Düsseldorf The shell company Lakestar Spac I of the investor Klaus Hommels, which has been listed on the Frankfurt Stock Exchange since February, takes over the holiday home broker Hometogo. The two companies announced this on Wednesday evening via ad hoc announcement. With the takeover, the Berlin start-up founded in 2014 will have direct access to the stock market.
The deal makes Hommel’s finance company the first technology space in Europe. The abbreviation stands for “Special Purpose Acquisition Company” and designates special purpose companies that are founded solely to give young companies quick access to the public capital market through takeovers.
This procedure has been a booming business in the USA for two years, but it is only the second attempt in the German financial center. Twelve years ago the investors Thomas Middelhoff, Florian Lahnstein and Roland Berger started a similar deal with their Spac “Germany 1”, but it turned out to be a fiasco for the investors. AEG Power Solutions, which was acquired in 2009, initially lost its value dramatically, and in 2017 it went bankrupt.
Upon completion of the Hometogo transaction, the combined companies will have a market capitalization of EUR 1.2 billion. After deducting the net debt, this results in a company valuation of 861 million euros for the start-up Hometogo founded by Patrick Andrae, Wolfgang Heigl and Nils Regge.
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In the 2019 financial year, the holiday home broker reported a net loss of EUR 22 million with sales of EUR 73 million. So it’s a big bet on the future. The Spac will probably be listed under the ticker symbol HTG in the third quarter.
The shell company, filled with 275 million euros, would not have been able to handle the transaction alone. Family offices specializing in tech investments and European tech entrepreneurs are also participating with around 75 million euros. Investor Hommels himself has also “significantly” increased it, according to a press release. Such so-called “pipe financing” is common with this instrument.
From the start-up’s point of view, a spac was one of three possible ways to go public – in addition to a conventional IPO and a direct listing, in which no additional equity is usually raised when going public.
Bet on return of travel business
“The Lakestar Spac I team has a wealth of experience supporting tech companies like Hometogo,” CEO Andrae said in the press release. Therefore it is “the perfect strategic partner, especially in the further expansion of our technology-based services for our partner companies”.
For investors, the takeover is a bet on a return to the travel business – and increased demand for vacation homes instead of hotels that are more at risk of infection from other guests.
The omens are good: even during the pandemic, the company grew in sales and achieved a record gross booking value of 1.3 billion euros last year. According to the company, the adjusted Ebitda could thus be improved to minus two million euros. In the current year it looks even better with bookings, they are already at a gross booking value of 904 million euros in the first half of the year. Hommels, who has invested in Hometogo with his venture capital firm Lakestar since 2018 and holds around five percent of the shares, knows the business figures well.
The holiday home broker has not yet delivered a positive return. Between 2014 and the end of 2019, the balance sheet loss increased to almost 67 million euros. But the black numbers are not the focus of the company, which has been financed by venture capital so far – and thus no dividends either. Rather, investors should be prepared for the fact that the company will continue to drive growth with the fresh capital.
Investors who have already invested in the Lakestar Spac can decide at a general meeting in a few weeks whether they agree to Hometogo as a takeover target. Otherwise, they should be able to return their papers without loss.
Hometogo founders Patrick Andrae and Wolfgang Heigl announced to the Handelsblatt that they want to reinvest the proceeds from the sale of the company directly in shares of Spac.
More: Skepticism among investors and warning shots from the SEC – the euphoria surrounding Spacs is gone