William Foley II and Trasimene returned for another IPO last Friday when Trebia Acquisition Corp. (TREB.U), filed for a smaller $375 million SPAC IPO. Trebia’s team is similar to that of Foley Trasimene Acquisition Corp. (WPF), which Richard Massey and William Foley filed as a $900 million IPO just a few days earlier on May 27th. WPF’s size will likely limit the SPAC to finding a deal of several billion dollars at the lower end of the range. Further, the newer, smaller Trebia SPAC seems to have a more generalist mandate than Trasimene, which is specifically looking at Fintech or Business Process Outsourcing targets. Keeping with the theme of increasing management’s pool of available targets, Trebia is “open” to targets operating in “financial services, technology, software, data, analytics, services and related areas”. Nevertheless, six of the seven people on Trebia’s management team made their careers in some part of financial services, so the market is probably looking for a deal focused on the team’s strengths regardless of the more general mandate.

Unlike with Trasimene, William Foley II is sharing some of the control of this company being that he is a co-founder and director, without the executive chairman role. William P. Foley II, or “Bill” Foley, is the founder of Fidelity National Financial and has been its Chairman for over 35 years. Mr. Foley is also the Chairman of Cannae Holdings and a Senior Managing Director of Trasimene Capital. He is also the Chairman of Dunn & Bradstreet as well as the Chairman and CEO of Black Knight Sports & Entertainment, which owns the Vegas Golden Knights NHL team. Prior to making a name for himself in financial services, Mr. Foley rose through the ranks of the US Military where he held a role negotiating Air Force contracts with Boeing. His life’s resume is blanketed in various leadership roles and deal-making experiences that make him a pillar of both Trebia and Foley Trasimene’s management teams.

Frank Martire Jr. co-founded Trebia with Mr. Foley. He is also a Director of Foley Trasimene and of Cannae Holdings. Mr. Martire has served as Executive Chairman to both NCR Corp. and Fidelity National Information Systems (FIS), the latter of which he was CEO of during a handful of acquisitions from 2009 – 2015. Martire was originally CEO of Matavante before it was acquired by FIS. He’s led companies as both an acquiror and acquiree and also has experience in the hospitality sector as a director for J. Alexander Holdings (JAX).

The name “Trebia” is a continuation of the military theme that gave “Trasimene” and “Cannae” their names. Trebia Acquisition Corp. is related to the Battle of the Trebbia River, which was the first major battle in the Second Punic War. Like the Battle of Lake Trasimene, the Battle of the Trebbia River was a Hannibal victory over the Roman army. It is interesting the team is now associated with three battles that Carthage won, yet it is a war they ultimately lost. The Second Punic War had a large impact on Rome where, among other things, a new social class emerged in the aftermath called the “equites”. The equites became Rome’s new business class. The metaphors seem appropriate for a management team with a long history of introducing new technologies to the antiquated world of financial services.

The terms of this deal are very similar to the larger IPO Mr. Foley filed two days earlier- 24 months, 1/3 warrant, ability to call the warrants for shares at $10.00 (in addition to cash and cashless exercise) as well as a forward purchase agreement from Cannae.  In the case of Trebia, there is only one FPA for $75 million.  This gives Foley & co. $450 million in dry powder.

No surprise the FPA is by Cannae Holdings, of which Mr. Foley is Chairman and his co-founder along with two other nominated directors for Trebia are also directors of Cannae. Also, it should be noted that whereas you sometimes see Forward Purchases include hedging language, where a purchaser isn’t 100% obligated, but can choose to not participate at the time of combination, the Trebia FPA (just like the Foley Trasimene FPA) is obligated. Per the prospectus:

“This purchase will be required to be made regardless of whether any Class A ordinary shares are redeemed by our public shareholders and is intended to provide us with a minimum funding level for our initial business combination.”

So in an ideal scenario, the $75 million FPA provides additional capital towards a purchase price, giving this team $450 million in cash.  However, in a worst case scenario, where there are significant investor redemptions, a target company is at least assured of a minimum $75 million at closing.  That makes negotiations with a target company slightly easier. Particularly in an environment like right now, where redemptions are more prevalent.

All told, this is a SPAC backed by a strong management team that has the right idea of keeping the IPO size smaller to open the vehicle up to a larger pool of potential targets.  For now investors can watch the Foley Trasimene IPO this week as a good gauge for how well-received this team is.

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