Appgate, a Miami-based cybersecurity platform provider, has agreed to merge with publicly traded shell company Newtown Lane Marketing.
The merger is expected to be finalized in the second quarter of 2021 and will provide Appgate access to capital to scale, advance growth initiatives and accelerate go-to-market strategies as part of a publicly traded combined entity, the companies said in a joint release published Tuesday.
An alternative investment manager also committed to invest up to $100 million in convertible notes in Appgate, valuing the cybersecurity company at $1 billion.
Appgate, which was spun out of Cyxtera Technologies in January 2020, has more than 360 employees focused on delivering zero trust-based cybersecurity and secure access platforms to over 650 government entities and enterprises. Its platforms include software defined perimeter, digital threat protection, risk-based authentication and offense-oriented professional services. The company is expected to record $40 million in fiscal year 2021 revenues and a 50 percent compound annual growth rate through FY 2025.
“This is a tremendous time of growth in our industry,” said Appgate CEO Barry Field.
He added that Appgate has been a partner to federal customers and enterprises that recognize the importance of implementing a zero trust strategy to counter ransomware and other cyber attacks.
Field will continue to lead as CEO and a board member at Appgate upon the deal’s closing. Other executives that are expected to stay as part of the management team and board of directors are Manny Medina, executive chairman; Alberto Arango, chief revenue officer; Rene Rodriguez, chief financial officer; Raymond Svider, director; Fahid Ahmed, director; and Jon Ledecky, director.
BC Partners and Medina Capital will continue to hold majority stakes in Appgate, control about 74.4 percent of Newtown Lane’s common stock and retain 100 percent of their existing equity in the combined public company for at least a year post-closing.
DBO Partners and Greenberg Traurig respectively serve as financial adviser and legal counsel to Appgate. Canaccord Genuity advises Newtown on the deal’s financial aspect, while Graubard Miller is the company’s legal counsel.