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Technology Stocks : Blank Check IPOs (SPACS)

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From: Glenn Petersen10/16/2020 6:49:29 PM
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Hungry to top Beyond Meat’s smash IPO, new plant-based food SPAC forms in Mass.

By Allison DeAngelis – Life Sciences Reporter, Boston Business Journal
October 16, 2020

Plant-based burger maker Beyond Meat became one of 2019’s hottest IPOs when it raised $240 million. Now, a new blank-check company based in Weston hopes to shoot past that figure and bring another plant-based food company public.

Paperwork was filed with the SEC this week for a new special purpose acquisition company named Natural Order Acquisition Corp. The plans are to raise some $287.5 million and acquire another company specializing in plant-based foods or protein alternatives, thereby bringing it public.

The Weston, Mass. company is the 14th Massachusetts-based SPAC to launch this year, as the creation of these types of shell companies has proliferated in 2020 nationally as well as in the Bay State.

The venture is being led by Paresh Patel, founder of small India- and Massachusetts-based firm Sandstone Capital LLC, and Italian entrepreneur Sebastiano Cossia Castiglioni. Castiglioni is best known as the CEO of investment firm NKGB Strategic Advisory, the fine art collectors network Opteres and the organic winery Querciabella. He is also a proponent of vegan eating and was one of the first investors in Beyond Meat.

Protein alternatives are a booming market. Venture capitalists invested more than $824 million in these companies last year, followed by more than $930 million in the first quarter of 2020, according to the Good Food Institute.

Less than 20 miles from Natural Order’s executive offices, a Seaport company spun out of life sciences unicorn Ginkgo Bioworks is creating meat substitutes using fermentation and other approaches. The startup, Motif FoodWorks, recently announced plans to begin production of its first commercial product, an ingredient to improve the flavor of beef substitutes.

In the same building, small firm Kerafast LLC is working with the aforementioned Good Food Institute to license cells and other components of meat substitutes.

The majority of these companies are privately held outside of Beyond Meat (Nasdaq: BYND), which launched on the stock market last year at $25 per share. Natural Order Acquisition Corp. plans to sell 25 million shares at $10 apiece.

Special purpose acquisition companies don't identify the company they hope to acquire before closing the fundraising. But Natural Order laid out a handful of criteria: the company will already have commercial revenues, a high growth rate and will be valued somewhere between $800 million and $4 billion. Beyond Meat's competitor, Impossible Foods, is valued at the top of that range, while controversial plant-based egg maker Eat Just is worth around $1.2 billion. Pre-commercial company Motif is valued at $327.5 million, according to Pitchbook.

Once the fundraising is complete, Natural Order Acquisition Corp. will have two years to complete one or more acquisitions.
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