Broad Capital Acquisition, a blank-check company targeting the aviation and aerospace industry, filed with the Securities and Exchange Commission on Thursday for an initial public offering to raise up to $100 million.
The Plano, Texas-based company, which was founded this year, intends to list as “BRACU” on the Nasdaq. It’s led by CEO and Director Johann Tse, founder of Aquarian Capital, which advises corporate buyers and sellers worldwide on merger and acquisition transactions. Tse previously served as a director of mergers and acquisitions for Yum! Brands, which operates American fast food brands KFC, Pizza Hut, and Taco Bell.
Broad Capital plans to target businesses engaged with emerging and transformational technologies, focusing particularly on those operating within the general aviation and aerospace industry, as well as the unmanned aircraft systems and advanced air mobility industries.
The company seeks to raise $100 million by offering 10 million units at $10. Each unit consists of one share of common stock and one right to receive one-tenth of a share upon the completion of an initial business combination.
At the proposed deal size, Broad Capital Acquisition would command a market value of $129 million.
Chardan Capital Markets, the underwriter, has an option to purchase up to 1.5 million additional units to cover over-allotments.
Future of Aviation
In the SEC filing, the company says it sees aviation and aerospace as a growth industry and ripe with opportunities.
It cites a report from Mordor Intelligence, a market research firm, which says the aviation industry was valued at $169.7 billion in 2020 and is projected to reach about $303 billion by 2026. The report says post-pandemic growth will be driven by advancements in technology, including better fuel efficiency and safety for both the commercial and general aviation sectors.
The company states: “We believe that the principal technologies and sectors with massive potential include: zero-emission propulsion technologies, artificial intelligence, internet of things (IoT), UAS, AAM, etc., as means to increase safety, convenience, efficiency, service precision, asset utilization, customer satisfaction, and to reduce carbon emission, traffic congestion and capital investment.”
Seeking a Partner
Broad Capital was formed as a special purpose acquisition company with the intention of finding a suitable privately owned company with which to merge. SPACs are a way for smaller private companies to go public without going through the traditional, and cumbersome, process of becoming a publicly traded company.
Other companies in the aviation industry have also used SPACs as a way to go public. Most recently, California-based eVTOL developer Joby Aviation announced on Aug. 11 it was joining the NASDAQ [JOBY] as part of a merger with Reinvent Technology Partners, a SPAC run by LinkedIn co-founder Reid Hoffman.
In its SEC filing this week, Broad Capital says it has not selected a specific company, but it has identified a prioritized target list.
“We intend to use our mobility sector insight and access to key ecosystem operators to quickly identify a company with a strong competitive position that could benefit from being a public company and our team’s expertise,” the company states.
