Deutsche Bank and UBS were listed as the underwriters in the deal.

Another SPAC IPO bites the dust.

Jon C. Ogg
February 10, 2009

Recently, The Nasdaq Stock Market (NASDAQ: NDAQ) submitted a proposal to the SEC to get in on the SPAC IPO market.  Right now, the American Stock Exchange has been the go-to vehicle for SPAC’s that has allowed these blank check acquisition vehicles to list in the United States. It’s hard to conceive any reasons that the SEC or any other regulatory body would block this move.

In 2007, 66 SPACs grossed over $12 billion in offerings, according to SpacAnalytics.com. And SPACS are showing no signs of stopping with almost $3 billion raised so far in 2008, comprising 53% of IPO filings this year.  This cottage sector is almost like trading much smaller versions of private equity, without as much focus and diversity.

According to their release last week, Nasdaq Senior Vice President Bob McCooey recognizes the potential in the recent IPO trend, stating, "Acquisition vehicles are an increasingly common capital-raising device. We believe that listing them on NASDAQ, subject to these important investor protections, will benefit investors and issuers alike."

In its proposal, Nasdaq will require the acquisition vehicles to meet all of Nasdaq’s minimum listing requirements, as well as “stringent” SPAC specific criteria, as follows:

• Requiring placement of the proceeds in a trust
• Requiring the completion of a business combination within 36 months
• Requiring shareholder approval for each business combination

Currently, most SPACs usually tend to face an 18 month deadline (or 24 months) to complete a deal to become an operational company. The extension could prevent SPACs from rushing to close a not-so-hot business combination.  There are some downsides as well because this could lead to many companies sitting on companies, and you could imagine that ultimately you could seem some very wide spreads to an IPO SPAC price and the market price.

Nasdaq did not specify a time frame.  We would presume that the only serious issues in determining an effective date would be an SEC review of any key differences in their listing requirements and the differences in terms for such a listing. SPAC’s and Blank Check companies used to be thought of poorly, but the image is being cleaned up now that many SPAC’s have effected mergers and become successful post-merger operations.  The share price track record for SPACs is still at least somewhat questionable and we have yet to see if this is a trend or permanent public component. Goldman Sachs avoids them, and few doubt their track record.

Jon C. Ogg
February 29, 2008

As you will see in our IPO INDEX, the amount of SPAC IPO’s is going through the roof:

• SPAC IPO FILING: United Services Management Corporation
• SPAC IPO FILING: Orbit Acquisition Corp. (OSW, OSW.U)
• SPAC Alert: BPW Acquisition Corp. Begins Trading (BPW, BPW.U)
• SPAC IPO FILING: Tri-Artisan Acquisition Corp.
• SPAC IPO FILING: Redstar Partners on the OTCBB
• SPAC IPO FILING: Delos Acquisition Corp

United Services Management Corporation is a newly organized blank check company formed for the purpose of acquiring (or merging, etc.) with one or more businesses or assets.  It noted that prospective target businesses will not be limited to a particular industry or to any geographic location, although it intends to focus initial efforts to a company that provides services to the government and commercial markets, with a particular emphasis on communications, information technology, or IT, and consulting.

No stock ticker has been taken, although Citigroup is listed as the underwriter for the IPO.

Its chairman and CEO is Joseph Wright, who is Chairman of Board of Intelsat Ltd.  He was CEO of PanAmSat from 2001 until selling that business in 2004.  In 2005, he led the company with its IPO and it noted that this combined of Intelsat/PanAmSat operation was acquired by BC Partners for some $16.5 Billion this month.  Other officers are listed as follows:

• Mr. Bernikow was Deputy Chief Executive Officer at Deloitte & Touche;
• Peter A. Cohen, founded Ramius Capital Group, LLC, a privately owned investment management firm that manages approximately $12 billion of assets;
• James A. Mitarotonda, is Chairman of the Board, President and Chief Executive Officer of Barington Capital Group, L.P., an investment firm that he co-founded in November 1991;
• Jerry Markowitz, is currently a partner in Conifer Securities, a supplier of infrastructure for investment managers.

Jon C. Ogg
February 28, 2008

Morgan Joseph is listed as the underwriter and the company has noted for filing purposes that it will sell up to $36 million in securities.  Redstar will also be listed on the OTCBB rather than being a fully-listed SPAC on AMEX or NASDAQ.

