When you see a deal announced with, say, a $200mm minimum cash condition and a $300mm PIPE (a 150% coverage ratio), often that means demand for the PIPE was so high that the parties decided to upsize. Q1 of this year saw lots of deals with a coverage ratio in excess of 100%. But you can see there are a lot fewer dots above that threshold than there used to be, indicating lesser demand overall.
Still, PIPEs are getting done. And it's probably healthy for the market to get more selective after a period of massive enthusiasm. But it will take time to see if deals struck during the hard times eventually perform better than those made when securing capital commitments was easier.
News From the Past Week
Deal News
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Horizon Acquisition Corporation (HZAC) announced a deal to acquire Vivid Seats, a North American independent marketplace for tickets to live sports, concerts and theater events. The deal reflects an enterprise value of $2.1bn and includes a $225mm PIPE with 80% of capital committed by the SPAC's sponsor, Eldridge Industries, which also agreed to backstop the entire trust account. The transaction is expected to close in 2H 2021.
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Fifth Wall Acquisition Corp. I (FWAA) announced a deal to acquire SmartRent, an enterprise smart home technology platform for property managers and residents. The deal reflects an enterprise value of $1.7bn and includes a $155mm PIPE led by Starwood Capital Group, Lennar and Invitation Homes. The transaction is expected to close in Q3 2021.
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Roman DBDR Tech Acquisition Corp. (DBDR) announced a deal to acquire CompoSecure Holdings, a provider of premium financial payment cards and of cryptocurrency storage and security solutions. The deal reflects an enterprise value of $1.2bn and includes a $175mm PIPE led by BlackRock and Highbridge Capital Management. The transaction is expected to close in Q3 2021.
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dMY Technology Group, Inc. II (DMYD) closed its acquisition of Genius Sports on Tuesday 4/20/2021 with less than 1% of public shares exercising redemption rights. Ordinary shares and warrants are now trading on the NYSE as “GENI” and “GENI/WS.”
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GigCapital3, Inc. (GIK) shareholders approved the company’s acquisition of Lightning eMotors at a meeting Wednesday 4/21/2021 with 29% of public shareholders exercising redemption rights. No closing timeline was given. Ordinary shares and warrants are expected to trade on the NYSE as “ZEV” and “ZEV/WS.”
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Northern Genesis Acquisition Corp. (NGA) shareholders approved the company’s acquisition of Lion Electric at a meeting Friday 4/23/2021. No redemption statistics were provided and closing is pending customary conditions as well as clearance from the AMF regulatory oversight body for Québec's financial sector. Ordinary shares will trade on the NYSE and TSX as "LEV" and warrants will trade on the NYSE and TSX as "LEV/WS" and "LEV.WT," respectively.
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Reuters reported that SVF Investment Corp. 3 (SVFC) is in talks with Mapbox, a location data services provider.
New S-1's
IPOs
Charter Extensions
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Union Acquisition Corp. II (LATN) extended its charter through 10/22/2021 with no sponsor contribution to trust. Approximately $136mm remains in the SPAC’s trust account after 32% redemptions.
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Tuscan Holdings Corp. II (THCA) extended its charter through 9/30/2021 with no sponsor contribution to trust. Approximately $149mm remains in the SPAC’s trust account after 14% redemptions.
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Big Rock Partners Acquisition Corp. (BRPA) extended its charter through 5/24/2021 with no sponsor contribution to trust. Approximately $6mm remains in trust after 330 shares exercised redemption rights.
Upcoming Meetings and Deadlines
- 4/26/2021 ALAC liquidation deadline (pending 4/23/2021 extension meeting results)
- 4/27/2021 STPK Stem, Inc approval meeting
- 4/28/2021 THCB Charter extension meeting (liquidation deadline 4/30/2021)
- 4/29/2021 VSPR HydraFacial approval meeting
- 5/5/2021 EXPC Blade approval meeting
- 5/6/2021 SRAC Charter extension meeting (liquidation deadline 5/12/2021)
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