SPACs are on fire.
Also known as special purpose acquisition companies, these blank check companies are essentially shells that don’t have any business operations or assets, but raise money from investors through stock-market listings.
The shell’s funds are then used to acquire businesses - thereby creating a path for companies to become publicly listed without going through the traditional IPO process.
Today, SPACs are some of the hottest investments on Wall Street.
In the first quarter of this year, total deal volume for these blank check companies reached a staggering $170 billion - which exceeded the total deal volume of $157 billion for all of 2020.
With their popularity gaining momentum, investors are increasingly looking for superior growth and high returns.
But while they’ve become extremely popular, there are very few that are actually high-quality investments with great business prospects.
In a previous article, we listed a few of the more popular SPACs to pay attention to.
Here, we’ve compiled a list of the top 5 SPAC stocks that investors should keep an eye on right now. They are:
Horizon Acquisition Corp (NYSE:HZON.U)
Broadstone Acquisition Corp. Units (NYSE:BSN.U)
Investindustrial Acquisition Corp. Units (NYSE:IIAC.U)
Pershing Square Tontine Holdings (NYSE:PSTH)
Dragoneer Growth Opportunities Corp. II (NASDAQ:DGNS)
Horizon Acquisition Corp is led by Chief Executive Officer, Chief Financial Officer and Chairman, Todd Boehly.
The blank check company is looking to concentrate its efforts in identifying businesses in the financial services industry, with a focus on differentiated financial services and financial services-adjacent platforms.
Financial services firms are some of the best value companies you can find in the markets today. A current acquisition in this space could produce superior long term returns in the future.
According to his bio, Mr. Boehly is the Co-founder, Chairman and Chief Executive Officer of Eldridge, a holding company with a unique network of businesses across finance, technology, real estate and entertainment. Prior to founding Eldridge in 2015, Mr. Boehly worked at Guggenheim Partners, the global asset manager, 2002 to 2015, and was President of Guggenheim Partners from 2011 to 2015. Mr. Boehly is a Board member of Kennedy-Wilson. Mr. Boehly received his B.B.A. from the College of William & Mary in 1996. He has also studied at the London School of Economics.
Broadstone Acquisition Corp. recently raised $300 million in its IPO which closed on September 15, 2020.
The blank check company’s management team is led by Hugh Osmond, Marc Jonas and Edward Hawkes. Over the past 20 years, they’ve led, managed and invested in transactions worth over £10 billion. Their investments include Pizza Express, Punch Group, Phoenix Group, and Keepmoat Homes.
The team has built sector-leading businesses across a broad range of industries, including two that became listed in the FTSE 100 Index (Pearl Group and Punch Group).
On November 27, 2020, Investindustrial Acquisition Corp. announced that through their IPO, the company raised total gross proceeds of $402,500,000.
Investindustrial Acquisition Corp. is an acquisition vehicle launched by Investindustrial, which is a leading European group of independently managed investment, holding and advisory companies with $12.3 billion of raised fund capital. The investment firm is focused on funding Southern European medium-sized companies.
Investindustrial Acquisition Corp. is led by CEO and Director Roberto Ardagna. He joined Investindustrial in 2010 and currently leads the team focused on companies with high growth potential. In this role, since 2018 he has led the acquisition of 16 companies, including add-ons and comprising, among others, the leading European producer of PVC-based thermoplastic solutions, Benvic, the British interior designer, OKA and the Italian food supplement manufacturer, Procemsa. Prior to joining Investindustrial, he worked for 4 years as an investment executive in the European Real Estate division of The Carlyle Group. He graduated from Bocconi University and holds an MBA from Harvard Business School. He speaks English and Italian.
Bill Ackman, the legendary founder and CEO of hedge fund Pershing Square Capital Management, made headlines last year when he raised money for Pershing Square Tontine Holdings, making it the biggest blank check company ever. It now has between $5 billion and $7 billion of equity capital for its initial business combination.
Pershing Square Tontine Holdings will seek targets in four principal market segments: high-quality IPO candidates, mature unicorns, private equity portfolio companies, and family-owned companies
Its investment criteria includes:
PSTH believes that its unique structure and willingness to acquire a minority interest in a company will help facilitate the completion of a transaction on attractive terms.
Dragoneer Investment Group is a San Francisco-based, growth-oriented investment firm backed by many of the world’s leading endowments, foundations, sovereign wealth funds and family offices, with a long track record of successfully identifying category and industry leaders. The firm’s track record includes public and private investments across industries and geographies, with a particular focus on technology-enabled businesses.
The company’s first SPAC, Dragoneer Growth Opportunities Corp (DGNR), recently announced a definitive agreement to merge with CCC Information Services Inc., a leading SaaS platform for the property and casualty (“P&C”) insurance economy.
Dragoneer’s second SPAC, Dragoneer Growth Opportunities Corp. II (DGNS), is now seeking an acquisition and has raised $240 million in an IPO. The Company is led by Marc Stad and Pat Robertson.