SPAC MBF Healthcare Acquisition Corp Restructures Transaction With Critical Homecare Solutions

MBF Healthcare Acquisition Corp (MBH) restructures transaction with Critical Homecare Solutions (CHS), lowering the acquisition enterprise value.

The restructured enterprise value is now estimated at $479 million, revised from the original estimated enterprise value of $534 million. CHS provided 2008 EBITDA guidance of $43 million to $45 million and 2009 EBITDA guidance of $53 million to $55 million.

MBH, CHS and the Sellers have agreed to set the termination date of the Stock Purchase Agreement as August 29, 2008, subject to the parties’ ability to secure a new committed credit facility on or before August 29, 2008, and MBH’s ability to acquire at least 16,171,875 warrants from certain MBH warrant holders in privately negotiated transactions and subsequently retire such warrants. If both of these conditions are met, the termination date will be extended to September 30, 2008.

Click here for the press release

SPAC Vector Intersect Security Acquisition Corp Signs Commitment Letter For New $30 Million Senior Secured Credit Facility

SPAC Vector Intersect Security Acquisition Corp, in connection with its acquisition of Cyalume Light Technologies Inc., signs commitment letter for new $30 million senior secured credit facility with TD Banknorth subject to definitive documentation.

The new credit facility will consist of a revolving credit facility of $5 million which matures three years from the closing date, a senior secured term loan facility of $20 million, and a $5 million commercial real estate mortgage loan both of which mature five years from the closing date.

Cyalume Technologies is the world leader in the chemiluminescent industry providing dependable light for uses by militaries, policemen, firemen and throughout the safety industry. Their chemical lights are depended on in emergencies such as blackouts, industrial accidents, acts of terrorism and natural disasters. The company employs more than 200 people at its world headquarters in West Springfield, Massachusetts.

Read the press release here

SPAC China Healthcare Acquisition Corp Announces Definitive Agreement to Acquire Water Treatment Firm Europe Asia Huadu Environment Holding

On August 6, 2008, China Healthcare Acquisition Corp (CHM) announced a definitive agreement to acquire Europe Asia Huadu Environment Holding Pte, Ltd (EAHE).

Under the terms of the acquisition agreement, CHM will acquire 100% of the stock of EAHE for a total payment of 10,500,000 restricted shares of common stock of CHM. Based on the closing price of $5.75 per share on the American Stock Exchange on August 5, 2008, the value of the acquisition is $60,375,000.

In connection with the transaction, Mr. Wu Wing Shu of Sky Rainbow Investment Ltd. has agreed to purchase up to $8 million of CHM common stock in the open market at market prices.

Huadu Environment Holding manufactures water treatment equipment and provides construction and engineering services for water treatment projects in China. The transaction will provide the company with access to additional capital for expansion of its water treatment business. The company is a privately held Singapore company.

Click here for the press release

Union Street Acquisition Corp Sets Shareholder Vote Date, Files Definitive Proxy

Yesterday, Union Street Acquisition Corp. set September 22, 2008 as shareholder vote date for its $110 million acquisition of all of the issued and outstanding shares of capital stock of Archway Marketing Services, Inc. and 100% of the membership interests of Razor Business Strategy Consultants LLC.

This acquisition marks the rare instance where a SPAC will attempt the nearly impossible feat to close two separately negotiated acquisitions from separate sellers on the same day in order to meet the 80% acquisition requirement

Click here for the proxy

Ladenburg Thalmann Reports Oustanding Deferred SPAC Fee Revenue of $41.2 Million, Pending SPAC Acquisition Closings

On August 11, 2008, Ladenburg Thalmann Financial Services Inc. (AMEX: LTS) reported that as of June 30, 2008, the Company had potential deferred fees for SPAC transactions of approximately $41.36 million which, net of expenses, amounted to approximately $24.46 million.

The issue of deferred fees at risk is a fairly large one for Wall Street:

There are currently 22 SPACs approaching closing of their transactions with deferred fees of $91.9 million at risk and 60 SPACs still looking for an acquisition with a whopping $415.1 million worth of deferred fees at risk.

That's an overall average deferred fee of over $6 million per SPAC, shared among, on average, two or three underwriters. Not bad business, if you can get it.

