Initial public offerings (IPOs) carried out through special purpose acquisition companies, or SPACs, continue to be red hot this year. So far in 2020, there have been more than 100 SPAC IPOs that have raised a combined $42.1 billion. The average IPO size has a value of nearly $400 million.
Importantly, the number of SPAC IPOs this year is forecast to more than double the 59 deals from 2019. In the last 12 months, SPAC deals have brought to market popular stocks such as Virgin Galactic (NYSE:SPCE), DraftKings (NASDAQ:DKNG) and Nikola (NASDAQ:NKLA).
Despite the recent stock market volatility, SPAC IPOs show no signs of slowing down. Here is a look at seven upcoming SPAC IPOs that investors can buy in the coming weeks and months. Many should hold their market debut before — or right after — the Nov. 3 presidential election.
- XL Fleet
- Onyx Enterprises
- United Wholesale Mortgage
Upcoming SPAC IPOs: CarLotz (LOTZ)
CarLotz, a 10-year-old used vehicle chain, is prepping an IPO on the Nasdaq Exchange. Importantly, Wall Street expects that deal to raise $300 million in capital and drive a nationwide expansion at a time when consumers are turning to second-hand vehicles.
The firm, which currently has eight locations and robust online sales, is going public through a SPAC IPO with Acamar Partners Acquisition (NASDAQ:ACAM), a Miami, Florida-based SPAC that was formed in 2018 and went public with a $300 million IPO in 2019. Deutsche Bank and Barclays are also helping CarLotz go public. The IPO should take place before the end of the year — and could happen as soon as this week.
After the IPO closes, CarLotz will take over Acamar’s public listing and trade on the Nasdaq under the ticker symbol LOTZ. Combined with Acamar’s existing capital pool and an additional $125 million coming from an investor group that includes former General Motors (NYSE:GM) CEO Rick Wagoner, CarLotz expects to come out of the deal with $321 million to put toward its aggressive expansion plans.
CarLotz aims to appeal to car owners who want to sell a used vehicle without the hassle. Sellers pay CarLotz an upfront fee of $299 to prep and list the vehicle for sale. Once sold, the company takes a $799 “success fee” from the proceeds, and the rest goes to the seller. The company sold more than 6,000 vehicles in 2019 and expects revenue of $110 million this year.
XL Fleet (XL)
XL Fleet has a proprietary electrification power train platform that transforms traditional fossil fuel-powered vehicles into hybrid and plug-in hybrid electric vehicles.
XL systems are currently available on a number of vehicles from Ford (NYSE:F) and General Motors. The company, based in Boston, Massachusetts, is going public through a SPAC IPO with Pivotal Investment Corporation II (NYSE:PIC).
When finalized, the combined company will be named XL Fleet and will be listed on the New York Stock Exchange under the ticker symbol XL. The combined company will also have an anticipated enterprise value of $1 billion and no material debt. XL Fleet should raise $350 million from the SPAC IPO and plans to invest in the development of new electrification technologies. It also wants to expand into emerging markets outside of North America.
XL Fleet has more than 3,200 commercial and municipal vehicles in more than 200 fleets throughout the U.S. and Canada. Combined, those fleets have logged more than 130 million customer miles. XL Fleet has strong momentum — it has a $220-million 12-month sales pipeline and forecast revenue of more than $21 million in 2020 and $75 million in 2021.
Upcoming SPAC IPOs: Onyx Enterprises (LGC)
Onyx Enterprises operates a leading e-commerce platform for the automotive market called CARiD.com that enables consumers and garages to source vehicle parts and accessories. Onyx has agreed to go public in a SPAC IPO with Legacy Acquisition (NYSE:LGC).
Importantly, Onyx Enterprises plans to raise about $330 million from the SPAC deal and use the proceeds to further expand in the automotive aftermarket.
However, Onyx Enterprises is more than an e-commerce company. It is also heavily invested in artificial intelligence (AI) and machine learning. Onyx is striving to become an online leader in the automotive aftermarket industry that is estimated to be worth $400 billion. At the end of June, Onyx was well-capitalized with $45.7 million of cash on hand. The IPO should come in early November, right as Americans head to the polls.
Skillz is one of the more exciting upcoming SPAC IPOs. The mobile gaming and financial payments company is about to go public after having one of its best quarters ever.
Skillz, which is holding a SPAC IPO through a merger with Flying Eagle Acquisition (NYSE:FEAC), is also one of the bigger stock debuts this autumn with a valuation of $3.5 billion.
The company is focused on competitive gaming and esports tournaments. It generates revenue from gamers who spend an average of 62 minutes a day playing video games on its platform, as well as from advertising. Skillz forecasts its revenue will grow from $225 million in 2020 to $555 million in 2022. That is a 57% compound annual growth rate (CAGR)!
Gaming today continues to grow at a rapid clip and is now bigger than movies, music and books, with more than 2.7 billion gamers playing monthly and 10 million developers creating content worldwide. And mobile gaming is the fastest-growing segment of the video game sector, forecast to increase from $68 billion last year to $150 billion in 2025.
Upcoming SPAC IPOs: ChargePoint (SBE)
ChargePoint seems like the right company at the right time. ChargePoint builds the infrastructure needed for mass-market adoption of electric vehicles. Experts forecast that the market will be worth $56.9 billion by 2026. Like the way that sounds? That same market could be worth $190 billion by 2030.
There is also a clear reason why investors are so excited about the ChargePoint IPO. We will need an international rollout of publicly accessible charging stations if we want EVs to eventually replace traditional cars.
ChargePoint is going public in the coming weeks in a SPAC IPO that will see it combine with Switchback Energy Acquisition (NYSE:SBE). The deal values ChargePoint at $2.4 billion. Importantly, ChargePoint has said that it plans to raise cash proceeds of about $700 million from the share sale. This is money it plans to use to repay debt, fund operations and support future growth. Last year, ChargePoint generated $147 million of revenue, and the company says it will be profitable by 2023.
United Wholesale Mortgage (GHIV)
United Wholesale Mortgage plans to hold a SPAC IPO with blank-check company Gores Holdings (NASDAQ:GHIV) in a deal that values it at $16.1 billion.
Like many mortgage lenders, United Wholesale Mortgage is looking to capitalize on the low interest rate environment that has ignited the mortgage market in the United States. On Oct. 13, the company released third-quarter results that showed it closed loan volumes of $54.2 billion, an 81% year-over-year increase. The strong results should peak the interest of prospective investors.
It is worth noting that, at $16.1 billion, United Wholesale Mortgage is the largest SPAC IPO to date. United Wholesale Mortgage is also among the largest non-bank mortgage lenders in the United States. How? The company has a 4.6% share of the total mortgage market.
Founded in 1986, it has nearly 7,000 employees. The company works with independent brokers to underwrite and service loans for residential mortgages. After the IPO, United Wholesale Mortgage will retain approximately 94% ownership of the combined company.
Upcoming SPAC IPOs: Playboy (PLBY)
The deal values Playboy at $415 million, and the company will make its market return under the ticker PLBY. Positioning itself as a “lifestyle brand,” Playboy is hoping investors will take a shine to its move into clothing, home goods and sexual wellness products. The well-known magazine ceased publication in February after 66 years of continuous publication.
Playboy went private a decade ago in a $207 million deal led by late founder Hugh Hefner and private equity firm Rizvi Traverse Management. In addition to raising money through the sale of stock, Mountain Crest Acquisition is also hoping to raise funds through the Playboy IPO with investors who contribute around $100 million to the deal in the form of a private investment in public equity (PIPE) transaction. The boards of both Playboy and Mountain Crest Acquisition have approved the deal.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.