Rebooting WeWork
The Rundown - Your weekly SPAC Recap (05/05/24)
Happy Sunday, Friends!Â
The last week of SPACs was packed with buyouts, IPOs, and deal amendments. A co-working spaces provider gets a lifeline with a restructuring deal with its creditors, while a SPAC terminates a deal with a group of companies. Also, two new IPOs are announced, including one from serial sponsor Michael Klein after a three-year hiatus. Read on to find out the latest about all things SPACs.Â
De-SPAC NewsÂ
$WE Agree to Restructuring Deal, Ending Adam Neumann Comeback
WeWork's senior creditors are set to take control of the company after committing to a new $450 million investment, effectively thwarting founder Adam Neumann's attempt to buy back the co-working space provider.Â
The deal's framework received approval from a New Jersey federal bankruptcy court judge, with creditors scheduled to vote on the restructuring plan on May 30. Yardi Systems, a real estate technology provider and creditor to WeWork, has agreed to invest $337 million, securing 60% of the reorganized company.
Additionally, a group of hedge funds will contribute the remaining $113 million for a 20% stake, while entities holding $4 billion of WeWork's pre-bankruptcy debt, including majority investor SoftBank, will receive the remaining 20%.Â
Investment bankers have valued the newly restructured WeWork at approximately $750 million, indicating that existing debt holders will recover an average of about 5 cents on the dollar, a stark contrast to its former peak valuation of $47 billion.Â
Adam Neumann, who resigned from WeWork in 2019, has made several attempts to reacquire the company since December, which were all declined. In court, his lawyers argued that Neumann should be allowed to review WeWork’s private financial data to potentially increase his previous $650 million bid.
SPAC Deal Updates
$QDRO Terminates Deal With Greg Lindberg Group of Companies
SPAC Quadro Acquisition One Corp has decided to terminate a deal with Greg Lindberg’s group of companies for breaching the terms of the merger.Â
On May 1, 2024, the SPAC canceled the merger with the Seller because the Seller did not submit the 2023 Financial Statements by April 30, 2024, and failed to provide the required Seller Disclosure Schedules by February 29, 2024, which are both considered material breaches of the agreement.
In January, Quadro announced a merger agreement with Global Growth, a private equity firm, planning for the SPAC to acquire seven companies in segments including sports collectibles and healthcare services, with a combined value of $3 billion.
This merger would consolidate the Global Growth Companies, previously operated through separate trusts, under a single CEO and CFO, enhancing shareholder accountability by terminating these trusts. Quadro previously raised $230 million through an IPO in February 2021, but redemptions have left the SPAC with $86 million in cash.Â
Potential SPAC DealsÂ
$MCAG Signs Term Sheet to Merge With CUBEBIO for Potential Deal
SPAC Mountain Crest Acquisition V has entered into a non-binding term sheet with Korean early-stage cancer diagnosis firm CUBEBIO.Â
The preliminary equity value of CUBEBIO in this deal is set at $620 million, but this may be adjusted based on further due diligence by Mountain Crest V and prevailing market conditions.
CUBEBIO is an in-vitro diagnostic company that has developed a technology that detects early-stage cancer by analyzing specific metabolites in easily collected urine, enhancing the accessibility of cancer screening. The company holds 37 patents and has produced several products including the CEED-PG/PGS, CEED-NOVUS-P for pancreatic cancer, and CEED-NOVUS for multiple cancers.
Recently the company secured a $14.5 million contract with Taiwan Biotech to supply cancer screening products to Taiwan, Vietnam, and Malaysia, with additional deals in the United States and Japan forthcoming.
Global Fund, an advisory firm based out of Washington D.C., which specializes in SPAC transactions, has been hired by CUBEBIO to assist with its proposed deal. Mountain Crest V previously raised $69 million through a November 2021 IPO, but 92% of the trust was redeemed during the last extension vote.Â
SPAC NewsÂ
Michael Klein Backs $250 Million $CCIX After Three-Year SPAC Break
Veteran dealmaker Michael Klein has floated his ninth SPAC, Churchill Capital Corp IX, planning to raise $250 million.
This marks Klein’s first venture into SPACs since partnering with OpenAI CEO Sam Altman in 2021, continuing a trend of serial sponsors launching significant new enterprises.
The newly launched $250 million vehicle is Michael Klein's smallest blank-check company yet and has not specified a target industry. Klein, who has found several Churchill vehicles, has also held top positions at Citi and Salomon Smith Barney.
Churchill SPACs merged with EV maker Lucid in 2021 and healthcare-focused MultiPlan in 2020, while also recently terminating a merger with UK-based SME owner CorpAcq.Â
During the height of the SPAC boom in 2020Â and 2021, sponsors like Klein raised over $245 billion through more than 850 vehicles, drawing interest from celebrities, athletes, and former politicians.
$DTSQ Files for $60 Million IPO
Blank-cheque firm DT Cloud Star Acquisition, which is being ed by a CITIC Securities executive, has filed with the SEC to raise up to $60 million in an initial public offering.
The Brooklyn, NY-based firm aims to raise $60 million by offering 6 million units at $10 each, where each unit includes one share of common stock and one right to receive one-seventh of a share after the merger.
Led by CEO and Chair Bian Fan, a Senior Vice President at CITIC Securities specializing in cross-border mergers and acquisitions, the SPAC does not have a specific target industry or geography but intends to focus on established businesses with strong financial prospects and market positions.
The company, which was founded in 2022, plans to list on the Nasdaq under the symbol DTSQU. A.G.P. is serving as the sole bookrunner for the deal.
Meme of the Day
Mother is Merciful
