TPG Pace Holdings Corp. Announces an LOI

And gets to extend three months to September 30, 2019

TPG Pace Holdings Corp. (TPGH), announced this morning that they had entered into a “non-binding letter of intent” with a private company. As a result, TPGH now has until September 30, 2019 to complete their Business Combination.  However, other than those two statements, that’s all we got in the press release.  No further details were given on the target.

TPGH, which IPO’d back on June 27, 2017, had 24 months to complete their acquisition, but per their prospectus, they have the ability to extend an additional three months “if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination”. 

Both Modern Media (MMDM) and KBL Merger Corp. IV (KBLM) had similar terms where they could extend without any contribution if an LOI had been signed, but going forward, I doubt we’ll see this in any new SPACs.  The SPAC market is too tight and investors we’ll not be willing to let teams extend without a concrete announcement of a named company and especially without a contribution to trust. (Note:  both KBLM and MMDM ran out of time on their original extensions and eventually had to contribute funds to trust to further extend).

However, it looks like we’ll have to wait a little longer to get the details on this potential combination, but let’s hope it’s as good as TPG Pace Energy, which combined with Enervest last July to create Magnolia Oil & Gas Corporation (MGY).  MGY was, by all accounts, a great deal and is currently trading around $11.76.

Stay tuned for further details.