Starboard Seeks Up to $345 Million for Blank-Check Company
Starboard Value Seeks Up To $345 Million for Blank-Check Company
(Bloomberg) -- Jeff Smith has become the latest activist investor to go on the hunt for a mystery company to acquire.
Smith’s Starboard Value launched a blank-check company Tuesday, and said it plans raise as much as $345 million to buy and fix up a company, leveraging its experience as an activist investor.
Starboard Value Acquisition Corp. will seek to raise $300 million by issuing 30 million units at $10 apiece, according to a filing. The value may increase by $45 million if underwriters exercise an over-allotment option, the filing shows.
The firm is following at least two other activist investors into the space. In July, Bill Ackman’s Pershing Square Capital Management raised $4 billion for a blank-check company. Dan Loeb’s Third Point launched one in 2018 and agreed to acquire payment provider Global Blue -- despite revising the terms of the deal in the wake of the Covid-19 crisis.
Blank check companies, also known as special purpose acquisition companies, or SPACs, raise money on the public markets to make a purchase within a set period of time, usually about two years. They don’t identify a target until shares are trading.
Mergers with SPACs have gone mainstream this year with firms seeking to go public without the risks of an initial public offering. A total $16.9 billion of SPAC mergers have been announced this year, compared with about $7 billion for the same period in 2019, according to data compiled by Bloomberg.
Starboard’s SPAC
The New York-based hedge fund said it plans to acquire and take public a business in the technology, health-care, consumer, industrial, hospitality or entertainment sectors.
Starboard aims to find a company that is “fundamentally sound but potentially in need of financial, operational, strategic or managerial transformation,” according to the filing.
The activist may also seek to buy an early stage company that has the potential to change the sector in which it competes, it said.
Smith, Starboard’s chief executive officer, will serve as chairman of the blank-check company, with Managing Director Martin McNulty Jr. taking up the position of CEO. Starboard Chief Financial Officer Kenneth Marlin will hold the same role at the SPAC.
The Starboard offering is being led by UBS Group AG, Stifel Financial Corp. and Cowen Inc., according to the filing. The company intends to list on the Nasdaq Stock Exchange under the symbol SVACU.
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