Post Holdings' SPAC found no deal in two years and was unwound at a ~$10M loss

In May 2021, at the height of the SPAC boom, food group Post Holdings, owner of Fruity Pebbles, Bob Evans sides and Peter Pan peanut butter, formed Post Holdings Partnering Corporation by selling 30 million units at $10 a share. Underwriters bought a further 4.5 million units at the IPO price. The stated goal was to partner with a consumer packaged goods business.

A SPAC has two years to complete an acquisition or must return the money to investors. Post said it failed to find a target by 28 May 2023, so it would unwind the company, with the last day of trading expected on 26 May. The amount to be returned to shareholders was still being calculated. CEO Rob Vitale, who also served as the SPAC's chief investment officer, told Food Dive that the 'blank check idea was great' but was doomed by bad market timing, adding: 'We don't fear experimentation and failure.'

Food Dive noted that the once-hot SPAC market had cooled and that several food SPAC mergers, including Tattooed Chef, AppHarvest, Stryve Foods and Benson Hill, were trading well below their SPAC prices, with only Utz doing better.

Post lost about $10M spent to organise and capitalise the SPAC; the cash raised was returned to the SPAC's shareholders.

Post launched the SPAC at the peak of the 2021 boom, and by 2023 the market for SPAC deals had cooled.

The structure imposes a two-year deadline, after which unspent money must be returned.

Food Dive noted that earlier SPAC mergers had performed poorly and that raising capital had become costlier after the jump in interest rates.

Vitale put it down to bad market timing.

A blank-check vehicle is a timed option, not a deal. Launching one at the top of a hype cycle means paying the setup cost for a target market that has cooled by the deadline.

Shares were due to be cancelled a few days after the last trading day. Food Dive described Post under Vitale as unafraid of financial experiments that other food and beverage companies would shy away from.