Cision, a GTCR portfolio company, is going public but not through an IPO. Instead, Cision is merging with a blank-check company from investor Mark Ein.
Cision, the Chicago media-and-marketing software firm, is combining with Capitol Acquisition Corp III. Terms weren’t disclosed but the combined company is valued at $2.4 billion, a statement said.
The deal includes $1.2 billion of debt and the rest is equity, said Ein, chairman and CEO of Capitol Acquisition. Of the $1.2 billion equity, existing owners, including GTCR, have $800 million while Capitol Acquisition has $400 million, he said.
“GTCR did not sell anything,” Ein said. “They’re rolling over their whole investment into the new company.”
Cision will become a unit of Capitol Acquisition Corp III. Cision will receive $325 million from Capitol Acquisition and will use the funds to pay debt, Ein said. Cision will have 68 percent of the combined company, while Capitol will have 32 percent. GTCR will retain a majority.
Capitol Acquisitions Corp III went public in October 2015. The blank-check company had 24 months to complete a combination, SEC filings said. “We always make it,” Ein said. “We had plenty of time.”
The transaction was not an auction, Ein said. Capitol Acquisition approached Cision in the fall.
The sale represents the growth of earned media, which refers to exposure companies don’t pay for such as communications and PR, Ein said. Cision, which owns PR Newswire, Gorkana and PRWeb, is a leading platform to help companies manage, distribute and measure earned media, he said.
The deal is Ein’s third with a blank-check company. In 2007, Ein launched his first special-purpose acquisition company, Capitol Acquisition Corp, which created mortgage real estate firm Two Harbors Investment, Reuters reported. His second SPAC merged with travel company Lindblad Expeditions in 2015.
Ein previously worked at Carlyle Group, Brentwood Associates and Goldman Sachs before he became an investor.
In November, Gores Group used an acquisition vehicle to buy Hostess Brands in a $725 million deal. Avista Capital Partners, the PE firm founded by former DLJ Merchant Banking executives, launched a SPAC in October. Avista Healthcare Public Acquisition Corp raised $300 million and has 24 months to acquire a healthcare company.
The SPAC frenzy has died down since 2007, Ein said, adding, “Only high-quality teams are raising them [now]. It’s a really good time for the asset class more generally.”
Michael Gilbert of PJT Partners was financial adviser to Cision. Citigroup Global Markets, Deutsche Bank Securities and Credit Suisse were financial and capital-markets advisers to Capitol.
Latham & Watkins and Graubard Miller provided legal advice to Capitol, while Kirkland & Ellis was Cision’s legal adviser.
Action Item: Contact Mark Ein: +1 202-654-7060.
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