The ranks of would-be special purpose acquisition companies in the Canadian market have been reduced by one with the news that Avingstone Acquisition Corp. has “withdrawn” its prospectus.
The scorecard now reads by doing this: filings have been designed for seven SPACs, five have raised capital; one is still on the market and one has now been withdrawn. SPACs are a new comer to Canada but well-known south from the order.
They follow a well-worn path: a group takes the initiative to produce a SPAC; capital is raised from the public and put into escrow; over the next two years the management team then seeks an acquisition target that is then offer the shareholders for any vote. If either no target is located or if the proposed transaction is voted down investors obtain money with a little interest payment. The five SPACs, which have closed their offerings, have raised more than $1 billion. No five have proposed a transaction.
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Originally, Avingstone filed a preliminary prospectus last September letting it raise $110 million. The issuer planned to concentrate “on hospitality and related real estate opportunities in the Americas and Europe.” In terms of an acquisition target Avingstone planned to focus on seeking out “businesses and assets with an enterprise value which range from $250 million to more than $500 million.”
Last November it filed an amended prospectus, a move that kept the initial prospectus current C all part of anticipation of bringing the offering to market if and when markets improved. So on March 7 Avingstone reported that it had withdrawn the amended prospectus.
The final SPAC, the Kew Media Group Inc. continues to be hanging around: it filed a preliminary prospectus last November looking to raise $70 million; recently it filed an amended prospectus which gave it a further 3 months to decide what it really really wants to do.
