Steve Salis is at it again.
The local entrepreneur — co-founder of &pizza, owner of Kramers books and the man behind Ted’s Bulletin — is planning to launch another special purpose acquisition company (SPAC) to take a promising business public.
A SPAC, often referred to as a blank-check company, raises funds through an initial public offering before merging with a yet-to-be-determined business, essentially granting the SPAC’s management a "blank check" to go out and find a private company to acquire.
It will be his second SPAC. Salis' D.C.-based Sizzle Acquisition Corp. raised $155 million in 2021 and closed on its merger with the Austrian lithium mining unit of European Lithium Ltd. to become Critical Metals Corp. (NASDAQ: CRML) in February. That stock is down about nearly 30% since the merger.
For this new SPAC, Sizzle II, Salis wants to raise up to $230 million from investors as early as this fall, after which he'll have two years to land a deal per governing regulations involving SPACs. He's tapped New York-based Cantor Fitzgerald LP to serve as the deal's investment banker.
Salis said he's scouring for a business operating in the consumer and hospitality sectors to merge with, though he said he's also open to making a deal with a company involved with artificial intelligence, robotics or sports as well.
"We could do a great deal in any industry. Our board will be diversified in nature comparable to what we did in the first go-round and this way we can get their perspectives," Salis told me during a video interview. "And if we need to transact away from our core competencies, then we'll feel confident that we can do that."
With Sizzle Acquisition Corp., Salis had three deals fall through because the stock prices similar companies in the same space plummeted, leading them to call off the transactions. Ultimately, Salis struck a deal to acquire the lithium mining division, not quite the consumer or hospitality venture he was pursuing originally for the SPAC.
Investors' appetite for SPACs has waned in recent years, but Salis does not see that as a deterrent. In his view, this next deal could land an attractive target because he thinks there are enough companies looking to go public via SPAC but not a lot of new SPAC formations to pick from.
Salis said he's looking for a business that's worth "north of $1 billion" privately and one that already has a leadership team ready to run a public company. The business also needs to be "financially in order," Salis said.
If all goes well, Salis said he can see himself establishing more SPACs down the road.
"For all the denigration of the product you get — because everyone and their dog got into this thing back in 2020 because the private market shut down…it's a very good product for a specific audience of companies," he said. "That should not be mistaken."
