GigCapital, Inc. and Global CPaaS Provider Kaleyra S.p.A. Announce Combination

GigCapital, Inc., (NYSE:GIG, GIG.U, GIG.RT, and GIG.WS) (“GigCapital”) a
Technology, Media and Telecom (TMT) Private-to-Public Equity (PPE)™
corporation, today announced that it has entered into a definitive
agreement to combine with Kaleyra S.p.A. (“Kaleyra”), a profitable and
rapidly growing CPaaS provider.

Following the combination, assuming no redemption by the stockholders of
GigCapital, the enterprise value for Kaleyra will be approximately $192
million, or 1.5x estimated fiscal 2019 revenue. The combined company
expects to utilize the available capital for organic and strategic
growth. The transaction closing is not conditioned on any level of
redemption by the stockholders of GigCapital or minimum cash delivered
by GigCapital at closing.

The parties expect to close the proposed transaction in the second half
of 2019.

The transaction is subject to customary closing conditions, including
regulatory and stockholder approval. Upon consummation of the proposed
transaction, the combined company will be renamed Kaleyra, Inc.
(NYSE:KLR). It is anticipated that, upon the consummation of the
transaction and in case of no redemption of the current cash in
GigCapital’s trust account, Kaleyra’s current shareholders and employees
would own approximately 33% of the combined company’s common stock and
GigCapital stockholders would own the remaining 67%.

“GigCapital is thrilled to partner with Kaleyra, our first transaction
using the Private-to-Public Equity (PPE)™platform
methodology, where GigCapital brings its management’s well-recognized
and decades-long technology public-market operational and
entrepreneurial expertise to enable the successful transition of a
late-stage growth technology company like Kaleyra to a US public-market
traded entity. Dario and his management team have consistently delivered
innovative technology, product leadership, global revenue growth and
profitability over the last several years. As a public company, Kaleyra
will have a stronger capital structure and greater latitude to excel and
achieve its projected accelerated financial growth by organic and
strategic means. The combination of Kaleyra and GigCapital brings
unique, attractive and promising opportunities to all shareholders, and
we are looking forward to working in concert with all to build a new and
advanced CPaaS industry leading company,” said Dr. Avi Katz, Founder,
Executive Chairman of the Board, and Chief Executive Officer of
GigCapital.

Mr. Dario Calogero, Kaleyra’s Founder and current Chairman of the Board
and Chief Executive Officer, commented: “I am personally very proud of
this transaction. This represents a significant milestone for Kaleyra
and will fuel our next phase of growth within the consolidating Cloud
Communications for Enterprises market. Kaleyra is well positioned in
this segment as the preferred partner for both small and medium-sized
businesses (SMBs) and larger enterprises, offering a highly secure,
compliant and integrated mobile communication platform company,
supporting FinTech, e-commerce and enterprises in the communication of
transactions and interactions with their customers worldwide. Our
product portfolio will expand further in servicing the selected
industries we address, taking advantage of the public market expertise
of GigCapital Founders, Directors and Advisors, as we merge our
expertise in technology, marketing, strategy and finance. We look
forward to working with Avi and his excellent team in this next stage
for Kaleyra as a public company.”

Kaleyra Investment Highlights

Leveraging its 20-year history of innovation, Kaleyra is a rapidly
growing cloud communications software provider delivering secure APIs
and connectivity solutions in the API/CPaaS market. Kaleyra’s solutions
include identity authentication, mobile and voice notifications on
transactions, banking services authorizations, most notably via
different integrated mobile channels through its platform.

Software and CPaaS are disrupting the telecom services market leading to
a dramatic shift from the traditional hardware-centric marketplace
approach. Kaleyra’s scalable cloud platform is at the forefront of this
evolution with a powerful combination of products that are secure,
flexible, fully redundant and feature-rich. By providing the complete
set of communications capabilities through converged infrastructure
APIs, Kaleyra has eliminated the concerns over incompatible hardware
components and network paradigms.

