And why not every SPAC is a dog
Rover is going Earlier this week, the company announced an all-cash sale to Blackstone valued at $2.3 billion. Raised company that focuses on pet care Hundreds of millions of dollars While it was private, through a Series G, it later went public via a SPAC. Notably, unlike many SPACs, Rover proves that blank check companies aren’t just a vehicle for burning wealth.
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The former startup has a 30-day shopping clause built into its deal with Blackstone, meaning other offers could come to the fore. However, with the private equity group paying a hefty premium for Rover shares – 61% more than the company’s 90-day volume-weighted average share price, For each version – This doesn’t seem very likely.
The Rover deal is expensive but has some notable caveats that tell us a lot about the state of the technology market and the companies backing it. I bet you didn’t expect your pet-focused e-commerce market to have an 8.7x revenue run rate in 2023!
This morning I want to dive into why I think Blackstone is paying so much for Rover, what we can glean from this research about other startups, and why some select public companies in a SPAC that are trading like real dogs might be bargains for the right buyer .
This price is not unreasonable
Rover and Blackstone announced their deal after we got the first one The company’s results for the third quarter of 2023Which means we have very up to date numbers regarding its recent performance.
Rover reported third-quarter revenue of $66.2 million, up 30% from the same period last year. The company also flipped to GAAP net income and told investors it intends to buy back more of its shares. It is too Beat the steering In the quarter.