DraftKings, Skillz SPAC Founders Planning $1.5 Billion IPO for Spinning Eagle Acquisition

Posted on: December 24, 2020, 10:40h.

Last updated on: December 24, 2020, 10:40h.

Jeff Sagansky, the Hollywood executive behind two of this year’s biggest blank-check deals in the gaming industry, revealed plans for another special purpose acquisition company (SPAC) initial public offering (IPO).

Spinning Eagle
Spinning Eagle
Hollywood executive Jeff Sagansky seen here in 2103. He and his partners are starting another SPAC. (Image: Variety)

In a Form S-1 filing with the Securities and Exchange Commission (SEC) on Dec. 23, Sagansky and partners Eli Baker and Harry Sloan said they’re looking to raise $1.5 billion through the IPO of Spinning Eagle Acquisition Corp. Units for that SPAC will trade on the Nasdaq under the ticker “SPNGU.”

Assuming the $1.5 billion figure remains accurate, Spinning Eagle will represent one of the largest SPAC IPO’s on record, trailing only the $4 billion raised by hedge fund manager Bill Ackman’s Pershing Square Tontine Holdings and Churchill Capital Corp IV.

We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us,” according to the filing.

SPAC usually have two years to find a merger target or risk liquidation.

Maybe Some Gaming Angles

Los Angeles-based Spinning Eagle is the seventh blank-check firm started by Sagansky and Sloan and while the S-1 doesn’t mention specific industries the new SPAC will evaluate for acquisitions, the duo’s track record indicates gaming assets could be on the shopping list.

Baker, Sagansky and Sloan were the founders and top executives of Diamond Eagle Acquisition Corp., the SPAC that served as the platform for DraftKings (NASDAQ: DKNG) to go public in April. Following that transaction, the trio started Flying Eagle Acquisition Corp., which merged with mobile gaming and esports provider Skillz (NYSE:SKLZ). That company went public last week.

Sagansky formerly led CBS Entertainment while Sloan was previously chief executive officer of the movie studio Metro-Goldwyn-Mayer.

“While the company (Spinning Eagle) has not selected a target industry or geography, it plans to target businesses that will benefit from its management team’s experience,” according to IPO research firm Renaissance Capital.

Unique Spin on Usual SPAC Structure

Spinning Eagle could do something not often seen in blank-check transactions. Should the SPAC not spend $1.5 billion on an acquisition, the company can “rightsize” its trust and use the remaining capital to create another SPAC, shares of which will be spun off to Spinning Eagle investors.

“In the event that we determine not to use all of the proceeds held in the trust account for our initial business combination, based on the capital needs of our initial business combination target and related factors, we will have the ability to rightsize our trust account by allocating a portion of our trust account to a new blank check company, which we refer to as SpinCo, and spinning off SpinCo as an independent, publicly-traded,” according to the S-1.

More than 220 blank-check firms went public this year, raising more than $70 billion, plenty of which have ties to or eyes on the gaming industry.

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