Separating the Wheat from the Chaff
The Nightcap newsletter: SPAC Track’s nightly recap of the action in the SPAC world. (September 29, 2021)
Discover and track all of the SPACs at spactrack.net.
The Stats:
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The Deals:
1) ARYA Sciences Acquisition Corp IV (ARYD: +1.01%) & Caritas Therapeutics (gene therapy business of Amicus Therapeutics)
Merger Partner Description:
Caritas’ focus as a clinical stage, rare disease discovery and development next-generation genetic medicines company
The mission of Caritas, the Latin word for compassion, will be to transform the lives of children and adults living with rare genetic diseases by harnessing the power of next-generation genetic medicine and gene therapy technologies through advanced protein engineering and innovative gene therapy vector technologies. Through its 60+ bench scientists and experienced development and leadership teams, Caritas will develop and advance a series of novel platform technologies to address the key challenges to the safe and efficient gene transfer necessary for next-generation gene therapies. These include proprietary technologies designed to address delivery, safety, durability, and manufacturability of gene therapies. The gene therapy pipeline is founded on deep expertise and platform technologies in protein engineering and rare disease biology, the broad research collaboration with the Perelman School of Medicine at the University of Pennsylvania (Penn) for best-in-class gene therapies, and a new co-development collaboration with Amicus.
Valuation: $242.4M EV
PIPE: $200M including investments from Perceptive Advisors, Redmile Group, Bain Capital Life Sciences, Invus, Avoro Capital Advisors, Surveyor Capital (a Citadel company), Deerfield Management Company, Wellington Management and Sphera Healthcare
Additional Financing: $50M investment from Amicus
News:
Palihapitiya says SPAC slowdown separated 'wheat from chaff' (Reuters)
The recent correction, after a boom that lasted several quarters, was needed to separate the "the wheat from the chaff," he told CNBC in an interview on Wednesday.
The U.S. Securities and Exchange Commission should make SPAC sponsors put up more at-risk capital to "have more skin in the game" and be better aligned with investors, said Palihapitiya, who has so far launched 10 SPACs and backed several other deals.
"The incentives aren't aligned to create great outcomes from the beginning of a SPAC to the end of a SPAC. And the most important thing we need to do is to force the people that are the sponsors to have much more capital at risk," he said.
"So if I want to raise a billion-dollar SPAC, I have to come up with $100 million."
SPAC managers are typically awarded warrants and founder shares that give them a much bigger stake in the combined company than their investment would otherwise allow them.
Palihapitiya's latest comments on lopsided SPAC incentive structures comes days after Elizabeth Warren and other Senate Democrats sent letters to a handful of SPAC sponsors, including him, Michael Klein and Tilman Fertitta, questioning incentive arrangements.
Through his SPACs, Palihapitiya has struck deals with companies ranging from space tourism firm Virgin Galactic Holdings Inc (SPCE: $22.56) to home-selling platform Opendoor Technologies Inc (OPEN: $19.96).
However, since the peak of the SPAC boom in March, investors have lost their enthusiasm because of poor financial performance and scrutiny from lawmakers and regulators.
One of Palihapitiya's SPAC deals, Clover Health Investments Corp (CLOV: $7.40 -5.85%), was accused by short-selling firm Hindenburg Research of concealing a U.S. Department of Justice enquiry into its business.
"I'm going to get a lot of credit when things go up and I'm going to get a lot of the blame when things go down," he said.
"I think we all have to take a step back and say, we are one year in to a pretty meaningful revolution in the capital markets that will take years to play out."
Merger Votes/ Completions:
PTK Acquisition (PTK: $7.74 -18.78%) completed its merger with Valens Semiconductor
Ticker change to VLN set for tomorrow, 9/30
Valens has received ~$155M in gross proceeds
Cerberus Telecom Acquisition Corp (CTAC: $9.29 -7.10%) shareholders approved its merger with Kore.
22.2M shares (~86%) were redeemed
Jaws Spitfire Acquisition Corporation (SPFR: $8.44 -14.31%) completed its merger with Velo3D
Ticker change to VLD set for tomorrow, 9/30
Velo3D has received ~$274M in net proceeds
Galileo Acquisition Corp (GLEO: $8.54 -19.74%) completed its merger with Shapeways
Ticker change to SHPW set for tomorrow, 9/30
Shapeways has received $103M in gross proceeds
Union Acquisition Corp. II (LATN: $9.86 +6.59%) completed its merger with Procaps
Ticker change to PROC set for tomorrow, 9/30
Procaps has received ~$160M in gross proceeds
Quick News Corner:
VPC Impact Acquisition Holdings II (VPCB) updates agreement to reflect a $310M min. cash condition and adds $6M in additional PIPE investment for its merger with Kredivo, bringing total PIPE to $126M
Tuscan Holdings Corp II (THCA) shareholders approve extension from 9/30 to 12/31 with 2.3M redemptions ($23.1M removed from trust)
Tracking De-SPAC S-1s (including PIPE resale registrations):
S-1s that went effective today:
Helbiz (HLBZ: $14.05 -32.03%)
424B3 filings (meaning S-1 is likely to go effective tomorrow):
Tango Therapeutics (TNGX: $12.03 -4.90%)
Volta (VLTA: $11.24 -0.97%)
SmartRent (SMRT: $12.60 -1.79%)
S-1 filings:
Lilium (LILM: $10.35 -4.26%)
IPOs to Begin Trading Tomorrow*:
1) Artemis Strategic Investment Corporation Announces Pricing of $175 Million Initial Public Offering (ARTE-U)
2) Home Plate Acquisition Corporation Announces Pricing of $200 Million Initial Public Offering (HPLT-U)
*priced at the time of this writing
New S-1s (1):
1) TMT Acquisition Corp (TMTC)
$50M, 1/2 W, 1 R (1/10 of a share)
Focus: Asia
Upcoming Dates:
This Week’s Announced Shareholder Meetings, Unit Splits, Warrant Redemptions, and Expected Ticker Changes
See the full calendar here.
Thanks for reading,