By Jeff Reeves
Special purpose acquisition companies, or SPACs, have become quite the rage in 2021. After raising $82 billion last year in a series of offerings, these “blank check” companies are intriguing investors because of their fashionable nature and high-growth potential.
If you’re wondering something more foundational — what, exactly, is a SPAC? ” — MarketWatch’s Robert Powell can give you the broad strokes.
But if you’re up to speed on why these unique vehicles are so popular and you’re more interested in finding one to throw your cash behind, here are nine options for you.
Full disclosure: The write-ups below are intended to be put on a watch list. They’re based, in part, on acquisition speculation. And just like rumors of a merger or buyout in a conventional stock can ultimately come to nothing, SPAC investors need to take all the hype and forecasting with a grain of salt until they see a press release announcing that the checks have been signed and these are done deals.
890 5th Ave nue
890 5th Avenue Partners , which is indeed located exactly where you think it is, has a diverse and interesting executive team that clearly has a nose for digital media. There’s Emiliano Calemzuk, a director at South American e-commerce giant MercadoLibre and former president of Fox’s TV studios. There’s also Scott Flanders, CEO of digital health-insurance portal eHealth, and former CEO of Playboy Enterprises and old-school music-by-mail provider Columbia House. Then there’s David Bank, who works in corporate development and strategy for A+E Networks. Perhaps unsurprisingly, the most recent rumor is that this media team is in talks with listicle icon BuzzFeed to take them public via their 890 5th Avenue SPAC. But even if this rumor falls through, it is a signal of the kind of 21st-century media platforms 890 is interested in.
Accelerate Acquisition Corp. /zigman2/quotes/225152942/composite AAQC.UT 0.00% is the blank-check company led by Robert Nardelli, former CEO of both Chrysler an Home Depot, and Jeffrey Kaplan, former head of global M&A at Merrill Lynch and former COO of Appaloosa Management. In a March IPO, AAQC raised $400 million before fees and expenses. Unlike some of the other SPACs on this list that have a definite tech-flavored approach, Nardelli is perhaps best known for things like building out the wholesale industrial supply business of Home Depot or overseeing nearly 50 acquisitions while at the helm of GE Transportation and GE Power Systems. This unique industrial focus may make AAQC the preferred vehicle for start-ups that are more direct plays on the real economy rather than Silicon Valley moonshots. The SPAC itself is pretty new, just raising cash in March, but in its S-1 filing Accelerate said “we intend to initially focus our search on identifying a prospective target business in North America within the industrial, transportation & mobility, consumer and retail sectors.” That seems to fit its executive experience well.
Altimar pulled off a successful deal at the end of 2020 with the mashup of its $275 million SPAC with Owl Rock Capital Group and Dyal Capital Partners. The result was a new combined alternative investment manager with over $45 billion in assets under management, which will be known as Blue Owl. Now it’s back in the news with a rumor in early March that its Altimar Acquisition Corp. II SPAC, which closed a $345 million offering about two months ago, is rumored to be in talks to take online photo company Shutterfly public once more. Shutterfly first went public in 2006, but was taken private by Apollo Global Management in a $2.7 billion transaction in 2019. In typical private equity fashion, it’s now time for Apollo to push the company out of the nest — but even if Shutterfly is not the final target of a deal, the rumor speaks to the potential of Altimar to act as an intermediary for private equity firms looking to make an exit.
Altimeter Growth Corp. raised $450 million in October 2020, and then its sister fund raised another $400 million in a blank check offering in January for Altimeter Growth Corp. 2 /zigman2/quotes/223690676/composite AGCB +0.05% . Menlo Park, Calif.-based Altimeter currently manages long-short equity funds as well as private capital funds that collectively are valued at some $10 billion. Its CEO, Brad Gerstner, has managed successful Silicon Valley exits including acquisitions by Google, and its director Rich Barton co-founded Zillow in 2004 and before that founded Expedia as a discrete group within Microsoft in 1994. Altimeter clearly has the know-how for a splashy tech deal, and is rumored to currently be in talks with Asia ride-hailing platform Grab.