Click here for more statistics, or to search for the SPACs that Ladenburg Thalmann still needs to get across the finish line.

Marathon Acquisition Corp. Shareholders Approve Merger with Global Ship Lease

Marathon Acquisition Corp, a SPAC that has shown up frequently in our blog, has finally closed on its acquisition of Global Ship Lease, according to an 8-K filed today. In August 2006, Marathon through its initial public offering raised approximately $308.8 million. The merger transaction values Global Ship Lease and its seventeen vessel fleet at approximately $1.0 billion. Following stockholder and warrant holder approval of the merger, Marathon’s stockholders will own approximately 66% of Global Ship Lease and CMA CGM will own approximately 34%.

Global Ship Lease is a container ship charter owner and a subsidiary of CMA CGM. of France, the world’s third largest container shipping company.

Global Ship Lease currently owns 12 vessels and has contracts in place to purchase an additional five vessels for $437 million from CMA CGM.

Click here for the press release.

Sports Properties Acquisition Corp Rumored in Bid to Buy the Chicago Cubs

According to an article yesterday in the Washington Post, Fred Malek, the Washington-based private-equity, formerly of Northwest Airlines and Marriott Hotels, has joined up with Sports Properties Acquisition Corp, a $200 million SPAC priced in January of this year, to make a bid for the Chicago Cubs.

The targeted properties, including the baseball team, Wrigley Field and a a portion of a regional sports network, are expected to sell for over $1 billion.

Malek, 71, has joined up with some heavy hitters to try and win the bid, including Stanley Kreitman, Hank Aaron, Mario Cuomo, Andrew Murstein, Richard Mack, and Jack Kemp, all board members of the SPAC.

Click here for the WaPo article

Tailwind Financial and Asset Alliance Corporation Announce Termination of Merger Agreement, Financial Services-Focused SPACs Face Trouble

On August 6, 2008, Tailwind Financial Inc, a $100 million SPAC priced in April 2007, provided notice to Asset Alliance Corporation of its decision to terminate their merger agreement first announced on January 8, 2008. Tailwind now has until the second week in April 2009 to announce and close on a transaction.

According to Tailwind:

"The decision to terminate was based on Tailwind’s belief that it would not be able to obtain the requisite stockholder approval for the transactions contemplated by the Agreement due to market conditions in the financial services sector."

Other financial services-focused SPACs still looking to announce their transactions, including Alternative Asset Management Acquisition Corp, BPW Acquisition Corp, Inter-Atlantic Financial, Inc, Prospect Acquisition Corp, and Triplecrown Acquisition Corp, should take a close look at the significant challenges to moving any future acquisitions over the goal line.

Bottom line for SPAC acquirors: Target quality firms, use significant leverage, and announce early. These factors should help mitigate investor challenges to approval.

Click here for the press release

$92 Million SPAC Trans-India Acquisition Corporation Signs Letter of Intent with Unnamed Target

Trans-India Acquisition Corporation (AMEX: TIL) announced that it has entered into an exclusive non-binding letter of intent relating to a business combination. The target is a company with business operations primarily in India. The Company will make an additional announcement once it has entered into a definitive agreement to complete a business combination.

Pursuant to the Company’s Amended and Restated Certificate of Incorporation, the execution of the letter of intent affords the Company a six-month extension for completion of a business combination, until February 14, 2009.

Read the press release here

SPACs With Less Than 100 Days to Announce or Close an Acquisition: It's a Fire Sale

As of today, the following SPACs have fewer than 100 days to announce or close their acquisitions. M&A bankers: time to buckle down on those remaining to close. For those SPACs still in the market, might it be worthwhile to lob a call into management to pitch that sell-side you've been working for a while?

