Cvent’s SPAC deal with Dragoneer values company at $5.3bn

Global event management software and technology provider Cvent is returning to the public markets with a Special Merger Acquisition Company (SPAC) deal announced 23 July. Cvent’s SPAC merger is with Dragoneer Growth Opportunities Corp. II (NASDAQ:DGNS) and values the company at USD$5.3bn. Cvent, founded in 1999, expects to use $801m of the capital raised by the transaction to accelerate innovation and expand its product offerings. Special purpose acquisition companies (SPACs) have emerged as a viable alternative to initial public offerings (IPOs), because they are often faster to arrange and consummate, and offer greater clarity of pricing and capital. Among the private investors in the public equity (PIPE) is Zoom Video Communications Inc, Fidelity Management & Research Company LLC, Hedosophia and Oaktree Capital Management L.P. “We believe that Cvent’s event technology is complementary to what we offer as a video communications leader and our organisations already have a long track record of working together as technology partners and as users of each other’s solutions,” said Zoom CFO Kelly Steckelberg. Public DGNS shareholders will own 5% of the company after the merger. Shares will trade as Cvent Holding Corp with ticker ‘CVT’ after the merger. Cvent CEO and founder Reggie Aggarwal (pictured) said: “The meetings and events industry has experienced rapid digital transformation over the last 18 months, with the pandemic creating a new paradigm for the events industry. Events became digitised through virtual and online experiences, and we invested heavily in expanding our virtual event capabilities. Now, we are engaging in a hybrid world, as in-person events resume, and virtual events remain prominent. With the increased digitisation of our industry, events are ‘always on’ and have fewer boundaries. My management team and our nearly 4,000 employees around the world are excited for the opportunity to continue to innovate and enable our customers to leverage Cvent across their Total Event Program.” Dragoneer founder and managing partner Marc Stad said: “We are excited to lock arms with Cvent and help position the business for its next phase of growth as a publicly listed company. In H2’20, Cvent launched its virtual events solution, and ever since, this virtual product line has been growing rapidly and has been well-received by customers. As the world reopens, we expect to move into a hybrid world that combines elements of in-person and virtual events. With the optionality, flexibility and reach that Cvent can provide, we expect organisations to increasingly turn to Cvent to expand their audiences and create new, user-friendly ways for both virtual and in-person participants to interact with their events. Moreover, Cvent’s hospitality cloud business is a differentiator that benefits from powerful network effects – a key tenet that we look for in many of our investments at Dragoneer. “Cvent is led by an exceptional management team with years of industry experience and a strong track record of profitable growth. We believe the $801m of capital expected to be raised from this transaction will enable management to double down on product development and further cement Cvent’s position as a leader in this software category.” The boards of directors of both Cvent and Dragoneer have unanimously approved the proposed business combination, which is expected to be completed in the Fourth Quarter of 2021, subject to, among other things, the approval by Dragoneer’s shareholders and certain other customary closing conditions stated in the Merger Agreement. Morgan Stanley & Co. LLC is serving as the exclusive financial advisor to Cvent. Morgan Stanley & Co. LLC, J.P. Morgan and Citi are serving as placement agents to Dragoneer on the PIPE.