Lifeline Spac I merged with Canatu

[Opa]

Following the VAC SPAC, the next one is heading to the exchange. Technology and growth focus, 70% subscription commitments already secured. Lifeline Ventures partners are behind the scenes, as you might guess from the SPAC’s name.

The company’s sponsors are the partners of the venture capital firm Lifeline Ventures,

Lifeline SPAC I is a limited company founded in 2021, whose sole purpose is to raise capital through an Initial Public Offering, list on the SPAC segment of Nasdaq Helsinki’s regulated market, and merge with an unlisted company within a set timeframe of 24–36 months.

Ahlström Invest B.V., G.W. Sohlberg Ab, Varma Mutual Pension Insurance Company, Mandatum Asset Management Oy, certain funds managed by Sp-Fund Management Company Ltd, Rettig Group Oy Ab, Visio Asset Management Ltd, and certain assets managed by WIP Asset Management Ltd (together the “Anchor Investors”) have provided subscription commitments in the IPO, under which they have committed, under certain conditions, to subscribe for shares being offered for a total of EUR 68.9 million at the subscription price of the offered shares. The Anchor Investors’ subscription commitments correspond to 68.9 percent of the shares being offered, assuming the IPO is fully subscribed.

The company’s strategy is primarily to identify an unlisted company operating in the technology sector with high growth potential and merge with it. Target segments include, for example, enterprise software, health tech, climate tech, digital consumer products and services, as well as robotics and hardware. These technology segments are globally extensive and also have very strong growth prospects.

The company aims to select technology-oriented, late-growth stage companies with a proven business model and high growth ambitions as its target company candidates. Examples of such companies include those seeking to increase growth by developing their marketing or aiming for geographical expansion, product development expansion, or otherwise significantly scaling their operations. Growth-stage companies in line with the company’s investment strategy typically require further operational and other development work before they can be expected to generate profit for their investors, but as a counterbalance to the high risk, there is typically a possibility of achieving higher returns in the long term.

https://www.lifeline-spac1.com/fi/itf-tiedote/

Etusivu - Lifeline SPAC 1

Lifeline Ventures—you can get an idea of where the people behind this SPAC have invested money from there:

Lifeline Ventures | Supporting resilient founders

[Tume1]

Lifeline Ventures has interesting companies in its portfolio.
I browsed through them yesterday as well and spotted interesting companies, such as Oura, Wolt, and Swappie.
I wonder if any of them fit the description given in the prospectus?

[Yu_Gong]

The company page and presentation event are now on InderesTV:

Lifeline SPAC I yhtiöesittely 5.10. klo 18.00 - Inderes

Company page: Canatu - osake - Inderes

[StockTycoon]

In practice, every investment made by Lifeline falls within the scope of that prospectus’s description. They specialize in those technology areas.

[Aleksander_V]

So, is there a possibility here that one of Lifeline Ventures’ holdings will be bought into Lifeline Space at a good price (at least a good price from Ventures’ perspective)?

[Tume1]

This thought definitely crossed my mind. Of course, I can’t say anything about the price, but this would be an easy way to “monetize” or gain a big benefit for current owners, and why not for future ones too.

Based on the text in the prospectus, their own companies would be among these potential targets and would also be really easy ones since they already know them.

The company aims to select technology-focused, later-stage growth companies with a proven business model as its target company candidates.

[Roni]

Lifeline SPAC I Oyj julkistaa lisätietoa suunnitellusta listautumisannistaan...

[Tedmel]

Each three (3) Offer Shares that are not redeemed in connection with the Business Combination, will entitle the holder to one (1) warrant (the “ Investor Warrant ”) issued free of charge approximately within 30 days from the General Meeting approving the Business Combination. Each investor Warrant entitles the holder to subscribe for one new series A share at a subscription price of EUR 11.50 per share.

Sounds like units are being marked here?