For those SPACs that have yet to announce a target for acquisition, the mere act of signing an vague letter of intent that doesn't even disclose the name of the target should be enough to buy another six months

SPACs With Less Than 100 Days Remaining to Announce an Acquisition:

• Churchill Ventures Ltd -- 21 Days remaining
• Oceanaut, Inc. -- 22 Days remaining
• Alpha Security Group Corp -- 43 Days remaining
• Santa Monica Media Corp -- 48 Days remaining
• Pinpoint Advance Corp -- 71 Days remaining

SPACs with Less Than 100 Days to Close an Acquisition:

• Marathon Acquisition Corp has only 15 Days remaining to complete its acquisition of Global Ship Lease
• Energy Services Acquisition Corp has only 21 Days remaining to complete its acquisition of C.J. Hughes Construction and S.T. Pipeline
• Granahan McCourt Acquisition Corp has only 70 Days remaining to complete its acquisition of Pro Brand International, Inc

Source? The SPACInfo.com Database, of course...

Marathon Acquisition Corp. Receives Consent From Warrant Holders to Amend Warrant Agreement, Clears Path to Shareholder Vote

Marathon Acquisition Corp. (Amex: MAQ.U and MAQ, and OTCBB: MAQ.WS) today announced that it has received the requisite consent to amend the Warrant Agreement governing its outstanding warrants to allow for the consummation of its merger with Global Ship Lease, clearing the way for the shareholder vote on August 12, 2008.

The amendment to the warrant agreement (1) amends the definition of “business combination” to include (A) the merger of Marathon with and into another entity and (B) a merger of Marathon into or with a non-U.S. entity and the subsequent business combination with another entity and (2) makes a conforming change to the merger provision to include a merger of Marathon into or with a non-U.S. entity.

Global Ship Lease currently owns 12 vessels and has contracts in place to purchase an additional five vessels for $437 million from CMA CGM four of which are expected to be delivered in December 2008 and one in July 2009. The merger transaction values Global Ship Lease and its seventeen vessel fleet at approximately $1.0 billion. Following stockholder and warrantholder approval of the merger, Marathon’s stockholders will own approximately 66% of Global Ship Lease and CMA CGM will own approximately 34%.

Click here for the press release

Has the SPAC Become a More Viable Exit For Private Equity Portolio Companies?

In an article today, Rick Miller, Terry Childers, Michael K Rafter, Hannah Crockett and Eliot Robinson from Powell Goldstein, LLP argue that:

"Against the backdrop of today's tightening initial public offering and credit markets, private equity firms are finding it increasingly difficult to exit their investments using traditional vehicles. The special purpose acquisition company, or SPAC, presents an intriguing exit opportunity for private equity firms looking to capitalize on the ready capital and flexibility offered by SPACs."

They cite "Flexible Acquisition Terms and Increased Earning Potential, Greater Certainty on Financing, and Pricing and Time Constraints" as good reasons for private equity firms to sell to a SPAC.

Click here for the article

Global BPO Services Completes its $200 Million Acquisition of Stream Holdings Corporation, Renames Self "Stream Global Services, Inc"

Global BPO Services Corp. (AMEX:OOO) announced on July 29th, 2008 that its stockholders approved GBPO’s proposed $200 million acquisition of Stream Holdings Corporation, a provider of global customer relationship management and other business process outsourcing services to Fortune 100 companies, at an annual stockholders meeting held in New York City.

The transaction subsequently closed on July 31, 2008.

In a twist, the SPAC will privately issue 150,000 shares of Series A Convertible Preferred Stock to Ares Corporate Opportunity Fund for $150 million, immediately following the closing of the merger. GBPO expects to use the proceeds from the private placement to commence a tender offer for the purchase of its common stock following the closing of the merger at a price of $8.00 per share. Following the vote, the tender offer was increased to 20,757,046 shares at $8.00 per share.

Click here for the approval announcement
Click here for the amended agreement with Ares
Ares Corporate Opportunity Fund

SPAC Shareholders Vote Against Global Services Partners Acquisition of SouthPeak Interactive, But Transaction Proceeds Anyway. What Gives??

Global Services Partners Acquisition Corp (GSPAC), one of those oddly shaped HCFP/Brenner Securities SPACs with two classes of Units (Series A and B), has proven the ability of the structure to allow management to push through an unpopular acquisition in the face of significant shareholder opposition.

Now that the shareholder vote is complete, GSPAC management is moving ahead with the acquisition of SouthPeak, by returning the trust to shareholders, but keeping the SPAC alive as a publicly traded shell company. SouthPeak will now have to go out and complete a private financing of at least $5 million that values the company at a minimum of $35 million, after which SouthPeak will perform a reverse merger with GSPAC to become a publicly traded entity.

