A special purpose acquisition company started by Michael Andretti closed on a $200 million initial public offering last evening and began trading on the New York Stock Exchange today.
The blank-check, Andretti Acquisition Corp., seeks opportunities that can benefit from the iconic racing family’s brand, both inside and outside of the worldwide motor sports platform, according to its prospectus. Michael is co-CEO of the venture with former U.S. Concrete CEO Bill Sandbrook. McLaren Racing CEO Zak Brown and Mario Andretti are among the other executives participating in the venture.
“There’s an engine under our hood, and that’s the difference, I think, between us and some others,” Michael Andretti said on a video call, referring to the quality of the SPAC’s executive team.
Andretti Acquisition first filed for an IPO in March last year, but it was delayed after regulatory guidance on SPAC accounting brought the then-booming IPO market to a temporary halt. Originally, Andretti wanted to raise $250 million, downsizing the fundraising to $200 million in an updated filing in November. The lag between initially filing for a SPAC and follow-through on the public offering has allowed the executive team to better understand the types of deals that succeed in the market, especially with start-up target businesses that don’t have substantive sales yet.
“We intend to be extremely cautious and very deliberate in our acquisition criteria and then also in our due diligence once we do identify a target,” chief financial officer and former logistics executive Matt Brown said on the video call. “That’s one thing we learned. There’s been a shift in the market toward more awareness by investors toward pre-revenue companies. One thing we’ll look at with those is: Do they have significant customer orders? Do they have partnerships with established industry players? Do they have investments by those types of companies as well?”
One sector the business has likely ruled out is using the SPAC to acquire a racing team, said Michael Andretti. “We’re not looking at purchasing a Formula One team with it or anything like that,” he said. In recent months, Andretti and his Andretti Autosport racing team have reportedly been in discussions to purchase an F1 team. Andretti operates EV racing teams in the Formula E and Extreme E circuits, as well as IndyCar, among other efforts. Potential targets for the SPAC include businesses related to electric vehicles, autonomous driving technology or battery development. Ultimately, while SPACs usually offer suggestions of businesses they intend to seek, they can elect to merge with any business as long as shareholders approve.
“I feel like we have a lot to bring to the party—we have a lot to offer, we have our brand, our expertise within the space, we have our contacts,” Andretti added.
Serving on the board of directors of the SPAC are McLaren’s Brown, who owns parts of racing teams with Andretti and Sandbrook. Jim Keyes, the former CEO of Wild Oats, Blockbuster and 7-11, AT&T chief audit executive Cassandra Lee, former NYSE co-CEO Jerry Putnam and John Romanelli of investment boutique Seahawk Advisory round out the board of directors. Mario Andretti, Michael’s father, is a special advisor to the business and part of its sponsor group, which puts up the money to form the SPAC and bring it to market.
“Between Michael and Mario, they can open any door in the mobility space in the world,” said co-CEO Sandbrook, also on the video call.
Like all SPACs, Andretti Acquisition had to wait until its IPO to formally search for companies to bring public. It has 18 months, extendable to 24, to find a merger, or else it must return the IPO capital held in trust to shareholders.
The SPAC has already had unprompted calls from various motor sports and auto industry businesses seeking to go public, noted Brown, the CFO. “In a perfect world, we would like to find a company that is generating EBITDA (earnings, before interest, taxes, depreciation and amortization) and that’s also growing quickly.”
