Introduction to the Altitude Acquisition Corp (NASDAQ: ALTU) SPAC
One of the exciting emergent sectors is forecast to be the travel and aviation industry is the ALTU SPAC. Although the talks of low orbital flight through companies like Virgin Galactic, SpaceX and Blue Origin are on the horizon, the Altitude Acquisition Corp looks to address issues a little closer to home.
On the 11th December 2020, the ALTU SPAC announced its trading on the NASDAQ. An IPO of 30 000 000 units at the standard $10 unit price, generating a blank check of around $300 million.
These units entitle the owner to a share of common stock and one half of a warrant. Pretty decent money for your investment considering the potential market cap of the targeted sector.
Although the travel, tourism and aviation sector is certainly lacking with sizeable SPACs and prospective companies, does the ALTU SPAC have what it takes to identify a potential industry leader and then merge successfully?
There is a surprising amount of competition within the sector which is forecast to boom in the upcoming years.
Sponsor Reputation & Context
The listed sponsor has been declared as Altitude Acquisition Holdco LLC. This company has clearly been established for the purpose of this SPAC.
However, a closer look at the Key Executives & Management reveal no potential sponsor hiding amongst them and as such the principal source of deal flow is through the nature of the selected Management team.
We do not intend to target entities associated with the Founders such as Teplis Travel Service, L.P., SBTech Limited or DraftKings, IncALTU SPAC Prospectus (Form 424B4)
Although an accurate analysis of deal flow from the view of an LLC is impossible, the number of connections, influence and networking the Key Executives bring will need to be exemplary.
This lack of an appropriate sponsor and concerns regarding the Management team become more apparent when analyzed in depth.
Key Executives & Management Team
Currently sitting at the director of two major publically traded companies. Draftkings Inc. (Nasdaq: DKNG) and Galaxy Gaming Ltd. (OTCQB: GLXZ) as well as an advisor to Jackpocket. Jackpocket is an online lottery app that is currently undergoing its Series C round of funding and showing incredible growth.
Prior to this, Mr Isaac has served in a multitude of leadership roles for many gaming and technology related companies. Including CEO and President of Scientific Games (Nasdaq: SGMS).
This experience has Mr Gavin Isaacs at the helm of a variety of companies both Public and Private and he has helped facilitate their growth and global expansion.
It is important to note that his experience is primarily in the Gaming Technologies sector and he has no experience in leading a company through the IPO process. Although his experiences with expansion, mergers and acquisitions is truly invaluable.
The founder and CEO of his own VC firm, Breitling Ventures. This private equity investment firm is the culmination of Mr Breitlings experience. Prior his “Venture” into Venture Capitalism, Thomas Breitling had an impressive list of roles within the travel and tourism industry.
Helping evolve huge companies such as the Las Vegas Reservations Systems. As well as Travelscape.com. He not only assisted the growth of Travelscape in reaching sales of over $100 million but also oversaw the acquisition by Expedia (Nasdaq: EXPE) in a $95 million merger.
His experience in the tourism industry is further extended through his $215 million purchase of the Golden Nugget Hotel and Casinos in Las Vegas. Also serving as the Senior VP at Wynn Resorts (Nasdaq: WYNN).
A man with an endless list of leadership positions through his extensive career. His most relevant positions include that of Predisent and CEO of Galileo Internation (a travel distribution services company). President and CEO of Cheap Tickets Inc. Co-CEO of Worldspan Travel Information Systems.
All this private sector travel-related experience is certainly impressive but he has maintained a leadership role at the world-renown Delta Airlines (NYSE: DAL).
His vast amount of experience in successful business leadership companies has led to his consideration in running for Governor of Wyoming.
He definitely gets our vote!
Previously serving as the Global CIO of Crawford & Company (NYSE: CRD.B). This is the world’s largest publicly listed insurance claims management company.
However, his travel industry experience is also extremely impressive. Having served as CIO at Spirit Airlings (NYSE: SAVE) as well as BCD Travel.
Although his roster of experience is certainly very impressive. One must note that his limited travel experience and impressive time served in some of the largest multinationals on the planet don’t really contribute to the SPAC process.
The sheer amount of experience in the Travel and Tourism industry that Michel Taride brings to the ALTU SPAC is unrivalled. Previously as the Group President of Hertz International (OTCPK: HTZGQ).
Extremely well respected and highly regarded in his field. A fantastic addition to the team.
Market Focus & Target Criteria
The focus of the ALTU SPAC is extremely interesting and in a very exciting and emerging sector.
We intend to focus on travel, travel technology and travel-related businesses with either business-to-business (“B2B”) or business-to-consumer (“B2C”) focuses.ALTU SPAC Press Release 2020
The decision to focus on the travel and tourism sector is certainly a very intelligent one. It was one of the largest sector drawbacks across the past financial year due to the Coronavirus. As any good invest will inform you, always buy in a dip.
This is exactly that the ALTU SPAC aims to do. Capitalize on the reemerging $2.9 trillion dollar industry.
We think this SPAC IPO’d at the perfect time, just months before mass vaccinations. The directors in particular make this a no brainer for us. This SPAC is a needle in a haystack.TC Investments 2021
Furthermore, the extended list of potential candidates spread across the following:
- travel booking engines
- revenue, payment and expense management services
- travel management companies
- alternative accommodation
- mobile-based travel solutions
This decision to focus on the travel and travel technology market is a fantastic one. Considering the fact that this is a relatively unknown target. The generated IPO earning also supports the enterprise value of $1 Billion or more.
Post Deal Value
One of the greatest values that an SPAC can potentially add or detract from. This is one of the more concerning aspects of the ALTU SPAC. However much the team of directors may seem, the performance of many Tourism and travel based businesses are somewhat fickle in nature.
The largest Travel tech companies only choose to go public after many years and a completely self sufficient model. One of the reasons why this is such a unique market, it will have to be seen as to whether investors will respond positively to the merger and selected combination.
As for the upward trend since Units and Shares could be solid separately, it is clear to see that many have identified that the Travel & Tourism sector is set to climb over the upcoming financial year.
The ALTU SPAC certainly seems capable and has done due diligence in the relevant market sector. However, the experience of the Management Team and Key Executives seems somewhat awry.
There certainly exists a good mix in both the public and private sector. Perhaps more relevant experiences to the Travel/Tech industry would be appreciated. However, the introduction of Key members with an emphasis on SPACs pre and post-merger will certainly benefit a lot.
No Airbnb-style IPO pops, however, because no one knows what the acquirers might score in the travel sector.— Sean O’Neill (Skrift) 2020
Thayer Ventures, Go Acquisition and a plethora of new SPACs in similar fields, it really is anyone’s guess as to what business the Altitude Acquisition Corp will affix itself to.
Even the uncertainly of acquisition sizing when first allocating units is causing a lot of concern.
This fluctuation between a a 250 million IPO, 17% reduction and then ultimately settling on a 300 million dollar IPO. Highlights the shaky foresight in potential market cap acquisition.
With a potential overvaluation like that, the members of of the Altitude Acquisition SPAC should remember the story of Icarus.
Another who chose to fly a bit too close to the sun.