For the past 22 years, Cascadia Capital has helped dozens of healthcare, retail, technology and other companies find buyers.
Now, the Seattle-based investment banking firm is on the prowl to make its own purchase. Cascadia Capital — led by Michael Butler and Jamie Boyd — filed to raise $150 million for a new special purpose acquisition company, or SPAC, on Thursday by the name of Cascadia Acquisition Corp.
The goal? Purchase an emerging technology company in what the long-time investment banking professionals call “industry 4.0.”
“Today, Industry 4.0 is seen as the fourth industrial revolution, using the building blocks of computing and advanced technologies like artificial intelligence, deep learning, computer vision, Internet of Things (“IoT”), gene sequencing, energy storage, and blockchain, to transform the physical, digital and biological worlds,” the firm wrote in a SEC filing. “As robotics, automation and artificial intelligence (“RAAI”) technologies cut across various sectors and end markets, we believe civilization will realize significant advancement and new levels of innovation.”
It’s interesting to see Cascadia enter the SPAC arena in part because Butler and Boyd have spent the bulk of their careers helping other entrepreneurs find buyers and sellers in a variety of industries. But it’s not completely out of the norm for those who help broker deals to enter the fray.
Seattle venture capital firm Frazier Healthcare Partners last fall formed a SPAC in order to buy a company in the life sciences arena.
What’s particularly intriguing in these scenarios, however, is that the SPACs formed by investment professionals may end up competing with clients. In other words, they could conceivably cherry pick the best deal. Cascadia Acquisition notes in the SEC filing:
“Our officers and directors may have a duty to offer acquisition opportunities to clients of Cascadia Capital, or our other affiliates. As a result, our affiliates and their respective clients may compete with us for business combination opportunities in the same industries and sectors as we may target for our initial business combination. If any of them decide to pursue any such opportunity, we may be precluded from procuring such opportunities.”
Reached via email, Butler declined to comment on their motivations for the SPAC citing a so-called “quiet period.”
Even still, the team’s M&A experience provides Cascadia Acquisition a unique lens in which to survey potential acquisitions. “We believe the multiple sourcing channels and deep relationship network of our management team and from our affiliation with Cascadia Capital, combined with our capital markets and transaction experience, provide us with a competitive advantage,” the firm wrote.
In addition to Boyd and Butler, the company’s directors include Edgar Lee, a former executive at Oaktree Capital Management; Scott Prince, CEO of APS Logistics Holdco; and Arun Venkatadri, a senior product manager at Aurora who previously worked at Uber and Lyft and founded Extremis Ventures last year.
SPACs, also known as blank check companies, re-emerged in a big way last year as capital flowed to newly formed entities and entrepreneurs used the financial instruments to more quickly enter the public markets. The SPAC market has cooled more recently amid additional regulatory scrutiny. Even still, SPAC Insider has tracked 395 SPACs so far this year, up from 248 last year. In 2019, just 59 SPACs completed offerings.
Seattle-based online pet sitting marketplace Rover this week went public via a SPAC, and Seattle biotechnology upstart Nautilus Biotechnology — which also went public via a SPAC deal this year — saw its shares soar this week after it was disclosed that Amazon held an equity stake.
