Avista Capital Partners, the private equity firm founded by former DLJ Merchant Banking executives, this week will join the ranks of PE firms that have launched blank-check companies.
Avista Healthcare Public Acquisition Corp, a special-purpose acquisition vehicle sponsored by the firm, plans to sell 30 million units at $10 each, a Sept. 30 SEC filing said. The Avista Healthcare offering was expected to price Oct. 10 and trade the next day on Nasdaq, an underwriting source said. Credit Suisse is sole underwriter, the filing said. UPDATE: Avista Healthcare priced 30 million shares at $10 each, an Oct. 10 statement said.
Blank-check companies, or special purpose acquisition companies, are formed specifically to buy companies. They are shell entities that typically raise money through the public markets.
Avista Healthcare plans to acquire a company in healthcare, including firms in pharmaceuticals, healthcare distribution and medical devices. After the IPO closes, the company will have 24 months to complete an initial business combination, the filing said. Avista Healthcare will target companies valued at $1 billion to $2 billion including debt, the Wall Street Journal said in September.
Thompson Dean, Avista Capital’s CEO and co-managing partner, and David Burgstahler, president and co-managing partner, owned a combined 80 percent of Avista Healthcare before the IPO, the regulatory filing said. That fell to a combined 15.6 percent after the blank-check company went public. Other Avista Capital operating executives own small stakes that brought the firm’s ownership of the SPAC to 20 percent after the IPO, the filing said.
Ex-employees of DLJ Merchant Banking formed Avista in 2005. The New York PE firm has about $6 billion under management. Avista Capital’s website said the PE firm is investing out of its fourth fund but it’s unclear how much that fund raised. In January, Avista filed a Form D for Fund IV. It did not set a target. UBS Securities is listed as placement agent for the fourth pool.
Avista’s third fund closed at $1.4 billion in July 2013, Buyouts has reported. The firm’s second pool collected $1.8 billion in 2010, while Fund I closed in 2006 with $2 billion.
Fund III is out of money, according to Preqin. Avista “may need to bridge with a SPAC,” a placement source said.
Other PE firms that have launched blank-check companies include TPG Capital, Centerview Partners and Wilbur Ross. Gores Group used a SPAC to buy Hostess Brands in July.
Avista Capital could not be reached for comment.
Action Item: Contact Avista: firstname.lastname@example.org
Photo courtesy ©iStock/megaflopp