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New SPAC Filing: Megalith Financial Acquisition Corp. Files for $150 Million IPO

News Update

New SPAC Filing: Megalith Financial Acquisition Corp. Files for $150 Million IPO

Jul 23, 2018 INTEL by Kristi Marvin

Megalith Acquisition Corp:  Focused on Financial Services and Fintech

Late Friday, Megalith Financial Acquisition Corp. filed for a $150 million SPAC IPO with a focus on the financial services industry as well as fintech businesses. Megalith is being led by Jay Sidhu, as Executive Chairman, and Samvir Sidhu, as CEO.

Jay Sidhu has had a long and well-known career in the banking and financial services industry, most notably as CEO of Sovereign Bancorp Inc. (NYSE: SOV) from 1989 until 2006. Under Jay Sidhu’s leadership, Sovereign grew from a $600 million banking institution with an IPO value of about $24 million to the 17th largest bank in the United States with a market capitalization of almost $12 billion.

Samvir Sidhu, who is Jay’s son, is also quite impressive.  In 2010, at the ripe old age of 26, he founded Megalith Capital Management, a real estate investment company focused exclusively on New York City.  According to The Real Deal, the firm has more than $1.2 billion in assets.

However, looking at this IPO’s structure, the warrant call for redemption threshold seems very high at $24, especially since this transaction is already offering a full warrant and 101% in trust ($10.10).  I find that very curious given this management team’s names and background. Maybe we’ll see changes in further filings.  Deal terms below.

Summary of terms are as follows:
  • Focus:  Financial Services/Fintech
  • $10.00 unit comprised of one share Class A Common Stock + one Warrant
  • Warrant call for redemption threshold: equals or exceeds $24.00 (cash or cashless exercise)
  • 101% held in trust ($10.10 per share)
  • 24 months to complete an acquisition 

Chardan is sole bookrunning manager.  Ellenoff Grossman & Schole LLP and Graubard Miller are Issuer’s Counsel and Underwriter’s Counsel, respectively.