SPACInsider Logo
Side-by-Side Comparison of the Twelve Seas and LF Capital SPAC IPOs
by Kristi Marvin on 2018-06-20 at 8:43am

Twelve Seas Prices an Upsized $180 Million IPO and LF Capital Prices $135 Million IPO

Last night, both Twelve Seas Investment Company and LF Capital Acquisition Corp. priced their initial public offerings and will begin trading today under the symbols TWLVU and LFACU, respectively.

Both SPACs were of a similar size (as of yesterday), but Twelve Seas did a surprise upsize to $180 million, whereas LF Capital raised $135 million in total gross proceeds.  I thought it would interesting to see a side by side comparison of terms to demonstrate the differences in structure and why some SPACs are able to upsize their offerings.  To be clear, an upsized offering does not  mean one deal is better than the other.  It does show investor interest or more specifically, institutional interest.  However, quality of offering and investor interest are sometimes not aligned. Let’s take a look.

 Twelve SeasLF Capital
Sector FocusPan-Eurasian RegionFintech
Initial Filing $mm$100.0$135.0
Last Amended S-1 $mm$150.0$135.0
Final Gross Proceeds Raised $mm$180.0$135.0
% Held in Trust / Per Unit100% / $10.00102% / $10.20
Backstop?NoYes
Anchor Investor?NoYes
Sponsor Private PlacementUnitsWarrants
Shares11
Warrants11
Rights10
# Months to Complete1824
UnderwritersEarlyBirdCapital / I-BankersB.Riley / Raymond James

As you can see, the real difference between Twelve Seas and LF Capital comes down to three items:

  • Unit structure:  In addition to one Share and one Warrant, Twelve Seas is offering a Right.  LF is not.
    • Offering a Right in addition to the Share and Warrant means additional potential upside to unit holders. Another “free look”.
  • Time horizon: Twelve Seas is offering a shorter time period to complete an acquisition (18 months vs. 24 months for LF Capital).
    • As an investor, institutional or otherwise, a shorter time period means a faster return on investment.
  • Backstop/Anchor Investor:  Twelve Seas does not have a Backstop/Anchor Investor. LF has BlackRock Funds acting as Backstop/Anchor.
    • Having a backstop and anchor means less negotiating power for institutions at the time of conversion/redemption.  By virtually guaranteeing the combination will close, the SPAC has more leverage for determining the conversion/redemption price even if the announced transaction is a so-so to below average deal. 

But here’s the real difference: All three of the above terms mean that as an investor, the terms are more favorable for Twelve Seas.  BUT… if you’re a SPAC management team, LF Capital’s terms are slightly more favorable to the SPAC.  Which is why LF had to put additional at-risk capital into the trust to bring the percentage up to 102% to get investors into the deal. To explain further, LF has an extra six month cushion for completing a transaction, they don’t have the added headache of a Right in their capital structure, AND they have a backstop investor to protect the cash in trust at closing.

So again, determining which structure is more appealing really depends on which side of the table you sit. Are you an investor or SPAC management?  Luckily, as a SPAC, there are a number of different term-levers you can pull or push to get your SPAC where you and your investors need it to be.  In the end, both of these two SPACs raised a good amount of capital and everybody wins. For now.

The clock just started ticking….

Congratulations to Twelve Seas and LF Capital.

Underwriters for Twelve Seas:  EarlyBirdCapital Inc., I-Bankers Securities, Inc.
Underwriters for LF Capital: B. Riley FBR, Raymond James

 

Recent Posts
by Marlena Haddad on 2022-12-02 at 5:38pm

  Below is a daily summary of links to the latest SPAC news and rumors gathered across the web.  Latest SPAC Liquidations: NightDragon, VectoIQ II, and Fortistar Sustainable Solutions Corp. Night Dragon Acquisition Corp. Will Redeem Its Public Shares and Will Not Consummate an Initial Business Combination NightDragon Acquisition Corp. (NASDAQ: NDAC) anticipates that the last trading day...

by Marlena Haddad on 2022-12-02 at 4:38pm

Lakeshore Acquisition I Corp. (NASDAQ:LAAA) disclosed this afternoon that its shareholders have approved its business combination with medical device company ProSomnus during a special meeting held earlier today. Approximately 92.4% of the votes cast at the meeting on the business combination proposal, representing approximately 80.5% of Lakeshore’s outstanding shares, voted to approve the deal. The SPAC disclosed...

by Marlena Haddad on 2022-12-02 at 11:38am

  Below is a daily summary of links to the latest SPAC news and rumors gathered across the web.  Latest SPAC News: Embark director Elaine Chao and others sued over SPAC merger, Alvotech switches CEO and takes COO from Teva, and Uber Freight and Aurora expand pilot  Embark Director Elaine Chao, Others Sued Over SPAC...

by Nicholas Alan Clayton on 2022-12-02 at 7:51am

SPACInsider contributors Anthony Sozzi and Sam Beattie this week compiled their three favorite potential SPAC targets among potential targets in the security industry. We look at why they are compelling and why each could be a fit for a blank-check merger. Security is on the market’s mind and is expected to grow at a CAGR...

by Marlena Haddad on 2022-12-01 at 5:55pm

  Below is a daily summary of links to the latest SPAC news and rumors gathered across the web.  Latest SPAC Liquidations: Atlas Crest Investment II and One Equity Partners Open Water I Atlas Crest Investment Corp. II to Liquidate Trust Atlas Crest II’s (NYSE:ACII) board and shareholders have agreed to establish today, December 1, 2022,...

Privacy Policy|Terms Of Use
Copyright © 2022 SPACInsider, Inc. All Rights Reserved