Redstar Partners, Inc. is a Cayman Islands blank check company recently formed (incorporated on January 3, 2008) for the purpose of acquiring, through a share capital exchange, asset acquisition, plan of arrangement, recapitalization, reorganization or other similar business combination, or control through contractual arrangements, an operating business having significant operations in the People’s Republic of China.  It says that it will not be limited to a particular industry, although it notes that it does intend to focus on the electrical equipment and components industry.

Here is the company’s brief description of management:

• Nathan J. Mazurek, Chairman of the Board & CEO/President hasbeen directly involved in over 20 consummated acquisition, divestiture,joint venture and investment transactions involving his companies,their factories and product lines in the electrical equipment andcomponents industry. Mr. Mazurek’s companies have historically beenfocused on circuit breaker, transformer and film capacitor products,and in the course of the last 20 years, he has developed an extensivenetwork of relationships with domestic, international and Chinesecompanies in the industry.
• Margaret Wong, Vice Chairman of the Board & EVP, startedconducting business in China in 1984 and is a recognized businessentrepreneur and advocate in the areas of Sino-American trade andcultural relations through her past and present roles as Board Memberof the California Chamber of Commerce International Committee and asAdvisor to the California Asian Chamber of Commerce, among others. Thecompanies Ms. Wong controls in China specialize in both the manufactureof electrical and lighting products and the export of environmental andenergy-related technology and equipment for wastewater treatmentprojects in China.
• Alex Ping Zhang, Vice President, has over 15 years of managementexperience in China. Prior to founding an environmental technology andequipment export company with Ms. Wong, Mr. Zhang established abusiness in China for Alanco Environmental Resources Corp. byintroducing and applying U.S. chemical processing technology to Chinesebusinesses. In addition, as a member of the American Chamber ofCommerce in Shanghai, Mr. Zhang actively works to enhance economiccooperation and participate in business opportunities between the U.S.and China.

Jon C. Ogg
February 21, 2008

The filing specifies that they will intend to initially focus on businesses in the business/information services industry in North America; however, they are not limited to this industry or geographic region.  In evaluating a potential target, Delos will use the following criteria: Competitive industry position; Experienced management team; Established track record; Potential for earnings and growth; Diversified Customer and Supplier Base.

Mel Bergstein, the Chairman of the Board and Chief Executive Officer, currently acts as Chairman of Diamond Management & Technology Consultants, Inc., a leading consultancy firm. Prior to Diamond, he held high management positions at Technology Solutions Company and Computer Sciences Corporation. He also has over 20 years of management consulting experience at what is now Accenture. The Vice Chairman and CFO is Michael Mikolajczyk, also a member of the Board at Diamond Management & Technology Consultants, Inc.

Delos joins a wave of recent SPAC IPO filings. SPAC’s and mortgage securities-related players are dominating the group of companies brave enough to go public in the wake of a looming recession.

Rachel Lopez
February 20, 2008

This blank check company was formed November 28, 2007, and like all SPAC”s it has no operations currently.  While this says that it is not limited to any specific sector, the company said in the filing that it intends to focus on on acquiring an operating business in the alternative asset management sector or a similar business.  The company has a different filing than many as it has the right of first review with a company:

• We have entered into a business opportunity right of first review agreement with Tricadia Capital, which provides that from the effective date of the registration statement of which this prospectus forms a part until the earlier of the filing by us of a current report on Form 8-K with the SEC announcing the execution of a definitive agreement for our initial business combination, or our liquidation, we will have a right of first review with respect to business combination opportunities of Tricadia Capital with a fair market value of $177 million or more that Tricadia Capital, including its principals and employees, first becomes aware of after the effective date. Tricadia Capital will first offer any such business opportunity to us (subject to fiduciary obligations it has to its clients as a registered investment advisor) and will not, and will cause each fund and other investment vehicle managed or advised by Tricadia Capital not to, pursue such business opportunity unless and until our board of directors has determined for any reason that we will not pursue such opportunity.