A few key terms are disclosed below:

• SouthPeak and/or the Company shall have completed, contemporaneous with the closing of the definitive agreement, a financing with gross proceeds of no less than $5.0 million;
• the transactions contemplated in the definitive agreement must be consummated by May 31, 2008;
• the total purchase price to be paid by the Company for SouthPeak shall consist solely of common stock of the Company having a fair value of no more than $35.0 million

The SPAC, which raised $30,000,000 in April 2006 by selling 400,000 Series A Units and 2,600,000 Series B Units has an unusual structure in which Each Series A unit consists of two shares of our common stock; and ten Class Z warrants and each Series B unit consists of two shares of our Class B common stock; and two Class W warrants.

Once again, we are not fans of this type of outcome for the SPAC product; it smells awfully like a bait and switch that could be potentially harmful to investors not savvy enough to vote against the proposed acquisition. We don't like the way this trend is going: SPACs that end up as reverse-merger candidate shell companies run contrary to the intended purpose of these instruments, and we believe that the exchanges should be taking a closer look at these outcomes.

Click here for the filing

Granahan McCourt Acquisition Corporation SPAC Announces Merger with Pro Brand International, Likes Antennae

Granahan McCourt Acquisition Corporation (a $90 million SPAC priced in October 2006 -- mentioned in an earlier post) has announced its intent to merge with Pro Brand International, Inc. (PBI) for $75 million in total consideration. Highlights about PBI and the transaction from the press release follow:

• "Designer and developer of advanced antenna and RF systems for the satellite industry
• Initial consideration of $75.0 million includes $55 million of cash and $20 million of stock, plus earnout contingent on performance through 2010
• Granahan McCourt team adds many years of operating and strategic experience and key relationships with companies in Europe, Latin America and Asia, strengthening growth opportunities
• 2007 revenue, EBITDA and net income were $132.0 million, $14.6 million, and $8.7 million, respectively
• Blue chip customer base including leading North American DBS operators
• Multi-pronged growth strategy including further rollout of new products to existing customers, geographic expansion, expansion into related verticals, and pursuit of acquisition opportunities in fragmented market
• Lower P/E, enterprise value to EBITDA, and enterprise value to revenue than publicly-traded comparables"

After the announcement, the common stock briefly traded up to $8.00, but has since dropped to yesterday's close of $7.92, somewhat below cash value in the trust on a per shares basis.

This is not a good sign for the acquisition: How the common trades after deal announcement is a fairly accurate indicator of investors' a) belief in PBI's validity as a acquisition target; and b) confidence that hedge funds will be voting for the acquisition.

Click here for the press release.

Shanghai Century Shanghaied By Its Shareholders

Shanghai Century Acquisition Corporation (AMEX: SHA, SHA.U, SHA.WT), a SPAC that raised $115 million in April 2006, announced that on April 29, 2008 its shareholders rejected its proposed acquisition of Asia Leader Investments Limited (a structured lease finance business in China initially in the banking/financial services infrastructure and automotive industries).

The idea was to expand Asia Leader's industry coverage after the closing to include: alternative energy infrastructure, energy savings infrastructure, healthcare, aviation and telecommunications.

The SPAC will now begin the process of liquidation.

This following the SPAC's botched attempt to acquire Sichuan Kelun Pharmaceuticals Co was scuttled after the transaction was unable to gain approvals from the People's Republic of China.


Click here for the press release

Granahan McCourt Acquisition Corporation SPAC Cuts it Close, Qualifying for Acquisition Extension on Last Possible Day

Granahan McCourt Acquisition Corporation, a $90 million SPAC priced in October of 2006, has announced that it has agreed in principle to acquire a target company, but has not yet disclosed the name. The company now has an additional 6 months to complete the transaction. According to the press release:

"Granahan McCourt Acquisition Corporation (AMEX:GHN, GHN.U, GHN.WS) (the “Company”) announced today that it has met the condition under its Fourth Amended and Restated Certificate of Incorporation that permits it until October 24, 2008 to complete an appropriate acquisition meeting the criteria set forth therein. The Company expects to announce a definitive agreement for a business combination shortly."

