Blackstone Products is merging with a special-purpose acquisition company to go public in a combination that values the griddle maker at roughly $780 million, the companies said.
The deal adds to a wave of investment activity for makers of outdoor cooking equipment, with more consumers preparing food at home during the coronavirus pandemic. Well-known grill makers Weber Inc. and Traeger Inc. went public through traditional initial public offerings earlier this year, as did Solo Brands Inc., owner of the popular Solo Stove outdoor fire-pit brand.
Blackstone Products is combining with Ackrell SPAC Partners I Co. ACKIU 0.10% , a blank-check company focused on the consumer-goods sector.
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Logan, Utah-based Blackstone Products is known for its outdoor griddles, which have smooth, flat surfaces and can be used to cook many different meals. Blackstone griddles have become popular on social-media platforms such as TikTok and Instagram, helping drive awareness for the company’s brand, Chief Executive Roger Dahle said.
“It’s a very powerful driver—that emotion,” he said. “Our customers are very loyal.”
The deal comes as some investors cool on publicly traded grill companies. Shares of Weber and Traeger have fallen more than 30% this quarter. Meanwhile, online grilling retailer BBQGuys last month terminated its SPAC deal that would have valued it at about $960 million, citing supply-chain disruptions affecting the company’s business.
Mr. Dahle said he is confident Blackstone Products’ steady growth will attract investors. The company anticipates sales this year of more than $450 million and next year’s to top $600 million.
Founded in 2008, Blackstone is the latest company to unveil a SPAC merger in a bid to raise cash and accelerate growth. Such deals have become popular alternatives to traditional IPOs, in part because they allow the company going public to make business projections that aren’t allowed in IPOs.
A SPAC is a shell company that raises money and trades publicly with the sole intent of merging with a private firm to take it public. After the private company files detailed financial statements with regulators and the deal is approved, it replaces the SPAC in the stock market. More than 600 SPACs have raised over $160 billion this year, eclipsing the total amount raised by all blank-check companies before 2021, according to Dealogic.
As part of the deal, Blackstone Products is raising $142 million in a private investment in public equity, or PIPE, featuring $31 million in equity investments and $111 million in convertible bonds. Some analysts see deals featuring convertible bond investments as riskier because they can pressure the company’s balance sheet if shares don’t rise.
The PIPE money and the roughly $140 million the Ackrell SPAC raised in December 2020 could be used to expand the business, though SPAC investors can withdraw their money before the deal goes through. Such withdrawals have become more common lately, making it harder to complete mergers.
The Ackrell SPAC has a distinctive structure in which investors who withdraw would forfeit warrants that give the holder the right to buy more shares at a specific price in the future. That feature could limit withdrawals.
Write to Amrith Ramkumar at [email protected]
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