Lionheart Acquisition (LCAP) Announces $32.6B SPAC Deal with MSP Recovery

It's a big week of SPAC merger votes and it starts with one of the biggest SPAC deals to date as LCAP announces it is taking MSP Recovery public.
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In case you missed it, check out last week's SPAC Wrap here.

In one of the biggest SPAC deals to date, Lionheart Acquisition Corp II (LCAP) announced a deal to talk MSP Recovery public with a valuation of $32.6B. Founded in 2014, MSP Recovery, specializes in payment recovery for improper payments made  to health insurers by Medicare and Medicaid customers. 

The deal is touted as "One of the Top Three Largest SPAC Transactions Announced to Date" and is expected to deliver $230M in cash to MSP assuming no redemptions. And, in regards to redemptions, the sponsor is unusually offering an incentive to shareholders that don't redeem -- issuance of additional warrants.  

Upon completion of the business combination and subject to compliance with the law, Lionheart stockholders who do not redeem their shares are expected to collectively receive approximately 1.029 billion additional warrants ("Additional Warrants”), with each such stockholder receiving at least 35 Additional Warrants, each with a 5-year tenor and being exercisable for one share of MSP common stock at an $11.50 strike price.

To make sure there is no further dilution by the issuance of the warrants, the MSP founders will be selling an equivalent number of securities back to MSP a the same value as the exercise price of the warrants. 

Given that the deal is valued at $32.6B and the SPAC is only a $230M, the pro forma ownership paints an interesting picture:

MSP shareholders will own the vast majority of the combined company

MSP shareholders will own the vast majority of the combined company

As of close on Friday, LCAP was trading at $9.89 and it will be interesting to see what, if any deal pop it gets today. We've seen a few recently, but for the most part the pop has only returned the SPACs to about the $10 NAV. 

Recent deal announcements:

Jul 12 | $ 9.89 | LCAP - Lionheart Acquisition Corporation II --> MSP Recovery
Jul 09 | $ 10.13 | FPAC - Far Peak Acquisition Corp --> Bullish
Jul 08 | $ 9.96 | HCAQ - HealthCor Catalio Acquisition Corp. --> Hyperfine, Inc.
Jul 08 | $ 9.79 | HCCC - Healthcare Capital Corp. --> Alpha Tau Medical Ltd.
Jul 08 | $ 10.52 | CND - Concord Acquisition Corp --> Circle
Jul 07 | $ 9.90 | DMYQ - dMY Technology Group, Inc. IV --> Planet Labs Inc.
Jul 07 | $ 9.94 | ATHN - Athena Technology Acquisition Corp. --> Heliogen
Jul 06 | $ 9.86 | CFV - CF Acquisition Corp. V --> Satellogic
Jul 06 | $ 10.65 | KVSB - Khosla Ventures Acquisition Co. II --> Nextdoor, Inc.
Jul 01 | $ 9.90 | ISOS - Isos Acquisition Corp. --> Bowlero

Achronix and ACE Convergence Acquisition Corp (ACEV) Terminate Merger Agreement

Originally announced in January of 2021, the proposed merger between Achronix and ACE Convergence Acquisition (ACEV) is now off. The two sides were "mutually agreed" and were apparently unable to meet closing conditions, including regulatory approvals

"Despite our best efforts to finalize this transaction, we ultimately concluded that going our separate ways was the best path forward for Achronix, ACE and all of our stakeholders. Achronix is in a strong financial and operational position, uniquely situated to provide flexible FPGA-based compute solutions for data-acceleration applications across a nearly $10 billion market opportunity by 2025," said Robert Blake, President and CEO of Achronix. "As the only independent company to offer high-end FPGA and embedded FPGA IP solutions, Achronix is well positioned to execute on high-growth opportunities. Throughout 2021, Achronix has continued to build strong momentum, and it remains committed to pursuing additional options to become a public company."

Given the original 18-month deadline for the $230m SPAC, ACEV still has until January to make a deal, so they have plenty of time. They will have an option to extend if necessary as well. ACEV closed Friday at $9.94 and has largely been stuck right around NAV since it leveled off after peak SPAC early in the year.

ACEV has been stuck right around $10 since peak SPAC died off

ACEV has been stuck right around $10 since peak SPAC died off

July's Merger Votes

Following a busier than expected July 4th holiday week, SPACs will see a lot of activity for the rest of July with a packed calendar of merger votes. Today sees Rodgers Silicon Value (RSVA) voting on the Enovix merger and Aspirational Consumer Lifestyle (ASPL) voting on Wheels Up Partners. Watch for redemptions with ASPL as it is trading materially below NAV and we've seen a recent uptick in redemptions overall, but especially for those trading below $10.

Jul 12 | $ 22.55 | RSVA - Rodgers Silicon Valley Acquisition Corp --> Enovix Corp
Jul 12 | $ 9.85 | ASPL - Aspirational Consumer Lifestyle Corp --> Wheels Up Partners Holdings LLC
Jul 13 | $ 11.86 | LCY - Landcadia Holdings III Inc --> The Hillman Group, Inc.
Jul 13 | $ 9.95 | AONE - one --> Markforged
Jul 14 | $ 10.21 | GXGX - GX Acquisition Corp --> Celularity Inc.
Jul 14 | $ 10.00 | EMPW - Empower Ltd --> Holley
Jul 14 | $ 9.77 | SBG - Sandbridge Acquisition Corporation --> OWLET BABY CARE INC.
Jul 15 | $ 9.99 | NHIC - NewHold Investment Corporation --> Evolv Technology
Jul 15 | $ 10.00 | DCRB - Decarbonization Plus Acquisition Corp --> Hyzon Motors Inc.
Jul 16 | $ 10.21 | FGNA - FG New America Acquisition Corp --> OppFi
Jul 19 | $ 10.21 | ANDA - Andina Acquisition Corp. III --> Stryve Foods, LLC
Jul 20 | $ 9.98 | RAAC - Revolution Acceleration Acquisition Corp --> Berkshire Grey
Jul 20 | $ 14.69 | GHVI - Gores Holdings VI Inc --> Matterport, Inc.
Jul 20 | $ 15.04 | PSAC - Property Solutions Acquisition Corp --> Faraday Future
Jul 20 | $ 9.98 | ACND - Ascendant Digital Acquisition Corp --> Beacon Street Group
Jul 20 | $ 9.98 | TWND - Tailwind Acquisition Corp --> QOMPLX, Inc.
Jul 21 | $ 13.77 | THCB - Tuscan Holdings Corp. --> Microvast, Inc.
Jul 21 | $ 9.98 | VCVC - 10X Capital Venture Acquisition Corp --> REE Automotive Ltd.
Jul 21 | $ 12.87 | CMLF - CM Life Sciences Inc --> Sema4
Jul 22 | $ 25.55 | CCIV - Churchill Capital Corp IV --> Lucid Motors
Jul 27 | $ 9.97 | CAP - Capitol Investment Corp V --> States Title Holding, Inc.
Jul 28 | $ 9.97 | NEBC - Nebula Caravel Acquisition Corporation --> Rover
Jul 29 | $ 9.99 | DGNR - Dragoneer Growth Opportunities Corp --> CCC Information Services Inc.
Jul 29 | $ 9.97 | RTPZ - Reinvent Technology Partners Z --> Hippo Enterprises Inc.

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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report.)