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MAD MONEY: JACOBSON'S MUSIC SPAC HITS WALL STREET

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There have been plenty of music acquisitions lately; catalogs, copyrights, writer/producer shares and distributors—you've seen the headlines here and elsewhere. But on Wall Street, Special Purpose Acquisition Companies, or SPACs (also called "blank-check" companies) have emerged lately as the sexy vehicle for investors looking to go public and raise piles of cash. During the last 12 months, SPACs have been launched by financial advisors, banks and media moguls like Kevin Mayer and Shaquille O’Neal.

Until now, though, a music-focused SPAC had yet to take on Wall Street. Neil Jacobson’s TMAC (The Music Acquisition Company) changed that with its NYSE launch 2/3. Opening at $10 a share, the IPO aims to raise $200m. While the biz is zeroing in on catalog, Jacobson is casting a wider net.

“Catalogs are one avenue. Record labels are a possibility. Publishing companies are a possibility," he said. "Those are all under the audio bucket.”

While SPACs cannot specify exactly where their money is headed (the “blank” part of "blank check"), TMAC will focus on investments in audio, tech, social media and consumer-based companies.

After pitching and meeting with a variety of bankers, CEO Jacobson and COO Todd Lowen were able to land their top two preferred banks, Citi and Cantor.

Finance expert Lowen describes the value of having a music executive of Jacobson's caliber attached to a SPAC: “If your company touches the music business—directly or indirectly—you get to add Neil to your team for free. Neil's not gonna come in and run your company; I'm saying that Neil will be a board member and adviser to be there when you need to unlock 20 years’ worth of relationships and networking for one purpose: your company. That's a really powerful thing to be able to offer.”

While other SPACs supply cash and a ticket to the IPO arena, none has a principal with the executive background of Jacobson, who has spent decades in the music biz. Mentored by Interscope boss-turned-billionaire Jimmy Iovine, the former Geffen President and founder of hitmaking hub Hallwood is one of the few young execs in the biz enjoying commercial and creative relationships at the highest level.

He’s also pumped to enter the finance world. “After almost 20 years at UMG and Interscope,” he says. “I always figured the next chapter in my life would be going to a private-equity company, raising some capital and finding the right companies to invest in. Todd planted the SPAC seed a year ago as an instrument we could utilize.”

After a couple of days of trading, TMAC is in the green. “We’re encouraged by the excitement around the market for this,” Lowen stated as the stock closed at $10.75 on 2/4.

Neil’s elevator pitch goes like this: “When you go public through The Music Acquisition Company, you’re getting the services from Citi and Cantor you'd get from a formal IPO in the first place. On top of that, you get my expertise around the music space and Todd’s expertise in the capital side.”

TMAC’s board includes LVRN founder Tunde Balogun, Propagate CEO and TV exec Ben Silverman (The Office, Who Wants to Be a Millionaire?) and financial advisor Michael Levitt.

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