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

Chardan 2008 China Acquisition Corp. Prices $55 Million IPO on Nasdaq (The First Ever) to Target Chinese Company Acquisitions

On August 12, 2008, Chardan Capital Markets has priced its fourth SPAC on the Nasdaq, selling 6,875,000 units at $8.00 each which will trade under the ticker symbol CACAU. This is the first SPAC in history to be filed on, then priced initially on the Nasdaq.

As mentioned previously, Kerry Propper, the owner and chief executive officer of Chardan Capital Markets LLC (formerly known as Gramercy Group), a New York based broker-dealer, has helmed three other SPACS thus far, raising nearly $100 million since his first $25 million SPAC in 2004, Chardan China Acquisition Corp.

This was followed by two SPACs with acquisition territories divided by the Yangtze River priced on the same day in May 2005, Chardan South China Acquisition Corp and Chardan North China Acquisition Corp.

The company will have to effect a business combination within 18 months after the IPO (or within 30 months from the consummation of the IPO if a letter of intent, agreement in principle or definitive agreement has been executed).

Click here for the final prospectus

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.

Subscribe to the SPACInfo.com SPAC Search Database for Only $99.00 Per Month

Exciting news here at SPACInfo.com: After months of testing and incorporating your feedback, we have launched our SPAC search subscription service at http://www.spacinfo.com/subscribe.html.

Our free search SPAC search service is being discontinued, but we are now offering unlimited access to the newer, faster and vastly improved SPAC database for only US$99.00 per month!

You will continue to get the same hard-to-find detailed SPAC information distilled from SEC Filings and press releases, but we've added over 30 new fields with detailed information about acquisitions, sponsor biographies, timing, underwriter compensation, counsel, and much, much more! Also, the search tool is now much more robust!

Click the following link today to subscribe to this valuable service:

http://www.spacinfo.com/subscribe.html

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

Greenwich PMV Acquisition Corp Files $200 Million AMEX IPO: Gabelli Strikes Twice on The Same Day

On August 5, 2008, the same day that he filed his $200 million SPAC Gabelli Entertainment & Telecommunications Acquisition Corp with the SEC, Mario Gabelli also filed Greenwich PMV Acquisition Corp. The two SPACs are exactly the same, save for two differences:

1) The sponsor teams are slightly different, and;
2) Greenwich PMV will explicitly NOT target the media, entertainment, telecommunications and financial services industries, while Gabelli Entertainment will target those industries.

This is reminiscent of the Chardan North and South SPACs, which were both filed and priced on the same day.

Each of Gabelli's SPACs will raise up to $200 million by offering 20 million units, consisting of one share of common stock and one warrant, to the public at a price of $10.00 per unit.

Click here for the filing

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

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

Serial SPAC-trepreneurs at Chardan Capital Markets File Their Fourth on Nasdaq: Chardan 2008 China Acquisition Corp

Li Zhang and the Propper family continue their SPAC dynasty with their fourth SPAC, Chardan 2008 China Acquisition Corp, a $55 million IPO filed July 30, 2008. This SPAC is notable because it is one of the first to be filed on Nasdaq.

Kerry Propper, the owner and chief executive officer of Chardan Capital Markets LLC (formerly known as Gramercy Group), a New York based broker-dealer, has helmed three other SPACS thus far, raising nearly $100 million since his first $25 million SPAC in 2004, Chardan China Acquisition Corp. This was followed by two SPACs with acquisition territories divided by the Yangtze River priced on the same day in May 2005, Chardan South China Acquisition Corp and Chardan North China Acquisition Corp.

In November 2005, Chardan China Acquisition Corp. completed its business combination with State Harvest Holdings Ltd. and changed its name to Origin Agritech Limited (Nasdaq: SEED).

Chardan North China Acquisition Corporation announced in late 2007 that its shareholders approved the acquisition of a controlling interest in Beijing HollySys Company and Hangzhou HollySys Automation Company. Chardan South China Acquisition Corp filed to liquidate following an unsuccessful bid to complete its acquisition of Liaoning GaoKe Energy Group.