[kettunen]

Lifeline 1 SPAC (LL1SPAC) prospectus:

Lifeline-SPAC-I-Oyj-Esite-4.10.2021.pdf

A few highlights:

Listing costs are paid by the founders, but reimbursed upon merger

The subscription price for sponsor and founder warrants is an average of €1.50. However, it is divided into subscription prices of €1.82 and €0.01. These warrant subscription capitals are used to cover the costs of searching for a target company. A total of €4.25M

Conversion of B-series shares to A-series is possible once the merger has been completed and the share price has traded above these limits for a specified period. The founders/sponsors hold 2,500,000 B-shares.

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Regarding target companies, they are looking for growth-sector tech companies that are already well-established. Candidates can certainly be found from Lifeline’s own investments or externally, with plenty of options available.

Pick candidates from here: https://www.lifelineventures.com/companies/
At least Wolt and Swappie caught my eye as potential options.
Oura as well, of course, but it’s probably too big already, and Nasdaq would be a better target

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All-in-all, a significantly smarter and more small-investor-friendly structure than VAC.
€10 subscription and redemption price; likely less if liquidated.
A sensible warrant and founder share conversion system and lock-up in place for A-shares held by founders.
Additional capital potentially at issue price from founders, if needed due to schedule delays or other reasons.

Dilution will, of course, come significantly from the founders’ B-shares and warrants, which are their big incentive to push the merger through.
The reimbursement of issue costs to founders stands out a bit, but.

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@Tedmel

It sounds like units are being subscribed for here?

It’s not units but A-series shares that are being subscribed for. To encourage passing the merger vote, there’s an additional incentive to hold onto the shares and vote in favor of the merger, as one warrant is distributed for every three shares.
The redemption price is €11.50, and it can be mandated for redemption if the share price has been over €18 for a specified period. Of course, one can also sell at that point.

[TJT]

Lifeline’s company presentation today seems to have gone largely unnoticed, as it didn’t spark any discussion.

Lifeline SPAC I yhtiöesittely 5.10. klo 18.00 - Inderes

This SPAC seems to have a lot more potential than Vac, and based on the graphs, it would apparently be possible to get into technology firms before they reach the billion-dollar mark, and the team has a proven track record of picking the right companies.
I’ll post some screenshots from their presentation material here, and I recommend watching the presentation itself if you’re interested in tech.
The only question is how many misses are included, or if they are the only entity in the world with a 100% track record.

[Pohjolan_Eka]

Well then! The difference between Virala and Lifeline is like night and day, and at least I find Lifeline’s investment story much clearer and fairer. I especially recommend reading the Risk Factors section of the listing prospectus, which is exceptionally well-prepared and easy to understand.

@kettunen

Units are not subscribed for, but rather A-series shares. There is an additional incentive to keep the shares and vote for the merger, as one warrant is distributed for every three shares when the merger vote passes.
The redemption price is €11.50 and redemption can be mandated when the price has been over €18 for a specified period. Of course, one can also sell at that point.

Yes, so the basic investor gets warrants if they vote for the merger. A slightly manipulative way to encourage voting as management wants, but it’s good that we don’t end up completely empty-handed as with Virala. Warrants can be held for 5 years or until the €18 price is exceeded for ten days:

The marketing brochure summarizes the different share classes and their impact well:

It is noteworthy that these Sponsor Warrants cannot be compulsorily redeemed, but can remain in circulation for up to five years even after a huge price increase. Slightly unfortunate, but otherwise quite understandable that such highly skilled individuals are wanted to be committed for years to come. The Sponsor Warrants are also quite reasonably priced, so there is no reason to complain too much on that front either.

Sponsors are subject to 24-month transfer restrictions

The redemption price is 10 euros, so you get your money back if you don’t approve the merger or if no target is found! Fantastic!

It’s great that the starting point for the SPAC’s duration is 24 months, not the 36 months that has become common in the Nordics. The SPAC’s goals and acquisition target are also clearly defined. Good job, Lifeline!

[akijoo]

This was asked in yesterday’s presentation and the answer was that Lifeline’s current holdings can also be among the target companies. Other answers stated that there are about ten companies in the Nordic countries that meet the criteria, so one could assume that Lifeline’s portfolio already contains a few of them. But the starting point is not to list Lifeline’s holdings, but to find a company that benefits most from the arrangement.

