Signing Day Sports, Inc. (NYSE:SGN) shares are trading higher after the company inked a binding term sheet to acquire 95-99% of Dear Cashmere Group Holding Company (OTC:DRCR), also known as Swifty Global, in an all-equity deal.

As per the deal, Signing Day Sports will issue its securities to Swifty’s controlling stockholders. Signing Day Sports will not make any cash payment in connection with the acquisition. The transaction values Signing Day Sports at $14 million and Swifty at $156 million.

Both companies plan to raise at least $2 million in financing, split equally, to support the deal and cover Signing Day Sports’ liabilities.

Upon closing, Signing Day Sports will acquire at least 95% of Swifty’s voting power and economic value from James Gibbons and Nicolas Link. The sellers will receive shares equal to 19.99% of Signing Day Sports’ common stock.

The remainder will be in convertible preferred stock, which will convert to common stock after shareholder approval and NYSE American listing clearance.

Post-transaction, Signing Day Sports’ legacy shareholders will hold 8.24% of the company, with the remaining 91.76% going to the sellers and other Swifty stockholders.

Upon closing, James Gibbons will assume the role of Chief Executive Officer of Signing Day Sports while continuing as CEO of Swifty. Both Signing Day Sports and Swifty will complete due diligence before the transaction, which is expected to close by October 31, 2024.

Swifty CEO James Gibbons commented, “After three years of software development and millions of dollars of investment, the company is now perfectly positioned for rapid growth and our acquisition by Signing Day Sports provides Swifty the platform to execute its growth plans.”

The acquisition of Swifty by Signing Day Sports is intended to result in the combined company being traded on NYSE American. Swifty will continue to operate under the Swifty management team led by James Gibbons, while Signing Day Sports will become a subsidiary of the publicly listed company.

Signing Day Sports, a software company that went public on the NYSE American less than a year ago, plans to utilize Swifty’s in-house development team to cut costs and speed up product development and rollout initiatives.

Signing Day Sports CEO, Daniel Nelson, commented, “It is with great excitement that we can announce the signing of a binding term sheet with Swifty Global to be the start of our new growth strategy of buying and building sports technology and casino gaming companies and other companies that are synergistic with our business.”

Price Action: SGN shares are up 241.9% at $0.444 premarket at the last check Thursday.

Image via Shutterstock

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