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Latham Advises Leading Technology Investor Francisco Partners in Connection With Movella and Pathfinder Acquisition Corporation’s Business Combination

October 7, 2022
Firm advises the technology focused private investment firm in the first of its kind financing involving a public tender offer, non-redemption agreement, PIPE backstop and two-phased structured debt financing with novel terms.

Pathfinder Acquisition Corporation (NASDAQ: PFDR), a publicly traded special purpose acquisition company sponsored by affiliates of HGGC and Industry Ventures (Pathfinder), and Movella Inc. (Movella), a leading full-stack provider of sensors, software, and analytics that enable the digitization of movement, announced they have entered into a definitive business combination agreement that, upon closing of the transaction will result in the combined company being publicly listed on the Nasdaq Stock Market. The combined entity, to be known as Movella Holdings, Inc., will have a pro forma enterprise value of approximately US$537 million.

The transaction is supported by US$75 million of committed financing from affiliates of Francisco Partners (“FP”), a leading technology focused private investment firm with over US$45 billion of cumulative committed capital. Under the terms of the investment, up to US$75 million of Pathfinder common stock will be purchased by FP prior to closing, which will be executed through a tender offer or direct placement of Pathfinder stock. In exchange for a non-redemption agreement for FP’s purchased stock, Movella will issue to FP at closing a 5-year PIK note. Under the terms of the financing, Movella will have the right to direct the sale of FP’s purchased stock into the public market, subject to certain exceptions, at any time following the closing of the transaction until the repayment or prepayment of the note, the proceeds of which will provide material credits against the note balance at a repayment or refinancing event.

Latham & Watkins LLP represents Francisco Partners in the transaction. The transactional team was led by Bay Area partner Haim Zaltzman and Bay Area/Los Angeles partner Elizabeth Oh, with Houston associates Benjamin Gelfand, Michael Basist, and Jack Gillen, and Bay Area associate Katherine Page. The corporate team was led by Houston partner Ryan Maierson and New York partner Erika Weinberg, with New York associate Jonathan Guest and Houston associate Bryan Ryan. Advice was also provided on tax matters by Bay Area partner Katharine Moir, with Bay Area associate Alex Farris.