Friday evening, we had another new SPAC filing in the form of the $175 million Oaktree Acquisition Corp. Actually, we had three new SPACs on Friday, but let’s focus on this one. Oaktree’s sponsor is Oaktree Capital Management, a leading global investment management firm with approximately $118.6 billion in assets under management.
Oaktree (the SPAC), will be led by John Frank, as Chairman, and Patrick McCaney, as CEO and Director. Additionally, Alexander Taubman, will be CFO and President. All three, are are currently working at Oaktree Capital with Mr. Frank as the Chairman of Oaktree Capital, Mr. McCaney as a portfolio manager for Oaktree’s Value Equities strategy, and Mr. Taubman as a managing director within Oaktree’s Value Equities strategy, which he helped launch.
However, while Oaktree is a big and recognizable asset manager, this team is a little on the young side. Mr. McCaney is 38 and Mr. Taubman is 32. However, having Mr. Frank as Chairman presumably makes up for that by providing the wisdom and a little gray hair. Nonetheless, everyone has impressive backgrounds. Perhaps we’ve all gotten used to teams with an older profile and the youngbloods have just as good a chance as any. Additionally, this team intends to capitalize on the ability of the Oaktree platform in the industrial and consumer sectors, so they have the full capability and support of the Oaktree Capital machine.
Focusing on the terms, we see this is a 100% in trust, 24 months 1/3 warrant deal. However, they have also added the warrant redemption for shares term at $10.00 along with the ability to remove $325K a year of interest for working capital purposes. This feels a little rich for a young and unproven team. It’s got all the tier-1+ bells and whistles, but they haven’t earned it yet. Granted, it’s Oaktree, but it still feels off-market and a tough sell. However, given that Conyers Park II just filed with a 1/4 warrant and Deutsche Bank is an underwriter on both SPACs, it would probably be challenging for the underwriters to tell this team they need to go out with a 1/2 warrant. Regardless of the politics, a 1/2 warrant feels more appropriate.
This is still an exciting SPAC with a high quality sponsor, but it will be interesting to see if SPAC investors push back on the terms given the debut of Conyers Park II’s 1/4 warrant. Conyers really threw a wrench into the terms mix.
Summary of terms below:
Israeli tech firms have made up an outsized proportion of SPAC activity and despite the ongoing tensions in its region, that dealmaking is continuing unabated. In fact, the SPAC named for the particular mission of taking Israeli firms public through SPACs, Israel Acquisition Corp. (NASDAQ:ISRL) in fact just took one step closer in completing that...
At the SPAC of Dawn Although the market has largely recovered from a negative stretch last week, the roller coaster is tilted back downward for Trump Media (NASDAQ:DJT), which slid -8% yesterday to $32.57 – one of its lowest points since closing with Digital World last month. Other SPACs and de-SPACs are having a more...
Remember the metaverse? Many do not. Meta’s (NASDAQ:META) attempted transition to virtually living and working seemed to mark a trend that went up and down quickly, but one SPAC deal has both survived that roller coaster and may rise with a second. Back in December 2022, Newbury Street (NASDAQ:NBST) announced a $1.85 billion combination with...
At the SPAC of Dawn Tucked into the bill that provides $95 billion in funding to American allies passed by the House this weekend is another measure that is likely to have far more impact on at least one pending deal in SPAC world. It would appear that the timing was fortuitous for TikTok rival...
With the passage this weekend of $95 billion in funding for Ukraine, Israel and Taiwan by the House of Representatives, some focus has gone back towards the defense sector, which has generally had a good year as a whole. But, SPACs have not been as active in defense, despite the fact that companies in the...