Revolution Acceleration Acquisition Corp. ($RAAC)
This is a pre-DA/pre-rumor SPAC to keep an eye on. The team and target are a great combination.
This SPAC stands out to us, just as $ALTU did (newsletter published earlier this month).
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What is Revolution Acceleration Acquisition Corp.?
$RAAC is a blank check company that intends to focus its efforts on merging with a business in “industries that complement our founders’ backgrounds”.
“We will deploy a proactive, disciplined and thematic sourcing strategy and focus our efforts on companies where we believe the combination of our management team’s experience, industry insights, professional relationships, regulatory and policy background and capital markets and deal structuring expertise can be catalysts to enhance the growth potential and value of a target business.” ($RAAC’s prospectus)
The team has government relationships, regulatory and policy experience, and a strong track record in a variety of industries.
Revolution Acceleration’s target business:
They are “uniquely positioned to capitalize on the opportunities that can be unlocked by the convergence of innovation, government policy and regulation. Healthcare, financial services, clean energy, consumer products, infrastructure, government to private sector transitions and media are large markets containing many companies we believe have long-term growth potential driven by disruption and significant regulatory and public policy considerations that we believe can be unlocked with the experience to guide them through their next phase of growth. In our judgment, technology is not a sector, but a catalyst and a competency and it will be a critical component in our evaluation of any potential business combination opportunity.” (424B4)
Multiple target industries
Healthcare
Financial Services
Clean Energy
Consumer Products
Infrastructure
Consumer/Food
Sports/Media/Entertainment
1 underlying goal: Converging innovation, government policy and regulation.
Their target makes them stand out, but their sponsor and team are where things really get interesting.
RAAC Management LLC
$RAAC is sponsored by RAAC Management LLC, a partnership between an entity controlled by John Delaney and Revolution Special Opportunities LLC.
“Revolution Special Opportunities LLC is part of a family of investment vehicles, which includes seed, venture and growth funds with an aggregate of over $1.6 billion in committed capital.” (prospectus)
Revolution has a strong reputation, and was founded by one of the RAAC’s directors. Revolution’s portfolio includes Tempus (data-driven precision medicine), TalkSpace (online therapy), BigCommerce (NASDAQ: BIGC), and DraftKings (NASDAQ: DKNG) among others. Revolution has an extensive network.
More about John Delaney and Steve Case below.
Revolution Acceleration’s team:
CEO & Director: John K. Delaney
Served as a member of the U.S. House of Representatives from 2013 to 2019.
Has served on the Financial Services Committee and the Joint Economic Committee.
Co-founded CapitalSource Inc. (NYSE: CSE) in 2000. He served as the CEO and Chairman from 2000 to 2011.
Co-founder/Chairman/CEO of HealthCare Financial Partners (NYSE:HCF), which was acquired in 1999 by Heller Financial.
Currently serves as the Executive Chairman of Congressional Bancshares, Inc. (operates Congressional Bank)
Ended his 2020 Presidential Campaign early, to not steal votes from Joe Biden and others.
He is well connected within the government, and will likely play a huge role in the future of Revolution Acceleration’s target business.
Director: Stephen M. Case
Has served as the Chairman and CEO of Revolution LLC (investment/VC firm) since April 2005.
He serves as a partner of Revolution Growth II (growth-stage fund), Revolution Growth III (growth-stage fund), Revolution Ventures II (early-stage tech fund), Revolution Ventures III (early-stage tech fund), Rest Seed Fund (early-stage fund), Rest Seed Fund II (early-stage fund), and Rise of The Rest Real Estate Management Company.
Has been a director of Sweetgreen, Inc. (food company) since December 2019.
Director of Maui Land & Pineapple Company, Inc. (NYSE: MLP) since December 2013. (agriculture holding/operating company)
Served as the Chairman of Exclusive Resorts LLC (membership-based luxury real estate) since December 2008.
Former director of BigCommerce (NASDAQ: BIGC).
Former Chairman of Time Warner, Inc.
Former co-founder, CEO, and Chairman of America Online (AOL)
Experienced businessman who brings a lot to the table.
Director: Steven A. Museles
Has served as the Chief Legal Officer and Corporate Secretary of JBG Smith Properties (NYSE: JBGS) since July 2017.
From 2013-2017, he was the Chief Legal Officer and Chief Compliance Officer of Alliance Partners LLC (credit-focused asset management firm).
