Monthly Bark Box subscription service to go Public via SPAC

2020年12月27日

BARK is a leading global omni-channel brand for dogs. They distribute products that include treats, food and plush chew toys via a monthly subscription called Bark Box. Customers love their dogs and want to provide them healthy food and treats in a fun way. Many customers post box openings on social media as the dogs go crazy to find out what's inside.

Northern Star Acquisition (STIC) is a special purpose acquisition company with 254m to deploy and another $2000 from PIPE investors. On December 17, STIC announced its intention to acquire BARK with the following details at an enterprise value of 1.6b. Ownership will be divided as:

1) BARK Equity (existing owners): 74.3%
2) PIPE Investors: 9.9%
3) SPAC Public Shares: 12.6%
4) SPAC Founder Shares: 3.2%

BARK's unique product offering and data-centric innovation seems to be a winning formula in a community of owners that deeply care about their pets physical and mental health.

A shout out to Jonah Lupton (jonahlupton) for this pointer. He has a great newsletter you can find from his Twitter feed.

Fundamentals

• Net revenue of 149m, 191m, 224m last three years (18,19,20)
  
• Estimated net revenue of 369m, 516m, 706m next three years (21,22,34)
  
• 60% gross margins and improving via high quality subscriptions
  
• 1.1m subscriptions
  

Technicals

• Up 37.58% since acquisition announce
  
• 25m Class A shares outstanding, 20m in float
  
• 465.5m market cap (based on Class A)
  

Question

I'm not an expert on how the SPAC final merger works. But it seems that given SPAC Public Shares (25m Class A) represents 12.6% of enterprise value, the market is effectively valuing the merged company at 3.6b (465.5m / 12.6% = 3.6b). I'm curious from others what their view is on SPACs and whether you invest before merger or after merger. Looking at other completed acquisitions, you can find cases for both, but typically the price drops back to the $10 for the original issue.

Anyway, looks like a great opportunity to put on the watch list.