The Nightcap: SPACs Love the Leafy Greens
Nightly recap of the day's SPAC highlights (June 17th, 2021)
Good evening,
Thanks for reading “The Nightcap”, a nightly recap of the highlights of the SPAC world. You can always discover and track all of the SPACs at spactrack.net.
A snippet from last night’s Nightcap:
Looks like indoor farming is back on the menu in SPACland with Bloomberg reporting that Berlin-based Infarm is in advanced talks with Kernel Group Holdings, Inc.
To refresh your memory… Spring Valley Acquisition Corp. announced a merger with AeroFarms back in March and AppHarvest received approximately $475M of gross proceeds after completing its merger with Novus Capital Corp back in February.
AppHarvest announced today that it secured a $75M credit facility to “fuel expansion of its rapidly growing network of high-tech controlled environment agriculture (CEA) facilities in Central Appalachia.” The company currently operates a 60-acre facility with 2 more under construction and plans to have 12 high-tech farms by the end of 2025.
And then this afternoon we heard the familiar sound of DJ Khaled:
Leo Holdings III Corp. (LIII: $9.80) is said to have struck a deal to merge with Local Bounti Corp., according to Bloomberg (article behind paywall).
Local Bounti Corp., an indoor agriculture startup, has agreed to go public through a merger with Leo Holdings III Corp., a blank-check firm, according to people with knowledge of the matter.
The transaction, which could be announced as soon as Friday, is set to value the combined entity at about $1.1 billion, the people said, asking not to be identified discussing a private matter. To support the deal, Leo Holdings III raised $125 million via a so-called private investment in public equity, or PIPE, from investors including Fidelity Management & Research Co. and Cargill Inc., the people said. Cargill is additionally slated to provide $200 million in debt financing, they added.
Representatives for Local Bounti, based in Hamilton, Montana, Leo Holdings III and Fidelity declined to comment. A representative Cargill didn’t immediately respond to requests for comment.
Founded in 2018 by co-CEOs Craig Hurlbert and Travis Joyner, Local Bounti focuses on the sustainable production and delivery of fresh produce. Its proprietary technology grows leafy greens such as romaine and butter lettuce and herbs like cilantro and basil using 90% less land and water than traditional agricultural methods, and without pesticides or herbicides.
If you’re thinking the indoor farms SPAC party must be coming to a close, past SPAC activity in other sectors points to the contrary. The bonanza may have just begun.
As Adam Bergman, Managing Director of EcoTech Capital, wrote back in late March after the AeroFarms SPAC merger was announced:
AeroFarms is now positioned to be a potential industry leader with access to considerable amounts of cheaper capital from the public markets. Additionally, as industry consolidation begins over the next few years, AeroFarms has both highly liquid public stock, as well as cash, to buy acquisition targets. Given that other vertical farming companies will need to respond to this advantage, I expect that most will likely pursue the public listing route.
The big question now is not whether the AeroFarms deal will herald a new era for public listings for indoor farming companies, which is all but certain to happen, but rather whether we are entering a period of public market activity for the broader AgTech & FoodTech sector. According to AgFunder, global investment in AgTech and FoodTech reached an all-time high of $15.8 billion in 2020. A consequence of the failings of the food & ag supply chain, worsened by COVID-19 during the past year, was that investors have been drawn to ag biotech, alternative protein, food waste mitigation, indoor farming, and robotics & automation companies that are using technology to drive innovation throughout the food & ag value chain. Furthermore, more AgTech and FoodTech companies are generating meaningful commercial revenue and have developed sustainable business models that provide a realistic path to profitability.
Given the growing interest from investors, including environmental, social, and governance (ESG) & impact, in private AgTech and FoodTech companies over the past couple of years, it is reasonable to ask whether the sector will follow a similar trajectory as the mobility sector, which had its best year ever, with over 15 public listings in 2020.
The article also listed some of AeroFarms’ vertical farming competitors:
Bowery Farming, CropOne, 80Acre Farms, Freight Farms, InFarm, Iron Ox, Plenty, Shenandoah Growers, Square Roots, and TruLeaf.
The Stats:
The Deals:
1) GS Acquisition Holdings Corp II (GSAH: $10.16) & Mirion Technologies
Merger Partner Description:
Mirion Technologies is a leading provider of detection, measurement, analysis and monitoring solutions to the nuclear, defense, medical and research end markets. The organization aims to harness its unrivaled knowledge of ionizing radiation for the greater good of humanity. Many of the company's end markets are characterized by the need to meet rigorous regulatory standards, design qualifications and operating requirements. Headquartered in Atlanta (GA – USA), Mirion employs around 2,500 people and operates in 13 countries.
Valuation: $2.56B Pro-forma EV
PIPE: $900M fully committed with participation from Janus Henderson Investors, Fidelity Management & Research Company LLC, funds and accounts managed by BlackRock, Neuberger Berman funds, including a $200 million anchor investment from Goldman Sachs.
Additional Financing: $125M commitment from Goldman Sachs to be used as a backstop in the event that the minimum cash condition fails to be satisfied.
New S-1 Filings:
1) Avista Public Acquisition Corp. II (AHPA)
$200M, 1/3 warrant
Focus: Healthcare
Management: Thompson Dean (Managing Partner & Co-CEO of Avista)
S-1 Link: https://www.sec.gov/Archives/edgar/data/1846253/000110465921082716/tm2110146-6_s1.htm
2) NorthView Acquisition Corp (Ticker not available yet)
$180M, 1/2 warrant
Focus: Healthcare innovation
S-1 Link: https://www.sec.gov/Archives/edgar/data/1859807/000121390021032773/fs12021_northviewacq.htm
SPACs Leaving the Nest:
1) Fortress Value Acquisition Corp. II (FAII) completed its merger with ATI Physical Therapy (ATIP: $10.01) with FAII starting to trade as ATIP today.
2) Crescent Acquisition Corp (CRSA: $9.41) shareholders approved the merger with LiveVox, with appx. 60% of outstanding shares redeemed (~$15M). The merger is expected to close tomorrow June 18 with CRSA starting to trade as LVOX following the closing. (Press Release)
3) Hudson Executive Investment (HEC: $9.00) shareholders approved the merger with Talkspace. The merger is expected to close on Tuesday, June 22 with HEC starting to trade as TALK on June 23.
4) Acies Acquisition Corp. (ACAC: $8.75) shareholders approved the merger with Playstudios. The merger will close “as soon as practicable” and ACAC will start to trade as MYPS following the closing.
Upcoming Dates:
This Week’s Shareholder Meetings and Unit Splits:
Friday, June 18th
Unit Split: Mountain Crest Acquisition Corp. III (BSKY.U: $10.07) to split into common shares and warrants
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