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Argus Capital Corp., a special purpose acquisition company (SPAC) targeting acquisitions in the broader media and entertainment sectors that was launched earlier this year by former top CBS executives, is set to go public on Wednesday.
The SPAC, or “blank check” company, priced an upsized initial public offering of 26.5 million units at $10 each, looking to raise $265 million after previously reducing its original target from $300 million to $250 million. “Each unit consists of one share of Class A common stock and one-half of one redeemable warrant,” the company said. Each whole warrant can be exercised to purchase one share of Class A common stock at a price of $11.50.
Argus, led by ex-CBS CEO Joe Ianniello as chairman and CEO and former CBS Interactive boss Marc DeBevoise as vice chairman and president, is now hunting for a company in need of capital to take it public and has 18 months to announce a deal. “Argus’ business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses,” the company said on Wednesday.
“We are long-term committed to the success of whatever deal we find,” DeBevoise told THR. Asked if there was any risk of not identifying a good deal within 18 months, he replied: “We are very comfortable that this won’t be an issue. We would lose all of our at-risk capital, so we are not going to let that happen.”
DeBevoise said the Argus team feels that “we put together the next generation of SPAC that has got real operators who have done work in the public markets and understand the ins and outs of what that investor base needs to look like for a company in our space.” And he added: “We have a full team that can do diligence soup to nuts. We have a human resources lead, a comms lead, a finance lead, a business development lead, a legal person. We have everybody on board all invested in the deal.”
Other former CBS executives working at Argus include former ex-communications chief Dana McClintock as chief communications officer, former CBS corporate communications executive Kelli Raftery as chief marketing officer, former CBS in-house attorney Maria Corsaro Charon as senior vp, mergers and acquisitions, former CBS chief administrative officer Stephen Mirante who has the same title at Argus, and former CBS News CFO Charles Pavlounis as chief business development officer.
Argus’ board includes Comcast Advertising chief growth officer Pooja Midha and investment banker Alan Mnuchin, the CEO of investment and strategic consulting firm Ariliam Group and brother of former Treasury Secretary Steven Mnuchin. Argus mentioned Mnuchin on Wednesday, saying it “expects to benefit” from having him on its board.
Discussing what type of companies Argus would target for a deal or deals, DeBevoise tells THR: “We consider our space tech-driven media given our background. Our goal is to find something in the broader TMT (technology, media and telecom) space, which is really big – entertainment, media, sports. That could be something where technology is driving change, mostly how consumers consume their content.”
Could that also include video gaming and live events? “We like IP-based gaming, because we understand that best,” said DeBevoise. “And I think there are things like live events, like in the sports world, that are adjacent to the space. If you think about that as our area, there are a lot of companies that fit that space, but we are going to be looking at what I would call late-stage private companies that are ready for an IPO that we can really help grow.”
He confirmed that Argus was also interested in what it had in a previously published prospectus described this way: “We also intend to leverage our management team’s considerable industry relationships to seek out potentially mutually beneficial corporate carve-outs from existing conglomerate companies. These transactions would enable the value of potentially non-core assets to be highlighted and allow conglomerates to retain ownership, participate in future value creation and monetize when appropriate.”
DeBevoise said such “corporate divestitures or carve-outs are a wrinkle, where we are a unique team.” And he said his experience selling CNET to Red Ventures after the merger that created ViacomCBS would help with such a scenario. “It is the idea that there is there is something embedded inside a larger company that, because of what has happened with that company, it just doesn’t fit with where the company is headed,” he explained. “We think there are going to be numerous of those in our space over the next 6 to 18 months. And what you really end up needing is an ability to get into the public markets faster, tell the future story and potentially bring in a management team.”
Depending on the needs of specific companies, such a deal could lead to more or fewer members of Argus’ team taking on operating roles. “Our entire suite of management that we put together is all willing to come in as investors or come in as a player if they need to, and jump into a company if they need to in a certain role and help it, which is somewhat unique,” DeBevoise said.
SPACs have become a popular vehicle for former top media executives, including James Murdoch and former Walt Disney executives Tom Staggs and Kevin Mayer, to raise cash and search for takeover targets.
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