An Introduction to the Marlin Technology (NASDAQ:FINM) Corporation
The FINM SPAC looks to take advantage of the huge amount of interest within the Tech sector. Bringing with it a sizeable Trust, it seems as though the Marlin Technology Corporation is on the hunt for a Unicorn.
Initially filing for a sizeable $300 million IPO, the company decided to upsize and enter the public markets on the 13th January 2020 with a $360 million offering. These $10 units consisted of a single share as well as a one-third redeemable warrant.
Since then, the company has been quiet but the grand entrance onto the tech sector is hard to ignore. Although still in the early days, the potential target of the FINM SPAC really could be a game-changer.
Sponsor Analysis & Context
The listed sponsor is the Marlin Technology Holdings LLC. The risk is mitigated through the joint-bookrunning managers of UBS Investment Bank and Jeffries. Completely acceptable for an IPO this large. The true deal flow of the company is set to arrive through CEO Nick Kaiser and his heavy affiliations with Marlin Equity Partners, as well as the brilliant team he has assembled.
Sitting as CEO and Director of the FINM SPAC, Mr Kaiser brings with him some extremely close ties with Marlin Equity Partners. Both as Co-Founder and Senior Managing Director of the highly successful firm since its creation 15 years ago. Mr Kaiser maintains a wide range of responsibilities, primarily providing oversight of all investment-related activities and decisions.
Furthermore, above the running of Marlin Equity Partners, Mr Kaiser also takes an extremely active role across a number of the firm’s portfolio companies. Having sat on a number of boards as well as mentoring and coaching a number of executive teams affiliated with the company. His particular focus of speciality lies with numerous enterprise software acquisitions, take-privates, corporate divestitures and growth equity investments.
Having such a close and intimate working history with the targeted sectors of the FINM SPAC, as well as such a close tie and influential hand in an associated sponsor is fantastic for the Deal Flow and capabilities of the FINM SPAC.
Established more than 15 years ago, Marlin Equity is a global investment firm that currently maintains in excess of $7.5 billion of capital under management. The transactions of the company spread across a wide range of avenues from acquisitions, limited partnerships, seed-stag, series investments, IPOs and even corporate divestitures.
Clearly no stranger to the tech sector, the company has seen more than 160 Software & Technology Acquisitions. However, Marlin Equity does have a reasonably wide scope of interest across the following fields:
- Industrial Technology
When seeking investment opportunities, Marlin Equity tends to focus on fragmented industries with opportunities for consolidation as well as companies with $10 million to $2 billion in revenue. It is clear to see with this calibre of targets that a likely candidate for the FINM SPAC has very likely entered the sights of Marlin Equity Partners.
As Chairman of the Board at FINM SPAC, Mr Spasov also maintains a very close relationship with Marlin Equity Partners. As Senior Managing Director his responsibilities extend past his focus of Executive and Investment Committees.
Prior to his tenure at Marlin Equity Partners, Mr Spasov maintains over 20 years of broad-based institutional investment and private equity experience. At Northrop Grumman, a firm that manages over $30 billion in investments. Mr Kaiser focused on private equity and real estate investing.
With a particular specialization in the sourcing and business development efforts at Marlin Equity, his significant network is invaluable in the target identification process.
The CFO of the FINM SPAC brings with him the experience of Chief Capital Markets at the Marlin Operations Group. This is an affiliate of Marlin Equity Partners. Maintaining a focus on corporate finance and capital markets support to prospective, new and existing portfolio companies. This has resulted in some highly applicable debt financing providers since 2017.
Prior to that, Mr Nutting served as Managing Director and the Head of Capital Markets & Corporate Finance at Glendon Partners (Gores Group affiliate). Having spent more than 12 years in investment banking, culminating in his position at Credit Suisse. With responsibilities extending to capital markets, mergers and acquisitions and corporate transactions.
With over 40 years as an executive in the technology industry, Mr Youngjohns is a fantastic addition to the FINM SPAC. Most recently serving as an operating executive in the Marlin Operations Group. A close affiliate of Marlin Equity Partners, the company focuses on providing due diligence and support to portfolio companies (primarily within the software and technology sectors).
Mr Youngjohn brings with him a vast and highly successful career in the public market. Having served as Executive VP and General Manager of Software and Cloud operations at Hewlett Packard Enterprise (NYSE: HPE). Mr Youngjohn actually pioneered HP’s cloud interests, known as HPE Helion. This became an $8.5 Billion non-core software business, known as Microfocus.
