Friday evening, the Osprey team filed their second SPAC with the $250 million Osprey Technology Acquisition Corp. (SFTW.U). Osprey Tech will be focused on the technology sector and in particular, Software-as-a-Service companies (SaaS). Additionally, Osprey Tech will once again be led by the Co-Chairmen team of Edward and Jonathan Cohen, and new team member, David DiDomenico, as Chief Executive Officer, President and Director.
However, within the SPAC community, the Osprey team is probably better known for their first SPAC, Osprey Energy, which combined with Royal Resources last year to create Falcon Minerals (FLMN). And while switching from the energy sector to technology probably seems like a weird pivot, energy is currently out-of-favor. So instead, why not round up a team with tech experience? And that’s what Osprey has done.
David DiDomenico, who is currently a partner at JANA Partners, has an extensive technology and technology-related investment background having been a co-portfolio manager of the JANA Partners and Nirvana funds, as well as managing director of new Mountain Capital and the portfolio manager of the New Mountain Vantage Fund. Edward and Jonathan Cohen, Osprey Energy’s Co-Chairman (as well as father and son), are no slouches either. They are Chairman and CEO, respectively, at HEPCO management, having acquired, founded, and/or managed over $30 billion of assets in a variety of industries.
Nonetheless, this SPAC’s structure is going with 100% in trust, 24 months, and a 1/2 warrant. So while they are technically an experienced SPAC team having already completed Osprey Energy, they are cognizant of the fact that their CEO and President (David DiDomenico) as well as their Board, are new. Plus, we are not in a terms environment where teams can push the envelope and ask for a 1/3 warrant. However, by going with a 1/2 warrant, the Osprey team is signaling that they are more than willing to prove themselves again. Additionally, some will notice the current share price of Falcon Minerals (FLMN ~$6.20), but keep in mind that this combination traded to as high $11.58 post-closing before the bottom fell out of the energy sector. Most SPAC investors did well.
In summary, the terms look appropriate and this SPAC should easily price. Look for this one to IPO very late October (perhaps on Halloween), but early November is probably more likely.
Summary of terms below:
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