In the 1990s, so called “blank check” companies were more than a little reminiscent of South Sea bubble era pools created “For carrying-on an undertaking of great advantage but no-one to know what it is.”
That sketchy reputation changed, thanks to Sir Martin Franklin of Mariposa Capital. He is credited with successfully reviving the use of Special-purpose acquisition company (SPACs), as public vehicles for long term M&A.
He details why he is more interested in “Owning assets [SPACs] rather than renting them [Private Equity].” His SPACs enabled companies such as GLG, Prisa, Phoenix Life, Burger King, and Macdermid Specialty chemicals to go public.
Along the way, these SPACs generated outstanding returns. In 2006, he founded Justice Holdings with Bill Ackman of Pershing Square as an investor. Justice Holdings merged with Burger King in 2012, creating a successful exit. Other exits include Benson Eyecare Corporation; it generated returns of 1,800%. He became CEO of Jarden Corporation, a conglomerate of consumer brands, which he grew from $300 million in revenues to more than $10 billion, with over 120 global brands and 35,000 employees It was acquired in 2016 by Newell Rubbermaid, generating returns for Franklin of 5,000%.
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Be sure to check out our Masters in Business next week with David Enrich, Finance editor at the New York Times. He is the author of The Spider Network about the LIBOR scandal; his new book is “Dark Towers: Deutsche Bank, Donald Trump, and an Epic Trail of Destruction.”