Welsbach’s quick thread
Welsbach Technology Metals Acquisition Corp. (NASDAQ: WTMA) It has raised $ 75 million from the IPO at $ 10.00 per unit, according to the terms of its latest S-1 / A regulatory dossier..
SPAC (Special Purpose Acquisition Company) aims to merge with a company in the technological metals and energy transition materials sector.
Although the company’s leadership is in metals and resources, they don’t have an SPAC track record, so I’m looking forward to the WTMA right now.
Background of Welsbach’s sponsor
Welsbach has 2 directors as its sponsor, Welsbach Acquisition Holdings LLC.
SPAC is run by:
- President and CEO Daniel Mamadou, former founder of Talaxis, was also a member of Noble Group’s technology metal group and head of the Asia-Pacific Corporate Solutions and Financing Group at Nomura Securities.
- Chief Operating Officer Christopher Clower, who previously founded PT Manoor Bulatn Lestari, an Indonesian resource company.
SPAC is the first vehicle of this executive group.
Welsbach wants to focus technology on the metals or energy transition metals market to find a suitable fusion partner.
It is difficult to quantify one of these market sizes due to the different definitions of which metals make up each market.
Welsbach’s SPAC IPO Requirements
Lombard, Illinois, Welsbach sold 7.5 million common shares and rights for $ 10.00 per unit, for a gross profit of approximately $ 75 million, without selling the usual underwriter options.
The IPO also provided for 1/10 of one share per share, which could be exercised upon the implementation of the initial business combination and expired 5 years after the completion of the initial business combination or earlier amortization or liquidation.
SPAC has 15 months to complete a merger (initial business combination). Failure to do so will result in shareholders / units being able to exchange the remaining income from the IPO stored in the trust.
The stock trading symbols are as follows:
Common Shares (WTMA)
The shares of the founders account for 20% of all shares and consist of ordinary shares.
The SPAC sponsor also purchased 347,500 units at a private location of $ 10.00 per unit. Private location units are similar to public units, except for transfer restrictions and other voting and amortization requirements.
One of the requirements for SPAC to conduct an initial business combination is the requirement to purchase one or more businesses of 80% of SPAC’s net assets and a majority vote to vote in favor of the proposed combination.
The SPAC may issue additional shares / units for a planned merger. Doing so would increase its Class B shares to maintain its 20% stake in the sponsor.
Comment on Welsbach
SPAC is notable for its extraordinary focus on technology metals or the energy transition metal industries for a potential fusion partner with a regional focus in Asia Pacific.
The leadership group seems to have a specialization in the metals or resource industry, which is to have a greater ability to improve the flow of potential agreement and close a deal.
They are large-scale management that seeks to target industrial spaces, but it is difficult to determine their growth characteristics due to the different definitions of the metals that make up these spaces.
Investing in a SPAC before announcing a proposed business combination is essentially investing in the top executives of the SPAC, their ability to create value, and the history of the previous SPAC return on shareholders.
So in a sense, investing in a SPAC can be compared to investing in a venture capital firm as a limited partner.
The cost of this investment is roughly the same as the 20% increase in the SPAC sponsor, but the time frame for a significant gain can be much faster, with a 1 to 3 year period for a SPAC of 10 or more. years for a typical venture capital fund.
Moreover, unlike a venture capital fund, SPAC is liquid and provides public liquidity with an additional liquidity benefit if they need to sell it.
In the case of this specific management team, there is no precedent for unsuccessful SPAC, which is very common with the recent boom in SPAC.
My focus is on experienced leadership teams and a successful track record of SPAC returns.
So I’m waiting for Welsbach because of the lack of history in SPAC.