Apple Creek’s management team will be made up of five senior managers of Tricadia Capital (the managing member of our founding stockholder) with an average, 20 years of experience in the fields of credit analysis and trading, leveraged loans, capital markets, risk management, structured products, and special situation investing.  The following Tricadia officers are managing this SPAC: 

• Chairman & Co-CEO, Michael Barnes;
• Co-CEO & Director, Arif Inayatullah;
• COO is Geoffrey Kauffman;
• Executive Vice President is John McCormick;
• CFO is Julia Wyatt.

Jon C. Ogg
February 6, 2008

The filing shows that Corporate Acquirers Inc. does not have any specific industry or geographic focus. They did specify that in evaluating potential targets, the following criteria may be used: Established companies with positive cash flow; strong competitive position in industry; experienced management team; and a diversified customer and supplier base.

Corporate Acquirers Inc.’s Chairman, President and Chief Executive Officer is G. Richard Thoman. He has been a top executive in a variety of industries including financial services, food, technology, and consumer and business-to-business marketing. Stephen R. Wilson is the Vice-Chairman and CFO. He has 25 years of experience in management, finance, and planning globally.

Rachel Lopez
February 4, 2008

The filing specifies that they will focus on the North American energy industry, particularly on power sector businesses or assets. In identifying a target, the management will evaluate based upon the following criteria: History of profitability and free cash flow; strong management team; opportunities for add-on acquisitions; spin-off or divestitures from larger companies; defensible business niche; and a diversified customer and supplier base.

The company expects to capitalize on the significant experience and expertise of its management in the energy sector. The chairman, president, and CEO of K Road Acquisition Corp is William Kriegel. He was the former founder, chairman, president and CEO of Sithe Energies, Inc., now one of the world’s largest independent power companies. With David Tohir and Barry Sullivan, Mr. Kriegel established K Road Power and K Road Ventures. Both companies invest in energy focused technologies and assets.

Rachel Lopez
February 4, 2008

The company is a SPAC, a special purpose acquisition company, so it has no existing operations.   This was formed to acquire, through a merger, capital stock exchange, asset or stock acquisition, exchangeable share transaction, joint venture or other similar business combination, one or more domestic or international operating businesses.  It intends to focus efforts on companies that create, produce, deliver, distribute, market content, products and services pertaining to the sports, leisure or entertainment industries.

Here is tha management team:

• Tony Tavares, President and Chief Executive Officer, is the former CEO and President of SMG, a premier management company engaged in the private management of stadiums, arenas, theaters and convention facilities.
• Jack Kemp, Chairman, was the Republican Vice Presidential candidate in 1996k former AFL quarterback.
• Andrew Murstein, Vice Chairman and Secretary, has served as the President and a director of Medallion Financial Corp. (NASDAQ:TAXI), a publicly traded investment company, since its IPO in 1996.
• Richard Mack, Director, is a senior partner at Apollo Real Estate Advisors.
• Henry "Hank" Aaron, Director, the unjuiced homerun king of major League baseball.
• Mario Cuomo, Director, is a former three-term Governor of the State of New York.
• Randel Vataha, Advisor, is a former Stanford football player and NFL wide receiver.
• Robert Caporale, Advisor, is a former sports and entertainment law attorney who has represented a number of professional sports leagues and franchises.

A unit consists of 1 common share and 1 warrant with a $7.50 strike price per unit.  Maybe investors will get to own another public sports team since these have essentially all gone private.  Prior public sports teams were the Cleveland Indians and Boston Celtics, and the Green Bay Packers are one of the community owned and quasi-public companies (that you can’t buy a share in easily).

Jon C. Ogg
September 28, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the Special Situation Investing Newsletter and does not own securities in the companies he covers.

Seanergy is a SPAC (Special Purpose Acquisition Company) that was recently organized for the purpose of a merger, capital stock exchange, stock purchase, asset acquisition or other business combination with an unidentified operating business.  The Company intends to focus on identifying unidentified operating business in the maritime shipping industry, but will not be limited to pursuing acquisition opportunities only within that industry.

So far this one has actually done fairly well despite transportation and shipping concerns in the U.S.  Shares traded as high as $10.40 yesterday and are trading at $10.35 this morning.  That isn’t a huge premium, but these SPAC’s are usually treated as empty shell companies until the underlying business is identified.

Jon C. Ogg
September 26, 2007