The Beneficient Company Group, a Leading Technology-Enabled Provider of Liquidity and Related Services to Investors in Alternative Assets, to Go Public via Combination with Avalon Acquisition Inc.
Digitally-Native Pioneer has Developed a Simple, Secure and Rapid Process for
- Beneficient has been Growing Responsibly and Improving Outcomes for Investors: The combination implies an enterprise valuation of
$3.5 billion for Beneficient, and validates its industry re-defining business plan and growth since inception. Upon closing, the combined entity would have access to the capital markets to offer more liquidity options and better serve investors in a historically costly and opaque market. - Strong History of Liquidity Execution: Beneficient has already financed transactions that delivered liquidity on approximately
$1.1 billion in net asset value of alternative assets since 2017, which includes approximately $383 million in the past 12 months. - An Unwavering Commitment to Regulatory Compliance: Beneficient has built a robust compliance and technology infrastructure, which has enabled it to receive a charter from the
Kansas Office of the State Bank Commissioner to serve as a secure regulated fiduciary financial institution and as a trustee, custodian and liquidity provider to mid-to high net worth investors and small-to medium sized institutions primarily inthe United States . - An Innovative Portal Powered by Proprietary Data: Beneficient’s AltAccess digital platform is the first widely available and cybersecure-certified venue for obtaining liquidity for alternative assets from a balance sheet provider acting as a regulated fiduciary. The platform is subject to regulatory oversight and is powered by over 800,000 lines of proprietary code.
- An Aligned, Experienced Leadership Team: The management team is led by founder, major shareholder and CEO
Brad Heppner , who previously founded and/or acquired 10 alternative asset operating companies, includingThe Crossroads Group and Capital Analytics, after working at institutions such asBain & Co. and theMacArthur Foundation over his 30-year career. - A World-Class Board of Directors: Beneficient’s Board of Directors includes investment management luminaries, two former
U.S. Federal Reserve Bank presidents and a former Big Four audit partner. - Mission-Driven and Focused on Economic Development in Local Communities: Beneficient’s transactions have already resulted in contributions of cash and assets with a value of more than
$15 million in the aggregate to theKansas Department of Commerce , theCity of Hesston , theKansas Economic Growth Trust and theBeneficient Heartland Foundation , each of which is dedicated to rural economic development inKansas . - Public Conference Call Today,
September 21 , at8:00 AM Eastern: Investors and other stakeholders are invited to join a call with Avalon and Beneficient regarding the proposed combination.
Beneficient’s end-to-end digital platform provides financing for liquidity and related services to a growing number of investors who are seeking liquidity for their alternative assets through regulated fiduciaries. The Company’s cybersecure-certified AltAccess portal is the first widely available venue for exchanging alternative assets from a balance sheet provider acting as a regulated fiduciary, is subject to regulatory oversight and is powered by over 800,000 lines of proprietary code.
The Company’s liquidity exchange offering leverages Beneficient’s proprietary technology and patent-pending algorithmic systems to provide alternative asset investors a quote for their investments and liquidity in 30 days or fewer. This compares to traditional processes that may take four to 12 months to execute and offer lesser price discovery at the outset of the process for the alternative asset holder. Upon closing, the combined entity would have access to the capital markets to offer more liquidity options and better serve investors in a historically costly and opaque market.
“We began Beneficient based on the simple, yet ambitious belief that individual investors and smaller institutions should be empowered with the same opportunities as large institutional investors when it came to their alternative investments. We are working to democratize the industry starting with a simple, secure, rapid and cost-effective solution to what we saw as the most foundational and pressing need: liquidity. Today’s announcement with Avalon validates our belief in Ben’s value and industry-redefining business plan and is a testament to the dedication of everyone at Ben who has made this possible.”
