Clal Finance to invest $60m in new US financial concern

Titanium Assets Management Corp. plans to raise a gross $120 million in an IPO on AIM.

Amir Keidan 30 May 07 15:31

Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) subsidiary Clal Finance Batucha Ltd. (TASE:CLFN) has committed to invest $60.6 million in Titanium Assets Management Corporation of the US. Clal Finance is using proceeds from its IPO in March to finance the investment.

Clal Finance said that Titanium Assets was incorporated in February 2007 and is preparing for an IPO on London’s Alternative Investment Market (AIM). It is a Special Purpose Acquisition Corporation (SPAC), whose strategy is to acquire one or more asset assets under management (AUM) companies, such as mutual funds and portfolio management companies. The company will initially focus on acquiring companies in the US, and will later seek target companies around the world.

Clal Finance added that it expected that Titanium Assets would offer no more than 20 million units at $6 per unit for total gross proceeds of $120 million. Clal Finance committed to the purchase of 10.1 million units, which will give it control of the corporation.

Published by Globes [online], Israel business news - www.globes.co.il - on May 30, 2007.

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SPAC specialist joins Mintz-Levin

Mintz Levin Expands Private Equity Practice with Addition of Len J. Nannarone

Firm’s Corporate Expansion Continues with Addition of Nationally-Recognized Private Equity Attorney

BOSTON--(BUSINESS WIRE)--Prominent private equity attorney Len J. Nannarone, who has represented many of the country’s leading investment firms, has joined the Boston office of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC as a Member in the firm’s Corporate Section.

Formerly a partner at Greenberg Traurig and in-house counsel to Intel Capital, Mr. Nannarone brings an extensive background representing major private equity firms, including The Blackstone Group, in acquiring target companies as well as serving as general counsel to their portfolio companies.

Mr. Nannarone is joined by Mathew C. McMurdo. Mr. McMurdo, formerly with Greenberg Traurig, joins as Of Counsel and will be based in the firm’s New York office. His practice focuses on general corporate and securities law. In addition to representing underwriters and issuers in public and private offerings, Mr. McMurdo has extensive experience in PIPE transactions and in representing underwriters in SPAC (special purpose acquisition corporations) public offerings.

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SPACs: Dazzling Profits, Exceptional Risk

Euromoney - June 2006, Pgs. 82-87

by: Helen Avery

No assets, no product, no business plan. The special purpose acquisition company (SPAC) exists for the sole purpose of receiving investors' money so it can go acquire some sort of a company. The chosen target is not part of a well-defined strategy with a particular purpose in a broader business plan. In fact, the publicly traded SPAC has no business plan and no assets, apart from what it can convince investors to give it. American and British investment bankers, hedge funds, and other professional investors have quietly socked $3 billion into SPACs since they initially listed on the American Stock Exchange and the OTC Bulletin Board in August 2003, the first of 50 SPACs listed in the United States. In the United Kingdom, SPACs are beginning to show up on the Alternative Investment Market (AIM). Helen Avery thought that canny professional investors would give SPACs a wide berth, but she now knows otherwise. Investors have turned millions over to these cash shells in the hopes that the SPAC might find a lucrative acquisition.

Dazzling potential profits. Certainly one lure is the SPAC's potential for dazzling profits, the author notes. Origen Agritech, a 2004 SPAC underwritten by SPAC pioneer EarlyBirdCapital, has generated a total return of 595%. EarlyBirdCapital has put together other deals with over 100% in total return. This upside potential has led many hedge funds and some mutual funds to pump millions into SPACs, although almost no one is willing to discuss the matter publicly. Not all SPACs make money, of course, and most have total returns in the single or low double digits. More worrisome is the tendency for returns to decrease over time. Flipping early will generate the highest return, but the total number of shareholders per SPAC indicates that retail investors have crept into the investor mix. "Buyer beware" may be reasonable for institutional investors, but regulators demand greater safety for retail investors.

read more >>> view article at Bowne Securities Connect.

Abstracted from Euromoney, published by Euromoney Institutional Investor Publs., Nestor House, Playhouse Yard, London EC4V 5EX, England. http://www.euromoney.com.

