Investors seeking exposure to a finance-focused special purpose acquisition company (SPAC) have a new deal to size up.
On Wednesday, December 6, blank check company Blue Room Acquisition filed an S1-Form with the Securities and Exchange Commission (the firm earlier filed confidentially in September). It plans to list on the Nasdaq under the unusually elongated ticker of “IBLUU.”
The SPAC has ambitions to take over a US-based finance firm with a market value between $250 million and $500 million. It is casting a wide net. Its stated interest areas for the target firm include advisory services, brokerage, asset and wealth management, banking services, insurance services, fintech, specialty finance, and digital assets and others.
Blue Room will offer investors 20 million units at $10 a piece in the hope of raising at least $200 million. Each of these units will consist of one share of common stock, one right to receive one-tenth of a share upon the completion of a business combination, and one warrant, exercisable at $11.50.
Maxim Group is listed as the sole bookrunner for the deal.
The group is headed by Erick Deneb Flores Garcia, the founder and CEO of Mexico-based financial services firm MKM Bolsa Privada. Flores Garcia has more than two decades of experience in the industry. Starting out in 2002, he cut his teeth as a financial advisor and trader at Mexican brokerage Actinver Casa de Bolsa in 2002 before moving on to HSBC and then later Ikon Multibank Group Beijing and XTB Brokers Spain. In September 2012, Flores Garcia established MF Market Makers, which provides trading services to worldwide clients.
IPO Outlook
The IPO market remained quite muted this year, dashing Wall Street’s hopes it would recover to 2021 highs.
Nonetheless, deal flow in 2023 has proven marginally better than last year. According to Dealogic data analyzed by EY, U.S.-listed companies generated $10.1 billion in the first half of the year through a total of 63 IPOs. In the first six months of 2022, just $4.7 billion was raised from 51 IPOs.
Investors had higher hopes for the second half of the year. Several blockbuster IPOs were billed to break the impasse. Yet several of these mega-debuts flopped, which sapped bullish energy. Share prices of German sandal maker Birkenstock, British chip designer Arm Holdings, and grocery platform Instacart all fell below their IPO prices in the few days following their public launches.
SPACs as a subcategory have not fared so well. According to SPAC Insider, there were just 29 SPAC deals done this year, which raised a total of just around $5 billion.
That looks woeful, considering that in 2020, there were nearly 250 SPAC deals that raised a combined total of $80 billion from investors, and in 2021, 613 SPACs were launched, generating over $160 billion.
Investors keen on this deal will need to keep abreast of further updates as to when the market will open the door to the Blue Room.
This article was produced and syndicated by Wealth of Geeks.