tZERO, which builds regulated infrastructure for tokenized securities, has signed a definitive agreement to go public through a merger with FG Imperii Acquisition Corp. (Nasdaq: FGII), a special purpose acquisition company. The companies said Monday that the transaction gives tZERO a pre-money equity valuation of $350 million.
According to a Form 8-K that FG Imperii filed with the U.S. Securities and Exchange Commission on Nov. 2, the merger agreement is dated Oct. 31. The filing sets stock consideration at $325 million, to be paid in FG Imperii Class A shares valued at $10.00 each.
Escrow shares are tied to derivatives and EBITDA targets
An additional 2.5 million shares will be placed into escrow at closing. Those shares will be released to tZERO holders only if specified milestones are met.
Half of the escrow, or 1.25 million shares worth roughly $12.5 million at the deal price, is tied to derivatives-related goals. The filing says those shares will be released if, within four years after closing, any one of the following occurs:
- the Commodity Futures Trading Commission approves pending applications described in the filing;
- tZERO’s introducing broker commercially launches regulated crypto derivatives or event-contract trading; or
- tZERO signs a qualifying license or partnership agreement for its derivatives or clearing platform.
The other 1.25 million shares require positive adjusted EBITDA in two separate three-month periods during the first year after the merger closes.
In its release, tZERO described itself as a CFTC-registered introducing broker and derivatives clearing organization. Its application to become a designated contract market, or a CFTC-licensed exchange, has not yet been approved.
Combined company is expected to trade as TZRO
The combined company is expected to trade on NYSE American under the ticker TZRO. Existing tZERO shareholders are set to roll all of their equity into the merged entity.
FG Imperii holds up to about $231 million in trust. That amount can shrink if shareholders redeem, and it comes before deal expenses.
FG Merchant Partners LP, an affiliate of Fundamental Global, signed a term sheet for a forward purchase covering up to 2.5 million shares, though definitive documents have not been signed. Another FG Imperii affiliate also invested in a tZERO funding round announced earlier, but the amount was not disclosed.
Alan Konevsky, tZERO’s chief executive officer, said in the company’s release: 「We have talked about the next phase of tZERO’s evolution requiring a more independent footprint. This transaction delivers that objective, unlocks growth paths and strengthens our ability to scale market infrastructure required for an increasingly tokenized financial system.」 He is expected to continue leading the combined company.
In the same statement, FG Imperii CEO Larry Swets said tZERO combines differentiated technology, hard-to-replicate regulatory infrastructure, and years of operating experience in digital securities.
Several closing conditions remain in place
Both boards approved the deal unanimously. Holders representing about 62% of tZERO’s fully diluted capital have also signed support agreements.
The companies expect to close the transaction in early 2027. Before that can happen, they still need shareholder votes at both companies, an effective S-4 registration statement, the expiration of the Hart-Scott-Rodino waiting period, and exchange listing approval.
Either side may terminate the agreement if the merger has not closed by March 15, 2027.
Before closing, FG Imperii plans to shift its place of incorporation from the Cayman Islands to Texas.
Recent activity at tZERO
The deal comes after an active stretch for tZERO. In September, the company made Goldman Sachs’ Treasury money market fund available on its Lynq settlement network. Late last month, the Depository Trust & Clearing Corporation, or DTCC, turned on its own tokenized securities service for 20 clients.
