M&A Trends In Tech: FiscalNote (NYSE: NOTE) CEO Tim Hwang Explores Taking Company Private, Company Sets Up Special Committee

December 26, 2023 at 09:15 AM EST

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By Austin DeNoce, Benzinga

FiscalNote Holdings Inc. (NYSE: NOTE), an AI-driven enterprise SaaS provider of policy and global intelligence, recently announced a potential transition to private ownership in its latest earnings call. The news of the potential takeover offer saw the stock jump by double digits, indicating the market's anticipation of the value this deal, if approved, could bring.

Potential Go-Private Transaction

FIscalNote recently celebrated its 10-year anniversary as a company and has only been publicly traded since August 2022 after a SPAC deal with Duddell Street Acquisition Corp. However, its brief time as a publicly traded company could be coming to a close. According to a recent filing, FiscalNote CEO Tim Hwang expressed interest in putting together a consortium to explore a potential go-private transaction. However, the company has emphasized that a definitive transaction or strategic change is not set in stone.

The Special Committee Formation

As part of its response to these discussions, FiscalNote has formed a Special Committee comprised of board members Michael Callahan, Manoj Jain, Stanley McChrystal and Anna Sedgley. The committee is tasked with evaluating and negotiating any potential go-private transaction proposal received from Mr. Hwang, as well as other potential transaction proposals, and it has been granted the full power and authority to act on behalf of the board.

The company has also enlisted the help of Centerview Partners as the independent financial advisor and retained Skadden, Arps, Slate, Meagher & Flom LLP as its legal advisor but has yet to receive any specific proposal. Nevertheless, all this underscores the seriousness with which FiscalNote is approaching this potential transaction.

M&A Trends In The Technology Sector

Looking at the broader trend within the technology sector, we may potentially be on the cusp of a resurgence in mergers and acquisitions (M&A) activity. After a relatively quiet 2023, 2024 appears poised for a more active M&A landscape largely driven by anticipated stability in interest rates, pent-up demand and sector-specific consolidation.

The tech sector, especially areas focused on productivity and efficiency gains like industrial automation and decision intelligence platforms, is expected to see heightened activity. However, challenges such as antitrust concerns and the cautious approach of private equity firms, which had seen a slowdown in dealmaking due to a lack of exit opportunities, serve as potential headwinds. Regardless, there is a possibility that M&A activity and private transitions in the tech sector could still rise meaningfully in the year to come.

Potential Implications Of Go-Private Transaction

For investors, the situation with FiscalNote represents an important story to follow as it could result in the company delisting in the near future. However, it also presents an intriguing case study of the evolving tech industry that could be a bellwether for similar moves within the sector. The outcome of the Special Committee's evaluations and the potential transition of FiscalNote from a public to a private entity will naturally have implications for the company and shareholders, but it could also have implications for the sector at large, particularly in terms of how companies navigate growth, valuation and strategic transitions in the market.

The Evolution Of FiscalNote In The Tech Industry

While any official deal remains to be seen, FiscalNote's current trajectory, with the formation of its Special Committee to evaluate a potential go-private transaction, reflects a significant moment in the company's history. It also signifies a key point in the tech sector's ongoing evolution, one that investors should watch closely for insights into broader market trends and strategic shifts within the industry.

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