Kaleyra has a highly diversified global list of more than 3,000
customers. Target markets include FinTech, e-commerce and logistics,
travel, healthcare, retail and education.

For fiscal 2018, no customer accounted for more than 10% of Kaleyra’s
total revenue. The majority of its customers span Europe, APAC, the
Middle East and Latin America. Kaleyra’s small presence in North America
is an opportunity to penetrate this large market as it looks to
aggressively drive future revenue expansion.

Kaleyra has remained profitable for 10 consecutive years. Led by a
combination of organic and acquired growth, pro forma revenue has nearly
doubled over the last three years while pro forma adjusted EBITDA has
increased by 3x during the same period. With the total addressable CPaaS
market is forecasted to increase at a 30.4% CAGR through the end of 2022⁽¹⁾,
Kaleyra believes that through product enhancements and market expansion,
its revenue and profitability growth rates over the next 3 years could
match those achieved in the recent 3-year period.

⁽¹⁾Sourced – 451 Research

Leadership Team

Mr. Dario Calogero will continue to serve as the Chief Executive
Officer, supported by his current management team combined with
additional public market executives, and will remain a member of the
Board of Directors to oversee and lead the operation of the business
post-transaction. Dr. Avi Katz will assume the role of Chairman of the
Kaleyra Board of Directors, which will comprise a total of seven
members. Also joining the Board will be current GigCapital Board members
Neil Miotto and John Mikulsky, and current Kaleyra Board members Simone
Fubini and Matteo Lodrini, as well as an additional independent industry
expert to be unanimously named by the other six members of the Board.

Transaction Details

Under the terms of the definitive agreement, GigCapital will purchase
all of the ordinary shares of Kaleyra from its shareholders. The
aggregate purchase price payable at the closing of the proposed
transaction (excluding transaction expenses and subject to certain
adjustments) will consist of (a) a mix of cash, convertible promissory
notes (with conversion to be based upon the volume weighted average
price of GigCapital common stock), or both in the aggregate amount of
$15 million, and (b) between 8,616,819 and 10,181,819 shares of
GigCapital common stock, with the level of redemption by the
stockholders of GigCapital being used to determine the exact number of
such shares to be issued. In addition, the Kaleyra shareholders will be
entitled to receive up to 4,292,272 shares of GigCapital common stock as
an “earn-out” based upon the post-combination company’s revenue and
adjusted EBITDA for 2019 and 2020. The cash component of the purchase
consideration, if any, is to be funded by cash in GigCapital’s trust
account established in connection with its initial public offering, as
well as the cash held by Kaleyra as of the Closing. GigCapital has also
agreed to adopt an equity incentive plan that it will submit to its
stockholders for approval. So long as such equity incentive plan is
adopted and approved, GigCapital has agreed to issue to certain
employees of Kaleyra or its subsidiaries 1,290,909 restricted stock
units.

As part of the transaction, the sponsor investors in GigCapital have
agreed to defer vesting and subject to a risk of forfeiture between
251,686 and 2,013,504 shares of GigCapital common stock (the “Deferred
Shares”), depending upon the level of redemption by the stockholders of
GigCapital, unless and until the Kaleyra shareholders receive the
earn-out.

The transaction has been approved by the boards of directors of both
GigCapital and Kaleyra, has been signed by all of the Kaleyra
shareholders and remains subject to the satisfaction of customary
closing conditions, including regulatory approval and the approval of
GigCapital’s stockholders. It is expected to close promptly following
GigCapital’s special stockholders’ meeting to approve the transaction,
subject to any regulatory requirements, and the sponsor investors in
GigCapital have agreed to vote all of their shares in GigCapital in
favor of the transaction.

GigCapital was advised on the transaction by Cowen and Company, LLC as
financial advisors, with Crowell & Moring LLP as legal counsel. Kaleyra
was advised by Northland Capital Markets and GCA Altium as financial
advisors, with Cooley LLP and Chiomenti as legal counsel.

