Connected car startup Wejo, backed by GM and Palantir, agrees to merge with SPAC
In SPAC news this week, Acorns Grow announced that it has entered into a definitive business combination agreement with Pioneer Merger Corp while a connected car startup backed by GM and Palantir is also choosing the SPAC route to come public.
ACORNS GROW, PIONEER MERGER: Acorns Grow Incorporated, a saving and investing app, has entered into a definitive business combination agreement with Pioneer Merger Corp. (PACX), a publicly traded special purpose acquisition company. The combined company will continue as a publicly listed entity and have an expected pro forma fully-diluted equity value of approximately $2.2B, assuming no redemptions. The oversubscribed, upsized PIPE was raised at $10.00 per share. The transaction is expected to close in the second half of 2021. Upon completion, the company will operate as Acorns Holdings and is expected to trade under the symbol "OAKS" on the Nasdaq Capital Market. The new Acorns will continue to be led by Noah Kerner, CEO, and the company's management team. As part of the merger, Kerner plans to contribute 10% of his personal ownership in Acorns to fund a novel program giving shares to eligible customers. Pioneer's sponsor is also planning to give 10% of its ownership in Acorns to this same program.
GM-BACKED WEJO COMING PUBLIC VIA SPAC: Wejo Limited, a connected vehicle data company, and Virtuoso Acquisition (VOSO), a special purpose acquisition company, announced Friday that they have entered into a definitive agreement for a business combination. Upon completion of the transaction, the combined company will operate under the Wejo name. Pursuant to the transaction, Virtuoso will combine with Wejo at an enterprise value of $800 million, which implies an estimated $1.1B pro forma equity value. Wejo's existing shareholders are rolling 100% of their existing equity into the combined company and will own approximately 64% of the issued and outstanding shares immediately following closing of the business combination, assuming no redemptions by Virtuoso's public stockholders. The transaction is expected to deliver approximately $330M of gross proceeds. Lead strategic investors in Wejo include Palantir Technologies Inc. (PLTR) and General Motors (GM).
BIGBEAR.AI, GIGCAPITAL4 SAID IN TALKS: AI company BigBear.ai is in discussions to go public via a merger with special purpose acquisition company GigCapital4 (GIG), Bloomberg's Gillian Tan reported. The blank check company is aiming to raise equity and convertible debt to support a deal that's set to value the company company at over $1.5B, Tan added.
BABYLON, ALKURI SPAC SAID NEAR DEAL: Babylon, a medical startup that connects patients and doctors via an app, is near a deal to come public via a merger with special purpose acquisition company Alkuri Global Acquisition, according to Bloomberg's Aaron Kirchfeld and Eyk Henning, citing sources. The deal could value Babylon at about $3.5B, according to people familiar with the matter, the report added.
NEW RULES TO TACKLE SPACS: The U.S. Securities and Exchange Commission is considering new rules to protect investors amid a surge in the use of special purpose acquisition companies as capital-raising vehicles, according to Reuters' Katanga Johnson. Gary Gensler, in prepared testimony to the financial services and general government subcommittee of the U.S. House Appropriations panel, said that overseeing SPACS has also placed demands on the resources at the watchdog, which has seen a 4% decline in its staff overall since 2016. “How do SPACs fit in to our mission to maintain fair, orderly, and efficient markets? It could be the case that SPACs are less efficient than traditional IPOs,” said Gensler, adding he had tasked staff to recommend possible rules or guidance in this area.
Northland analyst Subash Chandra initiated coverage of Sustainable Opportunities Acquisition Corp. (SOAC) with an Outperform rating and $20 price target. The SPAC has entered into a business combination agreement with DeepGreen Metals - which is developing a new, scalable source of EV battery metals - and the combined company will be renamed "TMC the metals company Inc." and operate as The Metals Company and is expected to begin trading under the ticker symbol (TMC) upon closing. The Metals Company is a "pioneer" in deepsea mining, said Chandra, who believes the social stigma of deepsea mining will diminish and that it is required to relieve a looming minerals supply deficit.
Northland analyst Greg Gibas initiated coverage of TPG Pace Tech Opportunities (PACE) with an Outperform rating and $15 price target. The special purpose acquisition company has agreed to a business combination with Nerdy, which operates an online learning destination across multiple subjects and learning formats. Shares of Class A common stock and warrants are expected to be listed on the New York Stock Exchange under the ticker symbol (NRDY) upon closing. He believes Nerdy has a platform with "attractive unit economics, scalable technology, accelerating metrics, an appealing value proposition, and large TAM ripe for disruption."
Benchmark analyst John Lawrence initiated coverage of Empower (EMPW) with a Buy rating and $15 price target. The special purpose acquisition company recently announced a definitive merger agreement that will result in Holley becoming a publicly listed company on the NYSE under the new ticker symbol (HLLY). Holley designs, markets and manufactures high-performance aftermarket automotive products for car and truck enthusiasts, Lawrence noted.
SPAC IPOs this week:
OceanTech Acquisitions I (OTEC) opened on May 28 at $9.95. "While it may pursue an initial business combination target in any business, industry or geographical location, it intends to focus its search on target businesses in the leisure marine, yachting and superyachting industries, and with enterprise values of approximately $250M-$1.0B," the company stated.
Dynamics Special Purpose (DYNS) opened on May 26 at $10. The company intends to focus its search for businesses "across the emerging healthcare value chain, including development platforms that enable applications in prevention, diagnosis, treatment or advanced biomaterials, and, within that context, specific categories include life sciences tools, enabling-software, synthetic biology and novel drug discovery."
Post Holdings Partnering (PSPC) opened on May 26. Post Holdings Partnering is a blank-check company formed by Post Holdings (POST).
EG Acquisition (EGGF) opened on May 26 at $9.94. According to EG Acquisition, "there are certain sectors that the company believes are particularly complemented by the expertise and relationships of its sponsor's affiliates, EnTrust Global and GMF Capital, including transportation and real assets, financial services, financial services technology, healthcare, real estate, and sustainability-focused businesses."
Fifth Wall Acquisition Corp. III (FWAC) opened on May 25 at $10. The company intends to focus on industries that "complement its management team's background, and to capitalize on the ability of its management team to identify and acquire a technology business focusing on verticals of the real estate industry, as well as the adjacent industries that collectively make up the human-made environment that provides the setting for human activity, ranging in scale from buildings to cities and beyond."
"On the Fly: The Week in SPAC News" is The Fly's new recurring series of stories on the latest SPAC initial public offerings, SPAC deal news, and associated analyst commentary.