Introduction to the Cohn Robbins Holdings Corp. (NYSE: CRHC)
In September 2020, Cohn Robbins Holdings Corp (CRHC SPAC) listed on the NYSE raising an upsized mega SPAC deal of US$ 720 Million offering 72 Million units at US$ 10 per unit with each unit representing one share of common stock and one-third of a warrant exercisable at US$ 11.50.
CRHC SPAC has been established to capitalize on the 70 years of combined experience of its co-founders; Gary D. Cohn and Clifton S. Robbins, in investing and managing capital flows and to leverage on their unique global network of relationships. The Company has highlighted that given the vast experience of their management team they intend to focus on several industries including the consumer sector and within the technology sector, they will be looking at software and fintech space.
The duo of Gary Cohn and Clifton Robbins is indeed a legendary lineup that brings onboard highly complementary capabilities across private equity, public market investing, hedge funds, investment banking, and financial services, venture capital & governmental sectors. Given the all-star lineup, CRHC SPAC has received positive coverage from prime-time news media. Below is the coverage provided by CNBC upon CRHC SPAC launch.
Sponsor Reputation and Context
Gary D. Cohn
The Star Attraction
Gary Cohn is the star investor for the CRHC SPAC; as he has all the key ingredients that any upcoming SPAC can dream of from its key management personal; including a highly successful carrier at a top-tier bank in the U.S. (Goldman Sachs), a top position in the U.S. President’s economic team and an advisory/board role with upcoming tech-related success stories.
Gary brings along more than 30 years of financial services and economic policy experience spanning the private and public sectors. Throughout his career; he held several leadership positions at Goldman Sachs, ultimately rising to the status of its President and COO levels. At Goldsman Sachs, he gained extensive experience in managing large and complex organizations operating in multiple industries and geographies.
Public Policy Experience
He left Goldman Sachs in 2016 to serve as President Trump’s top economic adviser between January 2017 and April 2018. At White House, he was responsible for policy advancement and close coordination of the administration’s policy objectives; leading the successful effort to grow the U.S. economy, create jobs, and increase wages through tax and regulatory reforms. Since leaving government service in 2018, he has been an active investor and board member of private tech companies. Over his career, he has built a vast network of relationships across large public corporates, venture-backed and private equity-backed private companies, the investment community, and across Govt. departments.
In January 2021, he has joined tech giant International Business Machines (IBM) as its Vice-Chairman; where he is involved in business development, client services, and relationship management. Here is a link to the news coverage of his appointment at IBM:
Cohn is regularly invited on prime-time media to express his views on the US economy. Here is a recent link to his interview discussing the U.S. economy on Yahoo Finance:
Cohn also remains an active advisor and investor in the technology space across the cybersecurity, blockchain infrastructure, regulatory technology, and medical technology sectors providing him exposure to disruptive drivers of change within the technology industry today. He remains an advisor to Hoyos Integrity ( secure smartphone / mobile communications system, and integrated multi-biometric digital wallet); Machine Zone (mobile gaming platform), NanoPay (Canadian payment platform), and Spring Labs (blockchain network for sharing data).
Clifton S. Robbins
He is a renowned investor with an established track record in structuring and executing complex investment transactions and providing investment value to investee companies across both the private and public equity space. Clifton Robbins has spent circa 40 years managing investments for institutional investors as a General Partner of KKR, and as a Managing Member of growth equity investor General Atlantic and as the founder & CEO of the long-standing multi-billion dollar public market investment manager Blue Harbour Group.
At Blue Harbour, Clifton Robbins has pursued a private equity approach model to the public markets known as the “friendly activism” approach making high conviction investments in core portfolio positions and actively collaborating with senior management and boards of the investee companies over a two-to-three-year period as a lead minority investor or a board member on strategies to further unlock and increase shareholder value. This approach contradicts the traditional approach which involves potential conflicts with boards and management teams. He is also known for being the first active equity manager to fully integrate ESG analysis into the investment process; making it an integral component of the investment selection process, entry price, and post-investment value creation decisions. His ESG framework has also been designed to identify opportunities to improve outcomes in material ESG areas; through long-term engagement as a lead shareholder.
