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New Apollo Blank-Check Spartan Raises $480MM in IPO


Apollo Global Management vehicle Spartan Energy Acquisition Corp. became 2018’s second upstream-focused blank check company to go public, raising $480 million through the sale of 48 million units at $10 each. The units, which began trading on NYSE Aug. 10 under SPAQU, contain one Class A common share and one-third of a warrant to buy one additional Class A share at $11.50. The initial public offering (IPO) closed Aug. 14 and underwriters were granted a 45-day over-allotment option for up to an additional 7.2 million units.

In addition, sponsor Spartan Energy Acquisition Sponsor LLC, a private fund owned by an Apollo affiliate, committed to buy 8.4 million warrants, or 9.36 million if the over-allotment option is fully exercised, in a private placement at $1.50 per warrant. Assuming full exercise of the greenshoe and the private placement, the SPAC could realize up to $566 million in gross proceeds.

The units become separable after the 52nd day of trading, with the Class A common trading as SPAQ and the warrants as SPAQ WS. The company’s initial stockholders own an aggregate 13.8 million Class B shares, or founders shares. They will automatically convert on a one-for-one basis into Class A shares when the company transacts its initial business combination. Spartan has also entered into a forward purchase agreement under which private investment fund Apollo Natural Resources Partners II, L.P. would buy up to 30 million units at $10 each for $300 million in total that would likewise close concurrently with the initial business combination.

Spartan’s board is headed by Chairman Gregory Beard, the global head of natural resources and a senior partner at Apollo, who joined the firm in 2010. He currently serves on several boards including Apex Energy, Jupiter Resources, and Talos Energy. Spartan’s CEO is Geoffrey Strong, also an Apollo senior partner and a former member of Blackstone’s private equity group. He serves on several boards alongside Beard, but also on Chisholm Oil and Gas, Great Salt Plains Midstream, and Vistra Energy.

Citigroup and Credit Suisse were joint book-running managers and Jefferies, RBC, and Tudor Pickering Holt were co-managers for the offering.

In April, HighPeak Energy Partners brought blank check company Pure Acquisition Corp. public in an offering that raised a total of $414 million, including over-allotment option.

Since the beginning of 2016, 12 energy-focused special purpose acquisition companies have completed IPOs, with five of them completing initial business combinations and one that is pending. Most SPACs have two-to-three years to make qualifying transactions before having to return the money to investors. 



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Robert Bleckman

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