Hennessy wants to test its feet in IPO waters again

By : Joe Dailey

Hennessy Advisors has been around for the past decade. And judging by the company’s growth from 2013 to 2016, it’ll be around for a long time. Hennessy Advisors has been doing well because of many reasons. There is a market for its products. Hennessy has very few competitors. Hennessy also has a business strategy that keeps it afloat during industry depressions.

One part of the Hennessey business model is to use special-purpose acquisition companies to expand its business model. In 2015 the company launched its first special-purpose firm into the public. On Tuesday, Hennessy registered another of its blank check companies to trade on the NASDAQ according to the investment research firm Renaissance Capital.

According to the site, Hennessy registered its blank check division under the stock label HCAC.U. The company, called Hennessey Capital Corp. III, will be the second company of its kind to launch to the public under the Hennessy umbrella. The first was held two years ago and was successful. No doubt Hennessy thinks this initial launch into the public market will go the same way because it filed to raise $225 million. That figure is one of the highest among acquisition companies that have filed to launch this year.

Hennessy Capital Corp. III will use the money from the issuance to continue with its mission. What that means is that the company will look for more businesses to merge with or just buy off to expand the already-great Hennessy Empire. The corporation could also choose to buy up assets or stock in other companies or refurbish them so long as it led to the same result. If the performance of the blank check’s predecessor is anything to go by, Hennessy Capital Corp. III will have a breeze with these functions.

Hennessy Capital Corp. II (NASDAQ: HCACU) went public in 2015. The company raised $175 million in that round by giving the public access to 17.5 million of its common stock at $10 per share. Hennessy Blank Check Number One has been doing well since then.

In late February 2017, Hennessy Capital Corp. II announced that it had completed its merger with Daseke Inc. The merger, which took two years to complete, puts the Hennessy blank check corporation on the global stage. According to the terms of the merger, the corporation will drop its name and take up the Daseke title. That seems like the only downside to the deal.

With the merger, Daseke Inc. aims to penetrate the trucking market a little more than it already has. In fact, Daseke CEO Don Daseke estimates that the company only has a 1% command of what he calls a $133 billion market. Even with that market cap, Daseke remains one of the largest in the US logistics market. It is also the largest “consolidator of open deck shipping in North America” according to its website. The Hennessy Capital Corp. II merger with Daseke makes the blank check company more valuable. If investors use this merger as a benchmark for the second blank check firm’s prospects, the IPO might be worth a lot more than its $225 million target.