Overview
We are a newly organized blank check company incorporated on August 10, 2020 as a Delaware corporation formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us. While we may pursue an initial business combination target in any stage of its corporate evolution or in any industry or sector, we intend to focus our search on telecommunications, media and technology (“TMT”) companies. Our management team and board of directors have had significant success sourcing, acquiring, expanding and monetizing these types of companies. We believe this experience makes us exceptionally well suited to identify, negotiate and successfully execute an initial business combination with the ultimate goal of generating attractive returns for our shareholders.
Management Team and Board of Directors
We believe our management team is well positioned to identify and evaluate target businesses within the TMT industry that would benefit from being a public company and from access to our expertise. We believe we can achieve this mission by utilizing our team’s extensive experience in growing and operating TMT companies, as well as our team’s broad network of contacts in the TMT sector.
Our chairman and chief executive officer, Peter D. Aquino, is a seasoned TMT executive who has been successfully active in the sector since the break-up of AT&T in 1983. Over the years, Mr. Aquino’s career accelerated to the C-suite and includes designing, constructing, and operating next generation TMT networks, products and services that span the globe. As an executive, innovator and entrepreneur active throughout the evolution of the TMT industry, Mr. Aquino approaches leadership positions with an attitude and culture that prioritizes investing into the tailwinds and creating value through management expertise in operations, M&A, and monetization of assets through further development and opportunistic exits.
Our sponsor, its affiliates and Mr. Aquino have over 25 years of experience working together and creating value in the TMT space and as active investors in TMT. Since the mid-1990s, when competition in telecom, cable television, wireless, and broadband technologies emerged in earnest, Mr. Aquino, after a 13-year career at Bell Atlantic (now Verizon), was attracted to emerging technologies and positions embedded in developing TMT companies that were or could be pivoted towards growth areas. Mr. Aquino’s interest and management expertise centered around leading companies focused on next-generation fiber builds, wireless technology expansion, and new technologies over the top of traditional telecom platforms. In addition, Mr. Aquino actively shaped companies to become more innovative and to invest in areas that could support growing data infrastructure, managed and secure network access, and new technologies ahead of the curve, such as: emerging IoT, e-sports and health, gaming and virtual reality, smart cities, and artificial intelligence and big data.
A common denominator during Mr. Aquino’s successful TMT career was a group of like-minded investors who enabled flexible capital structures, and an unwavering commitment to maximizing value through operational expertise and deal timing. A group of these financially successful and well-known investors make up the primary investors in our sponsor.
Mr. Aquino and the five other members of the board have a history of working together and are extremely experienced in the TMT industry. Collectively, the group’s track record includes several successful ventures over the last three decades in the target enterprise value range of $1 billion to $3 billion. Areas of success include the acquisition, operations improvement and financing of both value and growth companies across emerging TMT platforms. The team has collective experience in both wired and wireless technologies, spectrum assets, and emerging technologies in the TMT space. The team has acquired, restructured, and scaled up public companies in high-growth metropolitan markets throughout the United States, North America, and beyond.
Over the course of the digital revolution in TMT, Mr. Aquino and our experienced board of directors developed a solid track record of working in partnerships with other companies, as well as with other investors, to achieve maximum value potential. The collective team has worked together or independently on numerous success stories, including cable overbuilder RCN Corporation (“RCN”) (bolting on Con Edison and NEON Communications fiber networks), the global telecom portfolio of Primus Telecom Group, Inc. (with data center portfolios and UCaaS products), wireless operator Leap Wireless International, Inc. (restructured and recapitalized), TiVo Inc. and its patented DVR and streaming portfolio (one of the first to adopt as a cable operator), the XO Communications, Inc. and Allegiance Telecom, Inc. merger (restructured and advised), FiberTower Corporation and Straight Path Communications Inc. spectrum assets (acquired and monetized in an exciting competitive auction).
