New Lamar SPAC Seeks Tech Target

Lamar Advertising Co.’s newly formed SPAC company, called Lamar Partnering Co., has filed with the SEC for an IPO of $300 million, or up to $345 million if the underwriters’ over-allotment is exercised in full.

The SPAC will look for an acquisition target in the out-of-home advertising, technology and communications sectors, such as billboards and related forms of advertising. This company will not compete with Lamar’s REIT-focused ‎acquisition strategy.‎

A SPAC, also known as a special purpose acquisition company or blank check company, is a publicly-traded shell company formed to pursue private-sector deals by raising cash in an IPO and then seeking acquisition targets. The acquired companies then use the SPAC to sell shares publicly, a process that bypasses the typical initial public offering framework.

Members of Lamar’s management team will head the SPAC with Ross Reilly, Lamar’s vice president of mergers and acquisitions and business analytics, serving as its CEO. Lamar, a REIT, operates more than 357,500 billboard, interstate logo, transit and airport advertising displays across the US and Canada.

Many SPACS targeting the real estate industry have focused on technology in their respective verticals. In February, for example, Simon Property Group formed a $300 million blank check company targeting innovative retail companies. 

Simon’s SPAC does not have a specific target and is instead focused on “innovative business with the potential to disrupt various aspects of the retail industry and make a transformative impact on in-person and/or online experiences,” according to the company’s SEC filing.

In February, real estate tech company Matterport was taken public via a special purpose acquisition company by Gores Holdings VI in a $2.9 billion deal.

Gores Holdings VI is a $345 million SPAC and is the seventh vehicle sponsored by an affiliate of The Gores Group, a global investment firm founded in 1987 by Alec Gores.

Founded in 2011, Matterport’s platform turns physical space into 3D digital presentations. The company monetizes its data primarily under a recurring revenue Software as a Services model and grew its subscriber base by more than 500% in 2020. It has more than 250,000 subscribers in 150 countries. 

As more SPACs come to market, there is the potential for stress in the model, Zak Schwarzman, a partner at MetaProp told GlobeSt.com in an earlier interview. 

Lower-quality companies going public via SPACs could take the bloom off the rose, for instance. The longer the SPAC boom goes on unabated, that is more likely to happen, he says. 

“The best candidates, the most public market-ready companies, should be the first to be targeted by SPACs,” Schwarzman says. At some point, Schwarzman thinks some companies may rush in too early and become riskier and riskier. “That will likely happen the longer this goes on and contribute over time to some normalization,” he says.