DENVER, Colo. (247marketnews.com) — Fathom Holdings (NASDAQ:FTHM) and Neighborhood Intelligence (NASDAQ:NXH) are rewriting their proposed combination, replacing the previously announced merger structure with a transaction designed to fuse Fathom’s national residential brokerage and title operations with a substantial portfolio of digital assets. Under the proposed structure announced September 24, NXH would contribute its approximately 38.8% direct and indirect interest in tZERO, along with Medici-related fund assets and its investment in GrainChain, with those contributed assets assigned a value of no less than $130 million, subject to Fathom’s due diligence and validation.
The headline number is eye-catching because the proposed $130 million valuation is attached principally to NXH’s tZERO interest, while the transaction would give NXH newly issued Fathom shares and is expected to leave Neighborhood with a controlling interest in Fathom. The companies say the revised structure is intended to turn assets whose value can be difficult to track within NXH’s broader balance sheet into a more transparent, separately traded public-equity interest. The final share count, however, has not been determined, and definitive agreements still need to be negotiated.
The blockchain angle is where the story gets particularly interesting. tZERO announced a financing round earlier this month involving existing investors including Neighborhood Intelligence and Intercontinental Exchange (NYSE:ICE), saying the capital would support its infrastructure-as-a-service offering for tokenized securities and other assets. tZERO says its platform connects tokenization, trading, custody and asset servicing. The proposed Fathom structure would give the real-estate company an opportunity to explore applications involving tokenized commercial real estate, single-family rental portfolios and potentially other real-estate assets.
Marcus Lemonis, Executive Chairman and CEO of Neighborhood Intelligence, framed the transaction around making difficult-to-track assets more visible to public-market investors. “Our commitment was to find a way to take assets we believe have tremendous value, but whose value can be difficult for the market to see on our balance sheet, and translate them into a more transparent and trackable public equity stake,” Lemonis said. Fathom Chairman Scott Flanders added that Fathom brings “a national brokerage business, a title platform and real transactions” to the proposed combination.
For investors, the proposed deal creates a dramatically different setup from the original agreement, under which Fathom shareholders were slated to receive 0.2236 shares of NXH common stock for each Fathom share. The new concept instead places the digital assets inside Fathom while giving NXH a controlling equity position.
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