DiamondPeak Holdings Corp. (DPHCU) Files for $250M SPAC IPO

This morning, DiamondPeak Holdings Corp. (DPHCU) filed for a $250 million SPAC IPO focused on the real estate sector.  DiamondPeak will be led by David Hamamoto, the former founder of the Northstar Companies, which was sold to Colony Capital (NYSE: CLNY) in January of 2017. Mr. Hamamoto will be the Chairman and CEO of DiamondPeak.

Rounding out the team, however, are three former Lehman Brother’s Real Estate veterans.  Kyriakos Mihalitsis, the CFO of DiamondPeak, joined Lehman Brother Real Estate Partners in 2006. Mark Walsh, a Director, headed Lehman Brothers’ Global Real Estate Group and served as Global Co-Head of Lehman Brothers Real Estate Private Equity, before founding SilverPeak in 2010 (a multi-strategy investment platform). And finally, Steven Hash, a Director Nominee, was Global Head of Real Estate Investment Banking from 2006 to 2012 and Chief Operating Officer of Global Investment Banking from 2008 to 2011, among other roles while at Lehman (and it’s successor, Barclay’s).

Now, hindsight is 20/20, and it may seem incredulous now, but very few people saw the real estate collapse coming back then, or at least how significant it would be and how it would precipitate the financial crisis.  So yes, having the words “Lehman” and “Real Estate” might sound kind of scary on a CV, but if you read The Big Short (or saw the movie), there were really only a handful of people that were able to actually connect the dots while there was still time to correct anything.  Regardless, with experience (and maybe more so with bad experiences) comes knowledge and what not do in the next go around.

Looking at the terms, this structure is very similar to RMG Acquisition Corp., another Deutsche Bank deal.  Even the addition of the Crescent Term uses the threshold of $9.20, just like RMG does. However, the SPAC market remains tight. We won’t know if it’s beginning to loosen until we see a few deals price, so it remains to be seen if DiamondPeak needs to make some adjustments to terms.  However, they did remove the delaying amendment on this first filing.  Which means, come Feb. 7th, this deal could potentially price.   We’ll keep an eye out for any changes.

Summary of terms below:

Deutsche Bank is sole bookrunning manager.
Ellenoff Grossman & Schole LLP, and Ropes & Gray LLP, are issuer’s counsel and underwriter’s counsel, respectively.