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SPAC Momentum? 3 New Monday Deals

Three Monday morning SPAC deals (HCIC, STPC, LIVK) carry over Friday's quantity-based momentum, but will investors be excited and deliver any deal pops?

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Three SPAC deals kick this morning off carrying over momentum from Friday's 3 deals. Friday's deals were mixed with LifeSci Acquisition II Corp (LSAQ) having the most positive reaction from investors and jumping 6.6% on their announced deal with Science 37. Live Oak Acquisition Corp's (LOKB) deal with Navitas wasn't met with much enthusiasm and ended down 1% ending at $9.93. ACON 52's (STWO) deal with ESS gave a small boost, but it still ended the day 10 cents off of NAV at $9.90. 

So, while Friday gave the feel of momentum with more quantity, investors didn't get behind the deals fully and so maybe the quality wasn't there to inspire. With another three deals today the quantity will again provide a feel of momentum, but how investors react will be the real driver.

Hennessy Capital Investment Corp. V (HCIC) Picks Plus in $3.3b Deal
Plus will join the many other SPACs focused on autonomous vehicles in a deal valued at $3.3b with a $150m PIPE backed by funds from BlackRock and D.E. Shaw among others.

The EV / autonomous vehicle market is a big, compelling space that is seeing a lot of capital flow into it via SPACs. Questions that investors are asking about these companies are (a) does the company have the right technology, (b) do they have the right team to execute, and (c) is the valuation reasonable given the intense competition already in the space?

Last week we saw LiDAR companies all taking a hit as CF Finance (CFAC) and AEye revalued their deal. As of now, only Gores Metropoulous is a real standout for investors:

$ 9.40 | IPV - InterPrivate Acquisition Corp. -> AEVA, INC.
$ 9.91 | CGRO - Collective Growth Corp -> Innoviz Technologies Ltd.
$ 9.99 | CFAC - CF Finance Acquisition Corp. III -> AEye, Inc.
$ 10.02 | HCIC - Hennessy Capital Investment Corp. V -> Plus
$ 10.26 | CLA - COLONNADE ACQ -> Ouster, Inc.
$ 11.81 | GRAF - Graf Industrial Corp. -> Velodyne Lidar
$ 20.84 | GMHI - Gores Metropoulos, Inc. -> Luminar Technologies, Inc.

Star Peak II (STPC) Taking Benson Hill Public
Star Peak II (STPC) today officially announced that it is taking Benson Hill, a "plant-tech", firm public in a $1.4b SPAC deal. Behind Benson Hill is the promise of improved breads of crops that can drive savings for growers (e.g. maturing faster) or deliver better characteristics such as improved taste or protein content. 

Benson Hill is already driving $100m in revenue and has big name investors such as Alphabet, Inc. ( (GOOGL) - Get Alphabet Inc. Report) behind it already. The deal includes a $225m PIPE that will include additional funds from Bunge Ltd ( (BG) - Get Bunge Limited Report), Dreyfus Co. Investors, BlckRock, Hedosophia, and Lazard.

This joins other plant-based SPAC stocks such as Appharvest Inc (APPH) which was a de-SPAC from Novus and Spring Valley Acquisition Corp (SV) which announced a deal with AeroFarms. APPH is currently trading at $13.91 and SV is just under NAV at $9.95.

LIV Capital Acquisition Corp. (LIVK) Taking AgileThought Public
In a SPAC deal valued at $482m, LIV Capital Acquisition is taking AgileThought public. The deal is supported with a $43m PIPE. AgileThought delivers onshore and nearshore consulting and development services. In a relatively unusual move for SPAC deal announcements, the investor presentation focused its financial discussion on recent annual results and only projects out to 2022. 

Take Away
There is definitely a feel of more momentum in the SPAC space after Friday and this morning's announcements, but so far investors haven't shown a lot of excitement for the deals. With over 420 SPACs actively searching for deals and another 270 waiting to IPO the reality is that the pace is going to have to pick up significantly for the backlog to start clearing anytime soon. 

So, investors will likely try to remain patient and look for opportunities to add attractively priced, high quality pre-deal SPACs with strong sponsors to their baskets and, if the opportunity arises for a quick sell to capture upside on a deal announcement or execution news then they'll take it. Otherwise it will remain a yield + optionality play for those willing to play the long game.

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