Blackstone Veteran Chu, FNF's Foley Seek $1.1 Billionby and
Dealmakers target at least $600 million in SPAC IPO funding
CF Corp. follows blank-check stock offerings by Ross, TPG
Former top Blackstone Group LP dealmaker Chinh Chu and insurance executive William Foley are teaming up on a new $1.1 billion buyout venture that will purchase one or more yet-to-be identified companies in the financial, technology or services sectors.
The executives are staking the new company with $69 million of their own money, according to the filing.
CF Corp., a blank-check company the two dealmakers formed, is seeking to raise at least $600 million in an initial public offering, according to a prospectus filed Thursday with the U.S. Securities and Exchange Commission. The rest of the money will come from a $500 million private placement from a group of institutional investors that includes Blackstone.
Chu and Foley pledged to invest at least $55 million in the private placement plus $14 million more in the IPO. They will get an additional stake for managing the investment.
Blank-check, or special purpose acquisition companies, are formed with the intention of raising money to buy a company by a certain deadline. CF has two years following the IPO to do a deal.
Many of the investors in the private placement have agreed not to redeem their money even if they disapprove of the proposed acquisition, the filing said.
The offering’s underwriters, led by Citigroup Inc., Bank of America Corp.’s Merrill Lynch and Credit Suisse Group AG have an option to buy up to an additional $90 million in shares to cover over-allotments.
Chu, 49, a native of Vietnam, left Blackstone at the end of 2015. In a 25-year career he led some of the buyout giant’s most successful deals, including the $4.2 billion purchase of Ondeo Nalco and the $3.8 billion buyout of Celanese AG. Chu also spearheaded Blackstone’s attempt to acquire Dell Inc. in 2013 before it dropped out of the bidding for the computer maker. He remains a senior adviser to the firm.
Foley, 71, is chairman of title insurer Fidelity National Financial Inc., and has worked with private equity firms including Thomas H. Lee Partners on a passel of deals the company has backed, including a $5.3 billion takeover of business services provider Ceridian Corp. in 2007. Fidelity National has invested in businesses ranging from auto parts, mortgage services and restaurants.
He has been one of the most highly paid executives in the U.S., with a compensation package valued at more than $80 million in 2014, about half composed of a cash bonus. Fidelity National’s shareholders voted against Foley’s award last year.
The IPO would be one of the biggest by a blank-check company in recent years.
Wilbur Ross, a prominent private equity investor, raised $500 million through a SPAC in 2014, which will help finance a pending $1.6 billion purchase of resins and chemicals distributor Nexeo Solutions Holdings LLC.
Last year, TPG Capital, the private equity firm run by David Bonderman and Jim Coulter, raised a $450 million SPAC to buy a company in the technology, media or business services sectors. It has not yet announced a deal.
Foley didn’t return a message left with Fidelity National seeking comment. Karla Pena, an assistant to Chu, declined to comment.
(An earlier version of this article corrected Foley’s compensation.)