Security Matters announces $518m merger with Lionheart III Corp and Nasdaq listing

Security Matters ASX SMX Lionheart III Corp NASDAQ LION
The merger with Lionheart gives Security Matters an implied pre-money valuation of $288 million.

Anti-counterfeit technology developer Security Matters (ASX: SMX) has announced a $518 million merger with Nasdaq-listed special purpose acquisition company Lionheart III Corp.

The companies have entered into a business combination agreement and scheme implementation deed which will see Security Matters list on the Nasdaq through a newly-formed Irish company (SMX Ireland) to be named ‘SMX Public Limited Company’.

Under the terms of the deal, an SMX Ireland subsidiary will merge into Lionheart for Lionheart to become a wholly-owned subsidiary of SMX Ireland.

Security Matters shareholders will receive an aggregate of 20 million ordinary shares in SMX Ireland, equating to 10.24 Security Matters shares for every SMX Ireland share at $10 each.

Existing Lionheart shareholders will receive SMX Ireland shares and warrants in exchange for their existing Lionheart shares and warrants.

Lionheart’s board of directors has unanimously approved the transaction.

The board of Security Matters is yet to approve; however, it considers the transaction to be in the best interest of its shareholders and has recommended they vote in favour of the deal.

Following the transaction, Security Matters will delist from the Australian Securities Exchange (ASX).

Group equity value

The total proforma equity value of the combined group is expected to be approximately $518 million, reflecting an implied $288 million pre-money valuation of Security Matters.

The valuation represents a considerable increase on the company’s $18.3 million market capitalisation on the ASX.

The parties anticipate a post-transaction cash balance of $167 million after fees and expenses and subject to Lionheart investors redeeming their shares.

The funds will be used to finance operations and strategic growth opportunities.

At closing, Security Matters shareholders will own approximately 55.5% of the combined company provided there are no redemptions by Lionheart investors.

Security Matters said the redemption rate would be known after a shareholder meeting later this year, and it is working on a strategy to reduce the risk.

The ordinary shares and warrants of SMX Ireland are expected to trade on the Nasdaq under the ticker codes ‘SMX’ and ‘SMXW’, respectively.


ClearThink Capital has been appointed as the financial advisor to Security Matters for the transaction while EF Hutton (a division of Benchmark Investments LLC) will act as the advisor to Lionheart.

Legal counsel for Security Matters will be US-based K&L Gates, Israeli firm Afik & Co Attorneys & Notary and Irish company Arthur Cox LLP, while UK-based DLA Piper will act for Lionheart.

US-based Futerra has been appointed as Security Matters’ global brand strategy agency.

Options for future growth

Security Matters has been looking to list on the Nasdaq since May, as it seeks options for future growth.

The company markets itself as a “next generation solution” to addressing the anti-counterfeit, brand protection, client liability and track-and-trace markets.

It has developed a suite of integrated products to solve authentication and track-and-trace challenges in order to uphold supply chain integrity, quality assurance and brand accountability to manufacturers.

ClearThink Capital is reported to have flagged several special purpose acquisition companies which could facilitate the potential listing.

These are entities which do not have any commercial operations but are publicly listed with the purpose of finding and purchasing an operating company.

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