Starboard's Smith is latest high-profile investor to launch a SPAC, with fund seeking $300 million

Published Tue, Aug 18 202011:37 AM EDT

(This story is for CNBC PRO subscribers only.) Jeffrey Smith's Starboard Value said Tuesday that it is launching a special purpose acquisition company as the firm seeks to capitalize on a record year for SPACs. The new fund will be called Starboard Value Acquisition Corp, and it plans to raise $300 million through the sale of 30,000,000 shares priced at $10 per share. According to a filing with the Securities and Exchange Commission, the total amount could reach $345 million if underwriters' over-allotment option is fully exercised. SPACs are also known as blank-check companies, since investors hand over money without knowing when, or even what for, their capital will be used. Once the SPAC goes public, the goal is then for it to acquire or merge with a private company, taking it public in the process. Investors then have the option to become shareholders in the newly combined company. For the private company, it's a less risky way to go public on an often accelerated timeline, and without having to jump through all of the SEC's regulatory hoops. Amid volatility and a lackluster IPO market, SPACs are on track to raise a record amount of capital this year. In July Bill Ackman raised $4 billion through Pershing Square Tontine Holdings , making it the largest SPAC to date. In June Nikola went public through a reverse merger with VectoIQ , a SPAC headed by former General Motors Vice Chairman Stephen Girsky. Other SPAC deals announced this year include EV start-up Fisker merging with Apollo Global Management backed Spartan Energy Acquisition , as well as Lordstown Motors merging with SPAC DiamondPeak Holdings . Both of these transactions are expected to close later this year. Starboard's new fund, which will trade on the Nasdaq under "SVACU," will focus on "industries that align with the background and experience of its Sponsor and industry advisors," a statement said. This will include the technology, healthcare, consumer, industrials and hospitality and entertainment sectors. "We will seek to acquire established businesses that we believe are fundamentally sound but potentially in need of financial, operational, strategic, or managerial transformation to maximize value for stockholders," the filing said, while noting that the fund might also look at "earlier stage companies that exhibit the potential to change the industries in which they participate, and which offer the potential of sustained high levels of revenue growth." Jeffrey Smith will act as chair of the new fund, while Martin McNulty — a managing director at Starboard — will be the fund's CEO. UBS, Stifel and Cowen will jointly manage the new offering.

Jeffrey Smith, CEO and chief investment officer at Starboard Value LP.

David Paul Morris | Bloomberg | Getty Images

(This story is for CNBC PRO subscribers only.)

Jeffrey Smith's Starboard Value said Tuesday that it is launching a special purpose acquisition company as the firm seeks to capitalize on a record year for SPACs.

The new fund will be called Starboard Value Acquisition Corp, and it plans to raise $300 million through the sale of 30,000,000 shares priced at $10 per share. According to a filing with the Securities and Exchange Commission, the total amount could reach $345 million if underwriters' over-allotment option is fully exercised.