I came across CleanTech Acquisition (CLAQ) last month when it was fresh in the market and one month later, I see almost no one talking about it. For starters, the trust size is $174 million (prospectus says $150 Million but they had a clause where underwriter’s over-allotment option could be exercised, and it did, and that’s why it’s $174M). The common’s NAV is $10.10 according to prospectus but I also double checked this number by doing math as following: 174,225,000$ in trust and they have 17,250,000 public shares outstanding which confirms the NAV of $10.10 (the privately held shares are almost never sold by managers until after merger, before that they have almost no incentive to do so anyway unless they really broke and need money for food which I don’t think would be the case).
As of the last trading day, the commons ($CLAQ) are trading at 9.81 while the warrants ($CLAQW) are trading at $0.50 and the warrants offer 1-to-1 redemption which makes warrants a great buy as this would be the cheapest 1-to-1 warrant that you can find (maybe a couple more would be like a few cents less but again, price changes every second and $0.50 is usually the cheapest a 1-to-1 warrant gets).
What I really like about this SPAC is the breadth of the management team, from finance guys to politicians to actual subject matter experts, they have it all. All the three strong pillars to evaluate any company thoroughly, to influence the laws as need be, and the experience needed to be able to put a fair value on it — they have it all. Their focus area is basically any ESG themed company that is looking to expand its market reach. There’s a lot of ESG themed SPACs but most lack the expertise on their team to truly assess an ESG company when most of them are very technical. I love CLAQ because they made sure they have people from all walks of life. Lot of SPACs have three good pillars but I have come to the conclusion that CLAQ’s pillars are among the strongest and here’s why. Let’s start with the analysis:
Management
This would be one of those times when I’m not going to write about every single person on the team. They have 10 different people, and although it’s a good thing (more avenues that can bring a deal), it also presents a dilemma for me between whether to keep this post short and to the point or long and boring. I choose the former.
Eli Spiro is more of a finance guy than a usual biotech guy. He carries decades of experience in the capital markets and has led multiple deals under his belt valuing over a Billion dollars! He has some biotech background as well as he was involved in a hydroponic business that made leafy greens, and some other projects that turned waste into energy but honestly, I don’t like how they have him reflected in the prospectus. It kinda paints a biotech picture but he’s not really one of those guys. He’s a fine finance guy tho and it should be kept that way.
His career started off with GE Capital where he served as the Managing Director for about 5 years. He did over $4 Billion dollars in deals at GE. He then moved to Goldman Sachs (like every other finance guy) and became a VP there starting at the dot-com boom and finishing with the housing crash. He has been an advisor on both the buy-side and sell-side. He then joined GreyStone Investments as the Senior Managing Director — they are a real estate finance and investment company managing over $25 Billion (as of 2019). As of now, 2023, he serves as the Chief Executive Officer of Axxcess Capital Partners (sidenote: I hate how there’s a ‘c’ after two ‘x’, so annoying, hey Eli if you reading this, please rename!).
The other finance guy that I have is Richard Fitzgerald who has over 35 years of capital market and leadership experience. His resume is stacked. In all the companies he’s worked at, he almost always served as their CFO or some sort of executive or advisor role. He has been the CFO at a biotech company called Immunome which is a “biopharmaceutical company engaged in the discovery and development of novel antibody-based drugs”. He also served as the CFO of Sesen Bio and during his tenure, the stock was up 70% (over 2 years). He was also involved in the IPO of PAVmed (+170% YTD) which is a “medical device company engaged in advancing a pipeline of medical technologies from concept to commercialization using a business model focused on capital and time efficiency”. I’m not gonna mention every single company’s description but here’s the list of companies he’s been involved with: CFO at TechPrecision ($TPCS), VP and CFO at Nucleonics ($ALNY), Director at Exelon ($EXC). He is big into law reforms especially around the biotech industry and has lobbied for tax reforms that support it.
All that tells me that the finance guys know what they are doing. I have looked deeper into their previous deals and most made sense at that time.
