U.K. Encryption Firm Agrees $1.4 Billion Centricus SPAC Deal

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U.K. encryption software firm Arqit Ltd. agreed to go public through a $1.4 billion merger with Centricus Acquisition Corp., the blank-check company led by former Deutsche Bank AG dealmaker Garth Ritchie.

The transaction values the combined firm at about $1 billion including debt, according to a statement Wednesday. The deal will provide as much as $400 million of proceeds to Arqit, including $70 million from a fully committed private placement to investors including Heritage Group, Richard Branson’s Virgin Orbit and Japanese trading house Sumitomo Corp.

Arqit’s technology is used by customers including British telecommunications operator BT Group Plc, Sumitomo, the U.K. government and the European Space Agency, according to the statement. The company claims its technology allows users to secure their network devices against hacking -- even from attacks in future from quantum computers. It’s shareholders include the U.K. government.

U.K. Encryption Firm Agrees $1.4 Billion Centricus SPAC Deal

“This is a deep tech company which is many years ahead of the market,” Ritchie, chief executive officer of the investment vehicle, said in the statement. “Arqit has protected its IP by remaining in stealth mode whilst filing over 1,000 claims on more than a dozen patent applications.”

All of Arqit’s existing investors plan to roll over their holdings in the company, which will be listed on the Nasdaq market. The deal is expected to be completed by the end of the third quarter, according to the statement. Arqit expects to use proceeds to accelerate its expansion plans, including the launch of two satellites slated for 2023.

The SPAC is sponsored by Centricus, the London-based investment firm that helped set up the SoftBank Vision Fund. The blank-check company raised $345 million in its February initial public offering, data compiled by Bloomberg show.

JPMorgan Chase & Co. advised Centricus on the deal, while Deutsche Bank acted as financial adviser and capital markets adviser to Arqit.

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