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 | Max Chafkin

Tying the Knot

Merging with a specified purpose acquisition company, or SPAC, can be a smart way to go public without the uncertainty of a traditional IPO. But not all SPAC partnerships are made in heaven. Here is the scoop on three recent deals.

 
Company 2005 Sales SPAC The Deal
Honeymooners
Jamba Juice
Sells juices and smoothies in nearly 600 company-run stores and franchises		 $209 million Services Acquisition Corp. International, an outfit based in Fort Lauderdale, Florida, that made an initial public offering in July 2005 A reverse merger, approved by shareholders in November, netted Jamba Juice about $225 million in cash. Jamba Inc. (Ticker Symbol: JMBA) traded recently on the Nasdaq exchange at $9.99 a share.
Engaged
American Apparel
Los Angeles-based clothing manufacturer and retailer that appeared on the Inc. 500 list in 2005 and 2006		 $208 million Endeavor Acquisition Corp., a New York City SPAC that raised $129 million in a December 2005 IPO In December, the companies announced a reverse merger valued at $383 million, which includes the assumption of $110 million in American Apparel debt. Shareholders are slated to vote on the deal this summer.
Left at the Altar
Intercontinental National Bank
42-year-old community bank based in San Antonio		 $4.2 million Houston-based Coastal Bancshares Acquisition, which raised $33 million through an IPO in early 2005. Coastal's shareholders voted down a $16.8 million offer in October. The reasons are unclear, but one of the SPAC's investors, now-defunct hedge fund Amaranth Advisors, had lost $6 billion on natural gas trading in September.

Senior writer Max Chafkin has profiled companies such as Yelp, Zappos, Twitter, Threadless, and Tesla for the magazine. He lives in Brooklyn, New York.