Business Buffet

When hungry investors want to make a meal of a company, they can pool their millions in something called a SPAC

By Kit R. Roane

You may think that "SPACs" sound like something to keep your feet dry or the kind of gift sure to be returned. But for investors hoping to make a killing on a leap of faith, special purpose acquisition companies are hot commodities.

SPACs are publicly traded shell companies, meaning they have no business operations and exist as little more than a name until investors pump money into them. The payoff comes if a SPAC's management team is savvy enough to purchase an undervalued private company within a specific field--like shipping--and then run it successfully as a public company. In a perfect world, that private company would be bought at a fraction of what it is later valued at on the public market.

Such investment vehicles have been luring some big names. Steven Berrard, the former CEO of Blockbuster Entertainment Group, now heads a SPAC called Services Acquisition Corp. International, and Apple Computer cofounder Steve Wozniak is helping shepherd another SPAC called Acquicor Technology. A few top banks have also begun underwriting the deals, including Citibank and Deutsche Bank. The latter recently priced a 20 million-share offering for a real-estate SPAC called Cold Spring Capital, raising $120 million

In all, more than 50 SPACs filed to go public in 2005. About half of these, including Cold Spring Capital, have made it to market, raising around $1.2 billion that can be used for acquisitions. By comparison, only 11 deals went public in 2004, and those raised less than $500 million.

read more >>> this story originally appeared in the January 30, 2006 print edition of U.S. News & World Report.

Global Logistics Acquisition Corp. to Acquire The Clark Group, Inc.

2007-05-21 8:15 AM

NEW YORK, May 21 /PRNewswire-FirstCall/ -- Global Logistics Acquisition Corporation ("GLAC"), a specified purpose acquisition corporation (a SPAC), today announced that it has reached a definitive agreement to acquire The Clark Group, Inc. ("Clark"), a closely held provider of mission- critical supply chain solutions to the print media industry, for $75 million.

Under terms of the agreement, GLAC will acquire Clark, based in Trenton, NJ, for $72.5 million of cash and issue 320,276 shares to certain shareholders. Clark is majority owned by members of the Anderson family and

individuals associated with Anderson companies. The transaction is subject to the review of the Securities and Exchange Commission, shareholder approval, and other customary closing conditions. Assuming conditions are met, GLAC anticipates completing the transaction in the third quarter of 2007.

Over its 30-year history, Clark has built a position as the leading independent provider of value-added distribution, transportation management, and international air and ocean freight forwarding services to the print media industry. The Company's asset-light business model has enabled Clark to increase revenues and EBIT while requiring minimal capital investment. In 2006, Clark generated revenue of $77 million.

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Ladenburg underwrites $2.8B in SPAC offerings since 2005

Ladenburg Thalmann Reports First Quarter 2007 Financial Results

MIAMI, Fla.--(BUSINESS WIRE)--Ladenburg Thalmann Financial Services Inc. (AMEX: LTS) today announced financial results for the first quarter ended March 31, 2007.

In the first quarter of 2007, the Company had revenues of $15.9 million and net income of $874,000, or $0.01 per basic and diluted share. This compares to revenues of $14.8 million and net income of $4.7 million, or $0.03 per basic and diluted share, in the comparable 2006 period, which included a $4.8 million gain from the sale of the Company’s New York Stock Exchange (NYSE) membership in the first quarter of 2006. Excluding this one time gain, first quarter 2007 revenues increased $6.0 million, or 60%, and net income rose by $921,000 from the prior-year period. The first quarter 2007 results include non-cash compensation expense of $1.3 million, while the first quarter 2006 results include non-cash compensation expense of $0.7 million and the $4.8 million gain from the sale of the NYSE membership

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Blind Confusion

Shlomo Reifman 05.17.07, 6:00 PM ET

Business development companies (BDCs) are often confused with Special Purpose Acquisition Companies (SPACs), also known as "blank check" companies or "blind pools." These have a bad reputation because "the lifespan of a typical SPAC is usually not long or successful," says BB&T Capital Markets' Vernon Plack.