Prior to that, Mr Youngjohns was the President of Microsoft North America, managing a company that generated over $25 billion of revenue across the United States and Canada. As well as maintaining a number of high-level executive positions across Callidus Software, Sun Microsystems and even IBM.
Bringing with him over 30 years of relevant experience within the technology industry. Mr Donatelli has been involved with some of the most influential companies across the sector. Most recently sitting as the Executive VP of the Cloud Business Group at Oracle (NYSE:ORCL).
Prior to that, he served as the Executive VP and General Manager of Hewlett Packard (alongside Mr Robert Youngjohns). Mr Donatelli maintains a large list of experience in relation to M&A, software and hardware engineering as well as global sales, marketing, manufacturing and even supply chains.
Targeted Sector & Market Criteria
Considering the fact that Marlin Equity Partners is one of the most active private equity investors in the software and technology sectors, the general sector of the FINM SPAC remains clear. Comparing the sponsors focus on companies with estimated earnings of $10 million to $2 billion casts a wide net in relation to the $360 million Blank Check available. The approximate valuation range has been listed as $1.5 billion to $3.0 billion.
The company has gone on to highlight the following subsectors as particularly noteworthy and set to boom across the upcoming years:
- Internet of Things (IoT)
- Big data
Further citing a client base of the Enterprise Software Market. Considering it has seen annual growth of 11% from $314 billion in 2015 to $477 billion in 2019. And to further keen increased to a rate of 16.5%, hitting $1 trillion for the sector alone in 2025.
This is a particularly intelligent aspect of the technology sector to focus on. The companies involved are not big names and are nowhere nearly as renown as most. The nature of the Enterprise Software Market is that they appeal to companies and large businesses as opposed to the general public, artificial bloating of valuation or share price is rarely the case.
The likely targets are also extremely large and influential, whilst few and far between in the sector. The ability to catch a Unicorn with a $360 million check seems more a reality than anything.
Deal Flow Analysis
Marlin Equity Partners is an extremely established private investment firm that has operated successfully over a number of years. In regards to the software and technology fields, the company has had over 160 software and technology acquisitions with a shockingly incredible 77% strategic exit rate.
As a specialist in the field and no stranger to executing a number of transactions, Marlin Equity is able to offer value through a number of avenues. From Buisness development and growth, scalability, go-to-market acceleration, M&A strategy and even Cost Structure optimization. The post-deal value is near limitless.
The company also maintains a highly impressive list of successful previous ventures. Having seen companies through a number of operations both private and public (and even through the IPO process!).
Although Marlin Equity far prefers the Acquisition process (due to the capital available to the company), there has been an increasing interest in traditional investments. Having been involved in 16 investments but maintaining the Lead investor position across 12 of those, it should be noted that the vast majority of these investments have been focused in Series B and above.
The most relevant of Marlin Equity Partners to assessing the Deal Flow in regards to the FINM SPAC. Marlin decided to partner with Verisae, a global SaaS solutions provider. Verisae focused on assisting buisnesses across a number of operational functions (ranging from asset management to environmental sustainability).
After passing the primary rounds of seeding, the institutional investors were seeking liquidity and Verisae was seeking a partnership in order to grow through sales and marketing, ultimately selecting Marlin in 2012.
Through the partnership, Verisae shifted its focus and widened its scope into a number of largely untapped markets. This was achieved through means of acquisitions, mergers and a change of focus. Verisae, in conjunction with Marlin Equity Partners, acquired both WorkOasis and Hara Software and ultimately merged with Viryanet.
Ultimately, Versiae became an industry leader across managements, energy usages and mobile software in the relevant sectors and was ultimately sold in 2016 to Accruent.
FINM SPAC In Summary…
A quick look at the current share price of the FINM SPAC does not tell a pretty story. However, the units have been freshly split and there exist a number of factors that can account for its lacklustre performance so far. When looking at the team and assembly behind the company, a very different story becomes apparent.
Looking to enter the Tech sector with a particular focus on Enterprise Software with an interest in Cloud, Big Data and IoT applications. The FINM SPAC certainly seems to have done its homework.
Assembling an impressive team with a wide range of experience and influence, with the support of a highly active and substantial Tech-focused investment firm. We are all keenly waiting by to see where the Marlin Technology Coroporation is looking to invest this $360 million Blank Check.