As the market for blank-check companies continues to build momentum, Carlyle Group vet Mark Ein is prepping a follow up to his first effort, signaling plans via an S-1 filing to raise $175 million for Capitol Acquisition Corp. II.
Ein previously founded Capitol I, which was among the few blank check companies to follow through with an acquisition during the downturn. The company ultimately completed a business combination with Maryland real estate investment trust Two Harbors Investment Corp., a deal completed in October, 2009.
Like others that have managed to raised capital for blank check companies or special purpose acquisition vehicles in recent months, Ein has a track record. The Two Harbors deal has so far provided a return of more than 27% for the platform’s initial shareholders. Beyond his dalliances in the SPAC market, Ein also oversees a personal holding company, Leland Investments, which acquired security services company Kastle Systems, and founded Venturehouse Group, an early-stage tech specialist that has backed the likes of Cibernet Corp., VSGi, and XM Satellite Radio.
Earlier in his career, Ein spent time at Goldman Sachs, Brentwood Associates and The Carlyle Group, where he spent seven years as a principal focusing on tech and telecom investments.
Capitol II, like its predecessor, is sector agnostic, although Ein has a non-compete agreement through his role as chairman of Kastle that would preclude potential deals in the security space.
The proposed offering continues a trend that started to take shape in the second half of last year, following the IPO of Mark Klein’s 57th Street General Acquisition Corp. Tom Hicks, Robert L. Johnson, John Childs and John Shermyen, sponsored by LLM Partners, all followed with their own blank-check offerings. And in January, 57th Street’s effort culminated with an acquisition of New York cupcake purveyor Crumbs Bake Shop.
In the Capitol II IPO, each unit, consisting of one share of common stock and one warrant, will be priced at $10 a share. The warrant, exercisable 30 days after the completion of a business combination, entitles the unit-holder to purchase one share of common stock at a price of $11.50 a share. The underwriters were also granted a 30-day over-allotment option to purchase as many as 2.625 million units, which could push the offering to over $200 million.
Citigroup Global Markets was tapped as sole book-running manager of the offering, while Deutsche Bank Securities and Ladenburg Thalmann & Co. will join Citi as underwriters. Graubard Miller is serving as legal counsel to the blank check company, while Davis Polk & Wardwell is advising the underwriters.