Despite the strong demand, SRUNU didn't garner much attention on Friday. The likely reason for that is, it is a "blank check" company, which, oftentimes have complex capital structures -- as this one does -- and, there are no actual operations. Blank checks are formed solely with the intent of acquiring assets, effecting a merger, or reorganizing other businesses. Therefore, at the time of the IPO, investors aren't really investing in any business. Instead, they are betting on management finding attractive assets for the company to invest in, which will later generate attractive returns. In the case of SRUNU, it is an acquisition vehicle of Fund VI, an energy-focused private investment fund managed by Riverstone. In the future, it may pursue an acquisition opportunity jointly with one or more entities affiliated with Riverstone and/or one or more investors in funds managed by Riverstone.
As of the time of its prospectus filing, it had not identified any potential business combination target and it has not, nor has anyone on its behalf, initiated any substantive discussions, directly or indirectly, with any potential business combination target. Broadly speaking, its goal is to identify and acquire a business that could benefit from a hands-on owner with extensive operational experience in the energy sector and that presents potential for an attractive risk-adjusted return profile under its stewardship. SRUNU states that even fundamentally sound companies can often under-perform their potential due to a temporary period of dislocation in the markets in which they operate, inefficient capital allocation, over-levered capital structures, excessive cost structures, incomplete management teams and/or inappropriate business strategies.
Furthermore, SRUNU favors opportunities with certain elements of downside protection. For example, opportunities where it can hedge proven reserves to reduce commodity risk, while improving the risk-reward return by driving change and often accelerating the target's growth initiatives. Its management team has successfully applied this approach at Riverstone in both North America and Europe and has deployed capital successfully in all market cycles. Also, it does not intend to purchase multiple businesses in unrelated industries in conjunction with its initial business combination.
Obviously, there are no financials to speak of since it has not yet made any business acquisitions. It also does not appear that SRUNU has any near-term plans to offer a distribution.