SPAC Deal: Genesis Park (GNPK) taking Space Infrastructure Company Redwire Public

Another SPAC looks to space as Genesis Park (GNPK) announces it is taking Redwire public in a deal valued at $615 million.
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Gensis Park (GNPK) is taking Redwire public in a deal that will value the company at $615 million. The $100 million PIPE has Senvest Management, LLC and Crescent Park Management, L.P.  in it. The deal is expected to deliver around $170 million to Redwire's balance sheet. 

The full investor deck is here along with other details on their announcement page.

Redwire was formed just last year by private equity firm AE Industrial partners. Following the merger AE Industrial partners will remain the largest single shareholder. 

Cash Flow Positive

Given that Redwire already has positive cash flow it is unique amongst the recent SPAC space deals. Its current estimate for 2021 revenue is $163 million and is forecast to hit $1.4 billion by 2025. Given the speculative nature of many of the recent SPAC deals, the existing revenue will be a positive, but the ramp to $1.4 billion will be looked at with more scrutiny.

GNPK / Redwire cash flow positive today

GNPK / Redwire cash flow positive today

Valuation

SPAC deal valuations have increasingly become a big sticking point for investors. Especially as their financial forecasts have increasingly been pushed into years out with very ambitious targets. Based on the GNPK and Redwire deal deck, it will have a compelling valuation versus its space related peers.

GNPK / Redwire valuation comparison

GNPK / Redwire valuation comparison

Take Away

The SPAC deal pop has all but disappeared, so investors should be cautious here and make sure to do full diligence. In early pre-market trading GNPK was up around 5% immediately after the announcement but less than an hour later that has slipped to 1%. But, for investors that are looking to expand into space, or increase exposure, the GNPK / Redwire combination gives them another option.