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SPAC Sponsor Spotlight: Live Oak Merchant Partners

Rick Hendrix and Gary Wunderlich join the podcast to discuss SPACs, what makes a good deal, and future of the market.

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Investment firm Live Oak Merchant Partners is one of the leading "serial" SPAC sponsors, with views of maintaining a long term presence in the asset class. Led by Rick Hendrix and Gary Wunderlich, Live Oak brings both extensive capital markets and advisory experience with an investment track record. 

Live Oak has successfully completed 2 De-SPAC transactions:

  • Live Oak I, $200M IPO. Merged with Danimer Scientific (DNMR) in Dec-2020
  • Live Oak II, $253M IPO. Merged with Navitas Semiconductor (NVTS) in Oct-2021

With two more SPACs priced and looking for a target:

  • Live Oak Mobility (LOKM), March 2021 IPO for $253M, seeking a target within the mobility and motion sectors 
  • Live Oak Crestview Climate (LOCC), in partnership with middle market PE firm Crestview, September 2021 $200M IPO, seeking a target in the climate / sustainability sectors

Rick and Gary are understandably quite bullish on the future of SPACs and the value that they can represent to both potential companies to take public, but also investors. They joined the podcast to discuss the current and future state of the market, what the public has gotten wrong, and what the industry needs to see to sustain and enhance the asset class. 

Keys to a successful SPAC transaction, as a sponsor:

  • Extensive, rigorous due diligence process - even if it takes more time to complete. It's not the bank's job, the sponsor needs to go deep themselves
  • Having a wide funnel to evaluate several businesses, vs. taking any target
  • Treat the transaction as a private equity investment and an IPO
  • Do not underestimate the difficulty and complexities of getting a SPAC deal done
  • Credibility (valuation, projections) to not depress the public market currency

Live Oak's strategy for picking a target:

  • Proven technology, existing customers in place, real revenues
  • Early stage in a significant ramp in revenues
  • Management team that is willing and open to deep DD and customer engagement (see Gene Sheridan podcast)

SPAC market outlook:

  • SPACs are here to stay, sponsors will whittle down and be leaner
  • Alignment of incentives has to win out: deferral and vesting of founders economics. Founder and sponsors economics will be reduced
  • PIPE market, while tougher, will command a more broadly distributed investment group
  • Liquidations are going to rise in 2022/2023. The higher level of risk might deter issuance 

LOKB's Recent Win: Navitas CEO Gene Sheridan on GaN

SPACs Overview: Live Oak

live oak creds

Live Oak Merchant Partners SPACs


Live Oak and Crestview SPAC


Topics Discussed on the Podcast

  • History and background of Rick and Gary, and why they started in SPACs
  • How can a SPAC sponsor differentiate themselves amongst a sea of SPACs
  • Common themes in Live Oak's target companies 
  • What does the SPAC pipeline for private companies look like?
  • PIPE market, themes, how do you find the right longterm PIPE invetors?

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