Click here for the Chardan 2008 China Acquisition Corp filing

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

Gabelli Entertainment & Telecommunications Acquisition Corp Files for $200 Million AMEX IPO

Our billionaire friends at GAMCO Investors, Inc. (NYSE: GBL; a provider of investment advisory services to mutual funds, institutional and private wealth management investors, and investment partnerships), filed for a $200 million AMEX IPO last night.

Mario J. Gabelli (pictured at left), the billionaire CEO of GAMCO and ranked 698 among The World's Richest People In 2006, and a crew of GAMCO factoti have teamed up with Frederic V. Salerno, who was vice chairman and chief financial officer of Verizon until 2002, to target operating businesses or assets in the media, entertainment, telecommunications or financial services industries.

The team will own 20% of the post-IPO entity.

The market has responded well to this development, as GBL is up over 5% on news of the filing today.

Click here for the filing
Click here for Gabelli's Bio

We're Baaaack!

After a brief hiatus, we're back. Sign up with your email to the right to receive all the latest updates. Also stay tuned -- We've got a major overhaul of the database coming your way.

SPACs May Now List on the NASDAQ; AMEX and NYSE Forced to Eat Their Own Damn Lunch

Yes, we know that this information is a little stale (the release came out on July 25th, 2008), but it's big news nevertheless. In the face of opposition from the North American Securities Administrators Association (historically, the structure of blank check companies makes the offerings risky for investors and SPAC securities have been highly promoted at the IPO stage and in aftermarket trading), the SEC said that it would impose additional criteria intended to protect investors and that it would review each SPAC that applies to list and evaluate the reputation of the SPAC’s sponsors and underwriters.

Final criteria are as follows for Nasdaq listing, all other criteria are similar to previous listings:

• 90% of the gross proceeds from the IPO must be deposited in trust
• One or more business combinations within 36 months
• Business combinations must be at least 80% of the trust

Click here for the release

Tina Pappas, SPAC Lady: "The SPAC Market Has Legs"

Tina Pappas, a managing director at Morgan Joseph, was interviewed earlier this month by TheDeal.com.

"'Pappas, who recently married, seems to fit the Wall Street hard-charging mold, working into the wee hours. SPACs keep her occupied for now, but the views are mixed on the SPACs' near-term growth prospects. 'I think the market's got some legs,' Pappas says. 'Any time you have a product that appeals to investors, entrepreneurs and potential targets, that usually means it'll be viable long term.'"

Click here to read the full interview

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.

2005-2008 SPAC IPO Investment Banking Underwriting League Tables

We've looked at SPAC law firms and we've looked at SPAC accounting firms. We recently even looked at investment banks and their SPAC backlog. Fee-starved investment banks are looking back with wistful eyes to the days of ought-seven and ought-six, so let's help them remember the good 'ol days, shall we?

SPAC IPO rankings follow for all investment banks that have priced at least two SPAC IPOs per year since 2005. Equal credit has been given to all banks on each deal, so you'll see popular co-manager firms like Ladenburg Thalmann and Maxim Group showing up at the top of the lists in later years. Many SPACs underwritten by larger banks like Citigroup, Banc of America, Deutsche Bank and Merrill Lynch enlisted these SPAC experts to help with deal execution.

Trends are obvious here: Bulge-bracket investment banks only begin to enter the picture in 2006, but by the end of 2007 are capturing greater numbers of larger deals, reinforcing the product's credibility with investors and the markets overall.

Europe is Ready to List SPACs, Claims NautaDutilh Lawyer

The WSJ interviews Petra Zijp, co-head of Dutch law firm NautaDutilh’s capital markets team, about whether SPACs will be able to make it outside of of the United States as a viable product.

Here's a snip:

"DJ: So where does the European SPAC market stand now and what do you expect going forward this year?

Petra Zijp: Currently we have two listed SPACs. It is U.S. technology, which in the last 18 months has evolved greatly both in the sense that bulge bracket firms are doing these deals now and the quality of the sponsors has improved.

In Europe we are all set and ready to go. There are a few deals in the pipeline now, but I think Europe is waiting for the first few deals to come out and be a success. And then once people become comfortable with the structure, it will become a European product with European investors and European managers."

