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September 14, 2020
Welcome to the SPAC Research weekly newsletter.

PIPE Financing
Last month we looked at deal financing in recent years across all sources, including PIPEs, forward purchase agreements, and unredeemed trust accounts.

Below, we've restricted the sample to deals closed since the beginning of 2019. You can see that of the $14bn in equity capital deployed at SPAC deal closings, approximately 38% of it has come in the form of PIPE financing.
Part of the appeal of a SPAC listing to operating companies is the certainty it can provide on valuation and committed capital. The IPO market can be volatile, and an issuer won't know how much money it will raise or at what price until the day its IPO prices. But a company that signs up PIPE investors alongside a SPAC deal can feel assured of a minimum capital raise and a valuation agreed upon in advance.

PIPEs are also a great way to demonstrate committed equity capital at the time of a transaction announcement. Even with how hot SPACs have been the past few months, sponsors face a lot of work moving shares after a deal announcement if their common stock isn't trading materially above cash in trust. Most investors don't want to be the first to make an equity commitment, and it's easier for a fund to make an investment decision if it can piggyback off the due diligence of a name-brand investor that has signed a PIPE commitment in advance.

We always tell first-time sponsors that covering a majority of their deal's minimum cash condition with a $10 PIPE investment is the single most important thing they can do to support their transaction. So we wanted to examine the relationship between PIPE financing and deal outcomes. Below, you can see all the closed SPAC deals since the beginning of 2019 that included a PIPE investment, with the PIPE amount on the x-axis and the current market price on the y-axis.
GSAH/Vertiv ($1239/$16.85) omitted for visibility
The correlation is incredibly powerful, with larger PIPEs being associated with superior outcomes.

And what about for pending deals?
CCXX/Multiplan ($1300/$11.03) omitted for visibility
The relationship holds, although it's less powerful -- which makes sense given the $10 floor under weaker deals and the fact that there's been less time for price discovery.

We've explored the relationship between SPAC size, performance, and increasing sponsor quality in the past. Roughly speaking, larger SPACs have produced better outcomes on both the front and back end, and good outcomes have helped bring more great sponsors into the fold. That phenomenon is connected to the increasing size of both SPAC deal values and PIPE investments. And as you can see below, PIPE investments are clearly getting larger.
But SPACs and acquisition targets are getting larger too, so we wanted to look at PIPEs through another filter. We plotted all the PIPE investments below against the initial trust account values for each of those SPACs.
You can see that historically it was rare for SPACs to raise more than their trust account in a PIPE investment, with only four such deals occurring prior to 2020. But with the confluence of exciting deals, great sponsors, and strong markets, there are seven pending deals right now that have PIPE commitments for greater than 100% of their trust account.

Later this year we'll explore two offshoots of this week's study: the trading performance of SPAC deals as compared with the fraction of their minimum cash condition that was met via PIPE commitments, and the shift in SPAC enthusiasm to venture-capital style deals that trade on a multiple of future revenues.

News From the Past Week

  • Cohn Robbins Holdings Corp. (CRHC) (previously CSR Acquisition Corp.) raised $828mm in an upsized IPO without a specific sector focus. CRHC is co-chaired by Cliff Robbins and Gary D. Cohn. Robbins is a former partner at private equity firms General Atlantic Partners and Kohlberg Kravis Roberts, and the founder of Blue Harbour Group, a $2bn investment manager. Cohn served as assistant to the President of the United States for Economic Policy and director of the National Economic Council from January 2017 until April 2018. Before serving in the White House, Cohn was president, COO and a director of Goldman Sachs from 2006-2016. Credit Suisse is sole book-runner.

  • TWC Tech Holdings II Corp. (TWCT) raised $525mm for an acquisition in technology and technology-enabled services sectors. TWCT is led by Adam Clammer, a founding partner of True Wind Capital, a private equity fund focused on technology. TWCT is Clammer's second SPAC, and retains the executive team from Nebula Acquisition, which raised $275mm in January 2018 and acquired Open Lending (NASDAQ: LPRO) in June 2020. TWCT sports a $100mm forward purchase agreement. Citigroup and Deutsche Bank are joint book-runners.

