Hennessy Capital Acquisition Corp. IV Files for $250M SPAC IPO


Hennessy Capital Acquisition Corp. IV Files for $250M SPAC IPO

Feb 11, 2019 INTEL by Kristi Marvin

Monday evening, we had another new SPAC IPO filing, this time from serial SPAC issuer Daniel Hennessy.  Hennessy Capital Acquisition Corp. IV (HCACU), will be focusing on industrial, infrastructure solutions and value-added distribution sectors in the United States and plans to raise $250 million.  The eponymous Daniel J. Hennessy, will be leading as Chairman and CEO, while Greg Ethridge (most recently, President of Matlin & Partners Acquisition Corp.), will be in the role of President and COO.

For reference, below is a table showing the first three Hennessy SPACs and their business combinations.

Hennessy I$100Blue Bird Corp.BLBD$18.01
Hennessy II$175Daseke, Inc.DSKE$4.36
Hennessy III$225NRC Group Holdings Corp.NRCG$9.21

Looking at this SPAC’s structure (scroll down), we have a lot of “extras”.  We see an Anchor Investor (Blackrock for $32.5M), a Forward Purchase (Nomura for $125M), and the Crescent Term to boot (threshold of $9.20).  However, you will also notice that this is a 101% in trust deal ($10.10 per share) and there is 3/4 warrant included in the unit.  Plus, it has an 18-month life.  Notably, these terms are nearly the same exact terms Hennessy III went out with and it appears that is what the Hennessy team is most comfortable marketing.  (For reference, I looked up Hennessy III and their terms were: 18 months, 101% and 3/4 warrant, but no Forward Purchase or Anchor Investor.)

However, Hennessy III used Credit Suisse and Stifel as their underwriters, whereas Hennessy IV is using Nomura, Stifel and I-Bankers.  This is Stifel’s second appearance on a SPAC this year, having recently been an underwriter in the RMG Acquisition Corp. deal.  But the real surprise was Nomura.  This is Nomura’s first SPAC as an underwriter, so we’ve got another competitor for the League Tables this year!

All told, these terms are sell-able.  The 3/4 of a warrant always seems a little wonky, mostly because we are creatures of habit and have gotten so used to using the standard 1, 1/2 or a 1/3 that you throw a 3/4 in there and you actually have to think about it now.  But hey, whatever sells…

Summary of terms below:

Hennessy IV terms

Nomura and Stifel are joint book-running managers. I-Bankers Securities, Inc. is co-manager.
Ellenoff Grossman & Schole LLP and Skadden, Arps, Slate, Meagher & Flom LLP are issuer’s counsel and underwriter’s counsel, respectively.