Talking about the biotech people, the most important person that we have is Ankur Dhanuka. He is the Harvard guy who has dedicated his entire life towards finding the best clean energy sources. He worked with Nuclear energy for about a year and spent most of his time at an Indian Oil company at their alternate energy department. He’s been the tech-brain behind research like decarbonization at Harvard and also consulted governments. Concurrent to $CLAQ he’s also an advisor at The World Bank. Without going in-depth, I’m going to quickly summarize what I have on other people:
First, we have Louis Buffalino who is a board member of a battery charging company called Blink ($BLNK). They are “[the] owner, operator, and provider of electric vehicle (EV) charging services” and they are on their way to become the Chevron of Electric Vehicles. He was the SVP of $JLL which is a real estate investment company with over $70 Billion AUM and led them through their golden age.
Jon Najarian is another interesting guy on the board and comes with securities and futures market experience. He co-founded TradeMonster and sold it to E*Trade. He also created Mercury Trading which he sold to Citadel (one of the world’s largest hedge funds). He’s been a trader and was a Partner at LetCo (a real estate company). He’s the guy who developed the HeatSeeker algorithm.
Finally, we have the political connection that this SPAC has and it is Governor Bill Richardson (we also have Dan Reicher btw). He got New Mexico to become the “Clean Energy State” and got so much extra clean energy resources that they sell it outside of New Mexico. He also served as the secretary of the US Department of Energy and was the Ambassador to the UN during Clinton Administration.
And finally, we need to look at the underwriter, Chardan Capital Markets. It’s usually not that interesting but for our SPAC $CLAQ, the head of Capital Markets of Chardan is actually on the board of $CLAQ! His name is Jonas Grossman and he’s been with Chardan for about 18 years. He is one the most important guys in this entire SPAC because he’s has led and been involved with over 400 transactions. He sees companies wanting to go public or raise capital every now and then. There are more people involved in this SPAC such as Allen R Weiss who is a Disney guy; Britt E. Ide who’s one of the top lawyers and massive sustainable energy lobbyist; Douglas Cole who runs a Battery company and is a serial entrepreneur; and all these people have massive connections in the ESG industry.
With all that being said about the management, I can confidently say that they are well equipped to do a SPAC merger. Now let’s do some speculation:Target Speculation:
This section gets debated and heated oftentimes so before I say anything let me assure you this is pure speculation based on the social circle and background reports that I’ve gotten on CLAQ managers. I am confident they are open to any company across the world (multiple people on the team have worked internationally). So here it is, my educated guess would be BrightSource Energy. I have noticed an influx of LinkedIn connections between the SPAC managers and people associated with BrightSource. It is almost a unicorn valued at $999.86 Million (they should have just rounded it up honestly). Here’s what Pitchbook has to say about them: “Developer of solar thermal technology designed to produce electricity and steam for power, petroleum, and industrial-process markets worldwide. The company’s solar thermal technology combines breakthrough technology with world-class solar thermal plant design capabilities to generate clean energy reliably and responsibly, enabling customers to lessen their dependency on fossil fuels and avail cost-competitive reliable clean power when needed”.
As a way of reminder, CLAQ commons is just like most other SPAC commons, trading at 9.81. The warrants $CLAQW is my choice of weapon for this SPAC though. They have over a year to find a target and the warrants are trading at the lowest end on the entire spectrum of warrants that have a 1-to-1 redemption rate. I am confident they will find a merger and as long as there’s a merger, there’s very little downside (lookup how many warrants with target announced and 1-to-1 redemption trade below $0.50? Very few, less than 10 in the world of over 1000 SPACs).
Bottom line
ESG focused SPAC that has a combination of subject experts, finance pros, entrepreneurial people, and a political wing for a total of 10 people on the team. Have international connections and team consists of mostly executive level key players in the ESG world. The team has over a year to find a target and my educated guess is it would be BrightSource Energy. It makes the most sense to buy warrants $CLAQW and they even offer 1-to-1 redemption while being priced at the lowest spectrum on the SPAC warrant scale as of the last trading day.
This article was written by u/JustAnotherTradr.
