Boston Omaha Corporation announced  that Yellowstone Acquisition Company (“Yellowstone”) closed its initial public offering (the “IPO”) of 12,500,000 units at a price of $10.00 per unit, resulting in gross proceeds of $125,000,000. The units began trading on the NASDAQ Stock Market, LLC (“NASDAQ”) under the ticker symbol “YSACU” on October 22, 2020. BOC Yellowstone LLC, a subsidiary of Boston Omaha, served as the sponsor (the “Sponsor”) for Yellowstone’s IPO.

The purpose of the IPO is to pursue a business combination in an industry other than the three industries in which Boston Omaha currently owns and operates businesses: outdoor advertising (Link Media), surety insurance and broadband services businesses. For further information regarding the terms of the IPO and the rights and obligations of the Sponsor, please refer to the Yellowstone Prospectus on file with the SEC at www.sec.gov.

Boston Omaha elected to proceed with a SPAC public offering for the following reasons:

• Boston Omaha intends to use its existing capital for the three business lines in which it currently operates: outdoor advertising, surety insurance and fiber-to-the-home broadband services as well as investing in other future potential acquisitions and making other investments. By teaming with other public investors in the IPO, Yellowstone has the ability to pursue business combinations with larger companies than Boston Omaha could pursue currently on a stand-alone basis.
• There are many owner-operated businesses interested in minority owners for growth capital. Boston Omaha has invested in a number of these types of businesses. However, Boston Omaha’s ability to acquire a significant equity stake in a larger business through a business combination is limited by the Investment Company Act of 1940 (as amended), which requires a company which holds more than 40% of its assets in minority investments in other businesses to register under the Investment Company Act. This requirement prevents Boston Omaha on a stand-alone basis from consummating larger deals in which it would own a minority interest in a business, thus currently preventing or otherwise significantly limiting its ability to engage in larger business combinations.
• Acquiring a large percentage of equity in certain businesses, such as regulated financial institutions, would require Boston Omaha to comply with very burdensome and expensive regulations which would both limit its overall business operations due to capital and other financial testing covenants and adversely impact its ability to acquire other businesses which would not otherwise be subject to these regulations.

Insider’s take – Insider noted the original announcement of the offering back in September. If you remember that article, the original press release anticipated raising as much as $200 million.  $120 million is certainly a successful capital raise and Insider did confirm that Wells Fargo Securities has an over-allotment option which, if issued, could lead to additional funds raised.  We will continue to monitor progress and update again when we have a final total.

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