What SPAC Collapse? ESH Acquisition Corp. Debuts With $100 Million Offering and Potential Plans for a Music Industry Play

iHeartMedia Discreetly Files for IPO
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Who says the special purpose acquisition company (SPAC) sector’s collapsed? Former Disney exec Allen Weiss, Magic Johnson Enterprises exec Christina Francis, 1916 Enterprises’ Jonathan Gordon, and others have debuted a $100 million SPAC that could be teeing up a major music industry play.

ESH Acquisition Corp. (NASDAQ: ESHAU) just recently made its shares available on the public market. Bearing in mind the uncertain economy and the failure of many different SPACs to close purchases – see Liberty Media Acquisition Corp., Pershing Square Tontine Holdings, The Music Acquisition Corp., and SeatGeek’s nixed SPAC merger – ESH quietly scaled back its ambitions in the leadup to this week’s initial public offering.

To be sure, ESH had in May of 2022 prepped a comparatively substantial $300 million NASDAQ listing, specifically encompassing 30 million proposed units priced at $10 apiece – with each including a warrant to purchase another share for $11.50, according to the relevant SEC filing.

By comparison, the now-official IPO consists of 10 million units, worth $10.11 apiece when trading wrapped today and also good for the right to “receive one-tenth (1/10) of one share of our Class A common stock upon the consummation of our initial business combination,” a more recent SEC disclosure shows.

Additionally, a closely related company called ESH Sponsor owns 2.875 million “founder shares” and 6.32 million “warrants” (obtained at a $1-per-share price point, $6.32 million total) in the SPAC, the mentioned SEC document indicates.

Meanwhile, the window to finalize an acquisition has been increased from 15 to 18 months across the filings. And Magic Johnson, despite being listed as a vice chairman in the former prospectus, is no longer part of the management team, the newer disclosure states.

ESH’s executive team does however feature the above-noted Allen Weiss as chairman, Ackerley Partners co-founder Christopher Ackerley, 1916 Enterprises’ Jonathan Gordon, and Magic Johnson Enterprises president Christina Francis as director nominees, Audiosocket’s Edward Ackerley as an advisor, former Chesapeake Lodging Trust head James Francis as CEO, and former Blackstone exec Jonathan Morris as CFO, to name some.

Though ESH says it could look to buy companies in the hospitality or sports spheres, the previously highlighted prospectus also mentions the possibility of pursuing the purchase of “concert venues, theaters, cinemas, record labels, music and television streaming services, production companies and publishing houses.”

In other acquisition news, BTS agency Hybe is reportedly taking steps to raise around $400 million to bankroll global investments, whereas reports revealed this week that Spotify had sold music collaboration platform Soundtrap back to its founders after about six years of ownership.