Pagaya Technologies to Become Publicly Traded Company Through Combination With EJF Acquisition Corp. (EJFA)

September 15, 2021 8:49 AM EDT

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Pagaya Technologies Ltd. (“Pagaya”), a financial technology company that enables financial institutions to expand access to more customers through its artificial intelligence network, and EJF Acquisition Corp. (NASDAQ: EJFA), a publicly traded special purpose acquisition company, today announced that they have entered into a definitive business combination agreement. As a result of the transaction, which values the combined company (the "Company") at an estimated enterprise value of approximately $8.5 billion at closing, Pagaya will become a publicly listed entity and trade under a new ticker symbol.

Pagaya’s fully automated proprietary A.I.-powered network enables a comprehensive solution to banks, fintechs, merchants, lenders and other B2C businesses supporting Pagaya’s partners and their customers with expanded access to financial services to deliver better financial outcomes to our partners and their customers. Founded in 2016 by Gal Krubiner, Chief Executive Officer, Avital Pardo, Chief Technology Officer, and Yahav Yulzari, Chief Revenue Officer, Pagaya’s mission is to build the leading artificial intelligence network to help financial services providers enable better outcomes. Pagaya seamlessly integrates its A.I. network technology with partners’ infrastructure through an API. Pagaya’s partners transact across several markets including unsecured consumer, auto, credit card, point-of-sale, and real estate markets, and Pagaya has the goal of expanding, with plans to offer credit solutions for mortgages and insurance related products, among other data-rich markets.

Pagaya has developed the technology, data and network that seamlessly enables better financial outcomes for both its partners and their customers. Pagaya’s partners benefit by acquiring and converting more customers, building brand affinity, all in a highly efficient manner.

Upon closing of the transaction, Pagaya’s seasoned management team will continue to lead the Company. Manny Friedman, Chairman, EJFA and Co-Chief Executive Officer & Co-Chief Investment Officer, EJF Capital LLC, who bring more than 40 years of financial services experience, will join the Company’s Board.

Mr. Friedman commented, “We are proud to be partnering with Pagaya. The company’s impressive technology and proprietary A.I. network has meaningfully expanded access to financial services for consumers who are often left behind. Moreover, we believe that EJF’s unparalleled relationships and expertise across the banking and financial services sector will help accelerate Pagaya’s penetration in this large and fragmented sector.”

“This is an important milestone not just for us, but also for our partners, their customers and the broader financial services industry,” said Gal Krubiner, Co-Founder and CEO of Pagaya. “Legacy systems are historically fractured and inefficient. We identified a significant opportunity to address the inefficiencies of the current system by constructing a network powered by our proprietary A.I. technology. Our combination with EJFA allows Pagaya to combine our expertise with EJF’s deep financial experience. Together, we can continue to expand a leading artificial intelligence network to help our partners grow their businesses and better serve their customers.

Kevin Stein, CEO of EJFA, said, “Pagaya has proven its business model, achieved scale, and reached profitability, which is a testament to the strength of Gal’s leadership and the value Pagaya provides its partners. We look forward to supporting the Pagaya team to create substantial long-term value for shareholders, while democratizing access to financial services.”

Transaction Summary

The transaction values the Company at a pro forma implied enterprise value of approximately $8.5 billion at closing. The transaction includes $288 million in gross proceeds from EJFA’s cash in trust (assuming no redemptions) and $200 million in gross proceeds from a fully committed private placement in public equity (“PIPE”) from entities associated with EJFA that will close concurrently with the business combination. Additional targeted financing transactions or assignments may be considered.

Existing Pagaya equity holders, including current investors and employees of the firm, are expected to retain an approximately 94% ownership stake in the Company. The business combination, which has been unanimously approved by the boards of directors of both Pagaya and EJFA, is targeted to close in early 2022, subject to shareholder approvals and other customary closing conditions.

Additional information about the business combination, including a copy of the definitive agreement, will be provided in a Current Report on Form 8-K to be filed by EJFA with the Securities and Exchange Commission and available at www.sec.gov.

Advisors

UBS Investment Bank is serving as lead financial and capital markets advisor to EJFA. Barclays is also serving as financial and capital markets advisor to EJFA. Simpson Thacher & Bartlett LLP is serving as legal counsel to EJFA in connection with the transaction. Duff & Phelps, A Kroll Business, rendered a fairness opinion to EJFA’s Board of Directors. J.P. Morgan Securities LLC is serving as exclusive financial advisor to Pagaya, and Skadden, Arps, Slate, Meagher & Flom LLP and Goldfarb Seligman & Co. are serving as legal counsel to Pagaya in connection with the transaction.

About Pagaya
Pagaya is a financial technology company working to reshape the lending marketplace by using machine learning, big data analytics, and sophisticated AI-driven credit and analysis technology. Pagaya was built to provide a comprehensive solution to enable the credit industry to deliver their customers a positive experience while simultaneously enhancing the broader credit ecosystem. Its proprietary API seamlessly integrates into its next-gen infrastructure network of partners to deliver a premium customer user experience and greater access to credit.

For more information on Pagaya's technology, services, and careers, please visit www.Pagaya.com.

About EJF Acquisition Corp.
EJF Acquisition Corp. (“EJFA”) is a blank check company sponsored by EJF Capital LLC (“EJF”) and affiliates formed for the purpose of partnering with a high-quality financial services business. EJFA’s management team and Board of Directors are composed of veteran financial service industry executives and founders, including Manny Friedman, Chairman, Neal Wilson, Vice Chairman, Kevin Stein, Chief Executive Officer, and Thomas Mayrhofer, Chief Financial Officer. Founded in 2005 by Manny Friedman and Neal Wilson, EJF is a global alternative asset management firm headquartered outside of Washington, D.C. As of June 30, 2021, EJF manages approximately $9.4 billion across a diverse group of alternative asset strategies, including $3.4 billion in managed structured product assets. Mr. Friedman has been at the forefront of regulatory, event-driven investing in financials and real estate. He has over 40 years of experience working in capital markets and asset management and has structured and built numerous innovative investment strategies that have focused on some of the most powerful trends in the financial sector driven by regulatory change.

For additional information visit the company page here, and view the Investor Deck here.



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