Unlike BDCs, which already have an investment portfolio at least partly in place before they have a public offering, SPACs typically come to market as empty shells, but with plans to buy and operate one or more companies in a particular sector. Plack prefers to see a prior history so that "you're not just handing $100 million to someone with no track record."

SPACs also tend to use leverage in their acquisitions. A recent example is Ad.Venture Partners, run by former Net2Phone Chief Executive Howard "Howie" Balter. Last August it raised $54 million, and in March it acquired 180 Connect, a company that installs and integrates home entertainment and communications devices.

According to Dealogic, since the start of 2004, underwriters brought 106 SPACs to market, in offerings worth $8.5 billion. These stocks have a relative-to-market performance of 105 (where 100 means matching the S&P) from their offering value until the end of April this year.

read more >>> view article and SPAC performance tables.

CNBC on "blank check" IPOs

Blank check IPOs, shell companies that promise to invest your money, but without saying what they'll invest in, with Michael Connors, Information Services Group chairman & CEO; Jennifer Reingold, Fortune Magazine senior writer and CNBC's Carl Quintanilla


View CNBC video.

‘Blank-Check’ firms gain favor

Buyout Vehicles Going Public Score Hit With Investors

By YVONNE BALL April 23, 2007; Page C5

They have no operating assets, and there is no guarantee they will find any, but blank-check companies are growing in popularity after a quarterly record 17 of them went public in U.S. markets in the first three months of this year.

Also known as special-purpose acquisition companies, or SPACs, blank-check companies are essentially empty shells that promise to buy a business with the proceeds from their initial public offerings of shares.

Their popularity has been rising since 2004 when only 13 went public, raising $483.6 million, according to data tracker Dealogic.

That grew to 30 in 2005 and 40 last year, raising $2.1 billion and $3.4 billion, respectively.

Already this year, 20 blank-check companies have gone public, including three last week. Together, they have raised $2.1 billion. The average size of the deals in the past four months is about $107 million, with the largest belonging to Stamford, Conn.-based Information Services Group Inc.'s $259 million IPO. As the name suggests, the company intends to scour the information-services industry, including business, media, marketing and consumer information, for potential acquisitions.

Despite first-day returns averaging 0.1%, which may not be that surprising given that these companies have no real businesses, their popularity appears likely to continue. Since November, 12 more have filed paperwork to go public with plans to raise $1.5 billion, according to Dealogic.

As their numbers continue to grow, so too is their credibility, according to Michael Kollender, a managing director at financial-services firm Stifel Nicolaus. He has no connection to any SPACs.

"The market is certainly much more mature than it has been," he said. "There are much larger firms investing in and managing the SPAC IPOs."

Citigroup, Merrill Lynch and Deutsche Bank are prominent Wall Street firms that have underwritten some of the deals.

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Media execs give SPACs a boost

Former Media Executives Give New Life to ‘Blank Check’ Corporations

An obscure financing technique called “special purpose acquisition corporations,” or SPACs, are increasingly being used as an alternative to private equity.

Time was that former media executives were offered consulting contracts, partnerships at private equity firms or book deals. Now, they are being offered a blank check.

Over the past several months, new shell companies led by former senior executives of companies like Time Warner, ABC, RCN, DirecTV and VNU have raised hundreds of millions of dollars on the stock market in low-profile deals using an obscure but growing financing technique called “special purpose acquisition corporations,” or SPACs.

SPACs have been gathering steam over the past two years as an alternative to private equity as Wall Street firms like Deutsche Bank, Citigroup, Merrill Lynch and Lazard have begun underwriting them.

The catch in these deals is that investors do not actually know what their money is going to be spent on when they buy shares — hence the “blank check” designation given by the Securities and Exchange Commission.

In return, the founders — who include such media veterans as Herbert A. Granath and Eddy W. Hartenstein — put their own money and reputations on the line. But, they can’t spend the millions raised without first getting the approval of a majority of the shareholders.

Last month, a company called Media & Entertainment Holdings led by Mr. Granath, the longtime ABC executive and former chairman of ESPN, raised $100 million by selling shares and warrants. In February, another SPAC called Churchill Ventures raised $108 million. Its chief executive, Christopher Bogart, is a former general counsel of Time Warner and chief executive of Time Warner Cable Ventures.

