Jenner & Block

Firm Client Shift Technologies Closes Merger with Insurance Acquisition Corp.

On October 13, 2020, firm client Shift Technologies, Inc., a leading end-to-end ecommerce platform for buying and selling used cars, and Insurance Acquisition Corp., a NASDAQ-listed special purpose acquisition company, completed their previously announced business combination. As a result of the transaction, a newly formed subsidiary of Insurance Acquisition Corp. merged with and into Shift, with Shift surviving as a wholly owned subsidiary of Insurance Acquisition Corp.

In connection with the closing, Shift changed its name to Shift Platform, Inc., and Insurance Acquisition Corp. changed its name to Shift Technologies, Inc., trading under the new ticker symbols “SFT” and “SFTTW” on the Nasdaq exchange. The business combination brings the newest pure-play in the used car ecommerce market to the public markets.

The aggregate consideration to Shift equity holders consisted of $380 million in newly issued shares of Class A Common Stock of Insurance Acquisition Corp., plus an additional 6 million shares of Class A Common Stock held in escrow at the closing and released if the combined company achieves certain share price targets over time. The transaction provides the combined company with approximately $300 million, net of fees and expenses, including cash from Insurance Acquisition Corp.’s initial public offering and its private issuance at the closing of $189 million in shares to investors. The combined company expects to use its cash on hand to support growth and working capital. Following the close, Shift’s management team will continue to operate the combined company.

“Today marks an important milestone for our company. With the support of our shareholders, we have completed the merger with Insurance Acquisition Corp. and fortified our cash position with $300 million to invest in growing our business. We are thrilled to bring Shift to the public markets, fulfilling our long-term plan to be a publicly listed company,” said Shift Co-CEO George Arison. 

The merger agreement was signed just 21 days after the parties entered into a letter of intent.

The team was led by Partners Ishan K. Bhabha, Robert J. Rawn, and Martin C. Glass. Other members of the team included Partner Jeremy A. Casper and Associates Amy Inagaki and William R. Erlain (M&A); Partner Jeffrey R. Shuman (securities); Partner Geoffrey M. Davis (tax); Partner Lee K. Van Voorhis (antitrust); Partners Matthew J. Renaud and Raymond D. Sinnappan and Associate Maliha Ikram (employee benefits and labor) and Partner Steven R. Englund (IP).