Fintech-Focused SPAC Far Point Acquisition Corporation to Begin Trading Tuesday
This evening, Far Point announced the pricing of their $550 million, Third Point sponsored SPAC. The unit will begin trading Tuesday morning under the symbol FPAC.U.
This deal was hot, hot, hot. It started as a $400 million IPO, was upsized to $500 million and finally, upsized again to $550 million tonight. As a side note, I was personally, slightly more excited about this SPAC than GS Acquisition. Not to say that I didn’t like GS Acquisition (I did), but if I had to choose between the two, I would choose Far Point. Why? Less conflicts of interest (GS had a laundry list of conflicts with Goldman and a non-compete with David Cote and Honeywell, which may or may not be significant, but they’re there….) and I think the sector focus of Far Point edges GS out – Fintech vs. Industrials, for GS. However, based on our SPACInsider Poll, I was in the minority (62.5% voted in favor of GS vs. 25.0% for Far Point, and 12.5% for neither).
Regardless, both are massive, high-profile SPAC deals with similar structures and I expect both to present A+ business combinations. (Anyone want to place any bets on which presents the better acquisition?) As a reminder, I’ve listed below the summary IPO terms, but you can also find them here.
Summary of terms are as follows:
- $10.00 unit comprised of one share of Class A common Stock and one-third of a full warrant
- 100% held in trust ($10.00 per share)
- 24 months to announce an acquisition (+ 3 month extension with LOI)
- Warrant Redemption Price: $18.00
- Redemption Rights: limitation of 15% of the shares sold in the IPO
- Sponsored by Far Point LLC, an affiliate of Third Point LLC
- Forward Purchase Agreement: capped at the amount of redeeming shares over 20 million (40% of the IPO)
- Underwriter fees: 2.0% + 3.5% deferred fee
Congratulations to the Underwriters – Credit Suisse and BofA Merrill Lynch as book-runners. Ellenoff Grossman & Schole LLP and Skadden, Arps, Slate, Meagher and Flom LLP, were Issuer’s and Underwriter’s Counsel, respectively.