Engineering a Comeback for Blank-Check Companies

(Bloomberg Opinion) -- In the 1990s, so-called blank check companies weren't held in the highest regard. That didn’t matter to this week's guest on Masters in Business, Martin Franklin of Mariposa Capital.Franklin was among those in the early 2000s who revived the use of what are formally known as special-purpose acquisition companies, or Spacs, as vehicles for acquisitions and taking private companies public. Spacs that he headed up or participated in enabled companies such as GLG, Prisa, Phoenix Life, Burger King and Macdermid Specialty chemicals to bypass the process of using initial public offerings.

Along the way, these Spacs generated stunning 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 from closely held ownership. Other exits include Benson Eyecare Corp.; it generated returns of 1,800%. Franklin became head of Jarden Corp., a conglomerate of consumer brands, which he grew from a company with $300 million in annual revenue to one with more than $10 billion. Jarden was acquired in 2016 by Newell Rubbermaid, generating returns of 5,000%.

A list of his favorite books are here; a transcript of our conversation is here.

You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Overcast, Google, Bloomberg and Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here.

Be sure to check out our Masters in Business next week with David Enrich, an 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.”

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Barry Ritholtz is a Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”

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