The description of the transaction contained herein is only a summary
and is qualified in its entirety by reference to the definitive
agreement relating to the transaction, a copy of which will be filed,
alongside with the transaction presentation, by GigCapital with the
Securities and Exchange Commission (the “SEC”) as an exhibit to a
Current Report on Form 8-K.

Conference Call Information

At 8:00 a.m. EST on March 5, 2019, Kaleyra and GigCapital will host a
joint conference call to discuss the business combination with the
investment community. For those who wish to participate, the domestic
toll-free access number is 1-800-458-4148. The international access
number is 1-856-344-9290.

A replay of the call will also be available through March 12, 2019. To
access the replay, the domestic toll-free access number is
1-844-512-2921. International callers may use 1-412-317-6671. The
conference ID number is 9067169.

SEC Filing

A Current Report on Form 8-K has been filed today with the SEC,
accompanied by this press release and a corporate presentation, which
can be accessed through the SEC’s website at www.sec.gov.

Disclaimer

This communication shall neither constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any
sale of securities in any jurisdiction in which the offer, solicitation,
or sale would be unlawful prior to the registration or qualification
under the securities laws of any such jurisdiction.

Additional Information About the Transaction and Where To Find It

Additional information about the proposed business combination and
related transactions will be described in GigCapital’s Current Report on
Form 8-K and preliminary proxy statement relating to the proposed
business combination and the respective businesses of GigCapital and
Kaleyra, which GigCapital will file with the SEC. The proposed business
combination and related transactions will be submitted to stockholders
of GigCapital for their consideration. GigCapital’s stockholders and
other interested persons are advised to read, once available, the
preliminary proxy statement and any amendments thereto and, once
available, the definitive proxy statement, in connection with
GigCapital’s solicitation of proxies for its special meeting of
stockholders to be held to approve, among other things, the proposed
business combination and related transactions, because these documents
will contain important information about GigCapital, Kaleyra and the
proposed business combination and related transactions. The definitive
proxy statement will be mailed to stockholders of GigCapital as of a
record date to be established for voting on the proposed business
combination and related transactions.

Stockholders may also obtain a copy of the preliminary or definitive
proxy statement, once available, as well as other documents filed with
the SEC by GigCapital, without charge, at the SEC’s website located at www.sec.gov or
by directing a request to Tara McDonough, Vice President and Chief
Financial Officer, GigCapital, Inc., 2479 E. Bayshore Rd., Suite 200
Palo Alto, CA 94303, or by telephone at (650) 276-7040.

Participants in the Solicitation

Kaleyra, GigCapital and their respective directors and executive
officers and other persons may be deemed to be participants in the
solicitations of proxies from GigCapital’s stockholders in respect of
the proposed business combination and related transactions. Information
regarding GigCapital’s directors and executive officers is available in
its Form 10-K filed with the SEC on December 6, 2018. Additional
information regarding the participants in the proxy solicitation and a
description of their direct and indirect interests will be contained in
the preliminary and definitive proxy statements related to the proposed
business combination and related transactions when it becomes available,
and which can be obtained free of charge from the sources indicated
above.

About GigCapital, Inc.

GigCapital,
Inc. (NYSE: GIG, GIG.U, GIG.RT, and GIG.WS), is a Private-to-Public
Equity (PPE)™ company, (also known as a Blank-Check or Special Purpose
Acquisition Company (“SPAC”)), sponsored by GigAcquisitions, LLC, and
sole-managed by GigFounders, LLC (www.gigfoundersglobal.com).
All were founded in 2017 by Dr. Avi Katz. The companies are led by an
affiliated team of technology industry experts, deploying its unique
Mentor-Investors™ methodology to partner with exceptional privately-held
technology companies of dedicated solid entrepreneurs. The companies
offer financial, operational and executive mentoring in order to
accelerate their path from inception, privately-held entity into the
growth-stage as a publicly traded company. The partnership continues
through an organic and roll-up strategy growth post the public offering.
For more information, visit www.gigcapitalglobal.com.

