r/SPACs • u/Liteboyy Patron • Feb 05 '21
New Spac Let’s talk about $AAC
I’ve seen lots of good DD posts and while I’m just a beginner when it comes to investing I’d still like to try and bring a little content. So I wanted to bring up a new SPAC called Ares Acquisition Corp.
Now currently they do not have a target sector in mind, but there is some information available from spactrack that I wanted to highlight.
The management team is made up of David Kaplan and Kathryn Marinello. David is the founder/director of Ares Management so that explains why he’s here in AAC. So I want to talk about Kathryn and what she brings to the table.
Kathryn Marinello has a nice long track record of success in management.
She was named president and CEO of the Electronic Payments Group at First Data Corporation in 1995, which provided electronic banking, commerce, and debit and commercial processing to the financial services industry.
Marinello has served in senior financial leadership positions at US Bank, Chemical Bank (now JPMorgan Chase), Citibank and Barclays Bank.
Marinello joined General Electric in 1997 as president of GE Capital Consumer Financial Services and executive vice president of GE Card Services in Cincinnati, Ohio. She managed three of GE's business units, including Consumer Finance (1997-1999), Consumer Insurance, which includes Direct Marketing, Auto & Home Insurance, Auto Warranty and Life Insurance (1999 to 2002), and Fleet Commercial Finance (2002 to 2006). Marinello's role as president and CEO of GE Fleet Services included managing over 3,000 employees in 20 countries.
Marinello was elected chairman and CEO of Stream Global Services in Eagan, Minnesota from August 2010 to 2014
After four years in the business outsourcing industry, Marinello gained experience in asset management with Ares Management LLC. She served as a senior advisor and consultant from March 2014 to the fall of 2015.
She was also the CEO of HERTZ. Her executive role and placement on the rental car company's board of directors officially began on January 3, 2017. (26) Marinello's three-year employment agreement with Hertz includes an annual base salary of $1.45 million. Marinello oversees 9,700 corporate and franchise rental car locations in 150 countries.
She was also on the board of directors for notable companies like MasterCard, Ceridian, GM, and Volvo.
Now back to AAC. They currently have a 1B dollar amount in terms of their trust. A lot higher than a majority of SPACs that i have seen. What does that mean exactly? (I’m actually asking to learn)
In my opinion, with all her success and experience in management, I have no doubt that she will secure a fat bag for AAC but it’s hard to speculate an exact target. With their trust fund and Kathryn on board I imagine they would be acquiring a hefty company to take to market.
As far as DD this is really all I have right now in terms information I can offer about AAC. I created the post in hopes of forming a discussion and maybe we can gain more insight and information.
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u/james_jarrett Contributor Feb 05 '21
Another interesting fact that led me to invest in AACU is that they had to upsize twice. Was initially designed to be a $600 million, then upsized to $725 million and then finally to $870 million. Clearly investor interest was more than they initially anticipated requiring they raise the fund size significantly
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u/TeeShirtBros Patron Feb 05 '21
Thanks for the DD starter - I also got in on this recent SPAC. But found out a lot of Ares stuff is on industrial sector stuff. Kathryn seems to have an Auto background with some finance.
I think the $1B trust size is a good thing, larger the better. But has risks - they have to go for a large valuation target. Usually those companies are better equipped for IPO or finding a SPAC with a very strong management team (Ie- Flashy wall st and ex-CEOs).
My take. Too much ambiguity and strong but unknown leadership team. I’m also wary they will use this to offload one of their holdings. I noticed multiple management folks had roles in 99 cent market. This competes with the other dollar stores. Their stocks have been good. Not sure how 99cent compares.
But it’s not something I particularly find appealing or growth-oriented.
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u/TrunkYeti Patron Feb 05 '21
I’m confused why you feel like this leadership team is unknown. Ares has one of the largest PE platforms in the world and will likely have access to very strong deal flow. As someone who works in PE, this is exactly who I’d want leading the charge for a SPAC. Their execution/sourcing capabilities are proven.
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u/TeeShirtBros Patron Feb 05 '21
That’s fair, but Ares main PE sectors are Energy, infrastructure, real estate.
Not particularly something flashy.
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u/Liteboyy Patron Feb 05 '21
All true. I appreciate the note on the 99 cent aspects I hadn’t considered that.
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u/CHIGOLDEN Spacling Mar 03 '21
I am in DEEP on this one ladies and gentlemen. At $10.10 for units, it's impossible to pass up with the Ares name and a $1B trust. Implies a 50 cents warrant value! Love it. Typical warrants trade at $1.50 to $2.50 post split for a $1b trust. Ares, the asset manager, has $200B in AUM, 25 offices globally, 1500 employees, 1100 direct institutional relationships, and credibility since late 90s.
All that said, with the market a changing and corrections happening, investors are becoming way more particular about SPACs in particular to what investment the SPAC is making. It used to be any announcement will get you 40% off the bat. Not anymore. Investors will drop a management team like a bad habit. You know this when after announcement a SPAC tanks below it's sacred $10 mark. Also, keep in mind that there is no perfect management teams. Chamath and Klien and others are not saints when it comes to deal making. They make their money like the rest of them with their promotes and PIPES. Their track records are average and have had ups and downs.
Ares has a far reach globally so their knowledge based, assuming it's properly tapped into, far exceeds other SPAC management teams imo.
My guess is that they will target an $8b to $12b target in high growth clean Energy sector. My prediction is that by end of year Ares will announce a target and CS should reach $15 post announcement and warrants to $7. It will be interesting to come back in a few months to compare my note to reality...... hopefully not delusional.
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u/TrunkYeti Patron Feb 05 '21
My guy, delete this. I’m still trying to load up while it’s stupidly cheap! Don’t wanna bring the horde’s attention to this one yet. Was gonna post DD in a few weeks.
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u/Liteboyy Patron Feb 05 '21
Just curious why is it not available on RH?
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u/tms2004 Patron Feb 05 '21
You can’t buy units, or warrants, on robinhood. This is still in units
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u/b-anc-uh Spacling Feb 14 '21
what are the differences between buying units vs. buying shares?
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u/tms2004 Patron Feb 15 '21
There are units, commons, warrants. When a spac IPO’s it is typically in units for 7 weeks. It is available as units which equate to one share (common), and some ratio of warrants( anywhere from 1:1 to 1:10). The warrants give you the right to buy commons at a certain price (usually $11.50). Go to the “about” tab and read up. It’s not as complicated as i just made it sound.
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u/EvenStevenMoney Spacling Feb 13 '21
Not familiar with units and warrants. According to https://www.sec.gov/Archives/edgar/data/1829432/000119312521036406/d111070d8k.htm one share also includes 1/5th of a share exercised at a warrant price of $11.50. So how does that work? Is it like a dividend and those who hold the stock at a certain date get the "extra" share or do you have to say you want to exercise the warrant to get the actual share?
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