Stellar Acquisition III Inc. (NASDAQ: STLRU) (the "Company" or "Stellar"), announced the pricing of its initial public offering of 6,500,000 units at a price of $10.00 per unit. The closing of the Company's initial public offering was consummated on or about August 24, 2016. Each unit consists of one share of the Company's common stock and one warrant, enabling the holder thereof to purchase one share of common stock at a price of $11.50 per share. The securities comprising the units began trading on August 19, 2016 under the ticker symbol “STLRU”. Once the securities units began separately trading, the common stock and warrants were listed on NASDAQ under the symbols "STLR" and "STLRW," respectively.
Maxim Group LLC acted as sole book-running manager for the offering. Chardan Capital Markets, LLC and EarlyBirdCapital, Inc. acted as co-managers for the offering. The Company has granted the underwriters a 45-day option to purchase up to an additional 975,000 units at the initial public offering price to cover over-allotments. The Company sold an additional 400,610 Units based on a partial exercise of the underwriters ‘over-allotment option
The offering is being made only by means of a prospectus. When available, copies of the prospectus related to this offering may be obtained.
A registration statement relating to the securities was declared effective by the SEC on August 18, 2016.
Stellar is a blank check company, also commonly referred to as a Special Purpose Acquisition Company, or SPAC, formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities.
The Company's efforts to identify a target business will not be limited to a particular industry or geographic region, although it intends to focus efforts on seeking a business combination with a company or companies in the international oil and gas logistics, land and maritime oil and gas transportation, terminal and energy storage industries.
Please tell me about your involvement in the deal?
We were the auditor of record for the Company throughout the IPO process and assisted the team with navigating the Securities and Exchange Commission (SEC) filing process, providing practical real time guidance on the SEC comment letter process with their registration statement enabling the Company to go to market in the time frame originally mapped out in the marketing plan.
Our management team has been involved with over 50 SPAC transactions and has worked with virtually every legal and underwriting player in this niche space. These individual transactions have resulted in deals ranging from $50 million to over $1 billion. Withum is the auditor of record for over $3 billion of SPAC IPO’s sponsored by the investment community during the last 12 months.
Why is this a good deal for all involved?
The SPAC market continues to be very active since the traditional IPO market has been stagnant. There are a number of SPACs currently in the market place, but the majority of these are in excess of $100 million in proceeds. Stellar Acquisition III, at $65 million, has more target options available in its search for a business combination, since 80% of the proceeds raised in the IPO need to be used for the intended acquisition. This takes them out of direct competition with a large portion of the SPACs currently in the market place. In addition, the management group has a proven track record of success in the SPAC marketplace, having been involved in previous successful transactions. The management team understands the landscape and has experience in the intricacies of the business combination process, which should prove valuable down the road for the company.
What challenges arose? How did you navigate them?
For us as auditors, the biggest challenge usually occurs when there is a change in the structure or size of the offering. These changes normally occur during the marketing road show process and there are very tight timelines to adjust the registration statement in order to not interrupt the flow of the scheduled investor meetings. In the case of Stellar Acquisition III, the offering size was decreased from 8 million units to 6.5 million units, which causes edits to the audited financial statements and other areas in the registration statement. We had our team of experts on call and ready to review the revised registration statement to ensure all information included was accurately reflected and timely completed to re-file with the SEC.
