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The Eagle Flew the Nest: James Graf Files for His Own $225M SPAC
by Kristi Marvin on 2018-09-18 at 6:43pm

James Graf, who served on the Platinum Eagle, Double Eagle, Silver Eagle and Global Eagle SPAC teams, debuts his own SPAC – Graf Industrial Corp.

Tuesday afternoon, Graf Industrial Corp. filed for a $225 million IPO with a focus on the Industrial sector and is being led by the eponymous James Graf, as CEO and Director.  As previously mentioned, Mr. Graf brings a long SPAC resume to the team, having served on three previous “Eagle” SPACs (Double, Silver and Global) and another Eagle that is still searching (Platinum).

Looking at Mr. Graf’s previous SPAC experience, he served as vice president, CFO and treasurer on the Double Eagle SPAC, now WillScot Corp., and reviewing the table below, that one was very much a winner. The other two, not so much.

However, in the first three Eagles, Mr. Graf’s role was CFO.  He is also currently only a Director of Platinum Eagle.  So now that he’s in the pilot’s seat as CEO with Graf Industrial, it’s a bit of a different story. He’s got the “stick”. Plus, experience counts and Mr. Graf has that in spades.

NameIPO
Date
Unit
Price
Gross
Proceeds
(mms)
AcquisitionAcquisition
Symbol
Acquisition
Current
Share Price
Platinum EagleJan-18$10.00$325.0*Searching*------
Double EagleJune-15$10.00$500.0WillScot Corp.WSC$17.05
Silver EagleApril-13$10.00$325.0Videocon d2h Limited (Now trading on the NSE)VIDEOIND.NS---
Global EagleFeb-11$10.00$190.0Row 44 Inc. & Advanced Inflight AllianceENT$2.37

Regarding structure, once again we see the addition of the “Crescent Term“, which provides investors protection in the event an acquisition involves a PIPE.  Plus, we have another small twist regarding the completion deadline.  The prospectus states the team will have 15 months to complete an acquisition. However, if they need an additional three months, the warrant (which at IPO is for 1/2 share), becomes a warrant for 3/4 of a share.

Fifteen months is an incredibly short amount of time for a SPAC to complete a deal.  So, was the extra 1/4 share added to the warrant more palatable to the SPAC team rather than say, over-funding the trust to start with 18 months?  We can only speculate yes, but it will be a full-on sprint to the finish line.  Summary of terms below.

Graf Industrial Corp. Summary of Terms:
  • Focus:  Industrials
  • Size: $225 million
  • 100.0% held in trust ($10.00 per share)
  • $10.00 unit comprised of one Share of Common Stock + 1 Warrant for 1/2 Share 
  • Warrant call for redemption trigger: equals or exceeds $18.00 (cash or cashless exercise)
  • 15 months (+ 3 months) to complete an acquisition:
    • If an additional 3 months is needed, the public warrants become exercisable for 3/4 share 
  • At-risk Capital: $6.7 million (13,400,000 warrants at $0.50)
  • “Crescent Term” included
  • Underwriter fees: 2.0% + 3.5% “Business Combination Marketing” fee

EarlyBirdCapital and Oppenheimer & Co are co-bookrunning managers. I-Bankers Securities is co-manager.

Winston & Strawn LLP and Graubard Miller are Issuer’s Counsel and Underwriter’s Counsel, respectively.

 

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