  • Starboard Value Acquisition Corp. (SVAC) raised $360mm in an upsized IPO for an acquisition in technology, healthcare, consumer, industrials, or hospitality and entertainment. SVAC is led by Jeffrey Smith, managing member, CEO and CIO of Starboard Value LP, a $5.8bn asset manager he founded in 2011. SVAC will utilize a distributable warrant structure similar to Pershing Square Tontine Holdings (PSTH), in which non-redeeming common stockholders will share ratably in a pool of 6mm warrants to be distributed at closing of the SPAC's initial business combination. SVAC also features a forward purchase agreement that will backstop up to $100mm of public redemptions. UBS, Stifel and Cowen are joint book-runners.

  • Broadstone Acquisition Corp. (BSN) raised $300mm for an acquisition of coronavirus-stressed businesses in Europe and the UK. BSN is led by Hugh Osmond and Marc Jonas, co-founders of Sun Capital Partners, a global private equity firm with over $7bn in AUM. Citigroup is sole book-runner.

  • Prime Impact Acquisition I (PIAI) raised $300mm for an acquisition in the data economy. PIAI is led by co-CEOs Michael Cordano and Mark Long. Cordano was the CEO of Western Digital Corporation (NASDAQ: WDC), a developer, and manufacturer of data storage devices, from October 2015 until March 2020. Long served in executive roles for WDC during Cordano's tenure, and the pair both worked for Hitachi Global Storage Technologies, a manufacturer of disk drives and external storage devices, prior to their time at WDC. Goldman Sachs and BofA are joint book-runners.

  • Tortoise Acquisition Corp. II (SNPR) raised $300mm in an upsized IPO for an acquisition in broad energy transition or sustainability. SNPR retains the entire team from Tortoise Acquisition Corp. (SHLL), which raised $233mm in February 2019 and announced a business combination with Hyliion Inc. in June 2020. SNPR includes an optional forward purchase of up to $100mm by CIBC National Trust Company. Barclays and Goldman Sachs are joint book-runners.

  • NavSight Holdings Inc. (NSH) raised $200mm for an acquisition in national security, intelligence and defense. NSH is led by Robert A. Coleman and Jack Pearlstein. Coleman was the founder and CEO of Integrated Data Systems Corporation, a provider of software engineering, computer security and enterprise architecture solutions to the intelligence community and the Department of Defense, which was acquired by ManTech (NASDAQ: MANT) in February 2003. Pearlstein has over 25 years of operating experience in the technology sector, including more than 10 years with companies providing expertise and technology to the U.S. defense and intelligence communities. Credit Suisse is sole book-runner.

  • Industrial Tech Acquisitions, Inc. (ITAC) raised $75mm for an acquisition in industrial- and energy-focused technology in North America. ITAC is led by E. Scott Crist, who has more than 30 years of business experience as an entrepreneur, venture capitalist and operating executive. Maxim is sole book-runner.

  • Altimeter Growth Corp. (AMGC) filed to raise $450mm for an acquisition in technology. AMGC is led by Brad Gerstner, founder and CEO of Altimeter Capital Management, a technology-focused investment firm with approximately $6bn of assets under management. Prior to founding Altimeter, Gerstner was a founding principal at venture capital firm General Catalyst. The SPAC has two forward purchase agreements, one with Altimeter for $175mm and another with JS Capital for $25mm. Citigroup, Goldman Sachs and Morgan Stanley are joint book-runners.

  • Vesper Healthcare Acquisition Corp. (VSPR) filed to raise $400mm for an acquisition in pharmaceuticals and healthcare. VSPR is led by Brenton Saunders, the former chairman, president and CEO of Allergan plc (formerly NYSE: AGN), a developer and manufacturer of brand name drugs and medical devices, until its acquisition by AbbVie Inc. (NYSE:ABBV) in May 2020. Barry Sternlicht, who consolidated Starwood Hotels & Resorts (formerly NYSE: HOT) and is chairman of Jaws Acquisition Corp. (JWS), will serve on VSPR's board of directors. Goldman Sachs and JP Morgan are joint book-runners.