Click here for the article

SPAC Backlog Investment Bank Rankings: Who Stands to Lose the Most in Fees?

On the heels of yesterday's post about SPAC S-1 filing activity, we figured that we should give you a sense of which banks are behind the current backlog of filed SPACs waiting to go public. It's who you'd expect, and we left out any banks that only have one SPAC on file because, well, who really cares. If the SPAC bubble truly has burst, Citigroup stands to lose almost $140 million in upfront fees if none of the 13 SPACs it currently has in registration are able to price.

Here's another fact we dug up: All the SPACs in registration represent almost $520 million in upfront fees alone to investment banks with over $1 billion in fees available to banks if deals get done.

The rankings of investment banks with SPACs on file follows with Citigroup, Ladenburg and Lazard taking the top three spots, with 35 SPACs between them.



This ranking does not include foreign issuer SPACs, and only includes SPACs currently available for pricing.

DealBook Incorrectly Claims that SPAC Registrations Have Fallen to a Five Year Low

Yesterday's DealBook claimed that:

"...registrations dipped to a five-year low this month with only three listings for April, as the decline in initial public offerings caught up with the investment vehicles."

While it's true that s-1 filings dropped in April and the market is showing signs of slowing in general, in fact, on a monthly basis, there have been eleven months between January 2006 and today where monthly SPAC S-1 filings have dipped to three or fewer. See our analysis below:

SPAC S-1 Filing Activity: 2006 to 2008

You're asking our source again? Click on over to Edgar, folks.

Now, this isn't to say that SPAC filers are presented with signficant challenges vis-a-vis the growing backlog...Let's face it: With over 75 SPACs currently in registration with the SEC and probably another 20 to 25 foreign issuers filed on a confidential basis, the chances of making it through this backlog intact are slim.

Time to get your act together, Sorkin. Update: Looks like DealBook got our note. Click here for the article.

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

Morgan Joseph SPAC Conference -- Conclusion: Mo Money, Mo Less Problems?

Led by Tina Pappas, A.K.A. the "SPAC Lady", Morgan Joseph held its first annual SPAC conference in New York last week, attracting over 500 participants.

Attendees bemoaned the slowdown, with Richard Heckmann of Heckmann Corp. saying:

"...it seems to me that the SPAC market should be hotter than it is. Tell me a market you can go into where you can't lose money, the worst that can happen is that you'll get your money back."

... and that:

"My advice to a [new] team doing a SPAC is to bring something to the party. It's always about the management, it's always about the team. Money doesn't solve problems, management does..."

Click here for more coverage from Business Wire and TheDeal.com.

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

Andrew Murstein Interviewed in the Wall Street Journal About His SPAC, Sports Properties Acquisition Corp

In this April 22, 2008 interview with Stephen Grocer at the Wall Street Journal, Murstein outlines his plan for a $400 million to $1 billion acquisition of a sports-reated entity. He has been meeting with the comissioners of all the major American sports leagues (MLB, NBA, NFL, NASCAR) to vet opportunities.

Murstein notes:

"Teams in several of the leagues have been public before, such as the Boston Celtics and the Cleveland Indians, and their shareholders did very well. Several team owners have also contacted us, so we are talking to many prospects. There are some teams that are just not right for the SPAC, but many in large markets with great fan bases would be perfect. It would be great for fans to be able to buy the stock of those teams and own a piece of their favorite club."

Click here for the article

David Weidner at MarketWatch Predicts the End of "SPAC Fever", Compares SPAC Backlog to Halloween Hangover

David Weidner at MarketWatch has a forward looking analysis of the "companies, people and events" to shape the markets over the next few months, including SPACs:

"SPACs, or special purpose acquisition vehicles or blank check initial public offerings. These private equity companies wrapped up in an initial public offering have fueled the equity underwriting markets, but like a kid eating candy on Halloween, the markets are ready to hurl. There were 70 of these SPACs registered through April 14, according to The Deal. Many existing SPACs are folding because they can't find good companies to buy or they've met their deadline or both. SPACs made up 88% of the IPO backlog through March 25, according to Dealogic. This looks like the end for SPAC fever and who's going to pay the price? Citigroup, of course, the leading underwriter of SPAC deals."

