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Canada's SPAC makers: From an ex-MP to a fashionista

2017-03-17 21:39 ET - Street Wire

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by Stockwatch Business Reporter

Of the 252 special purpose acquisition corporations which have listed in the United States since 2003, 142 have closed deals (56 per cent). In Canada, by next week, the completion rate may be 50 per cent, or three out of six SPACs. Steven Silver and Peter Sussman's Kew Media Group Inc. (KEW: $10.25) expects to close, on Monday, its acquisition of six media production and distribution companies. Kew will pay $104-million, of which $14.32-million will be in cash and the rest will be in shares and assumed debt. It will also spend $24-million to redeem 33 per cent of its shares at $10.17. On Sept. 30, 2016, it had $71.15-million cash in escrow, so it should have enough to cover both the share redemptions and the cash portion of the acquisition price.

Mr. Silver and Mr. Sussman are film and television producers and financiers. Their Kew Media is the sixth and most recent SPAC listing on the Toronto Stock Exchange. It sold a $70-million initial public offering of units at $10 in June, 2016. All six Canadian SPACs sold their IPOs at $10 a unit, with each unit comprising one share and one-half warrant. A whole warrant is exercisable at $11.50 for five years. Kew's IPO shareholders are up today, but the bigger winners are the SPAC's founders, who paid 1.34 cents a share for their founder shares. Mr. Silver and Mr. Sussman control 303,068 of Kew's 1,860,502 founder shares, through KMG Entertainment LP. These shares, for which KMG paid $4,061, are worth $3.1-million today. KMG also bought 72,000 units at $10 in connection with Kew's IPO.

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