  • Qell Acquisition Corp (QELL) filed to raise $300mm for an acquisition in next-generation mobility, transportation and sustainable industrial technology. QELL is led by Barry Engle, the former president of GM North America, which is GM's largest segment with over $100bn in sales last year. JP Morgan and Barclays are joint book-runners.

  • Vector Acquisition Corporation (VACQ) filed to raise $300mm for an acquisition in technology. VACQ is led by Alex Slusky, the founder of Vector Capital, a technology-focused private investment firm that manages over $4bn in equity capital. Deutsche Bank and BofA are joint book-runners.

  • Climate Change Crisis Real Impact I Acquisition Corporation (CLII) filed to raise $200mm for an acquisition in ESG, decarbonization and combatting climate change. CLII is led by David Crane, the former CEO of NRG Energy, Inc. and International Power Plc, both electric power generation companies. Citigroup, BofA and Barclays are joint book-runners.

  • Delwinds Insurance Acquisition Corp. (DWIN) filed to raise $200mm for an acquisition in insurance. DWIN is led by Andrew Poole, former CFO of Tiberius Acquisition Corporation (TIBR), which raised $174mm in March 2018 and acquired International General Insurance Holdings Ltd. (Nasdaq: IGIC) in March 2020. DWIN's team returns much of the group from Tiberius, as well as Dominic Addesso, the former CEO of Everest Re Group, Ltd. (NYSE: RE). RBC and Cantor Fitzgerald are joint book-runners.

  • FinTech Acquisition Corp. IV (FTIV) filed to raise $200mm for an acquisition in fintech. FTIV is chaired by Betsy Z. Cohen, former CEO of The Bancorp, Inc. (NASDAQ: TBBK) and chairman of the first three FinTech Acquisition Corps (see here for a detailed history) and of FTAC Olympus Acquisition Corp. which raised $750mm last month for an acquisition in fintech. FTIV's CEO is Daniel G. Cohen, who founded Cohen & Company Asset Management (NYSE: COHN), and served as CEO of the first three FinTech Acquisition Corps and chairman of Insurance Acquisition Corp. (INSU) and INSU Acquisition Corp. II (INAQ). Cantor Fitzgerald is sole book-runner.

  • IG Acquisition Corp. (IGAC) filed to raise $200mm for an acquisition in leisure, gaming and hospitality. IGAC is chaired by Bradley Tusk, CEO and co-founder of Tusk Ventures, a venture capital fund that invests in early stage start-up companies in highly regulated industries. Tusk and CEO Christian Goode co-founded Ivory Gaming Group, a casino management company, in 2015. Cantor Fitzgerald is sole book-runner.

  • Recharge Acquisition Corp. (RCHG) filed to raise $200mm without a specific sector focus. RCHG is led by CEO Anthony Kenney, who built and ran Speedway LLC, the US's second largest company owned and operated convenience store chain, which is in the process of being acquired by the parent company of 7-Eleven for $21bn. Raymond James and EarlyBirdCapital are joint book-runners.

  • Dune Acquisition Corporation (DUNE) filed to raise $130mm for an acquisition in technology and SaaS. DUNE is led by CEO Carter Glatt, who was head of corporate development and senior vice president of GTY Technology Holdings Inc. (GTYH) from 2018 to 2020 and serves as CIO and managing partner of delta2 Capital, a SPAC-focused investment fund. CFO Michael Castaldy serves as CEO and managing partner of delta2 Capital, and co-founded Diverse Partners, LP, a multi-strat hedge fund, in 2014. Through Diverse Partners, Castaldy structured numerous SPAC IPOs and business combinations as well as led venture rounds for SaaS and health technology companies. Cantor Fitzgerald is sole book-runner.

