Racing giant Andretti Acquisition goes public via SPAC

Andretti Acquisition Corp. Co-CEOs Michael Andretti and Bill Sandbrook join Yahoo Finance Live to discuss the company's SPAC deal, company origins, the SPAC space outlook, acquisition targets, and sustainable racing.

Video Transcript

ADAM SHAPIRO: All right, race car fans, it is a fact that the technology and the state of the art technology in a lot of race cars eventually winds up, in some form or another, in the cars that we buy on the private market, when you can finally get a car, with the manufacturing and the supply chain issues these days.

I bring that up because we're going to bring in Michael Andretti, Andretti Acquisition Corp. co-CEO and director, along with Bill Sandbrook, Andretti Acquisition Corp. chairman and co-CEO, because, Michael, the other thing race car fans know is that if you've ever been to the infield at the Indianapolis Motor Speedway back in the day, there is treasure and trouble to be found. And you're raising a great deal of money looking for treasure. So what are you going to do with this blank check company that is now trading? What are you going to acquire?

MICHAEL ANDRETTI: We don't know yet. We're just starting the process of vetting the companies. We've actually been lucky enough to have 40 companies already come to us with interest for us to acquire them. So we haven't started the vetting process yet, but it will be probably in the next week.

EMILY MCCORMICK: Bill, you and Michael have known each other for a long time, both professionally and personally. Tell us how you decided to work together on Andretti Acquisition.

BILL SANDBROOK: Sure. I had retired from US Concrete about a year and a half ago. And around Christmas of last year, Michael came to me with the idea of starting a SPAC. He knew that he had a really good brand. And he has a fantastic network that the Andrettis have built over the last 50 years. And he has the ability to test out technologies on the racetrack that make it into the commercial mobility space.

But he also knew that he needed somebody that had public company experiences or experience. And I had done that for my entire career after I left the army, and having successfully run US Concrete and actually sponsored his son's race car, where our business interests intersected. He came to me because we've known each other for 50 years. And he trusted me. And from there, here we are today.

ADAM SHAPIRO: Bill, following up on that though, I mean, we're in a technological revolution, as we go from internal combustion engines to electric vehicles. I imagine there's a great many companies. How do you weed out those which are not worthy of acquisition or merger from those which are truly gems?

BILL SANDBROOK: Sure. They need to have a good management team. They need to hopefully have a need that is not being met in the current marketplace. Hopefully we can make them public company-ready. Remember, this is all about taking a private company, probably entrepreneurial bent, a founder that's more of an inventor than a public company CEO. And three months into the process, they're a reporting company.

And a lot of SPACs or a lot of de-SPAC companies have tripped up in that. So it's a combination of that they have some competitive advantage, a good management team, and the ability to go public and provide a market need that's not being met right now.

EMILY MCCORMICK: Michael, there were rumors last year that Andretti Autosport was looking to buy, potentially, a Formula One team. Would you consider acquiring a company in that space through Andretti Acquisition?

MICHAEL ANDRETTI: No. This is actually separate from the racing side in terms of that. Yeah, I'm still interested. We're still looking at Formula One. But I have backers for that that are very interested in doing it. So this is completely different.

Now, if the team can help in any way, then obviously, we'll be there to help. But it really has nothing to do with that.

ADAM SHAPIRO: Michael, I'm going to deviate a little bit from what you're doing business-wise, because we're excited to see when you actually do this, deploy the funds and merge. But from the racing side, do young people have the excitement these days for Formula One and for IndyCar racing? Because, I mean, there are teenagers today who don't want to get their driver's license, which blows me away. I can't believe it.

But does it still hold? I mean, I'm old enough to remember Jim Nabors singing "Back Home Again in Indiana at the 500." What's going on?

MICHAEL ANDRETTI: It is a little strange, I've got to admit. That's one thing that's been pretty cool for us. We've been in the sustainability space with Formula E, which is an all-electric series. It's a World Championship Series. It's actually the only FIA-sanctioned world championship electric series in the world.

So we've been in that space as well as Extreme E, which is a new series, which is electric off-road racing. So we have, I think, been able to keep the young fan interested because a lot of the youngsters nowadays are very concerned about the environment and things like that. And so I think we've been able to get a lot of new fans in that way through that series, those two series.

EMILY MCCORMICK: Bill, I want to dive a little bit deeper. What specific criteria are you looking for in an acquisition target? Because, as I believe Michael mentioned earlier, there were already companies interested in a tie-up with Andretti Acquisition. So how do you really pass through these potential tie-ups?

BILL SANDBROOK: Well, there are, obviously, some pre-revenue companies, because they're on the cutting edge and probably have the sharpest growth curve. So we'll look at them. But they also bring a lot of risk. And we also have a number of companies that have EBITDA, are more established, and are safer bets. But like I said before, they need to have a product or a competitive advantage or a niche that has not been met by any other public companies at this time. And they do need to have a good management team in place.