HumanCo and CAVU Partner on Health and Wellness SPAC

Two CPG powerhouses are coming together to launch a special purpose acquisition company (SPAC) targeting the health and wellness space. Today, holding company HumanCo alongside venture firm CAVU filed an S-1 form with the U.S. Securities and Exchange Commission, with the end goal of launching a SPAC known as HumanCo Acquisition Corp.

The SPAC is seeking to raise $225 million on the NASDAQ stock exchange, eventually trading under the ticker symbol HMCOU. CAVU has committed an additional $25 million in private placement, a deal that will close concurrently with the offering. In total, HumanCo Acquisition will have a market value of $306 million.

HumanCo Acquisition will have two co-chairmen — executive co-chairman Jason Karp, the former founder of Tourbillon Capital Partners and co-founder of HumanCo and snack brand Hu; and co-chairman Rohan Oza, the co-founder of CAVU Ventures and former CMO of Glacéau. HumanCo president Ross Berman will serve as CEO and COO Amy Zipper will also hold the same role at HumanCo Acquisition. Also from CAVU, co-founder and managing partner Brett Thomas will serve as president.

The company also announced a slate of proposed directors, which include John Foraker, CEO of Once Upon a Farm and former CEO of Annie’s; Kat Cole, COO and president of foodservice group Focus Brands; Dean Hollis, former president and COO of the consumer foods group at Conagra; and Brian Kelly, the chairman and CEO of PearlRock Partners.

According to the SEC filing, the Austin, Texas based company will seek to target companies within “consumer and technology markets” including food, beverage, household products, personal care, beauty, wellness, fitness and nutrition. Among other attributes, the S-1 filing notes that the combination of the HumanCo and CAVU teams will offer the entity “a competitive strength.”

“HumanCo Acquisition Corp. stands out as a truly mission-driven SPAC,” the filing states. “We leverage evidence-based, scientific research from world-renowned, published scientists to inform our criteria for identifying, monitoring, and optimizing health and sustainability focused businesses and their impact on society at large. We believe that this approach will allow us to effect a value-enhancing acquisition.”

Targets will have a “strong management team with founder-led culture,” along with “highly differentiated products with mission-driven, health-forward approaches.” HumanCo Acquisition will also look for “signs of market penetration” from brands and strong revenue and velocities.

Though both CAVU and HumanCo already invest in and acquire, respectively, companies within the health and wellness space, the SPAC will not prohibit either entity from pursuing a transaction associated with the firms or their directors. HumanCo has acquired ice cream company Coconut Bliss and plant-based cheese brand Monty’s, while CAVU holds investments in companies such as Hippeas, Health-Ade, Once Upon a Farm, Kite Hill, Skinny Dipped Almonds and Kettle and Fire. Due to SEC regulations, neither company could comment on how the SPAC will impact their respective companies.

Once the company begins trading, it will have 24 months to identify and acquire a target company. HumanCo Acquisition will seek to acquire 100% of its target’s assets or equity interests, but could acquire as little as 50% for the right target, so long as it also holds 100% controlling interest.

As part of its filing, the SPAC cites data from a 2018 Global Wellness Economy Monitor report, the health and wellness industry was valued at $4.5 trillion dollars, including $1.08 trillion in personal care, beauty and anti-aging, $828 billion in physical activity and $702 billion in healthy eating, nutrition and weight loss.

The filing goes on to cite four key reasons for “generational opportunity,” including: the lack of healthy options from “large legacy companies,” continued consumer interest in health and wellness, a healthcare system that is in an “unsustainable crisis,” and the ability for technology to amplify messages and information around wellness and sustainability.

“We believe that this dynamic provides a wealth of opportunities for emerging, authentic companies that offer consumers options to live a better and healthier lifestyle,” the filing states. “We have first-hand experience with these types of companies as investors and operators and believe that they provide a compelling investment opportunity.”