Topps SPAC: Everything you need to know about Topps

Rebecca Cattlin
By :  ,  Financial Writer

Topps SPAC: When will Topps go public?

Topps is expected to go public via a SPAC deal in Q3 2021, listing on the Nasdaq market under the ticker symbol ‘TOPP’. The company elected to use a blank cheque company due to the flexibility and ‘limited distraction to management’, according to a statement by chairman Michael Eisner.  

Learn more about what a SPAC is

The transaction includes a private placement of $250 million and will be led by Mudrick Capital with investment from institutions such as Gamco investors and Wells Capital Management.

In August, Mudrick Capital investor Lawrence Bass announced intent to sue the company to prevent a vote that would change how shareholders approve the share issuance that’s needed to close its merger with Topps. Shareholders are voting to approve the company’s plans to increase the number of Class A shares from 100 million to 350 million – which would dilute the value of investors’ stakes according to the complaint. Bass said that while currently Class A and B shareholders have to vote separately, the company is trying to change its charters to call for a combined vote, which could alter the outcome.

How to trade Topps shares

Once Topps has listed, you can trade its shares in the same way you would any other company on the stock market.

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How much is Topps worth?

The Topps SPAC deal values the company at approximately $1.3 billion. In 2018, the business was estimated to be worth $400 million, so the company has experienced decent growth to achieve its new valuation. This growth largely comes as a result of a boom in the sector during 2020 caused by homebound consumers returning to collectibles as well as new blockchain-based products.

What does Topps do?

Founded in 1938, Topps is a leading creator and marketer of sports and related cards, entertainment products, and confectionery. It has an exclusive license with the Major League Baseball to produce trading cards that feature the league’s players and logos. In 2019, it paid the Major League Baseball Players Association $18.7 million in licensing fees as part of its agreement that will end in 2025.

How does Topps make money?

Topps makes most of its income through sales of its sports trading cards, but has also expanded into mobile apps for collectors, non-fungible tokens (NFTs) and gift cards. It also has a candy segment that includes brands like Bazooka, Ring Pop and Baby Bottle Pop – which accounts for 35% of the company’s sales.

Is Topps profitable?

Yes, according to Topps Co’s Q1 2021 results, net income grew from $23.0 million to $23.4 million year on year on the back of $166.6 million in revenue, which itself increased by 55.3% during the period.

According to chairman Michael Eisner, ‘The company today is exactly the same financial position that Disney (DIS) was in 1984 to the dollar… if we do one-tenth as well as Disney, I will be very happy.’

Learn how to read a company earnings

What is Topps's business strategy?

Topps’s business strategy is focused on building customer engagement, driving excitement and innovation across Topps, and fuelling revenue growth with accelerated profitability.

The company aims to achieve this by diversifying its offering into e-commerce, mobile digital applications and digital e-gifting solutions, as well as the ever-growing market of NFTs and blockchain-based collectibles. Buying and selling NFTs is a similar concept to rare baseball cards, as each NFT is unique and can’t be duplicated.

Topps has also expanded away from just its traditional sports fan base, and has started producing on-demand Topps NOW cards that feature current events. For example, a card picturing Bernie Sanders sitting in his jacket and mittens that went viral sold over 91,000 copies.

Who owns Topps?

Topps is owned by Michael Eisner, former Walt Disney CEO, who currently serves as Chairman of the firm and will retain his post following the SPAC deal. Eisner bought Topps in 2007 for $385 million through his investment firm Tornante and Madison Dearborn.

Madison Dearborn will sell most of its shares in Topps amid the SPAC, but Eisner’s firm The Tornante Company will roll its entire equity stake into the new combined company.

Based on Mudrick II’s recent share price, Eisner will have about $540 million in shares due to his ownership stake of about 46 million shares – this includes a supervoting class crafted only for him, granting 86% of voting power.

Board of directors of Topps

Following the combination of Topps and Mudrick, the company’s board of directors will comprise of:

  • Michael D. Eisner, Chairman
  • Meltem Demirors, Board member
  • Andrew Redman, Board member
  • Eric Eisner, Board member
  • Maria Seferian, Board member
  • Jill Ellis, Board member
  • Scott Pasquini, Board member
  • Marc Lasry, Board member

Related tags: Equities Stocks Insights IPO

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