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True Wind hunts for a $1 bn-plus tech company with its second SPAC

The firm plans to merge TWC Tech Holdings II with a tech-focused high growth, high quality company with a transaction value north of $1 billion and up to $10 billion.

Proving successful once before, True Wind Capital is searching for a $1-billion-plus tech company with its latest SPAC vehicle, Sean Giese, a partner at True Wind, and John Gray, vice president at the firm, told PE Hub.

TWC Tech Holdings II, the firm’s second blank check company, has completed the pricing of its initial public offering of 52,500,000 units at $10.00 per unit. According to inside sources, demand was robust and the book was oversubscribed.

The units will be listed on the Nasdaq and begin trading under the ticker symbol “TWCTU.”

The SPAC is targeting $525 million in its initial public offering, according to an August 4 S-1 filing.

The firm plans to merge TWC Tech Holdings II with a tech-focused, high- growth and high-quality company with an enterprise value north of $1 billion and up to $10 billion, the investors said.

An industry specific focus and a large acquisition target allows the SPAC to differentiate in the midst of the recent SPAC boom, they said.

“Out of 115 SPACs on the market right now a small number are tech related,” John Gray, vice president at True Wind, told PE Hub.

“Our offering will be over $500 million…What that affords us is an ability to go after larger technology targets that are over $1 billion,” Gray said.

Deutsche Bank and Citigroup served as underwriters to TWC Tech Holdings II. True Wind also involved minority-led, women-led and veteran-led banks: Academy Securities, Blaylock Van, Loop Capital Markets, Roberts and Ryan, Tigress Financial Partners were all co-managers on the IPO.

“We expanded the universe of underwriters that most of the market uses,” Gray said. “You have 115 SPACs out there looking for targets, so having a unique, differentiated, and diverse perspective on how to approach a business combination from the minority-led banks, women-led banks, and veteran-led banks, is crucial.”

True Wind Capital’s previous SPAC, Nebula Acquisition, went public in January 2018 and completed its combination with auto finance analytics and services provider Open Lending in June 2020.

Being a multi-issuer is another important differentiator among the many first-timers in the SPAC market, Sean Giese, partner at the firm, said.

“Our first SPAC was well before the boom that you’ve seen thus far,” he said. “We saw that as another way for a tech company to get public really for two things that are lacking from a traditional IPO: more liquidity and transparency.”

According to Giese, being able to openly communicate with investors during covid-19 was crucial in closing the deal with Open Lending.

“Trying to share the information with investors on what was going on with the business during covid was incredibly important,” Giese said. “Having this ability to share a lot more information (versus a regular IPO) helped us execute on that deal.”

True Wind ended up raising north of $500 million for Open Lending. The business is now trading at north of $20 per share, implying those who invested in the company at $10 per share more than double their capital, Giese said.

This year has seen an acceleration in blank-check company filings, with notable SPAC IPOs ranging from electric vehicle maker Nikola to sports gambling giant DraftKings and Multiplan, a healthcare cost containment company, PE Hub reported in August.

True Wind Capital, led by Adam Clammer and Jamie Greene, who co-founded KKR’s global technology group more than a decade ago, is currently in the process of fundraising for its second fund, sources familiar with the matter told PE Hub.

True Wind’s debut fund, True Wind Capital LP, closed on $560 million in January 2017.

Action Item: Check out S-1 filing for TWC Tech Holdings II.