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Ashington Innovation becomes latest small cash shell to hit the London market


Cash shell Ashington Innovation [LON:ASHI] has become the latest, and probably the last, of the small cash shells to list on the London Stock Exchange. Also termed SPACs (special purpose acquisition vehicles), these structures saw a boom during the pandemic, and are designed to help private companies to go public on the stock market.

Ashington Innovation has been formed to seek the acquisition of one or more businesses operating in the technology sector, especially financial technology or deep technology.

What are SPACS used for?

SPACs are generally formed by investors, or sponsors, with expertise in a particular industry or business sector, with the intention of pursuing deals in that area. As a consequence, IPO investors have no idea what company they ultimately will be investing in. Selling to a SPAC can be an attractive option for the owners of a smaller company. Being acquired by a SPAC can also offer business owners essentially a faster IPO process under the guidance of an experienced partner, with less worry about the swings in broader market sentiment.

Changes in FCA regulations around cash shells mean that the number of new cash shells of this size is now extremely limited, making them rare beasts for both investors and for companies which want to use them to go public.

The Ashington Innovation directors said that in the increasingly fast-changing global environment there will be an abundance of opportunities to acquire existing businesses in the technology sector, and in particular businesses that possess and make use of proprietary technologies and own applicable intellectual property.

Ashington Innovation is not limited to any specific geographic region in identifying its target companies.

Ashington Innovation leadership team

Ashington Innovation directors Jason Drummond and Jason Smart, bring a wealth of experience in founding and building successful companies across a diverse range of sectors.

Drummond has a track record of founding and building successful companies, including 12 Internet and tech businesses over the last 19 years. He has also led the IPO of nine of his companies on European stock exchanges since 1999 and has had three of the best performing shares on the London Stock Exchange’s AIM market.

In the gaming and gambling space, Drummond founded Gaming Corporation plc [LON:GMC], the internet media and gambling affiliate business focused on the gaming sector. In 2005, Gaming Corporation raised $17.42m and acquired for $20m. Drummond also built from a domain name in 2001 to the UK’s largest casino portal and sold it to Cryptologic for £3.62m in cash in 2007.

Around the same time, Drummond co-founded Betex Group – a lottery management and technology company with a primary focus on mainland China – and listed it on the LSE’s AIM in 2006, raising £12.5m, and reaching a market cap of £45.3m on admission.

Co-director Jason Smart has spent over 15 years in capital markets, and over the course of his career, he has founded multiple companies including for EU financial services, and has plenty of experience with helping to bring companies to market. He has extensive knowledge of working alongside investment banks and legal advisers on acquisition, due diligence and structured finance deals.

Ashington Innovation to review a number of opportunities

In order to deliver significant value to shareholders, the directors of Ashington Innovation said they will continue to review a number of opportunities, and further announcements will be made as appropriate. The acquisition, of either the assets, or the share capital, of a target company, will be treated as a reverse takeover and, in order to maintain its listing, the enlarged group would be required to apply to have its shares readmitted to the Official List and trading on the Main Market of the London Stock Exchange.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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