Silicon Valley bigwig Peter Thiel teamed up with the founder and chairman of the private investment group Pacific Century Group, Richard Li, to create a closely watched SPAC, Bridgetown /zigman2/quotes/221951883/composite BTWNU -0.10% , that has been rumored to be interested in disruptive startups. In December, the leading contender was Indonesia e-commerce giant Tokopedia — though with the more recent confirmation of a merger with local ride-hailing platform Gojek, that deal clearly did not get over the finish line. Still, it’s this kind of deal that Wall Street should likely expect — something with high-tech potential, and most likely involving hungry Asian companies eager to tap into U.S. capital markets to fuel their growth plans.
D8 Holdings , a blank-check company that has strong consumer roots, raised $300 million last year. Since then, many people have talked about how the company is stacked with C-suite execs who know the retail market — David Chu, founder and former CEO of Nautica; Fred Langhammer, former CEO of Estee Lauder; and Terry Lundgren, who served for 14 years as CEO of Macy’s. But strangely enough, the most recent rumors have been around a robotic surgery company backed by Microsoft co-founder Bill Gates called Vicarious Surgical. You can take this one of two ways — the first is that the SPAC feeding frenzy transcends obvious business connections, or the second is that you can’t believe every rumor you read about these days. Whatever the case, it will be interesting to see how this team of experienced consumer business leaders find their way to make a market in the SPAC space.
Horizon Acquisition Corp. and Horizon Acquisition Corp. II /zigman2/quotes/223081949/composite HZON -0.10% are two vehicles to watch in the SPAC space. Todd Boehly, former president of asset manager Guggenheim and co-founder of successful investment holding company Eldridge Industries, leads horizon with a lot of experience in credit and investment markets. While many SPACs sometimes put a lot of emphasis on their team’s potential to build businesses, this unique understanding of capital markets may give Boehly a leg up. But that doesn’t mean this SPAC is without fashionable Silicon Valley chops, as the founder of wellness-tracking app PayActiv and the founder of budget and bill tracking app TrueBill are also on the executive team. There have recently been rumors that one of Horizon’s vehicles is involved in talks with online ticket marketplace and StubHub competitor Vivid Seats , which seems to be the right mix of investment potential and digital disruption that Horizon is looking for in a partner.
Qell Acquisition Corp. is on a clear mission stated in official publications as “seeking to invest in a high-growth business in the next-generation mobility, transportation or sustainable industrial technology sectors.” A good example comes from a recent rumor that Qell is talking with German flying taxi startup Lilium. Then again, the rumor from December that electric bus and battery storage player Proterra was about to be mashed up with the Qell SPAC made a lot of sense, too — but even with Proterra’s former CEO on the board, that deal never happened. The bottom line is still a flashy mobility play for Qell, however, and former GM North America CEO Barry Engle has made clear that his goal for this SPAC is to find a big opportunity in e-mobility. For those interested in the next Tesla or the next Uber, this may be one blank-check company that is worth watching in 2021 above the others.
Seven Oaks Acquisition Corp. is a SPAC for investors who want to see their values reflected on Wall Street, as the company specifically put in its S-1 filing that “we intend to focus on opportunities aiming to make a positive social impact with a specific emphasis on good environmental, social and governance (ESG) practices.” The company raised $200 million at the end of 2020 with that mission in mind, and has recently been rumored to be interested in online retailer Boxed that focuses on sending people products in bulk — saving on fuel, packaging and other unfortunate side products caused by on-demand e-commerce. CEO Gary Matthews was previously CEO at IES Holdings — a rather mundane electrical, communications and home-security player — so Boxed fits the kind of company Seven Oaks is likely looking for. After all, you don’t have to be the next big tech startup to simply find a better and greener business model.