ASAQ SPAC – Just Another FinTech Mover and Shaker

financial technology workflow

Introduction to ASAQ SPAC

This SPAC has mentioned that it hasn’t yet identified “any potential initial business combination target”. But what is quite clear is the type of company this is. This corporation plans to target many techs and tech service industries, media/telecom, and “business and consumer-related service[s]” companies. An interesting thing to note is that this SPAC wants to delve into the “technology-enabled financial services” industry known as Fintech. ASAQ is affiliated with the company MC Credit Partners, worth $2 billion in assets. Also, the merits of this company are very expansive, with the “senior investment team leverag[ing] a deep history of transaction experience and relationships forged over four decades at leading financial institutions.”

Management Team

Ashok Nayyar

CEO – Ashok Nayyar

The CEO of this company, Ashok Nayyar, comes from a very solid educational background. He “holds an M.B.A. from the University of Chicago Graduate School of Business and a B.A. from Columbia University.” Note that his undergraduate degree is directly associated with business (strong foundation). Regarding his personal experience, he has led multiple different companies before joining the likes of MC Credit Partners. For example, he has served roles such as “Founder and Chief Investment Officer of Cyan Partners LP”, “co-head of Global Leveraged Finance at Morgan Stanley”, and “co-head of North American Leveraged Finance at Citigroup Inc” to name a few. In addition to this, he has also overseen/been responsible for many transactions “which raised in excess of $300 billion” in the form of various types of loans. Finally, Ashok has also “served on numerous boards of private and public companies as well as charitable organizations and private schools.”

Co-President – Michael Zimmerman

Michael Zimmerman - Founder & Principal - Ground + Space | LinkedIn

The Co-President, Michael Zimmerman, holds an “M.B.A. from Columbia University Graduate School of Business and a B.A. from the University of North Carolina at Chapel Hill.” Although this person is very new to the company, joining only in July of 2020, he has lots of experience to bring to the company. He has served various roles such as “Senior Managing Director of Cyan Partners”, “Managing Director in Investment Banking at Salomon Brothers” (from 1994 to 2003), and more. One of the critical roles that Mr. Zimmerman served in the past and continues to do so now, is similar to a secretary role. More specifically he has lots of experience providing “strategic advisory services to multiple sponsors.” In addition to this, he also ran “capital raising for pipes, private equity, and mezzanine capital raising for corporate clients.”

Co-President/Secretary – David Gelobter

Management Team – Atlantic Avenue Acquisition Corp

Holding an “M.B.A. from the Harvard Business School and a B.A. from Williams College”, David Gelobter is more than qualified to serve this position for the corporation. He is also a “Managing Director at MC Credit Partners and has more than 30 years of investment management, investment banking, and operational experience.” Before joining this SPAC though, he has served many other roles giving him a lot of experience in the business world. Ones like “Managing Principal and Founder of Emerson Capital”, “senior member of the Financial Sponsors Group”, and more. In the present, he is serving multiple positions such as “member of the board of trustees for New York Public Radio and a member of the board of directors of Mobile Technologies Inc.”

CFO – Barry Best

Management Team – Atlantic Avenue Acquisition Corp

Mr. Best graduated with an “M.B.A. from the University of Chicago Graduate School of Business and a B.A. from the University of Illinois.” He began his career, in 1989 “as a member of Salomon Brothers’ Mergers and Acquisitions Group, where he was a co-founder of the Financial Sponsors Group.” He is very experienced, having “more than 25 years of investment management, investment banking, and capital markets experience.” Before becoming the CFO of MC Credit Partners, he has served various other roles such as “President of AEG Capital” (an investment banking firm), “head of Sagent Advisors’ Private Capital Markets Group”, and several other positions.

Deal Insights on ASAQ SPAC

Although there aren’t that many significant deals that MC Credit Partners have done so far, with the SPAC being really new, this SPAC is noted to be important, as shown in an article on the website Benzinga. In it, it includes ASAQ as part of a list of 8 record SPAC’s listed on the same day, in total raising “potentially over $3.25 billion in the process.”

Sponsor Analysis/Sectors of Focus

The sponsor MC Credit Partners (MCCP) manages lots of funds or capital, that is provided to middle-market companies across many industries. They go about this using a very partner-oriented approach, stressing the importance of building long-term relationships. They mainly focus on 5 categories:

  1. Flexible Capital: Basically the way this company deals with its finances is geared towards the needs of 2 things 1) the needs of their clients and 2) the strategic goals.
  2. Certainty of Pricing and Execution: No middle man, every client will get the opportunity to deal directly with the decision-makers.
  3. Comprehensive Solutions: The given ability to be the “sole capital provider” or to complement existing or new capital.
  4. Follow-on Investments: MCCP committed “accordion facilities to fund future acquisitions, capex requirements, or working capital needs.”
  5. Seasoned Team of Investment Professionals: Collectively, the team has over 250 years of “collective underwriting and investment management experience” while also providing more than “$500 billion of capital for companies across [many] industries.”

Investment Capabilities

This company works to create highly tailored Debt and Equity Capital to address the needs of every single client/customer of theirs. They focus on 3 aspects to meet these goals:

Types of Facilities:

  1. First Lien Loans (includes revolvers)
  2. Second Lien Loans
  3. Unitranche Loans
  4. Structured Equity

Unique Characteristics:

  1. Sizable hold positions
  2. Any indication of interest is provided within 2 days or 48 hours
  3. The customers themself are able to deal directly with decision-makers

Use of Proceeds

  1. Acquisitions/Expansions
  2. Organic Growth
  3. Refinancing of Existing Debt
  4. Recapitilizations/Dividends

Investment Criteria

Focusing on Middle Market Companies

  1. Every single industry group
  2. Proof/a record of solid cash flows
  3. Capital requirements of $40 million to $250 million or more
  4. Proven ability to operate with a leveraged capital structure

Typical Issues Profiles

  1. Sponsor-backed business
  2. Staple capital structures as evidenced by stable trends and appropriate leverage
  3. Publicly-traded corporations
  4. Management, entrepreneur, and family-owned businesses
  5. Alignment of interest sponsors/owners/management

Value Proposition

Certainty of Capital

  1. Principle Investor
  2. The capital is long-term based and from a top-tier investor base
  3. Committed acquisition

Flexible Capital Tailored to the needs of the Issuer

  1. Varying maturities with short non-call periods
  2. Investments can augment an existing capital structure or compromise the full capital structure.

Experienced Investment Team

  1. History of providing multiple rounds of additional financing
  2. Funded over $500 billion of debt and equity capital to companies across industries

More info can be found here.

Conclusion On Our Findings

Overall, this SPAC and its sponsor company are pretty generic, although not in a bad way. From all the info gathered on the various websites and articles, this company is very straightforward. They have a very structured way of doing business with their clients, using a very organized method and being as flexible as possible to let the customer choose how to set the deals. They don’t have anything fancy to really offer to the SPAC market, but they do have a very solid foundation. They stated explicitly that they will focus mainly on Fintech (the tech financial services) and nothing else. Last but not least, the management team has 4 different people managing the various parts of the company, and every person has a solid portfolio (years of experience working in the respective industries and a solid undergrad/grad education).

Leave a Reply

Your email address will not be published. Required fields are marked *