SPACs Eye Return to Space as Sentiments Shift
by Nicholas Alan Clayton on 2024-04-12 at 2:53pm

The SPAC boom of 2020-2021 brought the asset class into sectors they had never entered before and that had generated few if any public companies of any kind. Space was one of these, but it appeared to be a passing fascination as soon as macro financial winds changed.

That could be about to change once again thanks to some high profile successes and at least one SPAC team willing to make their bets squarely on the space.

On that latter point, Mission Space Acquisition Corp. (NYSE:MISN) filed to list this week as a $100 million SPAC with a team made up of aerospace and NASA veterans with a mandate to look first to the stars for its merger target.

This same team filed for a SPAC last August of identical size, terms, ticker, and the similar name of Mission Control Acquisition Corp, just with EarlyBirdCapital and Exos Securities lined up as the underwriters as opposed to B. Riley Securities on this newer iteration.

As such, Mission Space is likely a just a newer draft of Mission Control, but the first one has not yet been withdrawn so there remains the possibility that both will be listed. Either way, they are the first and second space-focused SPACs to file since December 2021.

On paper, space would appear to be an audacious sector for any SPAC to hitch itself to in more ways than one. Not only has no other SPAC done so at the outset in nearly three years, only two space sector deals have been announced since late 2022 – the latest by IX, which took its time to settle on a deal having IPO’d back in September 2021.

Altogether, this makes for a pretty stark two-year black hole in space-based dealmaking, and the six SPACs that listed specifically with space in mind in 2020 and 2021 appear to have gotten sucked into it. Only three ultimately listed and all three of these liquidated without a deal.

Space also continues to be risky business, but from a SPAC transaction basis, the sector has seen far fewer failed companies and deals than others have had attempting the comparably simpler task of making and marketing electric vehicles that drive on the ground.

In fact, before a certain former president successfully listed his media venture through a SPAC last month, the biggest story in SPACs in 2024 was arguably Intuitive Machines’ (NASDAQ:LUNR) successful landing on the Moon in February. This came almost one year on the dot after it completed its combination with Inflection Point.

Given the extent to which private technology funding dried up in the past few years, it’s not be a stretch to say that Intuitive Machines may not have made it all the way there without the SPAC deal. Although it posted an operating loss of -$56.2 million in 2023 due to the pricey nature of developing technology for space travel, it entered the month of March 2024 with $54.6 million in cash on hand.

That cash reserve was made up in part by a $12 million exercise of warrants by one investor in January and the sale of $20 million in stock and warrants to another last August in addition to the $26 million PIPE and $29 million backstop in its deal.

That is just about a perfect picture of how to leverage SPAC-specific financial resources through a de-SPAC and post-close. In fact, Intuitive Machines found enough attractive options for financing its needs that it expected as of last fall that it wouldn’t even need to pull on a $50 million committed equity facility Inflection Point also attached to their deal.

That’s not to say that the next big space deal will come from a SPAC specialized in the industry.

In fact, of the 16 SPACs that have struck either closed or pending combinations with space ventures since 2019, Genesis Park was the only one that specifically mentioned aerospace as an area of interest in its S-1.

Long Road to Space

 

Three more highlighted telecom, however, and that is a sector that these days inevitably involves at least some use of satellites in orbit. Sector expertise appears to have served Genesis Park well as its de-SPAC Redwire (NYSE:RDW) has had the second best share performance of this pack, just behind Intuitive Machines.

Before ultimately coming to the Intuitive Machines deal, Inflection Point was itself looking for a target in consumer tech. But another big name veered into the space lane in February when the Alex Rodriguez-led Slam Corp. (NASDAQ:SLAM) announced a combination with Lynk Global, which is working to launch and operate a constellation of satellites providing direct-to-phone telecom services for the first time.

Where A-Rod goes, eyeballs and wallets typically follow, and now that multiple launch companies have proven to be consistently able to get assets cheaply into orbit, it is no longer a theoretical door opening for the industry but one that has already been blasted open.

The growing contracts for space work from NASA, Space Force and private clients reaped by many of these de-SPACs are also not going to all be soaked by those companies alone and there are more targets out there.

Already, Sierra Space, which NASA has tapped to build its successor to the space shuttle noted that it has been approached by SPACs, but for now is focused on a traditional IPO path. But, all that really means is they haven’t gotten a strong enough offer from a SPAC yet.

Plenty of other space companies remain private, and repeat SPAC teams may have better intel on the industry now that many have a space deal under their belt. In fact, many potential targets are already working with former de-SPACs to launch their satellites or integrate portions of their equipment in one another’s designs.

Others are actively engaged in joint contracts. For instance, Rocket Lab is working with private satellite firm True Anomaly on a $32 million contract it just nailed down with Space Force, while Intuitive Machines is in a race with private firms Lunar Outpost and Venturi Astrolab to win the contract to provide NASA an updated Moon buggy for future missions.

 

Recent Posts
by Nicholas Alan Clayton on 2024-05-21 at 7:49am

At the SPAC of Dawn Yesterday’s trading provided a jumpy session for some of the highest profile recent de-SPACs with crypto marketplace Bakkt (NYSE:BKKT) leaping +45% to $16.65, although this price would be $0.67 adjusted for stock splits. DTC health firm Hims (NYSE:HIMS) and EV maker VinFast (NASDAQ:VFS) each gained more than +25% on the...

by Nicholas Alan Clayton on 2024-05-20 at 12:49pm

Distoken (NASDAQ:DIST) has entered into a definitive agreement to combine with staffing firm Youlife International. Shanghai-based Youlife provides a staffing and recruitment platform aimed at training up applicants and getting them matched with vocational careers in China and the Asia-Pacific region. The combined company is expected to trade on the Nasdaq under the symbol “YOUL”...

by Nicholas Alan Clayton on 2024-05-20 at 7:46am

At the SPAC of Dawn This week’s SPAC action is set to be front-loaded as far as votes are concerned with four extension votes today and tomorrow. Genesis Growth Tech (OTC:GGAAF) shareholders will also vote to complete its combination with Mind Maze Tuesday. Genesis Growth last closed at $12.50 – a $0.58 discount to its...

by Kristi Marvin on 2024-05-18 at 11:45am

Terms Tracker for the Week Ending May 17, 2024 Welcome to our weekly column where we discuss the findings from our IPO terms tracker based on the previous week’s pricings. SPACs managed to price their third IPO in the month of May this week with RF Acquisition Corp. II‘s $100 million offering. RF II’s IPO...

by Nicholas Alan Clayton on 2024-05-17 at 8:08am

At the SPAC of Dawn While AST Spacemobile (NASDAQ:ASTS) had the SPAC market’s biggest leap yesterday, among de-SPACs that are trading above $10, it was oil and gas firm Sable Offshore (NYSE:SOC) that had the best outing. It finished up +14% and is gaining a further +2% in the pre-market to $14.30 this morning. This...

logo

Copyright © 2023 SPACInsider, Inc. All Rights Reserved