Today we're kicking off a regularly occurring series of exclusive Q&A interviews with SPAC sponsors, teams, and targets.
Our goal is to enable the SPAC investor community to hear directly from the people behind the SPACs and their deals. What sets them apart, how they plan on driving long-term value for stakeholders, and what investors need to know that makes them special?
We're excited to start with Rosemary Ripley, CEO of Better World Acquisition Corp. (BWAC) who shares what makes BWAC an attractive investment.
Quick View: Better World Acquisition Corp. (BWAC)
IPO Date: November 2020
Targeting: Environmental, Social and Governance (“ESG”) profiles in N.A. & Europe
Sponsor SPAC History: this is the first SPAC for N*GEN
1. Why BWAC? What is your advantage?
Our sponsor, N*GEN, has an experienced team that has worked together for over 16 years with decades of experience growing companies in the ESG and sustainability areas. This means we understand sustainability from the ground up and where financial gains can be attained. We also have a strong track record in Healthy Living amongst our leadership team:
- Rosemary Ripley’s (BWAC and N*GEN’s CEO) expertise in healthy consumer and overall consumer category from years at Philip Morris running worldwide strategic work and now on the Board of Directors of Heineken. Her strategic M&A experience is priceless and leads to deal flow.
- Peter Grubstein (N*GEN CFO) brings operating experience and then investment experience, having founded N*GEN, which was one of the earliest Cleantech investment firms. Peter and the team understand the technology and its markets from the ground up.
As a consequence of being a pioneer in ESG, we have filed ESG reports for over 16 years, and social and environmental responsibility has been second nature and inherent in all investment activities for over 20 years.
As a Sponsor, this is our first SPAC, and we feel our $127 million trust provides flexibility and competitive advantage with closing acquisitions. We are active growth investors because this is an area of strength for our team, and we have built up our deal flow that sources numerous investment opportunities for our review each week.
Our Sponsor has taken significant minority positions to help strategically build a company (its products, operations, management, financial footing) so that it can fit well into a large strategic acquirer, a PE firm looking for an anchor to build a rollup strategy, or an IPO (via traditional route or SPAC/merger).
2. How does BWAC drive value?
Both our Sponsor management team as well as with BWAC’s board and advisors have strong M&A experience – all of whom are ready to be active post-IPO.
We expect to work with the current management team and our experience includes identifying and building out necessary talents on boards of directors. Our past growth equity experience as minority investors has taught us how to best align the interests of all shareholders, management and the community – true stakeholder capital.
Part of our investment criteria is that we expect that the CEO and the C-suite will be industry experts. Post-merger, we would use our contacts to help fill out any holes in the management structure.
3. Experience as a SPAC Sponsor
The deal pipeline is essential. We continue to farm it and take advantage of key megatrends we identify, investing in disruptive verticals, visiting each of the major participants, and developing trust as we get to know these businesses over time.
Our perspective has remained the same, which is that the investment must have a strong revenue and earnings base from day one. Our learning from Cleantech 1.1 was that companies cannot make the market come to them, so we have to invest in companies that are disrupting large, existing markets with great products that customers are already buying, not what they are considering buying. What this means is that the disruptor has to have a superior product at a price that is competitive with the incumbents.
Given our experience as private investors, we know it takes up to 2 years for some companies to be public ready: to build out the team, systems and to consistently report accurate projections that will not disappoint the street. We adopt these same requirements in the companies we are looking to potentially merge with.
4. What is next for the SPAC market?
Sponsor/shareholder alignment is an imperative. To better align with shareholders, the Sponsor trust size should be smaller than the current average so that the Sponsors’ shares are better aligned with the company’s shareholders.
Other priorities include:
- A flight to quality, where the valuations are based on real numbers and not on expectations. Accordingly, we are only looking at growth companies that already have solid revenues and significant contracted growth. We are avoiding heavily capital dependent companies, or ones that depend upon regulation for their growth
- The company’s projections are expected to show both base case and upside case, so that the investors are aware of all the potential risks that management is aware of
- ESG – we expect it to continue. We feel that the trend towards sustainability is growing, and that if a company is to succeed, it must embrace sustainability with all its ability. We spend a great deal of time ascertaining the value of the company to its customers and determining whether the customers be repeat buyers of the goods and services.
5. When an investor looks at BWAC, what should they think?
We want investors to think of BWAC as having the best team in the sustainable investing sector, providing the best returns.
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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report.)