TPG Files to Raise $460 Million in Buyout Vehicle IPO

Updated on

TPG Capital, the private equity firm run by David Bonderman and Jim Coulter, plans to raise as much as $460 million in an initial public offering of an investment vehicle to make acquisitions.

Pace Holdings Corp. will be led by Karl Peterson, a managing partner of TPG’s European business, according to a prospectus filed Thursday with the U.S. Securities and Exchange Commission. The offering figure includes $60 million that underwriters may sell if demand exceeds $400 million. Shares of Pace will be listed on the Nasdaq stock market.

Pace -- a special purpose acquisition company, known as a SPAC -- hasn’t identified a specific target, though it will look at underperformers in the technology, media or business services industries, according to the filing. Pace said it will have 24 months to put the money to work.

“While we may pursue an acquisition opportunity that does not fit with TPG’s mandate in any business industry or sector, we intend to capitalize on the ability of our management team to identify, acquire and operate a business that is not operating at its full potential,” Pace said.

TPG will own 20 percent of Pace after the offering, according to the filing. It also pledged $10 million to $11.2 million for warrants that could later boost its stake.

TPG, which is based in Fort Worth, Texas, manages $75 billion in assets. The firm is also gathering money for its first buyout fund in seven years and expects to reach its target of $10 billion, people with knowledge of the process have said.

Private equity investors including Wilbur Ross and JW Childs Associates have raised money through blank-check companies similar to Pace in order to make acquisitions outside of their main buyout funds. Tom Hicks, the former owner of the Texas Rangers baseball team, gathered capital through a series of SPACs after he left his private equity firm, Hicks Muse Tate & Furst, in 2004.

Entrepreneurs Martin Franklin and Noam Gottesman in April agreed to buy Iglo Foods Holdings Ltd., Europe’s biggest branded frozen-food company, for 2.6 billion euros ($2.9 billion) using a SPAC called Nomad Holdings Ltd. The vehicle raised about $500 million in an IPO a year earlier with the purpose of funding an acquisition.

(A previous version of this story included an incorrect reference to Madison Dearborn Partners’ use of a SPAC.)