In addition to his strong network of relationships across the PE and Venture Capital space, he has also been successful at building solid relationships with management teams and boards of the companies in which he invests. He has worked collaboratively with them over multi-year periods with the common purpose of enhancing and unlocking value at investee companies.
He is also a sought-after speaker regularly appearing on news media; to discuss his investment approach leading to portfolio success and the overall market dynamics.
Other Members of Management Team:
Other key members of the management team for CRHC SPAC include Todd Marcy (Managing Director); Charles Kwon ( Chief Finance Officer); and Cameron Mena (Senior Associate); who are all former employees of the Blue Harbour Group thereby representing the trusted team of Clifton Robbins.
Market Focus and Target Criteria
The Company has underscored in their S1 that its focus is on identifying suitable targets that complement the experience of their founders, and that can also benefit from the founders’ sourcing and governance experience in public markets to provide value enhancement opportunities. CRHC SPAC intends to rely upon its founders’ unique and vast network of relationships to source a transaction.
The Company intends to focus on several industries including the consumer sector, and within the technology sector, their focus remains on software and fintech space. The founders in their recent media interactions have noted that they intend to focus on middle-market companies with an average size of US$ 3 Billion to US$ 10 Billion. These companies continue to need liquidity support as the top-tier big corporates are awash with liquidity. Founders have a unique perspective with their hands-on experience of owning, advising, buying, and selling companies. CRHC SPAC remains interested in partnering with enterprises where they have an opportunity to add post-acquisition value creation; through board participation and by continuous involvement with their management (Clifton Robbins approach of Friendly Activism). Here is an interview of Gary Cohn discussing the unique perspectives CRHC SPAC brings:
Previous Deal Analysis
The founders have vast experience in deal sourcing, investing, and adding post-investment value across various industries; including the consumer sector and within the technology space in software solutions and fintech.
Clifton Robbins’ Recent Deal Execution Experience
Clifton Robbins following his investment style has made more than fifty core investments where he has worked with the boards and management of invested companies following his “friendly activism approach” as a lead shareholder to unlock post-acquisition shareholder value. Some of the success stories include:
- BWX Technologies (NYSE: BWXT): BWXT is a leading supplier of nuclear components and fuel to the U.S. government. Clifton Robins was instrumental in advocating for a successful spin-out transaction of this business from its former parent company and assisted the spin-co BOD.
- CACI (NYSE: CACI): CACI is a leading provider of expertise and technology to government enterprise and mission customers. Clifton Robins was involved in enabling this highly cash-generative company to repurchase 1/3 of its shares, and then to assist the company in considering strategic acquisitions.
- Jack in the Box (NASDAQ: JACK): Clifton Robbins advocated for the successful transition from company-owned to a primarily franchised system for this fast-food restaurant chain releasing substantial excess capital used for accretive share buybacks.
- OpenText (NASDAQ: OTEX): Assisted this Canadian-based software company with the evaluation of acquisitions and strategic transactions, improving its positioning with the U.S. investor community, and diversifying its board and management team.
- WebMD (NASDAQ: WBMD): Investigated strategic alternatives, including splitting the company in two or a sale, which the company ultimately pursued and successfully completed.
- Xilinx (NASDAQ: XLNX): Worked with the board to improve capital allocation and balance sheet efficiency of the highly cash-generative semiconductor companies, unlocking value through share repurchases.
Potential Target Companies
Thus given the solid relationship network of the founders and their historic track record of adding post-acquisition value to investee companies, CRHC is rightly searching for a candidate in a similar space i.e. a mid-size company that can benefit from the experience of an experienced SPAC team.
Positive Coverage on Reddit Forums
The SPAC has also received a lot of interest on Reddit forums.
Summarizing the CRHC SPAC
With a star lineup of founders in Gary Cohn and Clifton Robbins, CRHC SPAC has the potential to be the SPAC-based success story of 2021 given the vast experience and network of relationships of its founders and their solid track record in creating post-acquisition value for investee companies. The rising yield curve and the associated volatility witnessed in stock markets recently indicate that 2021 may prove to be a challenging year for potential SPAC dealmakers however CRHC has a distinct advantage given the legendary duo of Gary Cohn and Cliffton Robbins and we know the age-old adage “When the going gets tough, the tough get going”!