An Introduction to the North Mountain Merger (NASDAQ: NMMC) Corporation
The SPAC industry is growing to unprecedented sizes. Previously, the concept was laughed out of conversations but the NMMC SPAC is a clear sign that the process is here for the long run. Brought to you by a team of SPAC-veterans, fresh off the back of another highly successful merger.
North Mountain Merger Corporation brings with it an upsized $132.25 Million check to a target located within the FinTech sector. Appearing on the open markets September 18th 2020 with an IPO offering of $115 Million. The company offered the standard $10 units consisting of a share and a half-unit warrant.
Perhaps the FinTech sector is grossly imbalanced with more SPACs than likely candidates, but if any company should restore faith. It should be the NMMC SPAC. Having recently identified a target with their previous venture, South Mountain Merger Corporation, it is clear that the Team Members now have a taste for blood.
Sponsor Background & Context
The listed sponsor is North Mountain LLC with the sole underwriter as the world-famous Citigroup. A closer look reveals no Venture Capital firm, Investmentment manager or Equity firm relations. Where is this Deal Flow expected to come from? Well from the phenomenal Upper Management and the Key Executives, consider them Career Combinators!
Sitting as the CEO of the NMMS SPAC, Mr Bernicker most recently sat as the CEO of the South Mountain Merger Corporation (FinTech related). Seeing that company through inception to successful combination is just the tip of the SPAC and Acquisition-related experience that Mr Bernicker brings with him.
Acting as a consultant to Repay Holdings Corp (NASDAQ: RPAY) and guiding their merger with Thunder Bridge Acquisition in 2019. As well as International Money Express, Inc. (NASDAQ: IMXI) with FinTech Acquisition Corp. II in 2018.
Mr Bernickers experience with the SPAC process began as early as 2012. Where he sat as CFO of CardConnect, merging with FinTech Acquisition Corp in 2016, until its eventual sale to First Data Corp. (NYSE: FDC) in 2017. But prior to that Mr Bernicker maintained a wide level of experience within the finance sector in multiple executive-level positions.
It is clear to see that during the target identification and due diligence of South Mountain Merger Corporation, did he identify further targets that the North Mountain Merger Corporation could benefit from.
The CFO of the NMMC SPAC brings with him a line of SPAC-related experience as well. CFO’s with extensive M&A experience is not unheard of, but with such a direct history with SPAC’s? Having most recently sat as the CFO of the South Mountain Merger Corporation, Mr Dermatas’s history with Chuck Bernicker(NMMS SPAC CEO) far surpasses that.
Sitting as VP of Finance at First Data Corp. from 2012 till 2017 as well as the Senior VP of CardConnect, Mr Dermatas and Mr Bernicker underwent the SPAC-merger process together. However, Mr Dermatas does have more relevant SPAC-related history with his career beginning in private equity investment(Carousel Capital Partners) as well as a role in middle-market M&A at Edgeview Partners, now Piper Sandler (NYSE: PIPR).
Currently sitting as a Senior Advisor at MissionOG Venture Capital firm. Having also sat on the Board of the South Mountain Merger corporation, his deal flow through MissionOG seems invaluable when considering the company’s aim.
We partner with high-growth B2B companies that are driving the digitization of the economy. Thematic investors in key market segments where we have deep operational knowledge, including fintech, data, and software. We seek to invest $5 million to $10 million with significant follow-on capital where necessary.MissionOG – Press Release – 2021
It should be noted that these $5 – $10 million investments are considerably smaller and early-stage targets (MicroVC territory) and are greatly out of the scope of the NMMS SPAC. However, his other experience also supplements this fantastically.
Sitting within Payroc, LLC, a privately-held payments processing company as of 2019 as well as heavy connections with WageWorks, Inc. (NYSE: WAGE) through the company’s acquisition by HealthEquity (NASDAQ: HQY) in 2019. Alongside his tenure at JetPay Corporation from 2017 until the company’s acquisition by NCR (NYSE: NCR) in 2018.
Certainly no stranger to Investing, FinTech and Acquisitions. A brilliant addition to the NMMS SPAC.
