It’s time to play “Monday Morning Quarterback”

Gordon Pointe Acquisition Corp. (GPAQ). announced late last Thursday evening that it had entered into a non-binding Agreement in Principle to merge with an affiliate of HOF Village, LLC (“The Hall of Fame Village”, “HOFV”), a sports, entertainment and media company founded by the Pro Football Hall of Fame.  However, this morning, additional information was released in the form of a presentation and a conference call, scheduled for tomorrow at 10:00AM.

While we still don’t fully have all the details of this transaction (such as purchase price), the GPAQ and HOFV teams did provide a fairly comprehensive presentation on the Johnson Controls Hall of Fame Village.  This appears to be a very carefully controlled roll-out of details and while I don’t think it was intentional that GPAQ coincided this announcement (and vote) with the forthcoming NFL season, it’s a nice bit of marketing good fortune.  How many of you are in fantasy football leagues?

What we do know, so far, is the following:

• The company is expected to be renamed the “Hall of Fame Resort and Media Company” and will be listed on the Nasdaq as HOFV. (“Johnson Controls” is an awkward name so this is good news)
• Current equity holders of HOFV are rolling 100% of their equity and expected to own ~60% of the company
• GPAQ may raise additional capital through a PIPE and/or a “Qualified Opportunity Zone” investment
• No minimum cash requirement to close the transaction

Oh, and guess who’s going to be on the board?  Michael Klein…of Churchill I & II.  Michael Klein (and his firm M Klein) have been everywhere lately.  If you recall the firm of M Klein, is advising the Social Capital Hedosophia/Virgin Galactic deal, and while no advisors have been listed yet for the GPAQ/HOFV transaction, perhaps once this deal moves from “Agreement in Principle” to “Definitive Agreement”, we’ll see M Klein make an appearance once again.  Nonetheless, having Michael Klein, a proven SPAC sponsor and deal maker, on the board of the combined company is a nice “get”.

Additionally, HOFV has some fairly impressive projections with forecasted 2020-2023 sales growth of ~48% CAGR and an annualized run rate EBITDA of ~$50 million.  It’s a really good looking presentation with lots of good info on HOVF, but we need more details on how this transaction will actually be structured.  It’s one thing to say you’re going to combine with HOVF, but without knowing how much GPAQ is going to pay for it and how, it’s tough to get truly excited about this deal.  However, what this release IS trying to do though is build excitement…we’re in touchdown range, but the team needs to make a few more plays before they can score.

Lastly, one of the more interesting parts of the HOVF growth plan is the intention to build “Legends Landing”, the first ever assisted and independent-living facility intended for former NFL players, coaches and officials.  This seems like a real football utopia for old timers to live out their golden years with endless “football games” on the lawn (albeit with walkers and canes).  It conjures a really nice image, just not sure how their wives will feel about having to retire to community of non-stop football in Canton, Ohio.  Perhaps Legends Landing can employ some divorce attorneys as well.

CONFERENCE CALL DETAILS

• Tuesday, August 6, 2019, at 10:00 a.m. Eastern Daylight Time
• Interested parties may listen to the call by dialing 1.844.400.9700 (US) or 1.470.279.3859 (INT’L) and Entry Code: GPAQ0806.