After using its first blank-check company to buy Twinkie maker Hostess Brands Inc. in July and take it public, Gores Group is looking to follow the same recipe for a second delicious deal.
Documents filed with the Securities and Exchange Commission earlier this month confirm an initial public offering for the Beverly Hills private equity firm’s second blank-check company, Gores Holdings II, is planned for next year.
The company will make 37.5 million shares of the company available at $10 each, according to the SEC filing, which amounts to a possible $375 million IPO. Gores Holdings II will be run as a special purpose acquisition vehicle, though no target has yet been identified.
“Gores Holdings II, Inc. is a newly organized blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses,” the company’s S-1 filing reads. “We have not identified any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.”
Gores Group declined to comment through a spokesman citing a mandated quiet period.
The blank-check spinoff strategy is a somewhat unusual move for private equity firms, according to Lloyd Greif, chief executive of downtown investment bank Greif & Co.
“It’s curious,” Greif said. “Most established private equity firms wouldn’t do something like this because this is what they have a fund for, but Gores has always been different.”
The move could be a stopgap measure of sorts – or it could simply reflect the firm’s market outlook, according to Greif.
“They seem to be overdue for their next big fund,” he said. “But it could be that their perception is that in this environment (public money) is a cheaper source of capital.”
The private equity firm’s first blank-check venture, Gores Holdings, raised $375 million in its initial public offering on the Nasdaq in August of last year. Gores Holdings later facilitated the purchase of Hostess in July for $725 million from New York’s Apollo Global Management and Metropoulos & Co. of Greenwich, Conn. Gores Holdings II is structured similarly to its predecessor. Gores Group, along with Chairman and Chief Executive Alec Gores, will retain a 20 percent pre-IPO stake in the new company, according to filings.
