In this series we’ll be examining successful SPAC deals from the past both in the terms and circumstances of their de-SPAC processes and how they have weathered the storms that have followed after their public listings with research from SPACInsider contributors Anthony Sozzi and Sam Beattie.

First up is a target that has had rather high-profile highs and lows in OneSpaWorld.

Nassau, Bahamas-based OneSpaWorld runs a string of health, wellness and beauty centers at 51 destination resorts and onboard of 173 cruise ships around the world. If this sounds like a business almost tailor-made to be demolished by the pandemic, you would be right, but only to a limited extent as we will see.

Before a strange series of news stories first started appearing out of Wuhan, China, OneSpaWorld was sailing strong. It announced its business combination with Haymaker I on November 1, 2018 back when the Dow was 5,000 points lower, but it sure seemed like simpler times. The combination actually had some aspects to it that mark it out as different from the combinations of 2022.

For one, public Haymaker shareholders were expected at announcement to take a slight majority position with 51% of equity while the sellers were slated to hold onto a 26% stake from the start. The deal included a $122 million PIPE, which was set to convert to 19% of equity. This sort of equity breakdown was less uncommon in 2018, before SPACs began hunting bigger game and targets bumped up valuations to match.

After announcement, Haymaker I proceeded to heavily market its deal to sector investors and had the early good fortune of gaining a price target from Imperial Capital at $14. Once the Haymaker team had spent a few weeks hitting the road show and the Imperial analyst reaffirmed the $14 price target in a research note, the SPAC’s stock moved from its post-announcement perch of $9.97 to $11.18 on the day of its shareholder vote – almost a full dollar above its estimated pro rata cash in trust at $10.19.

As a result, the ownership percentages in its presentation were not far off as just 3.9% of Haymaker I shareholders opted to redeem their shares at the combination vote. Only two SPACs closed in 2019 with lower redemptions – Churchill I merging with Clarivate (NYSE:CLVT) and Health Sciences, which merged with Immunovant (NASDAQ:IMVT).

Shareholders were onto something that particular year as all three of these deals are beating the market currently. OneSpaWorld last closed at $8.09, while Clarivate and Immunovant finished Thursday trading at $9.15 and $9.35, respectively, while the Dow is down -17.3% year-to-date and the Nasdaq -31.9%.

OneSpaWorld traded so well initially that Haymaker I was released early from its lock-up, because 150 days out from close the combined company was trading in the $15 to $17 range and the lock-up release did not appear to negatively affect its share performance. During this time, it beat its investor presentations’ 2018 revenue guidance by 1%, achieving $541 million in 2018, but, OneSpaWorld had trouble on the horizon.

No one knew at the time that a giant world-altering shoe was about to drop in the form of the COVID-19 pandemic. With fears raising at the end of 2019, the company landed just shy of its 2019 revenue guidance, but things would fall off a cliff once the virus reached shores in the Western Hemisphere in early 2020.

Its shares fell from a February 16, 2020 close at $14.80 to a March 15, 2020 close at $3.04 and would eventually hit a low of $2.52 later that month. It is interesting to note that even a time of genuine disaster, the stock had a higher floor than many growth-stock de-SPACs that have since been impacted by inflation and recession fears in the current market.

OneSpaWorld still managed to generate $121 million in revenue in 2020, a far cry from its $668 million projection at the time of its SPAC deal announcement, but also perhaps greater than one might have expected in the circumstances. Nonetheless, OneSpaWorld’s March 2021 earnings update reads like a company pulling itself out from a calamity.

“Ship Count: The Company ended the [2020] fiscal year with health and wellness centers on 163 ships, all of which were closed as of March 14, 2020, and all except one remained closed at year end pending resumption of voyages.

Destination Resort Count: The Company ended the fiscal year at 54 destination resort spas, all of which were closed as of March 26, 2020. At year end, 45 destination resort spas were in operation.

The Company repatriated all of its employees from COVID related cruise suspensions, eliminating all ongoing expenses related to these repatriated employees. 18 cruise ship personnel have re-embarked on vessels that sailed in the fourth quarter of fiscal year 2020.”

It opted not to provide a guidance in the uncertain environment of 2021 and then 2022. But, despite the stock panic, OneSpaWorld’s status as a publicly listed company still wound up as a boon rather than a hinderance amid the pandemic. With its share price recovering to above $9, it raised $50 million from an at-the-market offering in December 2020 and its major shareholder Steiner Leisure was able to gain liquidity itself by selling 8,421,053 shares in a June 2021 secondary offering at a time when the share price had recovered to $11.21.

In the company’s last earnings release, it reported $127.4 million in revenue and $9.1 million in EBITDA in the second quarter of 2022 for a run rates of $509.6 million and $36.4 million, respectively. The company had also resumed operations on 167 cruise ships and 48 destination resorts and expected over 3,000 employs to be on vessels for September voyages.

The company had $13 million in borrowing capacity available under its line of credit and $10 million more it could pull on from its at-the-market program, and, as mentioned above, its stock price has recovered to about as well as one could expect in the current conditions. As mentioned above, the recovering company last closed at $8.09, which makes it the 10^th best performer among SPAC deals closing in 2019 and is a major reason why the Haymaker team currently ranks 16^th among 71 serial SPAC sponsors for average return on share price.

The Haymaker team followed up the early success of the OneSpaWorld deal by steadily gaining better IPO terms. Its first vehicle carried a 1/2 warrant, but Haymaker II IPO’d in June 2019 with a 1/3 warrant and it got to market with a 1/4 warrant for Haymaker III in March 2021. These next two SPACs completed deals, reaching into different sectors with c-store operator Arko Holdings (NASDAQ:ARKO) and healthcare firm Biote (NASDAQ:BTMD), but the team has sat out the market over the past year.

The team has had Haymaker IV on file with a trust overfunded to 102%, an 18-month transaction window and a 1/3 warrant in its units, since February 2022. It will be interesting to see if, how and when they come back.