SPAC Hall of Fame & Room of Gloom

By: SPAC alpha
On: June 1, 2020
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Why “hall” of fame and only a “room” of gloom you say? Why not a “hall of gloom”? Well, there’s a lot more folks in dem hall dere, dat’s why!

So, without further ado, here they are. No golden envelopes needed. Winners all around – their investors, their team and board and, above all, the target company that was the subject of their attention.

While we restricted the HoF list to ten names, here are another five honorable mentions:

  • Gores Holdings/Hostess (ticker: TWNK). This transaction featured the formidable pairing of Apollo Global Management, the prior majority owner of Hostess – Dean Metropoulos and, Alec Gores in a well-crafted transaction that traded at a $14/15 handle for a long time before ‘rona hit. IPO in Aug 2015 and Closing in Nov 2016.
  • Silver Run Acquisition/Centennial Resource Development(ticker: CDEV). This transaction featured the pairing of energy powerhouse (no pun intended), NGP Energy Capital and shale pioneer, Mark Papa acquiring a controlling stake in an oil & gas company in Southern Delaware Basin. The transaction was backed by a $1 billion PIPE with support from Riverstone, Capital World and Fidelity. CDEV traded at a $18 handle for 2 years before running out of fuel. IPO in Feb 2016 and Closing in Oct 2016.
  • TPG Pace/Magnolia Oil & Gas(ticker: MGY): This was no “Fixer Upper”; the transaction featured Texas Pacific Group along with former Occidental Petroleum CEO, Steve Chazen partnering with EnerVest to develop a South Texas based oil & gas company. EnerVest received $1.2 billion in cash payment along with ~$1.4 billion in stock consideration. MGY traded at a $12 handle until Jan 2020 energy meltdown. IPO in May 2017 and Closing in Jul 2018.
  • Haymaker Acquisition/OneSpaWorld(ticker: OSW): This transaction featured brothers, Steve Heyer, ex-CEO of Starwood Hotels and Andrew Heyer, founder and CEO of Mistral Equity Partners, acquiring OneSpaWorld, a portfolio company of L Catterton. This transaction was announced in the midst of the bucking Q4 2018 market and required deft handling to hold on to the reins. But, once they renegotiated the valuation downward and locked in a $122 million PIPE, OSW giddy upped and galloped to a $13 handle until ‘rona hit spa occupancy. IPO in Oct 2017 and Closing in Mar 2019.
  • GS Acquisition/Vertiv(ticker: VRT): This transaction featured Goldman Sachs and the former Chairman/CEO of Honeywell across the table from Tom Gores, founder of Platinum Equity. The $5.3 billion transaction was the biggest SPAC deal ever announced and included a $1.24 billion PIPE. IPO in Jun 2018 IPO and Closing in Feb 2020. The stock traded to $13 handle on Closing, went down to the low $7s in March and has roared back to new highs in May. This transaction is most likely to make its way into the HoF list.

And, now the RoG list. Not much to say here. A combination of competition and market conditions that led to a no deal outcome before the clock ran out. Obeying Hippocrates’ dictum of “primum non nocere”, liquidated SPACs dutifully returned the principal investment from their public investors.