Click here for the press release

April SPAC Acquisition Approvals Breathe Some Life Into SPAC M&A

While SPAC investors and sponsors are taking a little breather along with the rest of the IPO market, SPAC M&A continues to move forward. After a fairly rough start to the year, with five SPACs announcing dissolutions, transactions continue to be pushed through.

Here's the April list:

• Global Services Partners Acquisition Corp acquisition of SouthPeak Interactive. GSP has announced that their shareholder vote will take place on April 24, 2008 (Proxy Here)
• Asia Automotive Acquisition Corp acquisition of Hunan TX was approved on April 17, 2008 (Press Release)
• Jaguar Acquisition Corp acquisition of China Cablecom was approved on April 9, 2008 (Press Release)

Apex BioVentures to Liquidate, Unable to Complete Dynogen Acquisition Due to "Market Conditions"

Apex Bioventures, a $60,000,000 SPAC that priced its IPO in June 2007 has announced that it is terminating its planned $98,000,000 acquisition of Dynogen Pharmaceuticals.

According to the press release:


"Apex and Dynogen determined that, due to current market conditions, particularly for small capitalization public biotech companies, terminating the merger agreement was in the best interests of both companies and their respective stockholders"

This, on the heels of the spectacular, last minute blow-up of Oracle Healthcare Acquisition Corp's acquisition of Precision Therapeutics earlier this year.


Click here for the press release.

Ladenburg Thalmann & Co. Begins Issuing Research on SPACs, First Rating Unsurprisingly a "Buy"

According to DealFlowMedia, Ladenburg Thalmann & Co. has begun issuing research on SPACs, initiating with a "Buy" rating on Marathon Acquisition Corp (AMEX: MAQ). SPAC underwriters will take interest as Ladenburg was an underwriter on the Marathon IPO and currently has the company on out on the road trying to convince shareholders to vote for its deal.

As we mentioned in a recent post on Marathon, Michael Gross announced that he would be buying 12-vessel Global Ship Lease (a subsidiary of CMA CGM S.A. of France) for about $1 billion.

Marathon Acquisition Corp: Is No One Else as Pumped as We Are??

Mike, Mike, Mike...You kept us hanging all the way up until your 18 month deadline, then teased us at the 11th hour with a vague press release telling us all about how, damn it, you are gonna make this thing happen (even though you couldn't tell us anything about it)...

Now, you tell us that you're going to buy 17 ships, but not cool ships like cruise ships or cigarette boats, but lame, albeit cash cow, container ships for a billion bucks? Sigh.

Says Michael Gross, “Our stated investment goal when we founded Marathon was to extensively evaluate a full array of investment opportunities and identify the one that would provide investors with superior growth potential”

We'll see if the market agrees. You've got until August 30th to convince shareholders (yes the same ones who pushed trading to slightly below trust value after he announcement) to do the deal.

Here's the press release and roadshow presentation

Finance-focused SPAC Alternative Asset Management Acquisition Corporation Announces Intent to Buy Halcyon Asset Management

Alternative Asset Management Acquisition Corporation (AAMAC) today announced its intent to purchase Halcyon Asset Management, a $12 billion hedge fund, in a $974 million acquisition.

This follows on the heels of last year's mega $3.4 billion purchase of GLG Partners by Freedom Acquisition Corp.

Since asset managers have had some trouble getting public recently, will we see more of these?

"To finance the acquisition, AAMAC will use the:

• cash held in trust of approximately $390 million assuming no
  conversions and excluding deferred underwriting feess
• issuance of a note in the amount of $115 million, subject to adjustment
  in certain circumstances;
• In addition, the Halcyon equity holders will retain 46.9 million LLC
  interests in Halcyon that will be exchangeable on a one-for-one basis into
  Halcyon Management common stock, which was valued at $469 million.
• ...Halcyon equity holders will be eligible to receive up to an
  additional 26.6 million exchangeable LLC interests, which will be issued in
  equal amounts upon achievement of each dollar of stock price from $15 to
  $20."

Click here for more.