Paul Ryan, former speaker of the House, is creating a "blank-check company," The Wall Street Journal reported. The move comes amid growing interest in the business model, which is also called a special-purpose acquisition company (SPAC).
Ryan will be the chairman of Executive Network Partnering Corp. The company will seek to bring in approximately $300 million through an initial public offering (IPO), according to unnamed sources cited in the report. However, the number is not set in stone and could shift according to demand.
Ryan opted to not run for re-election last year. The Wisconsin Republican ran as the vice-presidential running mate of Mitt Romney in 2012.
SPACs deviate from the usual IPO process, as they become listed on the stock market prior to buying a company. The business model has become more widespread at a time when deal makers are aiming to capitalize on the pandemic’s negative economic impacts.
To date this year, new listings of 75 SPACs have notched just under $30 billion, the WSJ reported, citing Dealogic data. That is reportedly twice as many as were notched all of last year. In total, SPACs comprise approximately 43 percent of this year's IPO volume.
On July 22, Bill Ackman rolled out his SPAC on the New York Stock Exchange (NYSE). The hedge fund billionaire notched $4 billion for Pershing Square Tontine Holdings (PSTH). The SPAC will purchase one promising private firm and take it public. Ackman said that whatever company PSTH purchases will prefer to be acquired by the SPAC, as it will be able to determine how much money it is getting ahead of time.
“We come to an agreement on the value of the company [and] we buy only a minority interest in the business, so they’re not afraid to leave a little money on the table,” Ackman previously told CNBC.
The Ackman news came after a bevy of blank check firm rollouts. Trebia Acquisitions Corp., in one case, filed for a $414 million IPO, with 41.4 million shares available for $10 each.