Activists Strike Back

The Daily Dish (08/18/21)

SPACs are now Targets for Activist Investors 

There are now over 586 active SPACs in the market, with a combined capital of $175 billion. SPACs have seen big backers from billionaire Bill Ackman to former New York Yankee Alex Rodriguez.

Investors have been attracted to SPACs as they see it as an opportunity to buy early-stage companies with the prospect of blistering growth. SPACs have also been beneficial to both sponsors and target companies and have prevailed as a great alternative to a traditional IPO.

Now another group has set its interest in SPACs. Short Sellers and Activist Investors are now on the hunt for companies they think are weak.

Experts believe that it will be another 12 months before activist investors make a push as many of these new public companies have lengthy lock-up periods for founders and other insiders, preventing outsiders from building a sizeable stake.

A lot of SPAC targets that are going public with outdated governance or complex capital structures could be vulnerable to activist investors.

Carlyle Backed Firm Nearing $2.85 Billion SPAC Merger 

Carlyle backed Syniverse is nearing a deal with M3 Brigade Acquisition II, which values the company at $2.85 Billion.

The deal is expected to provide the company with $1.17 Billion in cash through a combination of equity and equity-linked capital and will be used to substantially reduce the company’s debt, as well as invest in data, machine learning and artificial intelligence technologies.

The announcement follows a sizeable investment from Twilio, which agreed to invest $500-$750 million back in March.

The deal is expected to close before the end of 2021 with Carlyle becoming the majority shareholder in the new company.

Shareholders Approve Largest Indian SPAC Deal 

Shareholders have signalled the green light for a SPAC merger between ReNew Power and RMG Acquisition Corp II in a deal that values the combined company at $4.4 Billion.

The landmark transaction represents the biggest overseas listing of an Indian company through a SPAC route.

The deal is expected to generate cash proceeds of $1.2 Billion, which comprises $345 Million of cash held in trust and $855 Million from a PIPE investment.

The transaction is expected to strengthen the company’s position in Solar and Wind energy generation for the Indian market by funding medium-term growth opportunities.

The proceeds are expected to support the company’s growth strategy, build out its contracted utility-scale renewable power generation capacity and reduce debt.

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