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.
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.
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.
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.