Hypebeast has joined the SPAC party and plans to list its shares on Nasdaq through a merger with Iron Spark I Inc.
This is the second time through for the media and e-commerce company, which is already listed on the Hong Kong Stock Exchange and will maintain both listings.
The deal will bring former Nike brand president Trevor Edwards back into the mix.
Edwards resigned from Nike in 2018 amid a swirl of complaints about the behavior of executives at sneaker giant, although no complaints were logged against him directly. Edwards has been relatively quiet on the fashion scene since. He is currently an independent director of Iron Spark and is expected to be on the board of the combined company.
The deal is set to close in the third quarter and marks an evolution in the SPAC rush. SPACs, or special purpose acquisition corporations, stage IPOs with the promise of spending the money raised on an acquisition or return it to investors in relatively short order. There was a huge rush in SPAC offerings during the pandemic, adding to the number of players on the hunt in the consumers space. Now those deals are coming to fruition.
In its deal with Iron Spark, Hypebeast will receive proceeds of $180 million, giving the company a pro forma equity valuation of $534 million.
The company plans to use the proceeds to “make investments across technology, talent, brand experiences and marketing in support of continued growth as an omnichannel media and e-commerce business.”
Founded in 2005, Hypebeast has more than 26 million followers and logged revenues of at least $112 million for the year ended March 31. From 2015 through 2021, the company saw a compound annual growth rate of 34 percent.
After the deal, Hypebeast shareholders will retain control, owning 56.2 of the combined company. The firm’s management will remain in charge after the deal with with Iron Spark chief executive officer Joshua Spear as well as Edwards expected to join the board of the combined company, which will trade under the “HYPE” ticker.
Kevin Ma, executive director, chairman and CEO of Hypebeast, said: “For more than 15 years, we’ve been on a mission to share the most authentic aspects of culture all around the globe. We’ve built a loyal and passionate community who trust our curation across diverse lifestyle categories spanning fashion, arts, design, luxury, sports, technology and more. Partnering with Iron Spark and entering the public markets in the U.S. will propel us to the next level. With access to new capital and talent, we will expand our universe of content, commerce and experiences in a way that strengthens our business and community.”
Edwards added: “It has been amazing to watch Kevin and the Hypebeast team for almost two decades grow from a small blog to a global barometer and catalyst of culture. Hypebeast has built a powerful connection amongst its readers and consumers globally who want to discover the undiscovered and learn about the up-and-coming — and they wholeheartedly trust in the brand to provide that. I look forward to collaborating with Hypebeast as they bridge communities of creators and consumers from around the world.”
Hypebeast has never had a problem with, well, hype, and has attracted many big name investors from the worlds of sports and entertainment, including Tom Brady, Naomi Osaka, Kevin Durant, Rich Kleiman, Tony Hawk, Joe Gebbia, Jonah Hill and Adam Levine.
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