VGAC SPAC – Virgin Group Seeking Crowd Consumer


Sir Richard Branson

INTRO TO VG ACQUISITION (NYSE: VGAC) SPAC

Sir Richard Branson, the English business guru, serial entrepreneur, and Necker Island-Loving man, is back at it again! This time he’s moving onto his next venture (this mogul truly cannot be stopped) with the creation of the SPAC: VG Acquisition. VGAC SPAC is a force to be reckoned with!

Onto the serious part . . . Virgin Group’s SPAC VG Acquisition Corp. raised $480 million by offering 48 million units at $10 per unit. Each unit consists of one share of common stock and one-third of a warrant (exercisable at $11.50). As much as we’d love Branson to be directly involved in the SPAC, Virgin CEO Josh Bayliss and CIO Evan Lovell will be responsible for managing this acquisition.

With Virgin’s reputation for consumer-facing businesses, Bayliss and Lovell are looking to target a consumer-facing business in either the United States or Europe. Virgin already has access to a plethora of resources and relations within the consumer-facing verticals. Likewise, it plans to keep to its roots and find the perfect consumer-facing business to take public.

SPONSOR REPUTATION AND CONTEXT

No surprise here—Branson and the rest of the team have enjoyed tremendous success through Virgin. Since Virgin’s inception in 1970, the company has grown, invested, and incubated many companies. Further, they have become successful in both the private and public markets. From Virgin Media to Virgin Mobile to Virgin Atlantic to other Virgin portfolio companies, it has been known to deliver on the promise of driving growth. One factor to keep in mind is that Virgin has had experience with different kinds of consumer companies. This is a beneficial addition since it will give the company the most optionality when pursuing the diverse options it might have for an acquisition. From airlines to music to technology companies, it has all its bases covered for a possible acquisition.

In the SEC filing, Virgin states the COVID-19 pandemic has led to “a rare opportunity to invest in fundamentally strong target businesses at attractive valuations.”

Virgin has worked with prominent firms, so there are many different avenues it can use to source a deal. For example, in the S1 filing it states that it has relationships with Bain Capital, Andreessen Horowitz, Delta Air Lines, and more.

One of the Virgin Group’s Portfolio Companies: Virgin Atlantic

KEY STRENGTHS OF VG AQUISTION’S DEAL

The VG Acquisition benefit undeniably comes down to the network of opportunities that VG Acquisition will be exposed to, given its relationship with Virgin.

Besides Branson, let’s look at Bayliss’s and Lovell’s backgrounds to understand why they might be great fits to drive the best possible acquisition target for this ideal SPAC.

Josh Bayliss Background

Bayliss has been Virgin CEO since 2011 and has had experience as both an investor and operator for Virgin. Specifically, Bayliss helps the firm develop, brand license, and manage Virgin’s direct investment opportunities. In addition, Bayliss has experience in everything from aviation and travel to health and wellness to media and mobile to financial services. This further leads to the relationships and opportunities he’s grown through the years, possibly leading to a fantastic deal in the future.

Evan Lovell Background

Similar to Bayliss, Lovell has excellent experience in investing. Before working at Virgin, Lovell worked for the well-known PE firm TPG Capital. He served on the boards of many of TPG’s portfolio companies and had worked as an investment professional.

With their experience operating portfolio companies, Bayliss and Lovell have what it takes to successfully find a company and elevate its standing.

The proprietary deal flow that Virgin will go through is noteworthy. Unlike other SPACs that claim they have access to “proprietary deal flow” and “industry relationships,” few people can match the expertise compared to Virgin. Since the firm’s inception in 1970, Branson and his team have done deals in so many industries—and they’ve consistently found winners.

Board Director Background

Last, it’s important to list a few board directors who will work with VG Acquisition. Teresa Briggs, James B. Lockhard III, and Douglas Brown will join as board directors. These individuals bring years of industry experience serving on boards for companies such as Snowflake (NYSE: SNOW), DocuSign (NASDAQ: DOCU), and Warby Parker.

RECENT RUMORS ON POSSIBLE TARGETS

What good is an article without reviewing some juicy material? The recent rumors on social media platforms and more all have different ideas on possible acquisition targets:

  • Breakthrough Energy
  • Envision Group—Makes Formula One electric racing vehicles
  • Virgin Orbit—Could Branson take ORBIT public via this SPAC?

The Virgin Orbit possible target brings about some interesting questions if Branson uses this SPAC to bring Orbit public. There has been lots of speculation on various Social Media platforms that after the success that they had on January 18th.

INVESTMENT CRITERIA

There’s nothing too special here, but it’s worth noting that VG Acquisition’s target criteria require a company that is public-market ready with a strong financial profile, proven management, and attractive returns.

ABILITY TO CREATE VALUE POST-DEAL

This one deserves attention. Besides having Branson publicize this company like there is no tomorrow, there will be significant post-deal opportunities.

First, Virgin has the well-known brand name that will enable the company to get the name “Virgin” added to it. Unlike other SPACs, having the Branson seal of approval will instantaneously grow value in the company. Second, the Virgin team members will bring value to the company through their experience operating companies.

SUMMARY ON VG ACQUISITION SPAC’S TEAM

No other team or company has as strong a brand name as Virgin. With Branson as founder, accompanied by two seasoned investment professionals, VG Acquisition has potential to be a great target company and will be able to drive post-acquisition growth.

Feel free to leave your thoughts and questions in the comments section below!

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