NEW YORK - Nidar Infrastructure Limited, a prominent Indian data center provider specializing in artificial intelligence (AI) and high-performance computing, has announced a definitive merger with Cartica Acquisition Corp (NASDAQ:CITE), a special purpose acquisition company. The merger is set to position Nidar as a publicly traded entity on a major U.S. stock exchange.
The transaction values Nidar at approximately $2.75 billion pre-transaction equity and is expected to provide the combined entity with increased capital market access to fuel its growth strategy. Nidar's CEO, Sunil Gupta, stated that the merger would leverage their Yotta data centers to meet the burgeoning demand for cloud infrastructure and AI services.
According to the terms of the Business Combination Agreement, Cartica will merge into Nidar, resulting in Nidar becoming the surviving public company. Shareholders of Cartica will see their shares converted into Nidar ordinary shares, while Cartica's warrants will become warrants to purchase Nidar shares. The agreement stipulates that these securities must be approved for listing on a major U.S. stock exchange, which is yet to be determined.
Cartica, which currently holds a trust account with approximately $25 million as of April 4, 2024, intends to use the proceeds from the Business Combination to execute Nidar's business plan and for general working capital purposes. Both Nidar’s and Cartica’s Boards of Directors, as well as Nidar's shareholders, have approved the Business Combination Agreement.
The completion of the merger is subject to customary closing conditions, including approvals by Cartica's shareholders, stock exchange listing, and the effectiveness of a registration statement filed with the U.S. Securities and Exchange Commission.
GLC Securities LLC and a suite of legal advisors have been engaged to facilitate the merger process. Additional details regarding the Business Combination will be available in a forthcoming Form 8-K filing by Cartica with the SEC.
This merger comes amid growing interest in technology infrastructure and India's increasing prominence in the global technology ecosystem. Suresh Guduru, CEO of Cartica, expressed confidence in the partnership with Nidar and the opportunities it presents for the technology infrastructure sector.
The information disclosed is based on a press release statement.
InvestingPro Insights
In light of the recent merger announcement between Nidar Infrastructure Limited and Cartica Acquisition Corp, investors are keen to understand the financial metrics that could impact the newly combined entity's performance.
According to InvestingPro data, the market capitalization of Cartica stands at $89.99 million USD, reflecting the company's valuation in the market post-announcement. This figure is significant as it provides a baseline for investors to assess the company's size and market presence.
Despite the optimism surrounding the merger, Cartica's current Price-to-Earnings (P/E) ratio is at a high 416.53, which may suggest that the company's stock is trading at a premium relative to its earnings.
This is further reinforced by an adjusted P/E ratio for the last twelve months as of Q1 2024 of 217.86. An InvestingPro Tip indicates that Cartica is trading at a high earnings multiple, which is an essential consideration for investors looking at the company's profitability and future earnings potential.
Another metric of interest is the company's price performance over time. Cartica has experienced a 1-year price total return of 5.44%, which could be indicative of steady growth. Additionally, the stock generally trades with low price volatility, an InvestingPro Tip that suggests relative stability in share price movements, potentially making it a less risky investment in terms of stock price fluctuations.
For investors seeking further analysis and tips on Cartica and the impact of this merger, InvestingPro offers additional insights. By using the coupon code PRONEWS24, users can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable resources.
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