SPAC Watch: Fortress Investment Group’s PE Division Joins SPAC Boom
January 19, 2021

Fortress Capital Acquisition Corp. (FCAX.U) recently priced its IPO, raising $350mm; units are currently trading at $10.85 (1/19).

This SPAC is sponsored by Fortress Investment Group, specifically its private equity business. While the S-1 shows Fortress is targeting a company in the financial services sector, no indication is given to what size a target will be.

Fortress Investment Group has sponsored several SPACs in recent years, most recently led by its credit division. A quick look at the history of Fortress SPACs:

Fortress Value Acquisition Corp. I

  • Raised $300mm via IPO (4/29/2020)
  • Merged with MP Materials Corporation (MP) for $1.04b at an EV/IPO multiple around 3x
  • Supported by a $200mm PIPE
  • The deal was announced October 27th, approved November 13th, with shares listing November 18th.
  • MP stock is up 124% since trading stand-alone
MP performance since November 18th

Two other credit sponsored SPACs are searching for targets:

Fortress Value Acquisition Corp. II

  • Raised $345mm via IPO (8/11/2020)
  • No target industry
  • Has not announced a target yet

Fortress Value Acquisition Corp. III

  • Raised $200mm via IPO (1/04/2021)
  • No target industry
  • Has not announced a target yet

Mosaic Acquisition Corp.

  • Affiliated with Mosaic Sponsor, LLC, an affiliate of David M. Maura, and Fortress Mosaic Capital LLC, a general affiliate of Fortress Investment Group (no specific division)
  • Raised $300mm via IPO (10/17/2017)
  • Merged with Vivint Smart Homes (VVNT) at an EV of $4.2b, for a EV/IPO multiple of 14x
  • $275M PIPE
  • The deal was announced December 18th (2019), approved January 17th, with shares listing January 21st.
  • VVNT stock is up 110% since listing
VVNT performance since January 21st

The Team

The Fortress Capital team is largely different that its Value counterparts, aside from CFO Daniel Bass who has taken on the same role at FCAX.

Michael Nierenberg (B+) is CEO and chairman of Fortress Capital Acquisition Corp. He’s an MD in the Fortress PE division and also serves as CEO of New Residential Investment Corp.

Daniel Bass is CFO of Fortress Capital Acquisition Corp. He has been the CFO of Fortress Investment Group since 2003, and is/was CFO of the aforementioned Fortress credit division SPACs

Varun Wadhawan is COO of Fortress Capital Acquisition Corp. He’s also an MD in the Fortress PE division.

In addition to Nierenberg, Fortress Capital Acquisition Corp. has two others on its board:

Elizabeth Fascitelli (B-) is a director at Fortress Capital Acquisition Corp. She was previously a partner at Goldman Sachs, where she was COO of merchant banking.

Debra Coleman is a director at Fortress Capital Acquisition Corp. She is a retired MD at BAML.

Take away

No stranger to SPACs, Fortress has brought some of the biggest names in the finance together for its latest offering. Taking previous performance into consideration, investors would be wise to follow FCAX in 2021.

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