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New $240m SPAC Seeks Gambling Sector Opportunities

  • 26 Capital Acquisition Corporation began trading Friday on the NASDAQ
  • The SPAC will consider viable private companies and segments of public companies
  • Numerous gambling-related companies have used SPACs to go public recently
  • The CEO has been in director roles for The Stars Group, Las Vegas Sands, IGT, and Playtech
Andrew O’Malley

Exterior of NASDAQ in Times Square
26 Capital Acquisition Corporation, led by a gambling industry veteran, began trading on Friday and will be looking at possible gambling-related companies to purchase. [Image: Shutterstock.com]

Investing in gambling sector

A new $240m special purpose acquisition company (SPAC) has launched and is seeking opportunities to invest in “high-quality” businesses in the tech and gambling sectors.

This SPAC, called 26 Capital Acquisition Corporation, began trading Friday on the NASDAQ under the “ADERU” ticker symbol. SpringOwl Asset Management CEO Jason Ader is the SPAC’s CEO.

A SPAC is a company created with the goal of finding a suitable private company in which to invest. The SPAC typically acquires the private company in a reverse merger, bringing the private company public without an initial public offering (IPO). The SPAC then usually takes the name of the private company.

One of the areas of focus for this SPAC will be the gaming technology and gambling sectors. It also plans to assess opportunities in the consumer products, ecommerce, and hospitality sectors.?

Assessing different opportunities

The SPAC’s SEC filing outlines the criteria by which it will seek potential opportunities. The SPAC will look at private companies that are sound but in need of some sort of boost, whether it is strategic, operational, financial, etc. The firm may also look at segments of public companies that could present a good opportunity.

24 million new shares with an initial price of $10 each

The start of the IPO proceedings saw the issuance of 24 million new shares with an initial price of $10 each. Shares closed Friday at $10.55. The timeline is for the IPO to finish on January 20, with SpringOwl Asset Management being the main investment sponsor.

As well as the Class A common stock that is part of all of the issued shares, the holder will also get half a redeemable warrant that provides the option to buy another share at $11.50. A number of gambling-related companies have gone public over the past year through reverse mergers with SPACs, including DraftKings, Rush Street Interactive, and Golden Nugget Online Gaming.

Capable personnel

26 Capital Acquisition Corporation CEO Jason Ader has plenty of prior experience in the gambling space. For seven years, he was an independent director at Las Vegas Sands. He has also been a director of IGT, Playtech, and The Stars Group.?

“significantly undervalued” and a valuable takeover target

Ader regularly comments about the state of the gambling market in the US. He has a 5% ownership position in gaming software firm Playtech, owner of the iPoker Network, and has said that the company is “significantly undervalued” and a valuable takeover target. Ader made similar comments about the 888 Holdings.

SpringOwl Asset Management CFO John Lewis will assume the same position in the SPAC. Former CEO of The Stars Group Rafi Ashkenazi is a nominee to be the director of the new company. He is currently the executive managing director and chairman of a digital gambling joint venture from Hard Rock International called Hard Rock Digital.?

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