The latest company that Indianapolis entrepreneur Bob Laikin has launched and taken public got off to a strong start on Thursday, with shares rising 10% in the first day of trading.
Indianapolis-based Novus Capital Corp. II is what’s known as a SPAC, or special purpose acquisition company. Such firms are merely shell companies with no operations when they go public. They then use IPO proceeds, often along with additional cash raised privately, to buy a business.
Novus II raised $250 million in advance of its debut Thursday, selling 25 million units at $10 apiece. Each unit consists of one share of stock and one-third of a warrant. Each whole warrant entitles the holder to buy one share of stock in the future for $11.50. Units closed at $11 on Friday, up 10% on the day.
Novus II plans to pursue acquisition possibilities in the “smart technology innovations” market. It plans to factor into its evaluation potential targets’ environmental, social and governance practices.
The Novus II IPO comes on the heels of the blockbuster performance of the first Novus, Novus Capital Corp., which raised $100 million in its IPO in May and late last month completed the purchase of Morehead, Kentucky-based AppHarvest, which aims to revolutionize agriculture by building high-productivity, sustainable, technology-augmented indoor farms.
Investors have swooned over the deal—swelling the value of a share and a warrant that sold for $10 in the IPO to about $52. As a result of the runup, a group of 20 founders—including former Brightpoint CEO Laikin and veteran technology executive Larry Paulson—are sitting on paper profits topping $200 million.
SPAC IPOs have become red hot on Wall Street over the past year—prompting executives from a broad range of industries to jump into the game. Emmis Communications Corp. CEO Jeff Smulyan last month raised $250 million for his SPAC, Monument Circle Acquisition Corp.
On Jan. 29, Simon Property Group CEO David Simon filed plans to raise $300 million for his newly formed SPAC, Simon Property Group Acquisition Holdings.