Cain International has become the latest real estate company to launch a special purpose acquisitions company in the US.
The firm, led by chief executive Jonathan Goldstein and head of private equity Nick Franklin, is seeking to raise $250m (£180m) to acquire a business active in experiential hospitality, location-based entertainment and real estate.
Cain said it was looking for “targets that have a strong brand and service offerings anchored in physical asset development and management, to which we can lend our expertise”.
It said it expected to focus on businesses with growth-oriented characteristics, tech augmentation and strong underlying demand drivers fuelled by consumers’ evolving preferences, including travel and leisure services, wellness, dining and entertainment platforms.
Within real estate, it said it would look at businesses providing innovative data-driven services to make physical spaces more accessible, connected, and experiential. This could include businesses in construction, design or property and asset management or firms enabling enhanced transparency in real estate transactions, valuation, financing, insurance, concierge, space-as-a-service or other solutions.
Cain said it did not yet have a target company identified but that it would be seeking assets that were:
- innovating the way brands and experiences manifest and operate in the physical space to increase the strength with which they support and leverage evolving consumer trends
- adapting hospitality in conjunction with broadly defined holistic wellness to drive growth/expansion across demographic segments
- establishing branded entertainment and hospitality offerings that drive immersive physical experiences augmented by digital engagement and remain connected across local, regional and global footprints
- capitalising on opportunities where the “exogenous shock of the current environment” has driven operational distress, especially where there is a need for restructured or newly injected capital and the effective management of physical assets.
The firm said long-term consumer trends had led to an evolution in the hospitality, leisure and entertainment sectors and that the desire for original, authentic, space-based experiences has led to the rise of new concepts, while changes in technology and the institutional real estate markets had created new opportunities.
“We believe the Covid-19 pandemic has accelerated these structural changes and has created dislocation in our targeted sectors,” said the firm. “Specifically, these trends have adversely affected firms with significant real estate holdings, and they have negatively impacted the ability of companies and business divisions in these sectors to access public markets through traditional initial public offerings or spin-offs. We believe there are many potential targets within the space that are both attractive acquisition opportunities and positioned to deliver substantial value to public shareholders.”
Cain is the latest in a growing list of companies using the SPAC regime to raise money fast to buy start-up and scale-up businesses in the real estate and real estate tech spheres. More than $75bn of SPACs have been raised in the US already this year with $1tn expected to have been raised before the year end.
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