Has Irish-led SPAC found ‘secret sauce’ in Belgian deal?

North Atlantic Acquisition Corporation’s deal with TeleSign strikes lucrative note

Of the record 1,000 US initial public offerings (IPO) in 2021 that raised €315 billion, some 60 per cent of the deals were in new generation cash shells, or blank-cheque companies, known as special-purpose acquisition companies (Spacs).

And one of the early Spacs out the gates in January was North Atlantic Id: "7.1213540", $action:"view", $target:"work"})" polopoly:contentid="7.1213540" polopoly:searchTag="tag_company">Acquisition Corporation (NAAC), led by Irish corporate finance executive Gary Quin and packaging industry veteran Patrick Doran, who got their timing spot on before the appetite for Spacs began to taper off from the end of the first quarter.

And with good reason. With so much Spac money sloshing around looking for deals (they typically have 18-24 months to buy something or face having to hand money back to investors), there was plenty of evidence of questionable purchases. Poor post-deal performances have spawned a cottage industry for lawyers and invited closer scrutiny from regulators.

Quin, NAAC's chief executive and a former vice-chairman of Credit Suisse's investment banking division and one-time adviser to Blackstone, and Doran, NAAC's president and former chief executive of Dublin-based packaging company Americk, are hoping the deal they have just struck will allow them stand out from the pack.

NAAC announced late last week that it had it had agreed to merge with TeleSign, a digital ID identification company owned by Belgian mobile phone group Proximus, in a transaction that would value the business at $1.3 billion (€1.15 billion).

“TeleSign is the secret sauce behind many situations that you deal with daily,” Quin told analysts on a call. “When you log into TikTok using two-factor authentication, you’re using TeleSign. When you need to reset your password on Alibaba and you’re sent a one-time passcode, you’re using TeleSign. When your food is being delivered and you message the driver, you’re using TeleSign.”

Proximus will own 66.5 percent of the combined company upon completion of the transaction early next year that will see the NAAC name disappear and TeleSign's chief executive Joe Burton become chief executive of the listed group. Quin will join the board.

TeleSign expects to accelerate its investment and growth as a result of the deal. Its revenues are forecast to soar from $391 million this year to $1.1 billion in 2026.

Still, NAAC investors aren’t getting carried away. For now, at least. The stock has moved just 1 per cent higher since the announcement and remain 15c off its $10 IPO price.