SPAC HYPE SPILLS OVER TO EUROPE Were we ten years too early?

Excerpt from: Hermann Simon, Many Worlds, One Life - A Remarkable Journey from Farmhouse to Global Stage, Springer Nature New York (forthcoming March 2021)

In 2011 Roland Lienau and I launched the first SPAC (Special Purpose Acquisition Company) at the German Stock Exchange (Deutsche B?rse).

To launch the SPAC, the initiators provided a certain amount of seed capital. Then we sought out co-investors to provide additional funds. We presented our idea to potential investors in all major financial centers on both sides of the Atlantic. The hook for these meetings was the Hidden Champions concept. Our goal was to use the funds we collected to acquire a Hidden Champion. The target company would then be merged into the SPAC and would thus become a publicly listed entity.

Lienau and I started the campaign in mid-2009, and by year’s end we had raised the 200 million euros we had planned on. In February 2010, we launched Helikos S.E. on the German Stock Exchange. The company’s balance sheet had 200 million euros in cash and 200 million euros in shareholder equity. The search for an acquisition candidate began and my role came to the forefront due to my relationships with the Hidden Champions. At the time the economy was showing the full effects of the Great Recession. When I called companies and waved 200 million euros of equity at them, the interest among many was obviously high. But when I said that the transaction would result in the company’s being listed on the stock exchange, the interest among more than 80 percent of the family-owned companies evaporated. The public listing was the core of the SPAC concept. If that were a knock-out criterion for an owner or an owner’s family, there was no point in scheduling a follow-up visit or presentation. We did schedule several meetings, but many potential targets dropped out of the discussions after one round.

Lienau and I were on the road for 18 months before we finally acquired Exceet Group S.E, a manufacturer of embedded computers. These are custom-built units used in security technology as well as in medical technology applications such as hearing aids, pacemakers, and MRI machines. In July 2011 the acquisition, merger, and the public listing of Exceet took place. The picture shows the three protagonists in this story standing in front of the bull at the Frankfurt Stock Exchange.

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