JW Childs to launch $200m SPAC

The Boston private equity firm will tap the public market for fresh investment capital after a number of staff departures.

JW Childs Associates, the Boston-based buyout firm led by a former Thomas H. Lee Partners professional, has filed with the SEC to take public a $200 million special purpose acquisition vehicle (SPAC) called JW Childs Acquisition I.
 
Adam Suttin, JW Childs’ co-founder and managing partner, will serve as chief executive officer and president of the blank cheque vehicle, which will have 24 months to purchase a company before the IPO proceeds are returned to shareholders. The SPAC will issue 20,000,000 units at $10 apiece when it debuts on the American Stock Exchange later this year.
 
JW Childs will purchase $15 million in equity in the new company, which will focus on “middle-market businesses in the consumer products or specialty retail sectors” with enterprise values between $750 million and $1.25 billion, according to SEC filings.
 
Partners at JW Childs declined comment.
 
Blank cheque companies such as JW Childs Acquisition I have grown increasingly popular among deal professionals, who see in SPACs a ready source of capital with favourable economics for the manager.
 
JW Childs has endured heavy personnel turnover in recent months while struggling to secure investors for a fourth fund. Most recently, JW Childs lost its president, Dana Schmaltz, and the chairman of its investment committee, Ted Yun, who reportedly left to found their own private equity firm.

Middle-market firm JW Childs, led by John Childs, spun out from Thomas H. Lee Partners in 1995, and has offices in Boston, Shanghai and Hong Kong. The fund from which the firm is currently investing, JW Childs Equity Partners III, has $1.8 billion in committed capital.

Past JW Childs portfolio companies have included Cinnabon and Ghiradelli Chocolates.
 
In related news, Goldman Sachs Group has agreed to underwrite its first blank cheque IPO, sponsored by private equity firm Liberty Lane. The move is seen as a sign of legitimacy for SPACs, as Goldman Sachs has been conspicuously reluctant to jump into the burgeoning market.