SPAC, special purpose acquisition companies, are an increasingly popular way to take a private … [+]
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Former CBS CEO Joe Ianniello and former ViacomCBS Chief Digital Officer Marc DeBevoise have filed with the SEC to create a special purpose acquisition company (SPAC). to target private companies in the media, entertainment and sports sectors that they can merge with, thereby taking that company public, in contrast to a traditional IPO, or a direct listing.
The SPAC, Argus Capital, filed with the SEC on July 22 and they will now go through a review process with the federal regulatory commission that handles public stock regulation.
All proposed SPACs have to file a Form S-1 with the SEC.
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When that review process is completed and the SEC has deemed Argus to be “effective” then they can commence the IPO. Once the IPO is successfully completed Argus will seek to find companies in their areas of expertise that they believe would be good performing public companies.
The SPAC market has been under a lot of scrutiny from the press, investors and the SEC over the recent months and many SPAC IPOs have been delayed, curtailed or cancelled. Many other SPACs are lined up with approval from the SEC, but are waiting to conduct their IPO. The IPOs provide part of the investment cash needed to fund a proposed merger, along with, usually, a PIPE (private investment in a public entity). Both the IPOs and the PIPEs have become difficult to execute in the last few months in the SPAC markets.
Some SPACs have performed quite well, while others have been challenged considerably in the market.
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On the bright side many SPACs have performed quite well and have allowed strong companies to go public with the benefits of a SPAC, such as the ability to project out-year earnings, ability to approve your major investors, some certainty with regard to capital raised that will go on the balance sheet, and speed/ease of the process vs. a traditional public IPO.
Joe Ianniello who occupied a number of positions at CBS has announced his own SPAC, to pursue and … [+]
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Argus said in their SEC filing, “Within these (media, entertainment and sports) sectors and other sectors, we seek to partner with late-stage growth companies as well as mature companies with the potential to accelerate growth through organic and transaction-driven strategies,” adding that “we also intend to leverage our management team’s considerable industry relationships to seek out potentially mutually beneficial corporate carve-outs from existing conglomerate companies.”
