Monday evening, Monocle Acquisition Corporation (MNCL), filed for $150 million SPAC IPO. Monocle is being led by Eric Zahler, as President, CEO and Director, and is a co-founder and Managing Director of Sagamore Capital, a private equity firm pursuing investments in the aerospace and defense, industrial electronics and selected business service markets. Sai S. Devabhaktuni, formerly the Executive Vice President and Head of Corporate Distressed Portfolio Management at PIMCO, will be Chairman of the Board of Directors.
As for the name “Monocle”, The Monocle Group LLC is an investment firm founded by Mr. Devabhaktuni that invests in inefficient markets with an emphasis on debt, equity and other obligations of financially stressed businesses. Although, it does conjure up images of Mr. Peanut.
Looking at this SPAC’s structure, we see a 100% in trust, one share + one warrant deal, with 21 months to find an acquisition. However, if Monocle needs a three month extension for a full 24 months, they must deposit into the trust account $1,500,000, or $0.10 per share.
Furthermore, Cowen is participating in the at-risk capital of $5 million, by purchasing 83,333 units of the total 500,000 units at $10.00. $833,330 is a size-able purchase by an underwriter, so Cowen has a considerable amount at risk too.
This is a fairly middle of the road SPAC – mid size, mid-terms, mid-team. As for the terms, given the current SPAC climate, it will be interesting to see if they need to amend by over-funding the trust to 101% or coming down to 18 months once it gets closer to pricing.
However, this does make SPAC #45 if it prices in 2018. There should be one or two more that file this year, but it remains to be seen if those price in December or January. Stay tuned.
Cowen and Chardan are joint book-running managers.
Greenberg Traurig, LLP and Ellenoff Grossman & Schole LLP are issuer’s counsel and underwriter’s counsel, respectively.
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