Former director, co-CEO, CLO, and Secretary of CapitalSource Inc.
Practiced corporate and securities law at Hogan Lovells (law firm).
Director: Phyllis R. Caldwell
Director of Ocwen Financial Corporation (NYSE:OCN) since January 2015.
Founder/managing member of Wroxton Civic Ventures. (since 2012)
Chief Homeownership Preservation Officer at the U.S. Department of the Treasury from 2009-2011. Helped with the ‘Troubled Asset Relief Program’.
From 2007-2009, she was the President and CEO of the Washington Area Women’s Foundation.
Spent 11 years with Bank of America (retired in 2007).
Independent director of City First Bank of DC since January 2014.
Director of MicroVest Holdings since October 2018.
She served as an independent director of American Capital Senior Floating (NASDAQ: ACSF) from January 2014 to September 2018.
Served on the boards of numerous non-profit organizations.
Director: Jason M. Fish
President of Sebastes Capital, LLC since 2013.
Co-founded Alliance Partners, LLC in 2011.
Served as Alliance Partners’ CEO until 2016.
Co-founded CapitalSource, Inc. with John Delaney. President/CIO/Vice Chairman until 2007.
From 1992 to 2000, he served as a managing partner of Farallon. (2 LLCs)
Former Senior Vice President at Lehman Brothers.
He has served as a director of Generate Capital, Inc. since 2014.
He has served as the Vice Chairman of Congressional Bank since 2018. (Director since 2012).
The team has a range of expertise.
$RAAC’s chart & relative information:
(information relative to the time of the article being written)
Commons: $10.75
Warrants: $2.27
Units: $11.47
Average volume: 45k
Offering details: $250 million IPO
1 warrant = 1:1 conversion rate at $11.50
1 unit = 1 share of common stock & 1/3 of 1 warrant
Our thesis:
This SPAC stands out to us because of what the management team brings to the table. We like how they have multiple targets, and how they want to leverage their policy experience with the target. We’re confident this team will get a deal. We plan to hold until a definitive agreement is announced. After an announcement, we’ll re evaluate to determine if we want to hold longterm. This SPAC is unique, and we’re excited to see what company they end up merging with. For each target industry, they are well positioned:
Healthcare - John Delaney’s relationships are hard to ignore given how healthcare is regulated. Revolution has experience in the sector as well, with investments in companies like Talkspace and Tempus.
Media/Sports/Entertainment - Revolution’s partners have “extensive access” to professional sports leagues, team owners, and sports media investors. They have built a track record of success investing within the industry. The government connections are very useful for sports-betting businesses, among others. Revolution has previously invested in Sportradar, DraftKings, and Scopely. (Note: Sportradar is considering a SPAC - $RAAC would need a massive PIPE, so not speculating here.)
Consumer/Food - Revolution has invested in 2 different leading fast casual restaurant brands: Sweetgreen and Cava. Revolution has also invested in CustomInk, CLEAR, Glowforge, and Orchard (all are tech-enabled, consumer-facing companies). They have years of experience investing in these industries.
Financial Services - Both John Delaney and Revolution have notable experience to offer a financial services business. Revolution has invested in Tala, which provides loans to people in developing countries. They believe technology is driving innovation in this sector, and they can clearly help drive further growth.
Clean Energy/Infrastructure - John Delaney’s network is key for this as well. John dropped out of the 2020 Presidential race to ensure he wouldn’t steal votes from Joe Biden and others. President Biden is a driving force in fighting climate change, creating organizations like “Clean Energy For Biden”. During John’s time in Congress, he was a leader on policies encouraging infrastructure, carbon pricing and negative emissions technologies. If he had became President, he would be taking similar actions to Biden. This team would be a good match for a clean energy company looking to go public.
This team has a unique combination of a team with a strong investment track record, government connections and experience in multiple industries.
Disclaimer & disclosure:
This newsletter is not financial advice. The content within it is either a) backed by a source that is attached (or prospectus), or b) an opinion. This is strictly for informational purposes only. We strongly encourage people to do their own research before buying or selling anything. It can be assumed we have a position in the stock mentioned in the newsletter. SPAC’s in particular have a lot of risks, please read into them here.
Well done, its pretty much at nav now with an ew12 setup, at the tip of the springboard