Brad Jacobs to lead equity investment of $1B in SilverSun Technologies

SilverSun Technologies and Jacobs Private Equity II, which is led by Brad Jacobs, announced that they and minority co-investors have entered into an investment agreement, pursuant to which JPE and the minority co-investors will invest $1 billion in cash into SilverSun. The proposed equity investment is comprised of $900 million by JPE and $100 million by co-investors, including Sequoia Heritage. Upon the closing of the equity investment, JPE will become the majority stockholder of SilverSun and Jacobs will become the Company’s chief executive officer and chairman of its board of directors. The Investment Agreement also provides for the spin-off of the Company’s existing business to SilverSun stockholders as of a record date that is expected to be one day prior to the closing of the investment. The remaining Company will become a standalone platform for significant acquisitions in an industry to be announced soon, along with the company’s new name. Under the terms of the Investment Agreement, the Company will, shortly after the closing of the investment, separate the existing SilverSun business as SilverSun Technologies Holdings and distribute all shares of the spin-off company to the stockholders of SilverSun as of a record date that is expected to be one day prior to the closing of the equity investment. The Company will also effect an 8:1 reverse stock split prior to the closing of the equity investment. Upon the closing of the investment and the effectiveness of the reverse stock split, JPE, Sequoia Heritage and the other co-investors will have: voting, convertible preferred stock that, in aggregate, is convertible into approximately 219 million shares of the Company’s common stock at a price of $4.57 per share; and warrants to purchase an additional approximately 219 million shares of the Company’s common stock at post-reverse-split exercise prices of: $4.57 per share with respect to 50% of the warrants, $6.85 per share with respect to 25% of the warrants, and $13.70 per share with respect to the remaining 25% of the warrants. Following the closing of the investment, JPE and the co-investors will own approximately 99.85% of the Company’s common stock on a fully convertible/exchangeable basis. In addition, SilverSun will declare a $2.5 million aggregate cash dividend to its stockholders as of the same record date, to be funded from proceeds received under the Investment Agreement. The transactions contemplated by the Investment Agreement have been approved by SilverSun’s board of directors, and are expected to be completed in 2024. The transactions are subject to SilverSun stockholder approval and the satisfaction of other customary closing conditions. The Company’s current management and board of directors, including Mark Meller, SilverSun’s chief executive officer, are expected to continue in their current roles at the spin-off company and its subsidiaries. The spin-off company will apply for a public listing of its shares, which will be registered pursuant to a Form 10 registration statement that will be filed with the U.S. Securities and Exchange Commission.