Longevity Acquisition Corporation Files for a $40 Million SPAC IPO.
Yesterday, we had a new SPAC IPO entry in the form of Longevity Acquisition Corporation, a $40 million China-focused SPAC being led by Matthew Chen, as Chairman and CEO. The bulk of Mr. Chen’s experience is in the credit derivatives market however, since January of this year, he has served as Vice President of XiaoMingTaiJi Anime Limited Co.
At first glance, you might think Longevity’s management and board are a little young and maybe a little light on acquisition experience, but for two very good reasons this might not matter in the IPO.
First reason – There has been a recent trend of China-focused SPACs that was first noticed and wrote about in last week’s subscriber email. The gist of which was, in all of 2017 and up until June of 2018, there weren’t any SPAC IPOs with a China or Asia focus. However, starting with Twelve Seas, on June 20th, we’ve seen four of the last seven SPAC IPOs state a China or Asia focus (Although technically, TWLV is “Pan-Eurasian”). Plus, we now also have TKK Symphony and Longevity on file.
The recent spate of China SPACs seemed curious, but we were given some insight by George Kaufman, Head of Investment Banking at Chardan. If you recall, Chardan was the underwriter for the most recent two China-focused SPACs – Greenland and Tottenham. A few factors seem to be driving the push:
- A-share valuation multiples in certain sectors have fallen below US market multiples, opening up arbitrage opportunities.
- A-share listing hurdles are steep and political. Listing applicants are seeking more timely options.
- There appears to be an element of foreign exchange facilitation as RMB-funded PRC companies list USD equity.
So as you can see, the recent increase in China-focused SPACs is a case of perfect timing. Getting the acquisition done? Well, that’s always a toss-up for any SPAC regardless of focus. It is a blind pool, after all. However, at least China offers up a big crop of potential acquisitions.
Second reason – This reason, while not as crucial as the first, is still nice to have and that is, Longevity has one of the Ellenoff Grossman & Schole lawyers on this deal. Bill Huo, who will be an Advisor to Longevity, has served as counsel of EGS since April 2014, where he concentrates on cross-border corporate finance, merger and acquisition transactions. We’ve seen underwriters participate in SPACs before, but this is the first time (that we can recall) where we’ve seen lawyers directly participate in a SPAC. Plus, if you’re going to have a SPAC lawyer on your team, EGS is a top choice. They consistently lead in the SPAC League Tables.
It should also be noted that the Longevity SPAC terms follow the Chardan template first seen with Greenland and Tottenham. Specifically, 12 months to find an acquisition, but with three(3) 3-month extensions possible with an increase of $0.10 per share added to the trust for each extension.
So now we are essentially seeing three types of SPACs: 1) the NYSE structure 2) the Nasdaq structure and 3) the China-focused structure. All work, it just depends on which flavor you want (or need).
Longevity Acquisition Corporation Summary of Terms:
- Focus: China
- Size: $40 million
- $10.00 unit comprised of one Ordinary Share + one Warrant (1/2 share) + one Right
- Each Right entitles the holder to receive one-tenth (1/10) of one Share
- Warrant call for redemption threshold: equals or exceeds $18.00 (cash or cashless exercise)
- 100% held in trust ($10.00 per share)
- 12 months to complete an acquisition + three 3-month extensions ($0.10/share added to Trust for each extension)
- Limitation on Redemption Rights: 15%
- At-risk Capital: $2.7 million (270K private placement units, Cantor participating for 20K units)
- Underwriter fees: 3.0% + 2.5% deferred.
Cantor Fitzgerald is sole book-runner.
Ellenoff Grossman & Schole LLP and Loeb & Loeb LLP are Issuer’s Counsel and Underwriter’s Counsel, respectively.
Mobiv Acquisition Corp. (NASDAQ:MOBV) announced this afternoon that it has closed its combination with EV motorcycle-maker SRIVARU. Shareholders originally approved the deal at a special meeting held back on September 28, but at that time, the parties expected the transaction to take just a week to close. Redemptions whittled Mobiv’s IPO share pool of 10,005,000 down...
Achari Ventures I (NASDAQ:AVHI) has entered into a definitive agreement to combine with medtech firm Vaso Corporation at an equity value of $176 million, or 19.5x its 2022 adjusted EBITDA. Wuxi, China-based Vaso provides IT services and sales support to medical device manufacturers. The combined company is expected to trade on the Nasdaq under the...
EF Hutton Acquisition Corp. I (NASDAQ:EFHT) announced this morning that its shareholders have approved its business combination with E.C.D. Auto Design. At the meeting, there were 5,089,203 shares of common stock, representing approximately 76.82% of the issued and outstanding shares of common stock, present. In connection with the meeting, the company’s stockholders holding 3,470,945 shares,...
Legato Merger Corp. III (NYSE:LEGT) filed for a $175 million IPO yesterday afternoon, becoming the fourth SPAC to file this week. While the other three SPACs that filed their S-1s earlier this week intend to pursue targets in the financial services and biotech industries, Legato III, similar to the earlier Legato SPACs, will focus on...
At the SPAC of Dawn This week ends with an unusually busy earnings calendar as 172 US-listed companies report quarterly figures today. Among them is Exela Technologies (NASDSAQ:XELA), which completed a combination with Quinpario 2 in 2017. The billing software company has gone on to do another SPAC deal on November 29, this time spinning...