  • Goldenbridge Acquisition Limited (GBAL) filed to raise $50mm for an acquisition in artificial intelligence. GBAL is led by Yongsheng Liu, who was CEO, chairman and director of Wealthbridge Acquisition Limited (HHHH), which raised $57.5mm in February 2019 and acquired Scienjoy (NASDAQ: SJ) in May 2020. GBAL's COO Ray Chen and directors Jining Li and Kinpui Choi also served in the same roles for Wealthbridge. Maxim is sole book-runner.

Deal News
  • Conyers Park II Acquisition Corp. (CPAA) announced a deal to acquire Advantage Solutions Inc., a provider of outsourced sales and marketing services to consumer goods manufacturers and retailers. The deal reflects an enterprise value of approximately $5.2bn, a multiple of 10.1x estimated 2021 Adjusted EBITDA. Existing private equity owners of Advantage will invest an additional $200mm as part of a $700mm PIPE at $10 per share. The transaction is expected to close in late October 2020.

  • B. Riley Principal Merger Corp. II (BMRG) announced a deal to acquire Eos Energy Storage LLC, a manufacturer of safe, sustainable, low-cost, and long-duration zinc hybrid cathode battery energy storage systems. The deal values Eos at an implied $550mm pro forma enterprise value, or 2.0x 2022E revenue. The deal is supported by a $40mm equity commitment by B. Riley in lieu of its $25mm forward purchase invesment. The transaction is expected to close in Q4 2020.

  • Haymaker Acquisition Corp. II (HYAC) announced a deal to acquire ARKO Holdings Ltd., an Israeli public holding company (TASE: ARKO) whose primary asset is a controlling stake in GPM Investments, the seventh largest convenience store chain in the United States. The deal reflects an enterprise value of $2.0bn, or ~9x GPM’s 2021E Pro Forma Adjusted EBITDA. Closing is expected in Q4 2020.

  • Monocle Acquisition Corp. (MNCL) and AerSale revised their merger agreement last week. Under the new terms, AerSale will be debt-free at closing and the transaction will have a fully diluted enterprise value of approximately $300mm, equating to approximately 5.5x AerSale’s forecasted 2021 Adjusted EBITDA. That's down from $430mm as originally announced in December 2019. MNCL will be required to have cash proceeds of at least $75mm at closing.

  • Bloomberg reported that Social Capital Hedosophia Holdings Corp. II (IPOB) is in advanced talks for a deal with Opendoor, a property technology startup, in a transaction that could be valued at around $5bn.

Charter Extensions

  • INSU extended its charter through 11/3/2020 with no trust contribution.
  • CFFA extended its charter through 12/17/2020 with no trust contribution.

Upcoming Meetings and Deadlines
  • 9/15/2020 OPES Charter extension meeting (liquidation deadline 9/16/2020)
  • 9/15/2020 JFKK Diginex approval meeting (liquidation deadline 9/30/2020)
  • 9/17/2020 LFAC Charter extension meeting (liquidation deadline 9/22/2020)
  • 9/24/2020 FMCI Charter extension meeting (liquidation deadline 9/30/2020)
  • 9/24/2020 TZAC Charter extension meeting (liquidation deadline 9/28/2020)


  • Hindenburg Research published a short thesis alleging misstatements and fraud at Nikola Corp. which was acquired by VectoIQ Acquisition Corp. (VTIQ) earlier this year.
  • Businesswire reported that Perella Weinberg Partners is forming a SPAC focusing on companies owned or led by women.
  • reported that former MGM Resorts International CEO Jim Murren is considering launching a SPAC.
  • There's a new SPAC Index from IPOX that intends to capture performance from IPO to deal consummation but its trading methodology isn't explicitly disclosed.
Disclosures: Site administrators may maintain positions in various SPAC securities and may trade in or out of those securities at any time without notice. Information from is provided for informational purposes only and should not be relied upon as the basis for any investment decision. Nothing on is a recommendation or solicitation to buy or sell any investment.