Crescendo is Putting the Band Back Together. Again!
Crescendo Partners’ Eric Rosenfeld, filed for a $130 million IPO late Tuesday, making Allegro Merger Corp., Rosenfeld’s sixth consecutive SPAC. In addition to an obsessive penchant for musical-term branding, the Allegro team and board seem to have a penchant for each other as well, since all have worked together (with the exception of board member Robert Deluce) on one or more of Rosenfeld’s five prior SPACs. It’s a reunion tour roadshow for sure, but let’s get to the details.
Summary terms include:
- Sector Focus: General / Broad
- $10.00 unit comprised of one share of common stock, one right and one full warrant
- Each right entitles the holder to receive one-twentieth (1/20) of one share
- 100% held in trust ($10.00 per share)
- 21 months to complete an acquisition
- Warrant redemption price: $18.00
- Redemption rights: limitation of 20% of the shares sold in the IPO
- Founders and Cantor Fitzgerald (the Underwriter) to purchase 372,500 private placement units at $10.00 to bring the trust to 100% (Founders – 322,500 units / Cantor – 50,000 units)
- Underwriter fees: 2.0% + 3.5% deferred fee. Cantor Fitzgerald is sole book-runner.
The Rights term is what stands out immediately. 1/20th of one share is the first to deviate from the standard 1/10th of one share. While on the face of it this might seem like a negative, Allegro does balance this by offering a full warrant and a 21 month time period to complete their business combination. Additionally, the limit for shareholders wishing to redeem is at 20% of the shares sold in the offering. More recent SPACs have had limits of 15%.
As for the five prior SPACs that the Crescendo team have completed, I’ve provided a summary below.
| Name | IPO Date | Unit Price | Gross Proceeds (mms) | Acquisition | Acquisition Symbol | Acquisition Current Share Price |
|---|---|---|---|---|---|---|
| Arpeggio Acquisition Corporation | June-04 | $6.00 | $40.8 | Hill International | HIL | $5.60 |
| Rhapsody Acquisition Corporation | Oct-06 | $8.00 | $41.4 | Primoris Services | PRIM | $26.27 |
| Trio Merger Corp. | June-11 | $10.00 | $69.0 | SAExploration | SAEX | $1.41 |
| Quartet Merger Corp. | Nov-13 | $10.00 | $96.6 | Pangaea Logistics | PANL | $3.39 |
| Harmony Merger Corp. | Mar-15 | $10.00 | $115.0 | NextDecade | NEXT | $6.35 |
Primoris is a hit, but the majority are misses.
“Past performance may not be indicative of future results…” Let’s hope that famous warning disclosure at the end of every performance report rings true here. On the whole, this deal looks like it might need some sweetening. Perhaps more at-risk capital from management to over-fund the trust and/or reverting the rights terms to 1/10th of one share will give investors additional comfort.
Lastly, Issuer’s Counsel and Underwriter’s Counsel are Graubard Miller and Ellenoff Grossman & Schole LLP, respectively.
Terms Tracker for the Week Ending December 1, 2023 Welcome to our weekly column where we discuss the findings from our IPO terms tracker based on the previous week’s pricings. For the most part, this was a quiet week for filings being that it followed the Thanksgiving holiday. Ideally, bankers, lawyers and teams got a...
Aimei Health Technology Co., Ltd (NASDAQ: AFJKU) announced the pricing of its $60 million IPO this evening. Its units are expected to begin trading on the Nasdaq under the symbol “AFJKU” on Monday, December 4, 2023. After the securities comprising the units begin separate trading, the Class A ordinary shares and rights are expected to...
PROOF Acquisition Corp I (NYSE: PACI) announced this afternoon that it has closed its business combination with private aviation company Volato after shareholders approved the deal at a meeting on November 28. In total, including previous shareholder votes, shareholders opted to redeem an aggregate of 99.93% of PACI’s trust, leaving it with less than $215,000...
Adit EdTech (NYSE: ADEX) announced this morning that its shareholders have approved its business combination with bitcoin self-mining company Griid Infrastructure at a special meeting held yesterday, November 30. A total of 8,520,710 shares of common stock, representing approximately 95.7% of the outstanding shares entitled to vote, were present at the meeting, constituting a quorum...
At the SPAC of Dawn There had been hopes that this week would take one world conflict off the board, but combat has resumed in the Middle East as other eyes are likely to be fixed on new Fed comments today. The fighting in Gaza continues to not appear to have appreciable affects on the...