Click here for the article

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)

SPAC Backlog Thickens, We Start Using the Word "Glut"

There are more SPACs on file with the SEC than have priced since early 2007. By our count nearly 100 SPACs, including foreign SPACs filed on a confidential basis, are waiting for market conditions to improve and move through the review process.

According to TheDeal.com:

"[The] large backlog of about 70 registrations has strained the market’s capacity. “There’s too much supply of issuers and just not enough demand,” said a New York investment banker."

We believe that many bankers, management teams and sponsor groups are taking a wait and see attitude these days, as the equity markets are still roiling from the mortgage crisis, depressing acquisition valuations and the ability of hedge funds to deploy capital.

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.

New SPAC Issues Reported to Decline by 10% in 2008, Nascent Industry Cringes

Reuters is reporting that SPACs IPOs are expected to decline by 10% in 2008.

Barry Grossman of Ellenoff Grossman & Schole LLP is quoted as saying:

"The whole IPO market will be down significantly this year ... There are a lot of SPACs in the pipeline right now and there's so much inventory out there that I can see people saying: 'I have enough SPACS in my portfolio right now; let me look around.' But if you have quality management, those deals are still getting done."

We say that projections that the SPAC market will decline by only 10% are naive, at best. SPAC IPOs this year are already down over 55% vs. the same period last year, and aren't showing any signs of recovery, while a stagnant backlog continues to grow. It ain't shaping up to be pretty.

Click here for more.

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.

Tracking SPACs: The Morgan Joseph Acquisition Company Index (MJACI) Chart Goes Up and Up

Wow, we sure love charts that go up: Morgan Joseph has a Bloomberg-quoted SPAC Index called the MJACI worthy of checking out for those of you who are looking for a holistic view of aggregated, indexed SPAC performance right up until the point that a SPAC buys a business. Morgan Joseph describes their index as follows:

"MJACI is a market capitalization weighted (excluding promote shares and over allotments) index. MJACI adds newly formed public acquisition companies at their initial offer price and removes an existing acquisition company upon consummation of a business combination. In either event, index weightings are linearly rebalanced. The index is set equal to a base of 100 as of January 1, 2005."

Of course, the index fails to take into account plummeting equity values exhibited by most SPACs following the acquisition, but most of you are probably playing arb strategies and getting out prior to the combination anyways on these things, so what do you care?

Find out more here.

Equal Time: Another SPAC Conference to Hit New York City in June

Dealflow Media is sponsoring a SPAC conference on June 5, 2008 at the Hilton Hotel, New York City. Should be a good one with a hole slew of tasty topics, and you save $200 if you sign up by April 18th.

At the conference, they're covering:

• Different Trading Strategies for Units, Common Stock & Warrants
• Understanding the Listing Alternatives: OTC, AIM, AMEX, Euronext and Nasdaq
• Tactics to Avoid Liquidation
• How Regulatory Changes Might Impact Blank Check Offerings
• Practical Valuation when SPACs are in Play
• Management Considerations: What it Takes to Run your Own Deal
• How to Arbitrage SPACs
• The Do’s and Don’ts of Searching for Targets & Tactics to Avoid Liquidation
• Dealing with Liquidity Issues and Positioning for a Shareholder Vote
• Approaches to Special Situations
• SPAC Structuring Alternatives including Trusts, Voting & Banker’s Compensation
• Moving a SPAC's Shareholder Base Away from Hedge Funds
• Data & Statistics: A Comprehensive Tour of the Modern SPAC Marketplace

Click here to register

SPAC Shareholders Get Out The Vote

Proxy solicitors are in for a profitable treat this month and next as seven SPACs have scheduled shareholder votes for reasons ranging from liquidation, changing their corporate charters to approving acquisitions.

Should be a fun couple of months:

• Asia Automotive Acquisition Corp -- April 4, 2008 -- Acquisition of Hunan TX Enterprise