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ESG SPACs: Savior or Scam?

The Daily Dish (09/13/21)

The Metals Company Has an Underwhelming Debut 

TMC The Metals Company, which went public last week through a SPAC merger with Sustainable Opportunities Acquisition Corp, had an underwhelming debut after shares sank 13%.

TMC wants to mine the deposit of battery metals located on the Pacific Ocean floor between Hawaii and Mexico. The company believes that the materials that can be mined are sufficient to electrify 280 million vehicles.

Despite the ambitious goal, it seems that investors have had little faith in the company and have pulled over $500 million in promised funding. The Canadian based company has had a cash disappointment as the merger only ended up raising $137 million in fresh funding, which is a long way away from the $7 billion in capital requirement for its large-scale commercial production.

TMC currently has no revenues and around two dozen employees, yet commanded a valuation of more than $2 billion when the merger closed.


Forge Global to Go Public in $2 Billion SPAC Deal 

Pre-IPO Marketplace, Forge Global, is set to go public through a SPAC merger with Motive Capital Corp, in a deal that values the combined company at $2 Billion.

Forge is an online marketplace for buying and selling shares of private firms and would be the first of its kind to go public.

Under SEC rules, most individual investors aren’t able to buy shares for pre-IPO stock. Such deals are typically limited to accredited investors, who meet certain criteria such as having a net worth of more than $1 million excluding home equity or an annual income exceeding $200,000. Forge currently has 123,000 accredited users on its platform.


Atlus Power Refinances Funding Facility Ahead of SPAC Merger 

Renewable energy developer Atlus Power, which is set to go public later this year in a SPAC merger with CBRE Acquisition Holdings, has just refinanced its senior funding facility for an additional $135 million.

The facility which is offered by Blackstone Credit’s Structured Products Group, has resulted in the total facility increasing to $503 million.

The new agreement states a reduction in the facility’s interest rate, as well as extending the term. The facility was used to partially fund the recent acquisition of a 79 MW portfolio of solar projects and was designed to finance future solar assets.

The company’s long term goal is to create a sustainable ecosystem of electrification through locally-sited solar power, energy storage and EV charging station to customers across the US. Atlus has constructed or acquired over 340 MW of capacity since its inception back in 2009. 


Banner Acquisition Corp Completes $150 Million IPO

Banner Acquisition Corp announced that it had closed its IPO of 15 million units at $10 on Friday. The stock is now listed on Nasdaq under the ticker ‘BNNRU’. Each unit consists of one share of the company’s common stock and one-half of one redeemable warrant, with each warrant entitling the holder to purchase one share of the company’s common stock at $11.5.

The SPAC is looking for targets in sectors including healthcare, education and business services with valuations between $500 million and $2 billion. Banner is led by Chairman Christopher Christensen, the co-founder and executive chairmen of the Ensign Group and Director Tanner Ainge, who is the managing partner of private investment firm Banner Ventures.


Reddit Reads

Evolution of SPAC Investors 

It’s Now a Buyer’s Market for SPACs as Deal Terms Get Sweetened

It’s a buyers’ market for SPACs as new SPACs have been willing to over-collateralize their trusts, boost the number of warrants given to investors, and shorten the amount of time they have to reach a deal.


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