Data Center, Physical Therapy, Electric Trucking Companies Get In On SPAC Explosion
The explosion in popularity of special-purpose acquisition companies, also known as SPACs or blank check companies, continues to touch the world of commercial real estate. Three companies with a combined value of over $7.5B will hit the public market through mergers with SPACs, all announced on Monday in separate press releases.
Data center owner Cyxtera Technologies will go public through a merger with Starboard Value Acquisition Corp. in a deal valuing Cyxtera at $3.4B. The transaction will bring in $654M of capital, which will include $250M of private investment in public equity, or PIPE, provided by a group of investors including Fidelity Management & Research Co. and partners of Starboard Value LP, which formed the SPAC. Cyxtera's existing ownership will retain a 58% stake, and its leadership will remain in place.
Xos, a firm that makes all-electric trucks for the logistics industry, will go public through a merger with NextGen Acquisition Corp., a SPAC formed by former Goldman Sachs and Carlyle Group executives, Bloomberg Quint reports. The take-public transaction will provide Xos with $220M in new equity from a group of investors that includes truck dealers like Thompson Truck Centers and values the company at $2B.
ATI Physical Therapy, the largest brand of outpatient physical therapy clinics in the U.S., will go public in a deal with Fortress Value Acquisition Corp. II, a SPAC formed by SoftBank-backed Fortress Investment Group. The merger, which values ATI at $2.5B, will provide $645M in funding, $300M of which will come from PIPE from a group of investors that includes Fortress itself. ATI's parent company, Advent International, will remain the majority owner.
Cyxtera owns 61 data centers across 29 markets and brought in $690M of revenue in 2020, its first full year in operation after being carved out of the portfolio owned by Lumen, previously known as CenturyLink. Fidelity and clients of Starboard Value have committed $100M to a forward purchase agreement for any investors in the SPAC who may wish to cash out at this point.
Launched in 2016, Xos started delivering its trucks to clients in 2019 and now counts UPS among its partners. Taking the new equity raised as part of the merger and the cash held in trust by NextGen, Xos will bring in $575M in gross proceeds, according to its press release. The company's founding leadership team will remain in place, predicting 2023 as its first year of positive cash flow.
ATI owns and operates nearly 900 locations across 25 states, with a model that primarily uses retail-type properties. Advent and other previously invested owners will not be selling any of their shares as part of the transaction, which will be used to pay down debt and preferred equity shares, according to the release.