Global SPAC Partners (NASDAQ: GLSPU): Merger with Gorilla Technology Group (Proposed Ticker – NASDAQ: GRRR)

EXECUTIVE SUMMARY

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The Shift – Over the past few years, we have been connecting more devices and generating data, faster than ever before. Increasing real time analysis of the data has brought about a seismic change, in what is called, Edge Computing. Founded in 2001, Gorilla is a global leader in Edge AI technology and has spent more than two decades developing its edge computing technology which combines with network edge server/cloud computing to deliver the best-in-class services to its customers that include leading names across industries and geographies.

• Best-in-class technology and a core technology roadmap will keep Gorilla at the forefront of the Edge AI market. Gorilla’s expert capabilities in all facets of Edge AI technology make it a standout player in this market. It is the only player with high competence or expertise in all segments, including Edge AI Appliances, Edge AI Inference Models, 5G-Edge AI Smart Solutions, Platform Independence, among others. The company also has a continuous core technology development roadmap focused on the Platform Independent AI Software for Massive AI SOC and Extended Market that will keep it at the forefront of edge AI solutions for managed service providers, distributors, system integrators, and hardware manufacturers. We believe this strong technology differentiation is the key source Gorilla’s moat and will ensure sustained growth for the company in foreseeable future.

• Well defined growth strategy aimed at increasing win rate and adding marquee clients will help drive revenue growth in the coming years, while boosting profitability. The company has a well laid out four-step winning sales strategy that includes 1) establishing strategic position and increasing win rate, 2) gaining key marquee clients in the U.S. and Europe, 3) creating an integrated global footprint and managed services platform, and 4) creating significant competitive advantages through collaboration and creating significant value-add for customers. Growth will also be driven by the company’s local know-how, business network, and $100 million+ growth investment it plans to make in the comping years, as well as its global expansion strategy aimed at growing its salesforce across continents (NA and EU) and maintaining its leadership position in the APAC region. Overall, Gorilla’s topline is expected to grow at 50%+ CAGR to $400 million by 2026 and will be complemented by expanding profit margins and rising operating cash flow.

• Edge computing is on the cusp of explosive growth and offers a $250 billion opportunity for Gorilla. Global spending on edge computing is expected to exceed $250 billion by 2024. The fast-paced growth of this industry will be driven by the advantages of edge computing, which is now ready to displace cloud computing as volume of data continues to grow at a rapid pace across various end-use industries. Gorilla has been working on this disruptive technology for 20+ years and is well placed to lead the technological shift in computing thanks to its expertise in edge software, edge hardware, and services, which make Gorilla a universal partner of choice for customers looking to deploy edge computing and will lead client acquisition.

• The transaction with Global SPAC Partners Co. (NASDAQ: GLSPU) values Gorilla at $708 million, which is 10.9x its 2022P revenue and a discount to peers. Gorilla’s sales multiple reflects a big discount compared to the CY22 sales multiple of its peer group consisting of SaaS players, automation technology companies, and automation software comparison. The average CY22 sales multiple of the peer group stands at 17.9x, suggesting that Gorilla is valued at a ~39% discount to its peers on average. The fully diluted proforma EV also reflects a 75%+ discount to the company’s $3.0 billion implied valuation based on 2026P revenue. Given Gorilla’s superior technology and positioning vs. peers, we expect the valuation gap with peers to narrow soon and expect Gorilla to trade at par or at a premium valuation compared to its peer group.

Contact: Peter Wright
Email: peter@intro-act.com
Phone: 617-454-1088

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