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

 

Side-by-Side Comparison of the Twelve Seas and LF Capital SPAC IPOs
Recent Posts
by Kristi Marvin on 2025-07-05 at 10:02am

Terms Tracker for the Week Ending July 3, 2025 Welcome to our weekly column where we discuss the findings from our IPO terms tracker based on the previous week’s pricings. We’re heading into the July 4th holiday, so we’ll keep this week’s column short and to the point. But before you head to the beach,...

by Nicholas Alan Clayton on 2025-07-03 at 12:54pm

Crown PropTech (OTC:CPTKW) has entered into a definitive agreement to combine with rare earth mining firm Mkango Resources (TSX-V:MKA) at a pre-money equity value of $400 million. London-based Mkango is working to commercialize a chain of rare earth mining and refining facilities in Africa and Europe. The combined company is expected to trade on the...

by Nicholas Alan Clayton on 2025-07-03 at 8:27am

At the SPAC of Dawn One of the biggest sources of uncertainty in the SPAC market in recent years has been regulatory changes, but new shifts could be in its favor. SEC Chairman Paul Atkins told CNBC yesterday that the commission would review the rules for SPACs after “rather controversial” changes to the rules passed...

by Nicholas Alan Clayton on 2025-07-02 at 12:13pm

McKinley Acquisition Corporation (NASDAQ:MKLYU) has filed for a $150 million SPAC to hunt for an innovative target company with an experienced financial team that has dabbled in SPACs before. The new SPAC is offering investors one right to a 1/10 share in each unit with no overfunding of the trust, but it could provide a...

by Nicholas Alan Clayton on 2025-07-02 at 8:29am

At the SPAC of Dawn The rain of SPACs has continued with four expected to make their debuts during today’s trading sessions after pricing their IPOs overnight. The largest of these, EQV Ventures II (NASDAQ:EVACU), even managed an upsize, making it the largest SPAC IPO since Ares II (NYSE:AACT) pulled together $450 million in 2023....

logo

Copyright © 2025 SPACInsider, Inc. All Rights Reserved