Beneficient has built a robust compliance and tech infrastructure. The Company has received a
To date, Beneficient has financed transactions that delivered liquidity on approximately
Notably, Beneficient has a growing network of wealth management partners, including broker dealers, RIAs and private banking platforms, and general partners. These partners can look to Ben as a “Preferred Liquidity Provider” that can deliver affordable, consistent and reliable services. The Company has also launched its own broker-dealer,
“Avalon’s target criteria included disruptive technology, innovative business strategy, a growing business, and a large total addressable market. Beneficient fulfills all of these criteria. The total addressable market for liquidity and ancillary services for alternative asset investors is large and growing considerably. Existing solutions for individuals and smaller institutions are cost prohibitive and time consuming, leaving their needs largely unmet. Beneficient’s innovative solutions tap into this unmet demand and represent a disruptive force transforming the way mid-to high net worth investors and small-to medium sized institutions – and really all investors – think about their alternative investments. Beneficient has been growing responsibly and improving outcomes for investors, and we look forward to helping Brad and the team execute on their strategic ambitions.”
Overview of Transaction
The combination implies an enterprise valuation of
Upon the closing of the transaction, and assuming no public stockholders redeem their shares, existing Beneficient shareholders are expected to continue owning 88% of the combined company, with public stockholders expected to own 10%, and Avalon sponsors expected to own 2%.
The Boards of Directors of both Beneficient and Avalon have unanimously approved the proposed business combination, which is expected to be completed in the first half of 2023 subject to stockholder approval and other customary closing conditions.
Overview of Beneficient’s Management Team
Mr. Heppner, who is founder, a major shareholder and Chief Executive Officer, leads the Company. He previously founded and/or acquired 10 alternative asset operating companies, including
James Silk , Executive Vice President & Chief Legal Officer:Mr. Silk has more than 20 years of investment management and financial services experience, previously serving as Partner atWillkie Farr & Gallagher LLP , where he counseled leading asset management firms on a wide variety of legal, compliance and regulatory issues.Derek Fletcher , President & Chief Fiduciary Officer Wealth Strategies Director:Mr. Fletcher has more than 25 years of wealth management and fiduciary advisory experience, previously serving as a Managing Director atBank of America Private Wealth Management and Partner atWinstead PC .Jeff Welday , Global Head of Originations & Distribution:Mr. Welday , who runs BenCapital Markets and is President ofBeneficient Securities Company , has more than 25 years of investment management industry experience, previously holding roles at institutions such as Invesco, Morgan Stanley and JP Morgan Chase.Scott Wilson , Chief Underwriting Officer:Mr. Wilson , who leads Ben Liquidity, has 20 years of experience, primarily in the alternative asset space, and also brings a strategy background from his tenure atMcKinsey & Company .- Dr.
Samuel Hikspoors , Credit Risk Officer & Managing Director:Dr. Hikspoors , who leads Ben Data Services, has more than 15 years of experience in alternative investments, risk and quant strategies, and previously held roles at Sage Advisory and Invesco after earning a PhD & MSc from theUniversity of Toronto .
Overview of Beneficient’s Board of Directors
In addition to
Thomas Hicks is an alternatives and private equity industry pioneer with decades of investment experience, who currently serves as Chairman ofHicks Holdings, LLC and previously served on the Board of Directors of Carpenter Technology Corporation.Richard Fisher is a banking executive, corporate governance expert and former President and Chief Executive Officer of theFederal Reserve Bank of Dallas .Mr. Fisher currently serves as President and Chief Executive Officer ofRWF Financial, Inc. , a Senior Adviser to Barclays PLC, a director on the Board of Directors ofTenet Healthcare (NYSE: THC) and Warner Brothers Discovery (NASDAQ: WBD) and previously served as a director on the Board of Directors of AT&T and PepsiCo.Bruce Schnitzer is a specialty financial services executive with more than 30 years of experience, who currently serves as Chairman of private equity sponsorWand Partners and previously served as President and Chief Executive Officer ofMarsh, Inc. and Head of M&A for J.P. Morgan.Peter Cangany is an audit executive with more than 30 years of experience working with diversified financial services organizations, who previously served as a Partner atErnst & Young where he advised insurance and reinsurance clients and led audit services for a range of global companies, including Fortune 100 financial services organizations and domestic insurers.Emily Bowersock Hill is a financial services executive with more than 20 years of experience, who founded and serves as Chief Executive Officer ofBowersock Capital Partners , a leading financial advisory firm.Ms. Bowersock Hill previously served as Executive Director, Senior Portfolio Manager and Family Wealth Director at Morgan Stanley and began her career as a consultant atMcKinsey & Company .Dennis Lockhart is a financial services executive, corporate governance expert and former President and Chief Executive Officer of theFederal Reserve Bank of Atlanta .Early in his career,Mr. Lockhart worked at Citigroup and Zephyr Management, served as a director on several public company boards and is currently serving on the Board of Directors ofInvesco Mortgage Capital (NYSE: IVR).
