Another day, another SPAC deal. Today Rover, a dog-walking company, announced its entrance into a definitive partnership with Nebula Caravel Acquisition (NASDAQ:NEBC). As far as SPACs go, NEBC stock is an interesting option right now. Investors are looking for growth anywhere possible. Indeed, Rover is a popular app increasingly used by dog lovers. Accordingly, investors are banking on growth in this niche sector due to Rover’s current market share.
Here’s everything you need to know about the Rover SPAC merger.
- Rover is valued at $1.35 billion currently. Additional institutional investment will make the combined entity worth approximately $1.6 billion at closing.
- Rover will add more than $300 million in cash to its coffers as a result of the deal.
- Upon closing the transaction, Caravel will be listed as ROVR on the Nasdaq Exchange.
- The closing date is not yet known.
- Pet-sitting and dog-walking is a growing business. Rover has handled more than 2 million transactions to date.
- Revenue growth is expected to follow suit, with 2020’s $48 million in revenue doubling to $97 million next year, and doubling again to $201 million in 2022.
- Rover is expected to be profitable by 2022. Investors expect $35 million in EBITDA in a couple years’ time.
Should Investors Buy NEBC Stock Today?
Pet care stocks are in high demand right now. Indeed, Rover’s 2 million transactions and 500,000 pet care providers boasted on its website are impressive. There are competitors in this space, however it appears Rover is leading the pack in providing high-quality, timely pet care services to owners.
Rover’s core business appears to have taken a hit as a result of the pandemic. A sharp drop in business and vacation travel led to a marked decline in the need for pet-sitting services. This is to be expected, and investors might thus be shaking their head at the timing of this deal.
However, when one considers the potential Rover has coming out of this pandemic, the picture becomes more rosy for the Rover SPAC merger. Pet adoptions have soared as a result of the pandemic. Those forced to quarantine or isolate are increasingly choosing to do so with a best friend.
Thus, I expect that as we come out of this pandemic, Rover’s business will be booming. I think we will see pent-up demand for travel supplement higher organic demand for services, creating two strong tailwinds for this stock.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article