Earlier this morning, Nebula Acquisition's (NEBUU) 25.0 million share IPO priced at $10, as expected, raising $250.0 million in gross proceeds. Nebula Acquisition is a blank check company, which means it doesn't actually have an operating business. Rather, it is created with the sole purpose of acquiring other assets or businesses, effecting a merger, or participating in a capital stock exchange.
What's unique about Nebula is that its' adviser and sponsor is True Wind Capital Management, a technology-focused private investment firm led by two former executives from Kohlberg Kravis Roberts & Company (KKR): Adam Clammer and James Greene. What also stands out about this particular blank check IPO is that it was underwritten by two tier one investment banks -- Goldman Sachs and Deutsche Bank. The most prominent firms typically back higher quality companies that are going public (which wouldn't normally include blank checks), so, that is a promising sign for NEBUU.
NEBUU is going to be a portfolio investment held in True Wind Capital's investment fund. Therefore, it will depend on True Wind's investment identification and evaluation platform to complete its initial business combination. More specifically, given Mr. Clammer's and Mr. Greene's experience, background, and networking within the lower-middle market and middle-market technology arena, it will be looking for opportunities of that size and scope.
In addition to focusing on small/mid market technology opportunities, NEBUU intends to acquire companies or assets that have the following characteristics:
- Large and growing market.
- Inherently profitable business with high operating leverage.
- Strong management teams.
- Differentiated products or services.
- Minimal technology risk.
- Appropriate valuations.
Furthermore, NEBUU's initial business combination must occur with one or more target businesses that together have a combined fair market value of at least 80% of the assets held in the trust account at the time of the agreement of entering into a combination.
Lastly, at this time, it does not have any specific acquisition targets selected. At the completion of this offering, NEBUU has funds available for a business combination equating to $241.25 million. If it is not able to complete an acquisition solely using cash on hand, it may issue debt or equity securities to finance a combination.