Transfix, Inc Digital Freight Platform, to Become a Publicly Traded Company Through a Business Combination With G Squared Ascend I

Transfix is on a path to transform the highly-fragmented $1 trillion total transportation & logistics sector with a focus on reducing the massive amount of waste across the supply chain

Transfix Inc. has entered into a definitive business combination agreement with G Squared Ascend I, Inc. (“G Squared Ascend I”) (NYSE: GSQD), a special purpose acquisition company sponsored by affiliates of G Squared (“G Squared”), a growth-stage venture capital fund manager focused on the technology sector. The closing of the transaction is expected by the end of the first quarter 2022. The combined company is expected to be listed on the NYSE under the ticker symbol “TF.”

Transfix’s digital freight platform – powered by its proprietary technology, AI, and automation and underpinned with world-class operations – is transforming the traditional and digital freight sector, bringing together the world’s best shippers and carriers, and delivering a transparent, trusted, and sustainable freight ecosystem. Transfix works with some of the largest Fortune 500 companies as well as mid- and small sized shippers, and has built a strong carrier community across the U.S.

Transfix’s asset-light business model has produced strong revenue growth and a rapidly expanding gross margin with exceptional operating leverage. This is demonstrated by the company’s ability to grow revenue by over 40% in 2020, while gross profit grew over 100%, despite a highly-tumultuous freight environment caused by the global pandemic.

Lily Shen, Transfix CEO and President, said, “We are thrilled to be partnering with G Squared on this significant milestone. They have been incredible partners who share our excitement about the opportunity ahead, and who bring invaluable expertise in and knowledge of our rapidly growing sector. With this transaction, Transfix is well-positioned to accelerate growth and innovation to drive our impact at scale. We are at the beginning of a new era for the freight industry.”

Drew McElroy, Transfix Co-founder and Chairman of the Board, stated, “This announcement marks an important moment in Transfix’s natural evolution to a public company. Our vision, since day one, has been to build the world’s most connected and intelligent freight platform. This marks the next important step in advancing and accelerating toward that goal.”

Larry Aschebrook, Founder & Managing Partner, G Squared and Chairman, G Squared Ascend I, commented, “Transfix’s leadership team has built a best-in-class business with an incredible team of freight industry and technology experts. The company has consistently delivered impressive growth and margin expansion and has demonstrated a clear path to profitability. We are delighted to continue our support of Transfix’s industry-disruptive business as it raises the bar for the entire sector to move goods more sustainably.”

Ward Davis, CEO, G Squared Ascend I, said, “Transfix exceeds our many acquisition criteria for Ascend I. Impressively, its team managed through the pandemic and its incredibly volatile impact on freight with exceptional, industry-leading growth and returns. The company’s consistently strong financial performance, outstanding shipper spend retention, and growing list of top tier enterprise accounts fuel our conviction in this business combination.”

Transaction Overview

The merger marks an exciting and significant next step in a deep, multi-year partnership between Transfix and G Squared, a growth-stage venture capital fund manager with significant focus on the freight-tech sector. The relationship, which began in 2019, has been underscored by diligence, expertise, sustainability, and alignment. G Squared has been consistently impressed with the company’s growth across all key metrics including revenue, new partnerships, and a clear path to sustained profit.

The transaction implies a pro forma enterprise value for Transfix of $1.1 billion. Upon the closing of the transaction, existing Transfix shareholders are expected to own approximately 69% of the combined company, with G Squared Ascend I public stockholders owning approximately 24%. G Squared Ascend I’s sponsor has agreed that 50% of its Transfix shares will be subject to forfeiture depending on post-closing share performance. By aligning compensation incentives with management, this structure represents G Squared’s long-term commitment to the investment. The Transaction will also include a Minimum Cash Condition of $200 million.

In addition to the $345 million cash in trust, G Squared is leading a commitment of an incremental $60 million under Forward Purchase Agreements, plus up to another $50 million under G Squared’s Forward Purchase Agreement to backstop redemptions from G Squared Ascend I’s trust.

Following this transaction, Transfix is expected to have approximately $375 million of cash net of transaction expenses, assuming no redemptions by G Squared Ascend I’s public stockholders to accelerate its growth initiatives. In May, Transfix closed on a $50 million, (5 year) senior secured revolver/credit facility with MidCap Financial. Combining the large ABL facility with the cash to the balance sheet from this transaction provides Transfix approximately $400 million in liquidity which will be used to accelerate growth initiatives by further investing in product innovation and technology, new partnerships, geographic expansion, and strategic and targeted acquisitions. Key areas of focus will include alignment of drop and backhaul, and extending the platform into Less Than Truckload and all areas of managed transportation and logistics.

The ability to leverage its public equity for recruiting, M&A, and other strategic endeavors provides Transfix the opportunity to generate value for our shareholders and accelerate growth.

The boards of directors for both Transfix and G Squared Ascend I have unanimously approved the proposed business combination, which is expected to be completed in the first quarter of 2022, subject to, among other things, the approval by G Squared Ascend I’s stockholders of the merger; satisfaction of the conditions stated in the definitive agreement and other customary closing conditions, including that the U.S. Securities and Exchange Commission (the “SEC”) completes its review of the proxy statement; the receipt of certain regulatory approvals; and approvals to list the securities of the combined company.

Lily Shen, Transfix’s Chief Executive Officer and President, and Drew McElroy, Transfix’s Co-Founder & Chairman of the Board of Transfix, will continue in their current roles along with the rest of the Transfix executive team.

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