“Private-to-Public Equity (PPE)” and “Mentor-Investor” are trademarks of
GigFounders, LLC, used pursuant to agreement.

About Kaleyra

Kaleyra is a global group specializing in providing mobile messaging
services for financial institutions and multiple other types of
enterprises of all sizes. Through its proprietary platform, Kaleyra
manages multi-channel integrated communication services on a global
scale, comprising messages, push notifications, e-mail, instant
messaging, voice services and chatbots. Kaleyra’s technology today makes
it possible to manage huge volumes of messages, with some 2 billion
notifications a month. For more information: www.kaleyra.com

Non-GAAP Financial Measure and Related Information

This communication includes reference to adjusted EBITDA, a financial
measure that is not prepared in accordance with U.S. generally accepted
accounting principles (“GAAP”). Adjusted EBITDA is defined as of any
date of calculation, the consolidated pro forma earnings of Kaleyra and
its subsidiaries, before finance income and finance cost (including bank
charges), tax, depreciation and amortization calculated from the audited
consolidated financial statements of such party and its subsidiaries
(prepared in accordance with local GAAP), plus (i) transaction expenses
of Kaleyra and GigCapital, (ii) without duplication of clause (i),
severance or change of control payments, (iii) any expenses related to
company restructuring, (iv) any compensation expenses relating to stock
options, restricted stock units, restricted stock or similar equity
interests as may be issued by the post-combination company or any of its
subsidiaries to their employees and (v) any provision for the write down
of assets. The pro forma earnings of Kaleyra, which is an Italian
company, and its subsidiaries, which include subsidiaries outside of the
U.S., may not be prepared in conformance with Article 11 of Regulation
S-X of the SEC. Adjusted EBITDA is being used to determine whether
conditions have been achieved that would result in the issuance of the
earn-out and the vesting of the Deferred Shares. GigCapital management
believes that this non-GAAP measure of Kaleyra’s financial results will
provide useful information to management and investors regarding certain
financial and business trends relating to Kaleyra’s anticipated
financial condition and results of operations. Investors should not rely
on any single financial measure to evaluate Kaleyra’s anticipated
business.

Forward-Looking Statements

This press release contains forward-looking statements within the
meaning of U.S. federal securities laws regarding the proposed
transactions and GigCapital. Such forward-looking statements include,
but are not limited to, statements regarding the closing of the
combination and the expectations, hopes, beliefs, intentions, plans,
prospects or strategies regarding the business combination and future
business plans of the Kaleyra and GigCapital management teams. Any
statements contained herein that are not statements of historical fact
may be deemed to be forward-looking statements. In addition, any
statements that refer to projections, forecasts or other
characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking statements. The words
“anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”
“intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,”
“project,” “should,” “would” and similar expressions may identify
forward-looking statements, but the absence of these words does not mean
that a statement is not forward-looking. The forward-looking statements
contained in this press release are based on certain assumptions and
analyses made by the management of GigCapital and/or Kaleyra in light of
their respective experience and their perception of historical trends,
current conditions and expected future developments and their potential
effects on Kaleyra and GigCapital as well as other factors they believe
are appropriate in the circumstances. There can be no assurance that
future developments affecting Kaleyra or GigCapital will be those
anticipated. These forward-looking statements involve a number of risks,
uncertainties (some of which are beyond the control of the parties) or
other assumptions that may cause actual results or performance to be
materially different from those expressed or implied by these
forward-looking statements, including that the GigCapital stockholders
will approve the transaction, the ability of the post-combination
company to meet the NYSE listing standards, and that Kaleyra will have
sufficient capital upon the approval of the transaction to operate as
anticipated. Should one or more of these risks or uncertainties
materialize, or should any of the assumptions being made prove
incorrect, actual results may vary in material respects from those
projected in these forward-looking statements. We undertake no
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except as
may be required under applicable securities laws.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190226005706/en/