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INTERVIEW: Newly-Listed Target Hospitality CFO Explains Key to Successful SPAC

John Jannarone

Target Hospitality Began Trading Monday on Nasdaq

What’s the key to listing through a SPAC, or blank-check company? We asked Target Hospitality CFO Andy Aberdale following the formal re-listing of the company (Nasdaq ticker: TH) after the merger of Target Lodging, Signor Lodging, and Platinum Eagle Acquisition Corp. The latter was a SPAC that raised money to find an investment and narrowed its sights on two companies, which both operated flexible-housing businesses focused in the petroleum-rich Permian Basin. The merger, which IPO Edge explained in a detailed analysis late last year, established a firm foothold in West Texas with revenue anchored by multiyear contracts from major petroleum companies.

Shareholders overwhelmingly approved the deal, with 93.1% of shares voted going in favor of it, making the country’s largest provider of specialty rental accommodations with premium catering and hospitality services.

IPO Edge: How did your financial advisors, Deutsche Bank and BofA Merrill Lynch, help the transaction succeed?

Mr. Aberdale: We worked with several top-notch advisors throughout the deal. They worked hard to provide us with the right counsel and helped us navigate the complexities of going public via a SPAC. This includes helping us package and present the most compelling investment opportunity to a diverse mix of investors. We are very pleased with the mix of investors in our company and we look forward to executing our plan intended to maximize shareholder value.

IPO Edge: Did you ever consider another route to public listing such as a traditional IPO or reverse merger? What made a SPAC the most compelling choice?

Mr. Aberdale: Target Hospitality was created through a 3-way merger combining Target Lodging and Signor Lodging into Platinum Eagle, the publicly-traded SPAC. We considered several options including a traditional IPO, but when we met the team at Platinum Eagle, through the private equity firm TDR Capital, the chemistry and timing aligned. It seemed like a natural synergy, especially given our operational management of Signor Lodging and their work with WillScot. Most importantly, they understood our business and fully supported us executing our growth plan early-on. Their experience and understanding of the SPAC process was key in guiding us through the public markets entry process. We look forward to leveraging our enhanced resources to advance our strategic priorities, creating value for our shareholders, and achieve long-term profitable growth while maintaining transparency.

IPO Edge: What was the most important factor in getting shareholder approval of your deal?

Mr. Aberdale: With any investment opportunity, it’s critical to package the information and story in the most compelling manner. We have a tremendous business and it was necessary to clearly convey to investors the powerful and highly complementary nature this business combination presented. We focused on spending plenty of time meeting and speaking with investors to answer their questions and get them comfortable with the transaction. In the end, investors recognized that this was an advantageous path forward to accelerate our long-term, profitable growth.

IPO Edge: Is there any advice you would offer to other companies considering a SPAC as a path to public listing?

Mr. Aberdale: It takes more than just a successful business to participate in a public listing. There is a learning curve in terms of telling your company’s story and responding to queries in a way that resonates with the public markets. Therefore, if you decide to go down the SPAC road, invest the time in educating the marketplace. This is not an easy process, requires meticulous preparation, and it moves very quickly. You need a seasoned team of professionals, both internally and externally, guiding you at each and every step. We were able to successfully close this deal and become a public company because of the excellent teams we worked with throughout the process.

IPO Edge: Do you believe you were able to reach enough potential shareholders during the marketing and investor education process?

Mr. Aberdale: We spent numerous hours meeting with and educating a diverse range of investors to build a strong, diverse shareholder base. This process was critical to our success and our advisors were careful to put us in front of the right mix of investors. I see the education process continuing as a public company and we are committed to maintaining a high level of transparency. Target Hospitality is a long-term story and everyone within the organization is committed to ensuring we continue to provide value to our shareholders and the best possible services to our customers, which will allow us to continue to grow and prosper.

 

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