With over 30 years in the finance, accounting and financial reporting focus with both public companies as well as financial institutions. Ultimately serving as the CDO of BankUnited Inc (NYSE: BKU), a bank holding company, from 2009 till 2013. Mr Pauls has left retirement for a highly successful second wind within the SPAC sector.
Having overseen the South Mountain Merger Corporation across a similar process, Mr Pauls clearly has an affinity and a talent for the process. His previous experience extends but is not limited to:
- TD Bank following its acquisition of Commerce Bancorp – President of Finance
- Commerce Bancorp – CFO and Chief Accounting Officer
- Ernst & Young – Senior Manager Audit Department
- Essent Group Ltd. (NYSE:ESNT) – Chairman Audit Committee
Besides his fantastic performance sitting on the board of the South Mountain Merger Corporation, Mr O’Callaghan also serves as the Managing Director of Onex Credit. This is the culmination of his 34 years of experience with credit markets, buisness development, and credit investment firms.
Prior to his tenure at Onex Credit, Mr O’Callaghan was a partner and headed the buisness development for Rotation Capital Management and MidOcean Credit Partners. Perfectly suited for these roles from his various banking positions at Bank of America, Deutsche Bank, Bankers Trust, Drexel Burnham Lambert and Manufacturers Hanover Trust.
It can be clear to see that Mr Scott O’Callaghan brings a great deal of expertise within the development of buisnesses, scalability and the generation of post-deavl value. Although he lacks FinTech and Investing experience, his contributions to the NMMC SPAC will be as invaluable as that to the SMMC.
Market Sector & Target Criteria
It has been extremely clear from the conception of the NMMS SPAC that the FinTech sector has been the clear target focus. Aiming to capitalize on the fantastic team assembled, as well as the highly applicable research and networking when identifying a suitable candidate for the South Mountain Merger Corporation.
We intend to focus on identifying businesses within the financial technology industry that will benefit from the rapidly evolving payment ecosystem.NMMS SPAC – Form S1 Filings – 2021
This subsector of Financial services is a highly lucrative and extremely disruptive sector of the industry. Many large players have started entering the financial payment real with Apple and Google being some of the most largest contendors within the sector (Apple Pay and Google Pay, respectively).
Assesing the potential value of the company is not as traditionally obvious, the $132 million blank check would normally be a clear indication of enterprise value. But the stated “Has the Potential to Grow Through Further Acquisition Opportunities, ” is a clear sign of the sheer level of scalability that Tech companies are accustomed to.
Past Deal Analysis – SMMC
Although Mr Chuck Bernicker has a multitude of SPACs to his name. The fact that the North Mountain Merger Corporation has the same team as the South Mountain Merger Corporation as well as the same scope and focus, the assesment of the SMMC SPAC is the ideal tool for comparison.
Hitting the open markets with a $225 million IPO on June 19th 2020. The company closed the successful public offering with an upsized $250 million. It was a mere 4 months later that the company announced a potential target. October 19th 2020, BillTrust was to become a publicly traded company through the SMMC SPAC combination.
The company focuses on AR Automation with B2B payments. Much like the targeted sector of the NMMC SPAC. It is clear to see that companies with a smaller valuation came across the SMMC SPACs plate.
Currently undergoing the SPAC-merger process, the results of the combination remain yet to be seen. Perhaps striking while the iron is hot is certainly the intention behind the hasty assembly of the NMMS SPAC.
NMMC SPAC In Summary…
There is very little to be said about the NMMC SPAC. Clearly dealing with accomplished veterans of the industry, this is no one’s first rodeo. The FinTech sector is certainly an alluring one, although many are claiming that it is saturated at this point.
However, the clear focus of the NMMS SPAC and its cohesion with the scope of the SMMC SPAC indicates that a deal and a target was already established from the beginning. Directed towards the FinTech and Payments ecosystem with a considerably smaller Blank Check and the same team as the previous Acquistion venture. I am not expecting any twists here.
Things seem safe and certain. But BillTrust is yet to hit the open markets and the quality of this Team, SMMC and NMMC technically remain yet to be tested.
If all else should fail, the third times a charm!