Richard Branson has pushed ahead with plans to raise up to $480 million through a blank check special purpose acquisition vehicle, or SPAC, according to a statement from his new company, VG Acquisition Corp.
Trading will kick off today on the New York Stock Exchange under the ticker symbol VGAC.U, with 48,000,000 shares initially priced at $10 each. The money is earmarked, according to a Virgin source, simply for a “new businesses venture.”
SPACs are shell companies that raise money by going public, then seek an existing business to merge with or acquire using the proceeds of the IPO. Branson himself will lead the management team of VG Acquisition Corp., which says it will focus on finding businesses from Virgin Group’s core sectors—namely travel, leisure, financial services, health, technology and renewable energy.
Branson has been modernizing the Virgin portfolio, with recent investments in Agilyx, a difficult-to-recycle waste plastics company founded in a garage in Longview, Washington, and BMR, a wind power venture focused on the West Indies and Latin America. After the pandemic grounded Branson’s Virgin Atlantic fleet and threatened his business empire, the focus is shifting back toward innovation and high-growth entrepreneurship.
SPACs—So Hot Right Now
This isn’t Branson’s first experience with SPACs, sometimes referred to as “blank check companies.” In October 2019, he took his aerospace firm Virgin Galactic public via a merger with a SPAC led by venture capitalist Chamath Palihapitiya, in an $800 million deal.
According to Barron’s, citing data from industry resource site SPAC Insider, there have been 116 initial SPAC public offerings this year that have raised $44 billion in proceeds, a sum now greater than the total from the past five years combined.
This week private company Playboy Enterprises will make its return to the public markets through a merger with a SPAC called Mountain Crest Acquisition Corp. In late September, Mountain Crest agreed to acquire all of the outstanding shares of the iconic media brand for approximately $381.3 million. Mountain Crest will be renamed on the Nasdaq under ticker PLBY.
In Europe, Egyptian billionaire Nassef Sawiris, best known as the owner of English Premier league club Aston Villa, is hoping to raise $600 million by listing his SPAC, Avanti Acquisition Corp., on the New York Stock Exchange. Avanti is a joint venture between NNS Group, the private family office of Nassef Sawiris, and Sienna Capital, a subsidiary of Belgian holding company Groupe Bruxelles Lambert.
Other billionaire investors, including Alec Gores and Tilman Ferreira, have gotten in on the SPAC gold rush as well. Billy Beane, the baseball coach made famous by Michael Lewis’ 2003 book Moneyball, who was played by Brad Pitt in the 2011 movie adaptation, has one called RedBall Acquisition Corp., working in the typically Beane-esque field of sports and media analytics.
Hedge fund billionaire Bill Ackman, in announcing a SPAC of his own in July, told Bloomberg TV, “We’re in a unicorn mating dance, and we want to marry a very attractive unicorn on the other side that meets our characteristics.”
His Pershing Square Tontine Holdings Ltd has seen its share price rise from an IPO price of $20, to $22.10 at the close of trading yesterday, despite the stock representing little more than a promise made to an otherwise nameless business.