A new special purpose acquisition company, or SPAC, is targeting independent RIAs and wealth management-focused technology companies.
Everest Consolidator Acquisition filed for an initial public offering on October 19 to sell 15 million units, in hopes of raising $150 million it can use to acquire RIAs, multi-family office platforms, and “wealthtech” companies. Each unit costs $10 and consists of one share of common stock and half of a redeemable warrant. A full warrant allows a holder to purchase one share at the price of $11.50 raising the potential value of the company to $188 million, according to its preliminary prospectus.
The blank check company plans to apply to the New York Stock Exchange under the ticker MNTN.U. It is based in Newport Beach, California but was incorporated in Delaware on March 8 of this year.
BofA Securities, Inc. is the underwriter and will be able to purchase up to 2.25 million units and an additional 1.125 million warrants redeemable after 45 days to cover over-allotment.
Everest is led by CEO Adam Dooley, the founder and CEO of private equity firm Belay International. Dooley couldn’t be reached to comment for this story.
The company’s chief operating officer and director, Jacqueline Shoback, is also the co-founder of 1414 Ventures, a venture capital firm focused on early-stage digital identity companies that support cybersecurity services and others.
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The private wealth management industry’s strong growth, a large total addressable market, and the sheer volume of companies available as potential targets are among the reasons Everest finds the industry attractive.
“In recent years, the wealth management industry has seen a proliferation of disruptive technology solutions in both the direct-to-consumer and business-to-business contexts. These technology solutions enable stronger and more comprehensive service offerings and drive operational efficiencies across the wealth management value chain,” the Everest prospectus says.
SPACs are public shell companies created with the sole purpose of acquiring private businesses and effectively helping them become publicly traded without filing for a traditional initial public offering. SPACs have been around for decades but their popularity soared in 2020. In 2019, 59 SPACs were created. In 2020, there were 247 SPACs that raised more than $75 billion, according to research firm Deal Point Data. The “SPAC boom” continued into this year; there were 298 filings in the first quarter alone.
Everest is seeking businesses that have a strong management track record for growth and profitability, can benefit from being a publicly traded company with access to broader capital markets, and can enhance stockholder value.
The SPAC has 15 months from the closing of the offering to complete a business combination, but it reserves a right to extend this period by two additional three-month periods for a total of up to 21 months. Stockholders cannot vote with or redeem their shares during extensions, which is not a trait of all SPACs.
“This feature is different from some other special purpose acquisition companies, in which any extension of the company’s period to consummate an initial business combination would require a vote of the company’s stockholders and in connection with such vote stockholders would have the right to redeem their public shares,” the company noted in its fillings.
The wealth management industry is no stranger to the SPAC craze.
In October of 2020, Vestigo Venture’s founders formed Lefteris Acquisition, a SPAC that targets financial technology companies valued between $600 million and $1.3 billion. Vestigo raised $200 million during its IPO. A month later, Kingswood Acquisition Corp., a SPAC, raised $115 million in its public offering. RIA Tiedemann Advisors, announced last month that it plans to go public through a merger with SPAC Cartesian Growth Corp.
Holly Deaton (@HollyLDeaton) is a staff writer at RIA Intel and based in New York City.