Apex Clearing Goes Public on Nasdaq Through Reverse Merger

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Securities custody and clearing firm Apex Clearing Corp said on Monday that it is going public through a reverse merger Northern Star Investment Corp II.

Apex will be listed on Nasdaq following the deal with Northern Star, a so-called blank-check company backed by Jon Ledecky, who is the majority owner of the NHL team, New York Islanders. The deal is poised to value Apex at about $4.7 billion including debt, according to a press release.

With Northern Star already a Nasdaq-listed firm, the deal allows Apex to go public via a backdoor listing and avoid the regulatory complexities of a formal IPO process. Going public through a traditional route can take longer to secure more regulatory approvals. The Securities and Exchange Commission will still need to approve Apex’s proxy filing.

Following the closing of the transaction, Apex CEO, William Capuzzi, and Apex President, Tricia Rothschild, will continue to serve in their current roles at the combined company. Northern Star Chairwoman and CEO Joanna Coles will join the new company’s board of directors.

“Apex’s paperless products and solutions serve as the infrastructure for a total addressable market of over $100 trillion in assets, of which the firm has approximately $100 billion under custody today. Year-to-date, Apex Clearing has provided custody for $14 billion in new assets. Apex is experiencing significant growth and momentum, now serving over 200 clients representing more than 13 million customer accounts, 3.2 million of which have been opened in 2021 alone, and more than 1 million new crypto accounts,” the company said.

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Crypto Companies Have Been Skipping IPOs

Apex Clearing has recently expanded its offering with a cryptocurrency platform that allows broker-dealers and investment platforms to offer crypto investing to their clients. The platform was developed in partnership with the company’s crypto custody offering, dubbed Apex Crypto.

The fintech company allows clients to open cryptocurrency accounts to buy and trade tokens. Apex Clearing will be opening doors for more digital wealth companies to include the virtual asset class into their clients’ portfolios. This is alongside traditional brokerage assets, which had been disjointed in the past. From a legal and regulatory standpoint, the platform will offer compliant custody and trading services for clients in most states. However, other states will still need additional licensing.

Apex isn’t the only crypto startup to test the reverse merger as many other companies used this strategy to go public instead of participating in an IPO.

Voyager, the New York-based crypto asset brokerage firm launched by Uber founder, has taken this route with the buyout of a publicly listed company on TSX stock exchange. Former hedge-fund manager Mike Novogratz also used the same tactic to list his crypto merchant bank Galaxy Digital Holdings on a Canadian stock market.