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Incorporated as a Cayman Island Company —Details on the Lamar Partnering Corporation SPAC

The LAMAR SPAC

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Details on the Lamar Partnering Corporation SPAC

 

 

 

by Brent Baer, Publisher, OOH Today

 

 

 

Reading Jim Johnsen’s post he shared in his weekly, OOH…Here’s One Thing– ‘KOKOMO‘, an examination of the Lamar Special Purpose Acquisition Company, (SPAC) named Lamar Partnering Corporation  (LPC for now) lead me to further inquiry into the story. 

Johnsen included in his piece, the link to the Securities and Exchange Commission’s S-1 Form filed by Lamar Partnering Corporation in stating its initial public offering of their securities.

https://www.sec.gov/Archives/edgar/data/0001854074/000119312521106918/d129488ds1.htm

What a read it is. Yes, it is lengthy. Yes, it is repetitious. And yes, it is detailed to the point of confusion. Let’s see if we can provide some of the points from the seemingly half a million page document, which might be of interest to you. Just the highlights. 

For starters, as it identifies itself as a blank check company, that’s a SPAC,  it tells us it is ‘incorporated as a Cayman Island Company’. A beautiful Caribbean island south west of Cuba. Great beaches. Kind of reminds me of the Beach Boy’s song about KOKOMO.  Heard that one before? Nice one Johnsen.  Who wants to attend those board meetings? 

Lamar Advertising is the ‘sponsor’ of the SPAC.  

 

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They are seeking to raise via public sale, yes you too can buy the newly minted company stock soon, $300,000,000 represented by 30,000,000 shares. That’s $10 a share they are planning to kick off at.  FYI, I am in when it drops below that number. There is a provision which allows for the raise to go to $345,000,000 lets just stick with the $300,000,000 for our post. By the way, ‘founders’ shares are priced at 0.003 per, after all, they are fronting the money to get the show on the road. 

Here is the exact language from the preliminary prospectus⇒

Lamar Partnering Corporation is a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to as our initial business combination. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We may pursue an initial business combination target in any industry or geographic location (subject to certain limitations described in this prospectus).

The new company, LPC, has a time table to complete the initial business combination of 24 months from the closing of the offering (again there is an alternative of 27 months from the closing of the offering if they have executed a letter of intent or agreement in principle).  Let’s stick with the 2 years for our post. Note typical SPACs, if there is such a thing as typical, it is such a new concept, run 18 month duration. 

If you read through the entire S-1 registration statement and I did several times, there are many references which I interpret as, this is what we intend to do, but if we change our mind and decide to go another direction, we will.   I can not tell you if all SPACs are ‘ambiguous’ (my judgement) and referenced like the one outlined in LPC or it is just LPC? I guess it doesn’t matter. It is not like Lamar is going to do anything dishonest or stupid. No seriously. Lamar is hands down the top operating company in the OOH Industry right now and has been since about 2015.  Harvard Law School is no small task—Sean Reilly’s degree.  Kevin (Older Brother) Reilly received his BA from the Crimson as well.

My point citing the ambiguity is, there are a number of directions LPC can go. They discuss in the registration statement what they intend to do but there seems to be caveat in every corner if they decide differently. Personally I don’t see a problem with that if that is indeed the case. More examples of this at the bottom of this page. 

If you want the greater detail, punch up the link above and sort through it.

More highlights.

The Plan is to identify a company which to acquire which can benefit from the experience, expertise and skills of the Sponsor, Lamar. My impression is LPC can not or will not, focus on assets which would compete with the Lamar REIT structure. But again that is my take is, that is not in stone.

If Clear Channel or Adams were ready to check out, is this a way for the Lamar mothership to guide the new LPC to take over?  Well ok, both are worth at least a billion dollars each, so maybe pieces? The point is, can that work under the SPAC guidelines? Others in my discussions this week have suggested it could. Regardless, it works for me.  For now.

What is Lamar suggesting they would look at with the $300 Million? Drawn from the S-1⇒

Intersection of Out-of-Home, Technology, and Communications.
We plan to partner with a company in a sector that is tangential to our sponsor’s expertise and does not compete with its REIT-focused acquisition strategy. These may include, but are not limited to:
♠Non-REIT Transit, Airport, and other Digital Media/Digital Addressable Screen Networks.
♠Advertising Technology.
♠International Out-of-Home.
♠Distributed Energy and Wireless Communications Infrastructure.

The Board of Directors & Management for LPC are:

Sean Reilly, will serve as Chairman of the new company. Sean is CEO and President of Lamar.
Jay I. Johnson, to be Director and CIO. Currently Lamar CFO and Treasurer
Ross Reilly, will be CEO of the new company. Sean’s nephew is Lamar VP of Mergers and Acquisitions. 
Joe O’Brien will be CFO. He is currently Lamar Corporate Controller
Buster Kantrow will be on the Investment Committee. He is current Lamar EVP of Biz Dev
Ian Dallimore will be on the new companies Investment Committee. Ian is current VP of Digital Growth and GM of Programmatic

Check out the Independent Director Nominees:

Barry Frey, currently DPAA CEO and Director. Frey is well connected to the entire Place Based DOOH world as well as the new tech coming into the OOH business. 

Bill Luby, partner of Seaport Capital. Luby goes way back with the Lamar from his Chase financial stints. Luby has had hands in telecom and of course very involved in OOH. Luby is the dough behind bMedia Group who bought Lamar’s Puerto Rico OOH in 2018.

 
Juliana F. Hill, is currently owner of JFH Consulting but her impressive OOH credentials are Clear Channel Communications, Cinemedia, and iHeart US West Communications. Her background drips of financial wizardry.   

Just viewing the names listed above, both directors and management, their expertise and connections, gives one a wide array of imaginary acquisitions. Who in the programmatic segment would not jump at hundreds of millions to ‘sell’? What place based small or multiple screen networks?—Many of whom are struggling big time, barely hanging on pre and now on the life support in post Covid. Oh yes! Wide opportunity exists. Consider one of my favorites; navigating to the Automated Vehicle or Intelligent Auto field.  Will LPC hedge against the great OOH catastrophe if Automated Cars become a reality? 

Fun to speculate. It will be interesting when they complete a deal(s). It can be more than one company as long as it reaches 80% of the assets held in various conditions per the S-1 Statement.

Additional criteria in considering an acquisition

Experienced, Established Management Team
Significant Future Growth Prospects
Leading Defensible Market Position
Reasonable Valuations.
Positioned to Benefit from Lamar’s Strengths.

 

 Entities which LPC execs, officers, directors and advisors have duties, obligations and relationships.

Principal Shareholders March 30, 2021

 

Consider some of the direct declarations I have sorted out, listed as ‘risk factors’ from the legal documents:

You will not be entitled to protections normally afforded to investors of many other blank check companies.

We may seek acquisition opportunities outside the digital media, advertising technology, international advertising, and/or distributed energy and wireless communications infrastructure sectors, which may or may not be outside of our management’s area of expertise.

Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.

Our company has overlapping directors and management with multiple entities, each of which may lead to conflicting interests. Additionally, certain of our officers and directors have, and in the future may have, additional fiduciary or contractual obligations to one or more other entities which may lead to additional conflicting interests.

We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us.

If you have about 4 or 5 hours, an S-1 is a read you should do at least once in your life. Take a short cut and read the Amended and Restated Memorandum and Articles of Association.

We look forward to Lamar Partnering Corporation’s further activities. Will there be other’s entering the arena as well?

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