On The Fly: The Week In SPAC News

Mergers and Acquisitions

In SPAC news this week, Clarus Therapeutics and Blue Water Acquisition announced a business combination agreement, while gaming company Super Group said it is merging with Sports Entertainment Acquisition.

BLUE WATER, CLARUS THERAPEUTICS MERGER

Clarus Therapeutics, a pharmaceutical company advancing androgen and metabolic therapies for men and women, and Blue Water Acquisition Corp. (BLUW), a special purpose acquisition company, or "SPAC," announced a definitive business combination agreement that will result in Clarus becoming a publicly traded company. This transaction values Clarus at $379M on a fully diluted basis, assuming no redemptions by Blue Water stockholders. In addition, current Clarus stakeholders will invest an additional $25M in Clarus following the announcement of this transaction. Clarus Therapeutics shareholders and Blue Water Acquisition Corp. shareholders will hold shares in Clarus Therapeutics, which is expected to be listed on NASDAQ. Subject to stockholder approval and the satisfaction of customary closing conditions, the business combination transaction is expected to close in the third quarter of 2021.

SUPER GROUP DEAL

Super Group - the holding company for Betway, an online sports betting brand, and Spin, a multi-brand online casino offering - announced it has entered into a definitive agreement with Sports Entertainment Acquisition Corp. (SEAH), a publicly traded special purpose acquisition company, to bring its global online sports betting and gaming group to the U.S. public markets. The combined company intends to apply to list its shares on the New York Stock Exchange under the new ticker symbol "SGHC". Upon closing of the transaction, the combined company will operate under the name Super Group.

SPAC PROJECTIONS

The U.S. Securities and Exchange Commission is weighing new guidance to rein in growth projections made by special purpose acquisition companies and clarify when such firms qualify for certain legal protections, Reuters' Anirban Sen, Chris Prentice, and Joshua Franklin reported, citing three people with knowledge of the discussions. The previously unreported measures being considered by staff at the regulator would escalate its crackdown on the SPAC frenzy, which it worries is posing risks to investors, the authors said.

COVERAGE INITIATIONS

Craig-Hallum analyst Ryan Sigdahl initiated coverage of PlayStudios with a Buy rating and $15 price target. PlayStudios provides a differentiated and better user experience with its playAWARDS loyalty platform versus other game studios, the analyst contended, adding that this is driving greater organic growth, retention, and less volatility and risk around new game launches. Sigdahl believes the company can achieve its ambitious near- and medium-term margin targets, which creates significant upside potential for shares, but thinks there is even more upside optionality with its evolution into a platform provider over the next few years. PlayStudios is merging with Acies Acquisition (ACAC), a special purpose acquisition company.

On Friday, JPMorgan analyst Tien-tsin Huang initiated coverage of Billtrust (BTRS) with a Neutral rating and $17 price target. The shares are up 55% from its special purpose acquisition company merger valuation set just six months ago, seemingly pricing in the belief that Billtrust is building a "long-term winner in the complex" business-to-business commerce space, Huang told investors. The analyst believes further upside might require near-term gross profit growth to exceed pre-pandemic levels.

SPAC IPOs this week:

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