand their rights and any potential dilution from the transaction.

Market Research Analyst

This SPAC merger reflects the ongoing trend of fintech companies seeking public listings through alternative methods. XDATA's Estonia base positions it within the European fintech ecosystem, which has been growing rapidly. The lack of detailed financial information in this announcement is typical for initial SPAC merger news, but it limits immediate market reaction. Investors will likely show increased interest once concrete financials are disclosed. The timing of the deal, expected to close in late 2024, aligns with market expectations for SPAC transactions. However, the current market sentiment towards SPACs has cooled compared to previous years, which may affect investor enthusiasm. The success of this merger will depend on XDATA's ability to demonstrate strong growth potential and differentiation in the competitive fintech landscape.

New York, NY, Sept. 13, 2024 (GLOBE NEWSWIRE) -- Alpha Star Acquisition Corporation (NASDAQ: ALSA) (“Alpha Star” or “ALSA”), a special purpose acquisition company, today announced the execution of a business combination agreement on September 12, 2024 (the “Business Combination Agreement”), pursuant to which Alpha Star will undergo a business combination with OU XDATA GROUP (“XDATA”), an Estonia-based financial technology solutions company. The transaction has been approved by the boards of directors of Alpha Star and XDATA and is expected to be consummated in late 2024. The closing of the transaction is subject to regulatory approval, approval by the shareholders of Alpha Star and XDATA and the satisfaction of certain other customary closing conditions.

Transaction Details

The Business Combination Agreement provides for (i) SPAC will incorporate a Cayman Islands exempted company (“PubCo”) in accordance with the Companies Act (Revised) of the Cayman Islands, (ii) the merger of Alpha Star with and into PubCo (the “Reincorporation Merger”), with PubCo surviving the Reincorporation Merger, and (iii) the share exchange between PubCo and the shareholders of XDATA (the “Share Exchange”, together with Reincorporation Merger, the “Proposed Transaction”), resulting in XDATA being a wholly owned subsidiary of PubCo. Following the closing of the Proposed Transaction, XDATA will operate through PubCo, and PubCo will be a publicly traded company listed on the Nasdaq Stock Market.

The board of directors of both XDATA and ALSA have unanimously approved the Proposed Transaction, which is expected to be completed later this year, subject to, among other things, the approval of the shareholders of XDATA and ALSA and other customary closing conditions, including but not limited to a registration statement on Form F-4 (the “Registration Statement”) to be filed by PubCo being declared effective by the SEC, and the listing application of XDATA being approved by the Nasdaq Stock Market LLC.

The description of the Proposed Transaction contained herein is only a summary and is qualified in its entirety by reference to the Business Combination Agreement, a copy of which will be filed by ALSA with the Securities and Exchange Commission (the “SEC”) as an exhibit to a Current Report on Form 8-K, which will be available at http://www.sec.gov.

Han Kun Law Offices LLP and Ogier (Cayman) LLP are acting as legal advisors to ALSA. Loeb & Loeb LLP is acting as U.S. securities legal advisor to XDATA.

About XDATA

XDATA is an innovative software development company based in Estonia, known for its expertise in financial technology solutions. The company provides a range of specialized products, including an Internet Banking Suite, Mobile Banking Apps for banks and EMIs, the AI-enhanced transaction monitoring solution ComplyControl, and a comprehensive CRM solution.

About Alpha Star Acquisition Corporation

Alpha Star Acquisition Corporation is a blank check exempted company incorporated in the Cayman Islands for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties that could cause actual results to differ materially from what is expected. Words such as “expects”, “believes”, “anticipates”, “intends”, “estimates”, “seeks”, “may”, “might”, “plan”, “possible”, “should” and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include, but are not limited to, statements regarding projections, estimates and forecasts of revenue and other financial and performance metrics, projections of market opportunity and expectations, the estimated enterprise value of the PubCo, XDATA’s ability to scale and grow its business, the advantages and expected growth of the PubCo, the cash position of the PubCo following closing of the Proposed Transaction, the parties’ ability to consummate the Proposed Transaction, and expectations related to the terms and timing of the Proposed Transaction, as applicable. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of ALSA’s and XDATA’s management and are not predictions of actual performance. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements. Such factors include, among other things: the possibility that the business combination will not close or that the closing may be delayed because conditions to the closing may not be satisfied, including shareholder and other approvals; the performance of ALSA and XDATA; the ability of the PubCo to meet the Nasdaq Stock Market’s listing standards; changes in the market for XDATA’s products and services; XDATA’s inability to maintain sufficient levels of liquidity and working capital; the amount of redemption requests made by ALSA’s public shareholders; the reaction of XDATA customers to the business combination; XDATA’s inability to develop and maintain effective internal controls; the exposure to any liability, protracted and costly litigation or reputational damage relating to XDATA’s data security; unexpected costs, liabilities or delays in the Proposed Transaction; the outcome of any legal, governmental or regulatory proceedings related to the Proposed Transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the transaction agreement; and general economic conditions. In addition, please refer to the Risk Factors section in the proxy statement/prospectus included in the Registration Statement relating to the Proposed Transaction to be filed by PubCo and in ALSA’s prospectus and its periodic reports filed or to be filed with the SEC, including its quarterly reports on Form 10-Q and 10-K for additional information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. In light of the significant uncertainties in these forward-looking statements, nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved and neither ALSA nor XDATA can assure you that the forward-looking statements in this press release will prove to be accurate. The forward-looking statements in this press release represent the views of ALSA and XDATA as of the date of this press release. Except as expressly required by applicable securities law, ALSA and XDATA disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Additional Information and Where to Find It