[JiiGee]

It works for customers of other banks through Danske Bank. Through Danske Bank’s subscription link, you accept a few terms, follow the instructions, and fill in your details and the desired subscription amount. After these steps, you will be redirected to the payment page, where you can choose your own online bank.

[Toivorikas]

A rare convincing presentation from the company’s management. The shares will surely sell well, the track record of the management and the sponsor committee is truly commendable.

[III21]

Of course, there’s always a chance that management is completely pulling our leg, but I must agree with the praise for their presentation at the company introduction. The trio, in my opinion, exudes a surprisingly strong sense that they are truly in this with all their heart and treat small investors equally. The slightly more generous terms of the SPAC than usual also support this impression.

If these men managed to completely sell me, I believe they can also sell the management and owners of some potential target company. So, I definitely intend to trust my money to this SPAC.

[Santtulainen]

I quickly skimmed through the prospectus, and it’s notable that there are 10,000,000 shares, of which anchor investors have committed to subscribe for 6,890,000 shares under certain conditions. For the rest of us, 3,110,000 shares remain to be subscribed, of which 400,000 shares are initially allocated for the public offering and 2,710,000 shares for the institutional offering. However, the prospectus states that the Company may, depending on demand, transfer Offered Shares between the Public Offering and the Institutional Offering, deviating from the preliminary number of shares.

The minimum subscription for the public offering is 100 shares and the maximum is 10,000 shares. The minimum for the institutional offering, on the other hand, is 10,001 shares.

The listing offering started on October 5 at 10:00 AM, and the subscription period for the public offering is estimated to end on October 12 at 4:00 PM. The institutional offering can be interrupted at the earliest at the same time, October 12 at 4:00 PM.

[Cosi]

Today I was also going through these brochures and was confused by the number of shares (someone had already competently attached tables to this thread about the share series and their different situations). The first diagram gives the impression that there would be a maximum of 18,666,666 A-series shares, but the table below has different amounts. In addition, the transaction is intended to be carried out with the company’s shares (or possibly even with a loan) and I am trying to figure out what the probable dilution of the stake will be once the target has been acquired and the warrants have been triggered. I may not understand enough about these to even get a ballpark estimate together, but there is certainly someone here who can, so thanks in advance for the help. I do see that the founders and sponsors have good incentives for this deal and I am trying to calculate whether it makes sense for an ordinary person like me to get involved. The probability, however, is that it will possibly take several years before the shares can be sold at a profit, and the last couple of IPOs I have invested in have yielded tens of percent (even doubled) in months. The idea is interesting, however, especially from the perspective of startup financing.

If someone was at that info session (which I couldn’t attend due to work), I would be happy to hear what the practical role of these sponsors is in this company (other than the operational personnel, that is). There are logos, but are they just for decoration?

[Hagking]

This is an exceptionally strong board and management team. One would think that with this group’s networks, a really interesting acquisition target could be found. I especially admire the fact that international investors and founders are on the board.

I started to think a bit about these acquisition targets. It would feel natural for them to acquire one of Lifeline’s own portfolio companies, but I consider this quite unlikely, based on what was described about the nature of ownership in the presentation. I would, however, guess that a Finnish startup that has grown with funding will be acquired, and there aren’t many that are ready for C, D, or E round growth funding. So it’s possible that an acquisition target can be chosen with relatively quick scoping.

Of course, another option is more of a growth equity style, meaning acquiring a slightly longer-operating, growing tech company and aiming to take its growth to the next level through strategy implementation and capital. But I hope an acquisition target is found quickly so we don’t have to wait too long without information on fund allocation.

[Markus14]

No, that’s not possible. For some reason, it seems that in all IPOs, it’s only possible to subscribe for shares to equity savings accounts (OSAKASÄÄSTÖTILI) of the subscription place. I don’t know if there’s a technical obstacle to this or just a practice to get people to open an equity savings account with their own service provider.

[mirjami]

Thank you very much for the answer