The Miller Family Office (“MILFAM”) and CCUR Holdings, Inc. (OTCQB: CCUR), affiliates of the sponsor, represent a collaboration between two TMT focused groups with 30+ years of investment experience in the TMT industry and highly successful track records. MILFAM has significant experience investing in TMT across the corporate life cycle, ranging from venture capital to distressed and CCUR is a publicly listed holding company whose management team and affiliates have a strong track record of investing in TMT, with a focus on financial restructurings, operational improvements, asset monetization and successful exits. The principals and affiliates of MILFAM and CCUR share a deep history with our Chairman and CEO, who has served as a public company CEO, board member and adviser to them since the mid-90s. They also have significant expertise in identifying and executing around compelling TMT investment themes as demonstrated through investments in companies including TelCove, Globix Corporation, Alaska Communications, NEON Communications, Straight Path Communications, Inc., RCN Corporation, Leap Wireless International, Iridium Communications Inc., First Avenue Networks Inc., FiberTower Corporation (“FiberTower”), PHAZR Inc., AboveNet Inc., Integra Telecom, iBasis, Teletrac Navman, 360 Networks, Inc., Allegiance Telecom, Inc., Lumos Networks, Primus Telecom Group, Inc. (“Primus”), Focul Solutions, TpX Communication (f/k/a TelePacific Communications), Next Nav, MPower Communications Corp., WCS, Microcell Telecom, Metrocom, Microcell Telecommunications Inc., Motient Corporation and FairPoint Communications.
Members of our management team and principals and affiliates of MILFAM and/or CCUR led the successful transformation and asset monetization of Primus, putting the company on track as a leading competitive telecom and infrastructure provider in Canada, Australia, and the US. Through investment into attractive growth trends in data storage, internet access, and high capacity fiber transport for the enterprise market, the Company was optimized and positioned for a sale. Primus relisted on the New York Stock Exchange and all business units were ultimately sold through several transactions. Primus Australia was sold to a strategic buyer, Primus Canada data centers were sold to Rogers Communications and Primus Canada to a private equity firm. These numerous transactions over two and a half years unlocked significant value for stakeholders.
Members of our management team and principals and affiliates of MILFAM and/or CCUR also led the successful strategic transformation, repositioning and sale of RCN. The Company was transformed from an analog to an all digital-HDTV cable network and a new metro fiber business unit was created. Two strategic bolt-on deals with ConEd and Neon Communications materially boosted the fiber unit’s scale and value. RCN was also one of the first companies to renegotiate programming contracts to increase operating margins and pave the way for streaming rights, pioneering the deployment of DVRs in the network to increase revenue and margins from IoT and live streaming. RCN was sold for $1.2B in 2010.
Mr. Aquino partnered with Pamplona PE to transform and eventually sell Lumos Neworks (“Lumos”), where principles and affiliates of MILFAM and/or CCUR were also active investors. Lumos was transformed from a rural local exchange carrier (“RLEC”) to a higher value emerging fiber-to-the tower leader, enabling 5G development and re-engineering the backbone network to handle growing bandwidth requirements efficiently. Lumos was sold to EQT Infrastructure in 2017 for nearly $1 billion, representing an approximate 10x EBITDA multiple, significant expansion from historical RLEC multiples of 6x EBITDA.
Members of our management team and principals and affiliates of MILFAM and/or CCUR were also early adopters and investors in wireless spectrum and technology. Significant investments in Straight Path Communications, FiberTower, and PHAZR were part of a thesis around 5G and the importance of millimeter wave spectrum for next-gen mobile networks. FiberTower underwent a successful restructuring and subsequent years of litigation with the FCC to recover previously terminated spectrum licenses before leading a sale to AT&T. All three investments were successfully monetized, with Straight Path sold to Verizon for $3.1 billion in May 2017, FiberTower sold to AT&T for $207 million in early 2018, and PHAZR sold to JMA Wireless in December 2018.
Telecom, specifically, is very compelling with a large inventory of maturing private investments clustered around verticals well understood by the management team. Ever-increasing bandwidth requirements have driven a large volume of venture capital investment around technology themes such as 5G, IoT, fiber tech, network infrastructure, cloud, smart cities and autonomous vehicles. 5G speeds are expected to enhance wireless connection speeds 100x over existing technologies, enabling mobile devices to function as connected supercomputers and leading to a speed revolution. Rapid technology change (i.e. big data, cloud) and platform evolution (i.e. 5G) has created upheaval in business strategies and significant new opportunity or operational resets and new business models. Spartacus is positioned to capitalize on the evolving TMT sector. Late stage venture capital investments in private U.S. TMT companies has increased from $4.2 billion in 2010 to $54.7 billion in 2018. Private equity investments in private U.S. TMT companies has increased from $13 billion in 2010 to $59.7 billion in 2018.
Together, the management team, board and knowledgeable investors are in a strong position to attract a large pool of potential target companies from which they can select the best investment opportunities.