HUB Security to Become Publicly Traded on Nasdaq Through Business Combination with Mount Rainier Acquisition Corp

Author: Charles Gross | March 23, 2022 07:13am
HUB Cyber Security (Israel) Limited (TASE: HUB), a Tel-Aviv based developer of Confidential Computing cybersecurity solutions and services ("HUB" or the "Company"), and Mount Rainier Acquisition Corp. (NASDAQ:RNER), a U.S. publicly traded special purpose acquisition company ("RNER"), today announced that they have entered into a definitive business combination agreement.  Upon closing of the proposed transaction, the combined company (the "Combined Company") will operate under the "HUB Security" name and is expected to be listed on Nasdaq under the new ticker symbol "HUBC." HUB develops and markets Confidential Computing solutions and services that aim to disrupt cybersecurity for enterprises and governments worldwide. HUB's proprietary hardware solutions enable the protection of sensitive IT data through a computer's RAM memory or processor, creating a Trusted Execution Environment (TEE). HUB provides a holistic cyber defense of end-to-end data protection across all phases of the data lifecycle and offers next-generation encryption solutions, including advanced quantum computing defense. The Company has received FIPS 140-2 Level 3 to meet stringent U.S. security standards and the highest level of security for cryptographic modules. HUB operates in a rapidly growing Confidential Computing market that is expected to reach $54 billion by 2026 at a CAGR of 95%-100%, according to Confidential Computing Research 2021, published by Everest Group Inc. HUB's solutions and services are delivered to enterprises including, but not limited to, insurance companies, commercial banks, payment companies, telecom operators, and governmental entities primarily through long-term contracts. HUB's Founder, Chief Executive Officer, Eyal Moshe and the current management team will continue to lead the Combined Company. Moshe said, "We have a wide range of game-changing cybersecurity hardware technology and services for better global cyber defense. The U.S. is our prime target market for growth and we seek to expand our U.S. operations significantly via this business combination. We are passionate and excited about this opportunity to become publicly listed in the U.S. on Nasdaq and to continue our growth and global expansion." Matthew Kearney, Chairman and CEO of RNER, said, "Our mission is to find a high quality, well led, technology backed business whose high growth potential would be accelerated by merger with our company. HUB meets all these criteria and we are delighted to be able to recommend this business combination to our stockholders. We look forward to working with Eyal and the HUB team through to its successful listing." Transaction Overview The Combined Company will have an estimated pro forma enterprise valuation of approximately $1.28 billion. Cash proceeds from the proposed transaction are expected to consist of up to approximately $176 million of cash held in RNER's trust (before any redemptions by RNER's public stockholders and the payment of certain expenses) and approximately $50 million attributed to the PIPE investment anchored by Israeli and American institutional and existing investors. Proceeds from the PIPE are expected to satisfy the minimum cash closing condition and will be used as working capital to support continued growth and to fund acquisitions. HUB shareholders will retain 100% of their existing equity holdings and are expected to own approximately 81% of the Combined Company on a non-fully diluted basis immediately following the closing of the proposed transaction, assuming no redemptions by RNER's public stockholders.  Founder & CEO Eyal Moshe will continue to own approximately 6% of the combined company on a pro forma basis, assuming no redemptions by RNER's public stockholders. The board of directors of each of RNER and HUB approved the proposed transaction. The proposed transaction will require the approval of the stockholders of RNER and HUB, the effectiveness of a registration statement to be filed with the Securities and Exchange Commission (the "SEC") in connection with the proposed transaction, and the satisfaction of other customary closing conditions.  The proposed transaction is expected to close in the third quarter of 2022. Additional information about the proposed transaction, including a copy of the business combination agreement and investor presentation, is available in the Form 8-K filed today with the SEC by RNER at www.sec.gov. Advisors A-Labs Advisory & Finance Ltd. ("ALabs") and Oppenheimer & Co. Inc. are serving as financial advisors to HUB, and ALabs is serving as sole placement agent for the PIPE. Latham & Watkins LLP and Pearl Cohen Zedek Latzer Baratz are serving as legal advisors to HUB. A.G.P./Alliance Global Partners is serving as the exclusive financial advisor to RNER. Loeb & Loeb LLP and Sullivan & Worcester LLP (Tel Aviv) are serving as legal advisors to RNER.

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