A Special Purpose Acquisition Company (SPAC) led by a serial dealmaker floated on the London Stock Exchange today, having raised $550 million to buy out a private company that wishes to list in London.
Admiral Acquisition Corp is led by Sir Martin Franklin, nephew of DNA pioneer Rosalind Franklin. He has a long history as a corporate raider and was once Wall Street’s youngest CEO. The company sold $550 million worth of shares at $10 each. With no current operations of its own, it will use these funds, plus debt it can raise, to buy a company, allowing the acquired business to list in London.
Franklin said Admiral is looking for an established business in a “leading competitive industry position with a defensible moat”, but had no specific industry or region in mind.
SPACs surged in popularity in 2020 and 2021, mainly in the US, being seen as a faster way to list than an IPO. Online car retailer Cazoo and payments giant Paysafe were among the companies taken public by SPACs as investors poured a combined $250 billion into the acquisition vehicles..
But the trend sharply fell off as shareholders lost money on the vast majority of these companies. An index of companies that listed via SPAC is down 62.5% since peaking in February 2021.
After 613 SPACs launched in the US in 2021, only 14 have floated so far this year.
At the same time, the deal comes at a time of doubt about London’s attractiveness as a place to list, with new listings slowing significantly. An analysis for the Standard last month found that Britain’s top 100 companies would be worth £460 billion more if they moved to New York.
Admiral Acquisition must buy a company within the next two years, or it will be wound up and its cash will be returned to shareholders.