The newly combined entity’s Board of Directors may include new independent individuals.
Corporate Social Responsibility and Community Investment Overview
Beneficient is a mission-driven company that is focused on helping foster economic development in its local communities. Beneficient’s transactions have already resulted in contributions of cash and assets with a value of more than
Avalon Webcast and Conference Call Information
An Avalon investor webcast and conference call discussing the transaction can be accessed on
Participant Dial-In Numbers:
- United States Toll-Free: +1-877-407-9039
- United States Toll/International: +1-201-689-8470
- Conference ID: 13732807
A transcript of the call and a presentation will also be filed by Avalon with the
Advisors
Lazard served as sole financial advisor to Beneficient and
About Beneficient
About
Additional Information and Where to Find It
In connection with the proposed transaction, Beneficient will file with the
Participants in Solicitation
Avalon and its directors and executive officers may be deemed participants in the solicitation of proxies from Avalon’s stockholders with respect to the proposed business combination. A list of the names of those directors and executive officers and a description of their interests in Avalon is contained in Avalon’s final prospectus related to its initial public offering dated
The Company and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the stockholders of Avalon in connection with the proposed business combination. A list of the names of such directors and executive officers and information regarding their interests in the proposed business combination will be included in the proxy statement/prospectus for the proposed business combination that will be filed on Form S-4 when available.
No Offer or Solicitation
This communication does not constitute (i) a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the business combination or (ii) an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase, any securities of Beneficient, Avalon, the combined company or any of their respective affiliates. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, or an exemption therefrom, nor shall any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction be affected. No securities commission or securities regulatory authority in
Forward-Looking Statements
Certain statements included in this communication that are not historical facts are forward-looking statements. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, certain plans, expectations, goals, projections, and statements about the benefits of the proposed transaction, the plans, objections, expectations, and intentions of Beneficient and Avalon, the expected timing of completion of the transaction, and other statements that are not historical facts. These statements are based on information available to Beneficient and Avalon as of the date hereof and neither Beneficient nor Avalon is under any duty to update any of the forward-looking statements after the date of this communication to conform these statements to actual results. These statements are based on various assumptions, whether or not identified in this communication, and on the current expectations of the respective management of Beneficient and Avalon as of the date hereof and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as and should not be relied on by an investor or others as, a guarantee, an assurance, a prediction, or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Beneficient and Avalon. These forward-looking statements are subject to a number of risks and uncertainties, including, but not limited to, changes in domestic and foreign business, market, financial, political, and legal conditions; the inability of the parties to successfully or timely consummate the proposed transaction, including the risk that any regulatory approvals or the SEC’s declaration of the effectiveness of our prospectus/proxy statement are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the combined company or the expected benefits of the proposed transaction or that the approval of the requisite equity holders of Avalon is not obtained; failure to realize the anticipated benefits of the proposed transaction; risks related to the rollout of Beneficient’s business and the timing of expected business milestones; the effects of competition on Beneficient’s business; the amount of redemption requests made by Avalon’s stockholders; the ability of Avalon or Beneficient to issue equity or equity-linked securities or obtain debt financing in connection with the proposed transaction or in the future; and those factors discussed in Avalon’s final prospectus dated
Contacts
For Investors:
Beneficient Investor Relations
[email protected]
[email protected]
For Media:
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