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New Providence Acquisition Corp. Files $200 Million SPAC


New Providence Acquisition Corp. Files $200 Million SPAC

Aug 26, 2019 INTEL by Kristi Marvin

Late Friday evening, we had a second IPO filing with New Providence Acquisition Corp., a $200 million consumer focused SPAC being led by Alex Coleman and Gary Smith.  Alex Coleman will be leading as Chairman and Chief Executive Officer, while Gary Smith will be the co-Chief Executive Officer and Director. Both Alex and Gary come from consumer-heavy backgrounds, albeit, Alex as the deal-maker and Gary as the operator, which always makes for a good pairing.

Additionally, the entire team, including the Directors, has a wealth of food and beverage consumer history. To wit, you could have a meal at The Outback Steakhouse while enjoying a refreshing Pepsi, followed by a Red Bull chaser, topping the meal off with some Mrs. Field’s cookies and you would have hit many of the companies this team has been involved with.  And then if you wanted to elevate your cooking game, you could wander over to the Culinary Institute of America, of which, Rick Mazer (a Director) is the Chairman.

However, Mr. Coleman was most recently the CEO of Tilt Holdings (CSE: TILT), the “vertically-integrated infrastructure and technology cannabis company”, which, like many cannabis companies lately, has had a rough go of it.  Mr. Coleman stepped down in early May, and per the press release, was replaced by an “operator”, Mark Scatterday.  The press release implies that was always the plan since Alex’s tenure was about getting the company through a four-way merger and a public listing. No easy feat. Alex was the “deal guy” and then turned the reins over to an “operator”.  Some would argue that that’s spin, but most deal-makers do tend to get a little restless.  And SPACs sure do look appealing if you enjoy the hunt for a deal.

Regardless, this is still a first-time SPAC team and as such, the terms look to be a good fit.  New Providence is a 100% in trust, 18-months duration, 1/2 warrant structure. Plus, they’ve thrown in the Crescent Term at $9.20 (although that seems standard these days) and an “Indication of Interest” for up to 1,980,000 units at $10.00, or $19.8 million, from UBS O’Connor LLC.  UBS O’Connor is also participating in the sponsor group. Given the current SPAC environment, these terms feel appropriate, plus, they have solid partner with UBS O’Connor to add an extra bit of strength to this SPAC.

In summary, this SPAC should get sold fairly easily, but they’re still going to have market hard to drive demand. After all, we currently have eight SPACs with a consumer focus out looking for combinations right now, with China Yunhong, which is on file to IPO, looking in the consumer category as well.  New Providence makes it ten for consumer-focused SPACs and while they all have their own niche focus on the category, New Providence is going to have to demonstrate why they are deserving of capital in a crowded field to make this stock pop on day-one.

Look for this one to price mid-September.

Summary of terms below:

New Providence terms 8-25-19