AvePoint Inc., a maker of software products that help organizations manage their Microsoft 365 deployments, today announced plans to go public through a merger with a special purpose acquisition company.

Microsoft 365 is a family of cloud services from Microsoft Corp. that includes Office 365 and other offerings. A special purpose acquisition company, or SPAC, is an entity created for the sole purpose of merging with another firm and taking that firm public.

For tech companies looking to hit the stock market, partnering with a SPAC can be much faster than a traditional initial public offering, which is part of the reason such deals are becoming more common. Lidar startups Luminar Technologies Inc. and Aeva Inc. are two of the companies that have opted to take this route recently instead of a traditional IPO.

The SPAC with which AvePoint has inked a deal to go public is Apex Technology Acquisition Corp., which is led by former Oracle Chief Financial Officer Jeff Epstein and Brad Koenig, onetime head of technology investment banking at Goldman Sachs.

The deal will see AvePoint receive $352 million in capital that has been raised by Apex. On top of that sum, the company has closed a $140 million “committed private investment” led by a group of institutional investors.

AvePoint will have a total of $252 million of cash on the balance sheet following the transaction’s completion. From there, it will head toward the stock market with an anticipated equity valuation of $2 billion.

The SPAC merger is a high-profile exit for AvePoint, which started out 20 years ago selling software for backing up Microsoft Exchange mailboxes. It has since built out an expansive portfolio of software products to ease the maintenance of enterprise Microsoft 365 deployments supporting large numbers of users.

AvePoint provides controls for securing the business data that a company’s employees keep in Office 365 applications. Administrators can, for example, limit workers’ ability to share Excel spreadsheets containing customer information, or require that certain sensitive files be encrypted. AvePoint also offers tools for finding sensitive data that doesn’t comply with internal security rules. 

The other products in the company’s portfolio focus on related Microsoft 365 management tasks. They enable organizations to create backups of important business records, manage Microsoft Teams deployments and migrate records from legacy Microsoft Corp. products such as on-premises SharePoint environments, to name some of the use cases AvePoint targets.

The company says its products support more than 7 million users across both enterprises and government agencies. AvePoint expects to close the year with revenue of about $148 million, which would represent a 26% improvement over 2019.

AvePoint will use the funds raised through the merger with Apex to step up engineering activities, international expansion efforts and other elements of its business strategy. The company’s current shareholders will have control of about 72% of the combined entity that will emerge from the merger with Apex. Among those shareholders is Sixth Street, an investment firm that led a $200 million funding round into AvePoint at the start of the year. 

Photo: AvePoint