Source: lloydslist.com — By Greg Miller, June 22, 2024
Nasdaq Heidmar is latest shipping company to opt for non-SPAC reverse merger
What do football great Lionel Messi, the sister of fashion designer Tommy Hilfiger, the tasty dark-roast coffee of Café Caribe, American flags, online advertising and California surfer dudes have in common? They all played passing roles on the long and winding road of shipping companies seeking Nasdaq listings.
There are different paths to Wall Street. There are initial public offerings and direct listings. There are also reverse mergers, when a shipping company takes over an existing listing. Reverse mergers are commonly associated with special purpose acquisition companies (SPACs), but they also involve businesses that are effectively selling their listings — and that's where football, coffee and fashion come in.
Tanker and dry bulk pool operator Heidmar has been on the hunt for a public listing for more than a year. Heidmar, which is based in Athens and led by CEO Pankaj Khanna, announced plans in March 2023 to merge with a SPAC, Home Plate Acquisition Corporation. That didn't work; Heidmar terminated the agreement in October 2023, citing adverse market conditions.
A new path to a public listing was revealed: a merger with MGO Global. Florida-based MGO Global was founded by Argentinian businessman Maximiliano Ojeda and his partner, Ginny Hilfiger, sister of Tommy Hilfiger. The company made headlines when it secured exclusive rights to Messi's personal brand for sales of clothing and accessories. According to securities filings, MGO signed a four-year agreement for use of Messi's trademark for fashion and agreed to pay him minimum guaranteed royalties over the period of €4m ($4.3m). A final payment of $1.6m was due to the football legend. The price was too steep. MGO bowed out. It sold the Messi license (and the obligation for the final royalty payment) to a much larger clothing company, Centric Brands, for $2m.
That game changer left MGO with only one other retail business: Stand Flag Poles, an online seller of residential flagpoles and American flags. The merger with Heidmar is scheduled to close by late 3Q24, with MGO shareholders to own 5.66% and Heidmar shareholders 94.34%. The stock ticker would change from "MGOL" to "HMAR."
Product-tanker owner Pyxis Tankers debuted on Nasdaq in October 2015 after merging with LookSmart, a San Francisco-based digital advertising business. Long before Pyxis' debut, the reverse-merger path was used by Greece's Aristides Pittas for his company Euroseas. Euroseas debuted on Nasdaq in January 2007 after a reverse merger with Cove Apparel of San Clemente, California — a lifelong surfer running the business out of his house, with $3,000 in cash and more than $90,000 in liabilities.
Almost two decades later, the public shipping entities that arose from the shell of Cove Apparel — Euroseas and Eurodry — are posting combined revenue of over $200m per year.