SPAC Veteran Eli Baker Launches $1.5 Billion IPO with New Spin Innovation to “Rightsize” – IPO Edge
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SPAC Veteran Eli Baker Launches $1.5 Billion IPO with New Spin Innovation to “Rightsize”
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SPAC Veteran Eli Baker Launches $1.5 Billion IPO with New Spin Innovation to “Rightsize”

By John Jannarone

SPAC veteran Eli Baker has filed a prospectus for a $1.5 billion IPO for Spinning Eagle Acquisition Corp., introducing a new innovation that would allow the vehicle to “rightsize” by spinning off part of itself if all of the capital is not needed for a single transaction.

Spinning Eagle will raise $1.5 billion to be used toward a target acquisition in any industry. That marks one of the largest SPAC deal to date aside from the $4 billion raised by William Ackman’s Pershing Square Tontine Holdings and Churchill Capital Corp IV.

Mr. Baker is well known for recent successful deals including gaming platforms DraftKings Inc. and Skillz Inc. (see interview here), which have quintupled and doubled, respectively, since listing in 2020. He has once again hired The Goldman Sachs Group, Inc. as an advisor on the deal. Neither Mr. Baker nor Olympia McNerney, who runs U.S. SPACs at Goldman Sachs and spoke at an IPO Edge forum last summer, could immediately be reached for comment late Wednesday.

The spin option appears to be a smart way to raise the most possible capital while Mr. Baker’s deal prowess is in extremely high demand – even if it’s not all needed for his favored target.

“In the event that we determine not to use all of the proceeds held in the trust account for our initial business combination, based on the capital needs of our initial business combination target and related factors, we will have the ability to rightsize our trust account by allocating a portion of our trust account to a new blank check company, which we refer to as SpinCo, and spinning off SpinCo as an independent, publicly-traded special purpose acquisition company,” the filing said. “If we elect to effect a spin-off, we will designate a specific amount of the proceeds then held in the trust account for our initial business combination, and, prior to our entry into the definitive agreement for the initial business combination, contribute the excess amount to a trust account of SpinCo, in exchange for units, Class A ordinary shares and warrants of SpinCo.”

Spinning Eagle is not the only pedigreed SPAC to hit up the market this week. Dan Hennessy’s Hennessy Capital Investment Corp. V also filed for a $250 million IPO, hot on the heels of the successful merger of Hennessy Capital Acquisition Corp. IV with electric vehicle maker Canoo. The newly-formed company now trades under ticker GOEV and trades just below $20 a share, up 100% from the SPAC’s IPO price.

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