Blank Check Constellation Alpha Capital announces plans to list

It looks like more companies have started putting up special purpose acquisition companies up for IPOs in 2017 than any other period. Antero Midstream joined the list in April, and now Constellation Alpha Capital has too.

British Virgin Island-based Constellation Alpha Capital Corp. formed the black check Constellation Alpha Capital LLC in 2017 to acquire assets in the Indian market. According to the SPAC’s IPO filing, constellation Alpha Capital LLC exists to acquire assets, either by buying them or merging with other companies, on behalf of its parent company. The SPAC will operate within the Indian business and healthcare brackets.

Constellation Alpha Capital Acquisition II is based in West Palm Beach, Florida. At the moment the SPAC really has little that can make investors buy into it. Constellation Alpha Capital has not been around for a single fiscal year, so it has no reported revenue. As it stands now the company is fully backed by its parent corporation, which does not do much for investors’ confidence so to speak. One thing the SPAC has going for it though is its $160 million present market cap, which might turn out to be a factor that’ll convince investors to take part in the IPO.

Constellation Alpha Capital LLC will list on NASDAQ under the stock label CNACU. By offering up 12.5 million common shares at an estimated $10 apiece, the SPAC stands to make $125 million easy. For underwriters like Cowen & Co. and I-Bankers, there’s an overallotment option that the company hopes will bring its total proceeds to about $127 million. That would be a safe deal for a SPAC.

SPAC IPOs have not been known to be the most successful. They have no revenue, and their futures are typically uncertain. They are a lot like biotech start-ups in the regard. Investors may have taken little time to consider SPAC IPOs in the past, but things are looking up for blank check companies. An illustration is Alignvest Acquisition II.

Alignvest Acquisition II is a second SPAC formed under the Alignvest Corp. Alignvest Corp. Launched its first SPAC into the public trading market in 2015. Alignvest Corp. is a Toronto-based investment group.

Over the past few weeks, Alignvest Acquisition II has been trading on the TSX market under the ticker label AQX. Here is the interesting bit. When it was filing, Alignvest Acquisition II stated that it planned on raising 250 million in its IPO. For a SPAC, the figure seemed a bit steep. However, when the corporation closed its initial offering on Friday, it had raised a little over $350 million. And the SPAC can raise even m ore in its IPO because its underwriters have a 30-day purchase option to buy up to 52.5 million shares at the IPO price. As it currently stands the Alignvest Acquisition II IPO is the largest in Canadian IPO history, sharing a spot with an Acosta SPAC.

The successful pricing of the Alignvest Acquisition II IPO might be a sign that investors might finally be willing to put their money in SPACs. The Constellation Alpha Capital LLC IPO could not have come at a better time.