Benzinga | Apr 19, 2021 07:52AM EDT

CompoSecure To Go Public Through Merger With Roman DBDR Tech Acquisition Corp.; Deal Values CompoSecure At Pro Forma Enterprise Value Of ~$1.2B

* Leading provider of payment technology and security solutions

* Emerging cryptocurrency and digital asset storage and security solutions represent significant growth opportunity

* $261 million of net revenue and $116 million of Adjusted EBITDA in 2020 with a strong growth profile

* Transaction values CompoSecure at a pro forma enterprise value of approximately $1.2 billion

* Transaction includes a $175 million fully committed exchangeable notes and common stock PIPE financing from private investors and led by funds and accounts managed by BlackRock and Highbridge Capital Management

* Joint investor conference call and presentation on April 19, 2021 at 9:00 am ET

CompoSecure Holdings, L.L.C. ("CompoSecure"), a leading provider of premium financial payment cards and emergent provider of cryptocurrency storage and security solutions, and Roman DBDR Tech Acquisition Corp. (NASDAQ:DBDR) ("Roman DBDR"), a special purpose acquisition company, announced today that they have entered into a definitive merger agreement. Upon closing of the transaction, the combined company (the "Company") will operate as CompoSecure, Inc. and plans to trade on the Nasdaq stock market. The transaction reflects a pro forma enterprise value for the Company of approximately $1.2 billion.

CompoSecure is a pioneer and category leader in premium payment cards and an emergent provider of cryptocurrency and digital asset storage and security solutions. Using proprietary manufacturing methods that meet high standards of quality and security, and leading-edge engineering capabilities and technologies, CompoSecure provides some of the world's largest banks and financial institutions, such as J.P. Morgan Chase and American Express, with innovative products that elevate their customers' experience. CompoSecure's innovative cryptocurrency cold-storage and security solution, ArculusTM, leverages the Company's 20-plus years of payment card technology and security expertise to advance cryptocurrency and other digital asset adoption. ArculusTM enables users to store and manage their digital assets using a highly secure payment card form factor and intuitive mobile wallet, incorporating a unique three-factor authentication system.

Jon Wilk, President and CEO of CompoSecure, stated, "We are excited to partner with Roman DBDR on our path to becoming a publicly traded company and we appreciate the ongoing support of our lead investor, LLR Partners, and our founders. CompoSecure's mission has always been to help our clients offer their customers highly differentiated payment products and solutions which enable them to cultivate new customer acquisition, spending and retention. We have a bold vision for where we can take this business over the next five years, as we deliver superior solutions to the payments, cryptocurrency and broader digital asset marketplace, starting with the upcoming launch of our ArculusTM solution in the third quarter of 2021. As a public company, we will have access to new sources of capital for both organic and inorganic growth opportunities, and will continue investing in innovation to support our clients and our growth plan. It is a tremendous achievement to reach this milestone in our company's history, and I look forward to working with our great team to continue to grow this business."

Dr. Donald Basile, Co-CEO and Chairman of Roman DBDR, stated, "After reviewing numerous business combination opportunities, CompoSecure stood out as a leading platform company that is highly profitable and has technology ready to enable customers to take advantage of the blockchain and digital asset revolution. We found a broad ecosystem of hardware, software, payments and services capabilities, and look forward to building and scaling that ecosystem to an over billion dollar net revenue stream by 2025. Combining CompoSecure's proven business, focus on innovation, superior manufacturing expertise and experienced management team with Roman DBDR's track record of creating and scaling large market opportunities, we believe this company has significant long-term growth potential."

Dixon Doll, Jr., Co-CEO of Roman DBDR, stated, "CompoSecure is a world-class platform for next generation payment technology, security, and cryptocurrency solutions. Its distinct value proposition has resulted in widespread adoption by major banks, financial institutions and emerging FinTechs to support their acquisition of payment card customers. We believe this is a platform company that can launch successfully into the digital asset and blockchain markets with a proven product."

Mitchell Hollin, Partner at LLR Partners and Chairman of the Board of CompoSecure, stated, "Since our equity investment in 2015, CompoSecure has always demonstrated a clear vision for long-term growth and value creation and this transaction provides it with the opportunity to continue to expand its best-in-class products and solutions and accelerate its growth initiatives. We look forward to seeing CompoSecure's continued success and growth as a public company."

CompoSecure Investment Highlights

* Established high-growth FinTech business addressing large market opportunities across payment cards, cryptocurrency and digital assets.

* Trusted, highly embedded relationships with blue chip clients, including leading financial institutions (such as J.P. Morgan Chase and American Express), as well as FinTechs (such as N26 and Crypto.com), with a group revenue-weighted average client tenure of 12 years.

* Products and technology solutions platform uniquely positioned to capitalize on fragmented cryptocurrency and broader digital asset markets.

* Compelling financial profile with high growth, attractive margins and high cash flow generation -- generated $261 million of Net Revenue and $116 million of Adjusted EBITDA in 2020 (44% Adjusted EBITDA Margin).

* Proven and experienced management team, who will continue leading the combined company. Transaction Summary Under the terms of the proposed transaction, CompoSecure and Roman DBDR will merge with a pro forma combined enterprise value of approximately $1.2 billion. The cash components of the transaction consideration to CompoSecure's equity holders will be funded by Roman DBDR's cash in trust of approximately $236 million (assuming no redemptions) as well as a $175 million private placement financing of 7.00% exchangeable unsecured notes and common equity from institutional investors, led by funds and accounts managed by BlackRock and Highbridge Capital Management, which will close concurrently with the merger. The $130 million of exchangeable unsecured notes have a five year maturity and have a conversion price of $11.50, representing a 15% premium to the purchase price of the common shares. The balance of the consideration to CompoSecure's equity holders will consist of equity in the pro forma Company. CompoSecure's current equity holders will own approximately 60% of the pro forma company immediately after closing, assuming no redemptions. The transaction is expected to close in the third quarter of 2021 and remains subject to approval by Roman DBDR stockholders, the expiration of the HSR Act waiting period, and other customary closing conditions. The Boards of Directors of both CompoSecure and Roman DBDR have unanimously approved the contemplated transaction.