Holley is merging with a special-purpose acquisition company in a deal that would value the aftermarket-auto-systems seller at about $1.55 billion, the companies said.
Controlled by private-equity firm Sentinel Capital Partners, Holley is combining with the SPAC Empower Ltd. EMPW 0.40% to go public. Sentinel will be the combined company’s largest shareholder if the deal goes through. The roughly $1.55 billion valuation includes debt.
Holley makes and sells parts—including fuel-injection systems, carburetors, engine products and exhaust systems—for high-performance cars. Based in Bowling Green, Ky., it markets to car and truck enthusiasts to personalize their vehicles with brands such as MSD, Flowmaster and Accel.
“It is very much a passion-driven business,” Holley CEO Tom Tomlinson said in an interview.
Founded more than 115 years ago, Holley had net sales in 2020 of about $580 million, up more than 25% from the year prior. It would be one of the few companies going public via a SPAC that has been around for decades and has existing sales. Many others pursuing SPAC mergers are tied to futuristic themes such as space travel and green energy.
“This is a real company with real drive and growth potential,” said Matt Rubel, Empower’s CEO and a former retail executive.
SPACs are shell companies that list on a stock exchange to acquire a private company and take it public. The private company then gets the SPAC’s place in the stock market. Also called blank-check companies, SPACs have become the hottest trend in finance, being created this year at the rate of roughly five per business day, with celebrities such as the singer Ciara backing them.
Through Wednesday, 70 blank-check company mergers had already been announced this year. The total value of the companies exceeds $175 billion, already topping last year’s record figure of about $150 billion, according to Dealogic.
Empower raised $250 million when it listed last year, formed by the private-equity firm MidOcean Partners. In addition to that money, Holley is raising $240 million in a financing round called a private investment in public equity, or PIPE, led by Wells Capital Management and Wasatch Global Investors. It also has a $50 million forward purchase agreement with a MidOcean fund.
Holley was sold to Sentinel by private-equity firm Lincolnshire Management in 2018. Lincolnshire had acquired Holley from another private-equity firm, Monomoy Capital Partners, in 2013.
The deal is expected to close in the second quarter, with Holley trading under the ticker “HLLY.”
Write to Amrith Ramkumar at [email protected]
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Appeared in the March 12, 2021, print edition as ‘Auto-Parts Firm Holley To Merge With SPAC.’