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Blank checks are hot tickets

Liz Moyer 12.20.05, 7:39 AM ET

New York -Blank check companies are proliferating, though just eight of the several dozen that have been formed have remotely succeeded in their original missions.

These companies -- shells, really, that promise they will take investors' money and use it to buy real companies -- are effectively Wall Street's Wild West.

There are 39 of these companies in registration to sell shares to the public, including 32 that have filed with the Securities and Exchange Commission just since July 1. Several are seeking listings on the American Stock Exchange, where four already trade. The total capital expected to be raised in these stock offerings is nearly $3 billion.

They are also popping up in Europe, where two have begun trading on the alternative marketplace of the London Stock Exchange (which, incidentally, is itself publicly traded).

But investors, mainly value fund investors, hedge funds and high-net-worth individuals, aren't getting much for their money. These blank check companies, also known as special purpose acquisition corporations, have no operations or businesses. Instead, they are set up with the support of private equity investors with the goal of acquiring a business within a specific time frame.

In most cases, the name of the CEO is all a SPAC has going for it. On Friday, Star Maritime Acquisition Corp. raised $188 million in its listing on the American Stock Exchange. It is run by a group of executives who have a high profile in the shipping business, though they aren't necessarily household names. Its chief executive is Prokopios Tsirigakis.

Also on Friday, shares of Boulder Specialty Brands joined the crowd of SPACs that trade on the over-the-counter bulletin board market, or pink sheets, where most of them are to be found. The Longmont, Colo., company run by chief executive Stephen Hughes, a food industry executive, raised $136 million.

Among those in registration and preparing for a listing on the American Stock Exchange: Endeavor Acquisition Corp., run by Eric Watson, a New Zealand investor, and Jonathan Ledecky, a private equity manager and the founder and former chief executive of US Office Products. Endeavor's board of directors includes Edward Mathias, the founder of buyout shop Carlyle Group. It is looking to raise $200 million.

Then there is Acquicor Technologies, founded by former Apple Computer executive Steve Wozniak and others and looking to raise $150 million to buy in the technology, multimedia and networking sectors.

Around since the 1990s, SPACs have exploded in popularity in the last couple of years as hedge funds and other institutions and individuals scour for the next great thing that has gone unnoticed by Wall Street. They are raising far more than the $20 million to $50 million that used to be typical, and they are attracting the interest of deal makers at large investment banks, like Citigroup and Deutsche Bank--a niche where boutiques once dominated.

Citigroup underwrote the Boulder Specialty deal, along with Roth Capital. Deutsche Bank is the underwriter behind a pending $150 million IPO being arranged for Grubb & Ellis Realty Advisors, which aims to buy commercial real estate properties.

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Apple co-founder "Woz" launches SPAC

Former Apple execs, including Woz, launch "blank-check" company, Acquicor

Wozniak (credit)

Here's our story in the Mercury News today about the trio of former Apple Computer executives who are riding on the reputation of the famous company's brand, and have created a new shell public company, Acquicor, that will shop to acquire technology properties.

Acquicor is quite an extraordinary story, for a few reasons. It is led by former Apple Chief Executive Gilbert Amelio, who was ousted from Apple in 1997; co-founder Steve Wozniak, who is now an entrepreneur running a Mountain View wireless start-up called Wheels of Zeus (WOZ); and Ellen Hancock, who was chief technology officer, also until 1997.

First reason it is remarkable: Acquicor raised $150M yesterday in its IPO, even though these three folks are the company's only employees. The company is a so-called blank-check company, meaning it will basically write checks for technology assets. Its credibility rests entirely on the reputation, experience and network of the three executives.

Second reason it is remarkable: These guys are already leading extremely busy lives. Read our story, although we didn't have enough space in our Merc story to list all of their jobs and board seats. Read the SEC prospectus for full details. Amelio, the CEO, has a full time job as CEO of another company (perhaps he is trying to keep up with Steve Jobs, who is now CEO of Apple and, until Disney's acquisition, CEO of Pixar?)

