Harry Calkin, Cooley

As a Spurs fan, Cooley associate Harry Calkin was forced to turn a blind eye to his client’s sponsorship of rival team West Ham, when advising on the firm’s first special purpose acquisition company (SPAC) deal out the London office.

Calkin, who joined Cooley in January 2015 when the London office launched, was lead associate advising Guernsey domiciled Super Group (SGHC Limited) on its US SPAC merger with Sports Entertainment Acquisition Corp and listing on New York Stock Exchange (NYSE).

SGHC is comprised of around 100 entities across 23 jurisdictions, including global online sports betting and gaming businesses Betway, which sponsors West Ham, and Spin.

“This was the first SPAC transaction I have worked on, and it involved a large international Cooley team, so I had to work closely with my colleagues in Boston and LA. It was a really collaborative deal and great team to work with”, Calkin recalls.

The deal presented rare legal challenges but was completed by a remote-working transatlantic team of more than 50 lawyers, led by UK managing partner Justin Stock – who had ported the relationship from his previous firm, Morrison & Foerster, when the London office was established.

The objective of the deal was to fast-track SGHC’s expansion globally, including in the US where gambling restrictions have been relaxed. SPAC’s have become a popular tactic in the US market, enabling faster access to capital than a traditional IPO would and the model is fast catching on in the UK.

The transaction, which is due to complete in Q4 2021, places a pre-money valuation on Super Group of $4.75bn and the combined business, with the NYSE listing to follow.

“The diligence and disclosure exercise allowed me to get a good understanding of how the online gaming industry operates whilst building a good institutional knowledge of the client”, Calkin recalls. This was important as Cooley has acted for Super Group and Betway on a variety of confidential corporate, commercial and litigation matters since the London office launched and is a key client.

“The team on this transaction was large, involving a number of law firms and other external advisors across different time zones. This is a Guernsey company, listing on the NYSE with regulatory counsel based in Israel and Nevada, so it was crucial to be organised and be part of a supportive team”, Calkin says.

“In order to get the group ready to list there was a significant internal restructuring to ensure the right companies were brought into the group and were in the right place. Given the group has circa 100 entities in multiple jurisdictions this involved liaising with local counsel and working closely with the company’s CFO and tax advisers. As a number of these entities are regulated by gaming regulators we also needed to co-ordinate with regulatory counsel and ensure the correct conditionality and approvals were in place. Each of these had its own complexity and felt like its own transaction!”

A typical SPAC transaction includes a private investment in public entity (PIPE) investment to bolster the balance sheet but there was no such facility in this transaction as the group is profitable and cash generative. However, to better operate as a US listed group, having regard to the US Security and Exchange Commission’s (SEC) accounting requirements, coupled with those of gaming regulators, and the operational needs of the group, a significant intra-group reorganisation was needed, working with both Ernst & Young and BDO.

For Calkin, this provided a critical learning experience. “Given the emergence of the SPAC market I feel it is important to have an understanding of how these transactions work, especially given Cooley’s emerging company client base includes numerous potential SPAC targets. I would hope that this is the first of many such transactions given the government’s goal to make the UK a friendly place for SPACs to list, standing me in good stead to get involved in similar transactions”, he says.

Prior to this deal, Calkin has advised on a mixture of general M&A and venture financings. “I have particularly enjoyed working on transactions involving innovative companies, whether large – for example, Immunocore’s $75m crossover and IPO – or on the smaller side, like seed fundraising for Gyrogear, a company building neuromuscular medical devices”, he explains.

“The great thing about Cooley is that we act for some of the most disruptive companies and there is real satisfaction in helping these companies scale. I have also enjoyed working on transactions with an international element which allow me to build relationships with the wider Cooley team. Recently I assisted on Pizza Hut’s restructuring and CVA and it was satisfying helping to support a legend of the high street which provides thousands of UK jobs.”

Working with Stock in the past, Calkin advised RZC investments on its acquisition of cycling brand Rapha in 2017 and acted for Acelity on its acquisition of Crawford Healthcare in 2018. And following the SGHC deal, he says he’s gone on to be involved in a mix of M&A and VC work, including a sell side $100m private equity exit and acting company side on a £60m Series B financing.

All of which now takes place in a post-pandemic world, where remote working has been fast-tracked into the ‘norm’. While Cooley had been operating remotely very successfully throughout the pandemic, Calkin recalls the lack of being able to meet in person adding a layer of complexity to SGHC deal.

“Working from home can be isolating, particularly when the hours are long and you don’t have office camaraderie – sometimes it can feel more like living in the office than working from home”, he recalls.

“[It] can make it feel less like you are part of a team, but it remains extremely important to maintain a good team ethic, particularly on large transactions where you need people to be working together. Ultimately people buy into team and firm culture, and a consequence of the pandemic is that has inevitably been lost to some extent. Getting back into the office has been a reminder of how much I missed working alongside colleagues and the buzz of an office environment.”

Despite this, Calkin believes there are some benefits. Video conferencing meant more face-to-face time with the client, while he says being able to share documents live with the team and the client saved time and improved accuracy.

“I think video conferencing is here to stay and don’t see us reverting to pre-pandemic dial ins. Remote working means it is particularly important to stay close with the team and so there was a conscious effort on this deal to have regular Zoom check ins and update meetings.”

Despite the challenges, the complexity of this deal introduced the client to a wider range of the firm’s capabilities and helped reinforce Cooley’s experience in Foreign Private Issuer (FPIs) and complex cross-border transactions and the tech industry.

Reflecting on the deal, Super Group CEO Neal Menashe says: “The transaction was highly complex, across many countries and with multiple challenges. Led by Justin Stock, Cooley’s transatlantic team was stellar throughout the transaction, operating tirelessly and seamlessly to get the deal done, enabling us to move to our next stage of global growth.”