Rithm Acquisition Corp. Announces Pricing of $200 Million Initial Public Offering

Rhea-AI Summary

Rithm Acquisition Corp has announced the pricing of its initial public offering (IPO) of 20,000,000 units at $10.00 per unit, totaling $200 million. The units will trade on the New York Stock Exchange under 'RAC.U' starting February 27, 2025.

Each unit comprises one Class A ordinary share and one-third of one redeemable warrant. Each whole warrant allows purchasing one Class A share at $11.50. Once separate trading begins, shares and warrants will trade as 'RAC' and 'RAC.WS' respectively.

The IPO, expected to close February 28, 2025, is managed by Citigroup Global Markets, BTIG, and UBS Investment Bank. Underwriters have a 45-day option to purchase up to 3,000,000 additional units to cover over-allotments.

Positive

• Successful $200M IPO pricing achieved
• Major exchange listing (NYSE) secured
• Strong underwriting support from top-tier banks
• Additional $30M potential through over-allotment option

Negative

• SPAC structure carries inherent uncertainty until target acquisition
• Warrant dilution potential at $11.50 exercise price
• No specific business combination target identified yet

Insights

SPAC Analyst

Rithm Acquisition Corp. has launched a $200 million SPAC IPO, pricing 20 million units at the standard $10.00 starting point. Each unit includes one Class A share plus one-third of a warrant (exercisable at $11.50). Trading begins February 27 on NYSE under "RAC.U" before eventually separating into "RAC" shares and "RAC.WS" warrants.

The high-profile underwriting team of Citigroup, BTIG, and UBS suggests strong institutional backing despite the challenging SPAC market environment. Recent quarters have seen numerous SPACs struggle to find suitable targets or facing significant redemptions upon deal announcement.

For investors, this represents a pure "management bet" at this stage. While the standard 45-day over-allotment option (for 3 million additional units) provides flexibility to the underwriters, the true value proposition hinges entirely on the quality of acquisition Rithm eventually secures within the typical 18-24 month window.

The 1/3 warrant structure is somewhat less generous than some SPACs offering 1/2 or full warrants per unit, potentially indicating management's confidence in delivering shareholder value through the eventual business combination rather than needing to attract investors with more favorable terms.

Notably absent from this announcement is any specific target industry focus, leaving Rithm with a broad mandate but providing minimal guidance to potential investors regarding management's expertise or strategic direction.

NEW YORK--(BUSINESS WIRE)-- Rithm Acquisition Corp. (the “Company”), a special purpose acquisition company formed for the purpose of entering into a combination with one or more businesses or entities, priced its initial public offering of 20,000,000 units at a price of $10.00 per unit. The units will be listed on the New York Stock Exchange and trade under the ticker symbol “RAC.U” with trading expected to begin on February 27, 2025. Each unit consists of one Class A ordinary share of the Company and one-third of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share of the Company at a price of $11.50 per share, subject to adjustment. Once the securities comprising the units begin separate trading, the Class A ordinary shares and warrants are expected to be listed on the New York Stock Exchange under the symbols “RAC” and “RAC.WS,” respectively.

The offering is expected to close on February 28, 2025, subject to customary closing conditions.

Citigroup Global Markets Inc., BTIG, LLC and UBS Investment Bank are serving as the joint book-running managers for the offering. The Company has granted the underwriters a 45-day option to purchase up to an additional 3,000,000 units at the initial public offering price to cover over-allotments, if any.

The offering is being made only by means of a prospectus. When available, copies of the prospectus may be obtained from: Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone: 800-831-9146; BTIG, LLC, 65 East 55th Street, New York, New York 10022, or by email at ProspectusDelivery@btig.com or UBS Investment Bank, Attention: Prospectus Department, 1285 Avenue of the Americas, New York, NY 10019, by telephone: (888) 827-7275 or email: ol-prospectusrequest@ubs.com.

The registration statement relating to the securities sold in the initial public offering was declared effective on February 26, 2025 by the U.S. Securities and Exchange Commission (the “SEC”). This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Rithm Acquisition Corp.

Rithm Acquisition Corp. is a public acquisition vehicle sponsored by an affiliate of Rithm Capital Corp. (“Rithm Capital”). The Company intends to target companies in the financial services and real estate sectors where its management and Rithm Capital have extensive investment and operational experience. In addition, the Company expects to evaluate opportunities relating to digital infrastructure, including opportunities at the convergence of infrastructure and technology. The Company believes that its management team is positioned to drive ongoing value creation post-business combination, as the team has done with multiple prior investments in various sectors over time, and is well suited to identify opportunities that have the potential to generate attractive risk-adjusted returns for its shareholders.

About Rithm Capital

Rithm Capital Corp. is a global asset manager focused on real estate, credit and financial services. Rithm Capital makes direct investments and operates several wholly-owned operating businesses. Rithm Capital’s businesses include Sculptor Capital Management, Inc., an alternative asset manager, as well as Newrez LLC and Genesis Capital LLC, leading mortgage origination and servicing platforms. Rithm Capital seeks to generate attractive risk-adjusted returns across market cycles and interest rate environments. Since inception in 2013, Rithm Capital has delivered approximately $5.8 billion in dividends to shareholders. Rithm Capital is organized and conducts its operations to qualify as a real estate investment trust (REIT) for federal income tax purposes and is headquartered in New York City.

Cautionary Note Concerning Forward-Looking Statements

This press release contains statements that constitute “forward-looking statements,” including with respect to the proposed initial public offering and the anticipated use of the net proceeds. No assurance can be given that the offering discussed above will be completed on the terms described, or at all, or that the net proceeds of the offering will be used as indicated. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including those set forth in the “Risk Factors” section of the Company’s registration statement and preliminary prospectus for the Company’s initial public offering filed with the SEC. Copies are available on the SEC’s website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250226416762/en/

Investor Contact:

info@rithmacquisitioncorp1.com

Media Contact:

Sarah Salky

Joele Frank, Wilkinson Brimmer Katcher

(212) 355-4449

Ritm-jf@joelefrank.com

Source: Rithm Acquisition Corp.

FAQ

What is the total value of Rithm Acquisition Corp's (RAC) IPO?

RAC's IPO is valued at $200 million, consisting of 20,000,000 units priced at $10.00 per unit.

When will RAC units begin trading on the NYSE?

RAC units (RAC.U) are expected to begin trading on February 27, 2025, on the New York Stock Exchange.

What is the structure of RAC's IPO units?

Each unit consists of one Class A ordinary share and one-third of one redeemable warrant, with each whole warrant allowing purchase of one Class A share at $11.50.

What is the over-allotment option for RAC's IPO?

Underwriters have a 45-day option to purchase up to 3,000,000 additional units at the initial offering price.

Who are the joint book-running managers for RAC's IPO?

Citigroup Global Markets Inc., BTIG, , and UBS Investment Bank are serving as joint book-running managers.