In connection with the Proposed Transaction, XDATA and ALSA intend to cause a registration statement on Form F-4 to be filed with the SEC, which will include a proxy statement to be distributed to ALSA’s shareholders in connection with ALSA’s solicitation for proxies for the vote by ALSA’s shareholders in connection with the Proposed Transaction and other matters as described in the registration statement, as well as a prospectus relating to PubCo’s securities to be issued in connection with the Proposed Transaction. ALSA’s shareholders and other interested persons are advised to read, once available, the preliminary proxy statement/prospectus and any amendments thereto and, once available, the definitive proxy statement/prospectus, in connection with ALSA’s solicitation of proxies for its extraordinary general meeting of shareholders to be held to approve, among other things, the Proposed Transaction, because these documents will contain important information about ALSA, XDATA, PubCo and the Proposed Transaction. After the registration statement is filed and declared effective, ALSA will mail a definitive proxy statement and other relevant documents to its shareholders as of the record date to be established for voting on the Proposed Transaction. Shareholders may also obtain a copy of the preliminary and definitive proxy statement/prospectus to be included in the registration statement, once available, as well as other documents filed with the SEC regarding the Proposed Transaction and other documents filed with the SEC, without charge, at the SEC’s website located at www.sec.gov.

Participants in the Solicitation

ALSA, XDATA and PubCo and certain of their respective directors, executive officers and other members of management and employees may, under SEC rules, be deemed to be participants in the solicitations of proxies from ALSA’s shareholders in connection with the Proposed Transactions. Information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of ALSA’s shareholders in connection with the Proposed Transactions will be set forth in the proxy statement/prospectus included in a registration statement on Form F-4 to be filed by PubCo with the SEC. You can find more information about ALSA’s directors and executive officers in ALSA’s annual report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on July 3, 2024. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests will be included in the proxy statement/prospectus when it becomes available. Shareholders, potential investors and other interested persons should read the proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents , once available, at the SEC’s website at www.sec.gov, or by directing a request to Alpha Star Acquisition Corporation, 100 Church Street, 8th Floor, New York, NY 10007.

No Offer or Solicitation

This press release is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed transaction described above and shall not constitute an offer to sell or a solicitation of an offer to buy any securities of Alpha Star or PubCo, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.

Contact Information

For inquiries regarding ALSA

Zhe Zhang
Chief Executive Officer
Email: zhangzhe@siftcap.cn

For inquiries regarding XDATA

Roman Eloshvili
Chief Executive Officer
roman@xdatagroup.io 

FAQ

What companies are involved in the Alpha Star Acquisition (ALSA) business combination?

Alpha Star Acquisition (NASDAQ: ALSA) is entering into a business combination with OU XDATA GROUP, an Estonia-based financial technology solutions company.

When is the ALSA-XDATA business combination expected to close?

The business combination between Alpha Star Acquisition and XDATA is expected to be consummated in late 2024, subject to regulatory and shareholder approvals and other customary closing conditions.

What are the key steps in the ALSA-XDATA business combination process?

The process involves incorporating a Cayman Islands exempted company (PubCo), merging Alpha Star with PubCo, and a share exchange between PubCo and XDATA shareholders, resulting in XDATA becoming a wholly owned subsidiary of PubCo.

Where will the combined ALSA-XDATA company be listed after the merger?

Following the closing of the proposed transaction, the combined company (PubCo) will be publicly traded and listed on the Nasdaq Stock Market.