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UPDATE 2-Apex Clearing to go public via $4.7 bln deal with Ledecky's SPAC

·2 min read

(Updates Apex's descriptor, adds functions)

Feb 22 (Reuters) - Apex Clearing Corp, a clearing firm and acustodian for digital assets, said on Monday it will go publicthrough a merger with a blank-check firm backed by New YorkIslanders co-owner Jon Ledecky, in a deal that values thecombined entity at $4.7 billion.

The deal with Northern Star Investment Corp II isexpected to fetch Apex $850 million in gross cash proceeds,including a private investment of $450 million anchored byFidelity Management & Research Company LLC and Baron CapitalGroup.

Apex is a financial technology firm that provides clearingservices, digital custody, cryptocurrency solutions andfractional share trading, among others, to its clients.

It was the clearing provider for trading app Robinhood untilit launched its own trade-clearing system in 2018.

Northern Star, led by Ledecky and former Cosmopolitanmagazine editor-in-chief Joanna Coles, last month raised $400million in an initial public offering.

Another Ledecky- and Coles-backed SPAC, Northern StarAcquisition Corp, agreed to take pet services firmBarkbox Inc public for $1.6 billion in December.

Apex is owned by fintech firm Peak6 Investments LLC and itscustomers include Firstrade Securities Inc and Social FinanceInc (SoFi), the company's website showed.

SoFi is also going public through a merger with SocialCapital Hedosophia Holdings Corp V, a blank-check firmbacked by venture capital investor Chamath Palihapitiya.

SPACs are shell companies that raise funds through an IPO totake a private company public. They have gained immensepopularity as they provide more certainty over achievablevaluation and require less scrutiny than traditional IPOs.

Apex will be listed on the New York Stock Exchange after themerger and will trade under ticker symbol "APX".

Citigroup was the financial adviser to Northern Star, andJ.P. Morgan Securities to Apex.(Reporting by Sohini Podder in Bengaluru; Editing by AdityaSoni and Shinjini Ganguli)