Third reason it is remarkable: The execs are indeed big names, and each one of them are undoubtedly highly respected, but how much have they really proven recently? It is noteworthy how former success here in Silicon Valley can live on in perception. There is a saying among reporters in the news business: "You're only as good as your last story." In former days, some veteran reporters just got so "tired" in their later years that people began to wonder how good these icons really were -- even if they'd written brilliant stories during their dashing youth. Of course, technology is a different business. And we are not saying here that these three are tired. It is just that usually a public company has to jump through quite a few hoops on the way to prove itself, and its management. Sales, for one, would be nice. In this case, no sales. And Apple's phenomenal success with the iPod, a product ushered in under Steve Jobs, is a relatively new phenom. People forget Apple was struggling back in the late 1990s. To be fair, Amelio's ouster from Apple may have perhaps been more to do with a cultural misfit. But for these three to be making strategic technology decisions in a world that is vastly different than when they cut their teeth two decades ago, and with so little proof that they can work now as a team, makes us muse.

Posted by Matt Marshall on March 15, 2006 8:19 AM

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See related article, "Watch the SPAC trend."

The IPO gets edgy

What's trendy on Wall Street? Shell "companies" that go public with no business plan other than to buy an existing brand with shareholders' money, says Fortune's Jennifer Reingold.

By Jennifer Reingold
Fortune senior writer

February 7 2007: 6:48 AM EST

(Fortune Magazine) -- Dov Charney, CEO and founder of American Apparel, has never been much of a traditionalist. He produces his casual clothes in the U.S. when virtually all his competitors offshore them. His ad campaigns look more like nudie mags than the Neiman Marcus catalog. So it should come as no surprise that Charney has managed to take his company public using an edgy technique that, like some of his ideas, is fast becoming trendy.

On Dec. 18, 2006, Charney said he was selling American Apparel to an already-public company called Endeavor Acquisition (Charts) for $384.5 million in restricted stock, cash and debt. Endeavor is a SPAC, or special purpose acquisition company - an entity that has gone public for the sole purpose of buying another company in the future.

According to Dealogic, 87 SPACs have begun trading in the U.S. since the end of 2003, buying some well-known companies like smoothie purveyor Jamba Juice. Last year alone, 40 SPACs worth $3.4 billion were announced, up from $484 million two years earlier.

SPACs are essentially shell companies. They go public with little more to show investors than a management team and an agreement that the money raised will be used to fund an acquisition in a particular sector, such as retail, or in an emerging market like China. Ergo, a SPAC is a roll of the dice.

"Imagine paying $50 to go to a Broadway show, and you have no idea what's behind the curtain," says lawyer Mitchell Littman of Littman Krooks LLP, who works with a lot of SPACs. "You are relying on the fortune and integrity of the management team." Once a deal is completed, the SPAC's managers (who typically receive 20 percent of the public shares as compensation) are free to sell their holdings, usually after a lockup period.

Today's SPAC boom harkens back to the flurry of "blank check" companies that sprang up in the 1980s. Those were widely discredited by a wave of scams in which fraudsters would take a shell company public, announce a merger, pump the stock and then dump it before everyone realized that the hot target company was anything but. Investors have a lot more protection with SPACs, which must hold almost all the money in escrow until a deal is done.

From Charney's perspective, there is no downside to the arrangement. It lets him raise cash relatively quickly, remain the largest shareholder and avoid having to sell other investors on his vision until after his company is already publicly traded.

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Media SPACs on the rise

For media acquisitions, the rise of the 'blank check'

By Richard Siklos

Thursday, April 26, 2007

NEW YORK: It used to be that former U.S. media executives were offered consulting contracts, partnerships at private equity firms or book deals. Now, they are being offered a blank check.

Over the past several months, new shell companies led by former senior executives of companies like Time Warner, ABC, RCN, DirecTV and VNU have raised hundreds of millions of dollars on the stock market in low-profile deals using an obscure but growing financing technique called "special purpose acquisition corporations," or SPACs.

SPACs have been gathering steam over the past two years as an alternative to private equity as Wall Street firms like Deutsche Bank, Citigroup, Merrill Lynch and Lazard have begun underwriting them. The catch in these deals is that investors do not know what their money is going to be spent on when they buy shares - hence the "blank check" designation given by the Securities and Exchange Commission.

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