Market Overview

What Is A Blank Check Company?

What Is A Blank Check Company?

Gores Holdings II hit the market Friday in a $375 million IPO and is expected issue at $10 per share. Gores Holdings II’s parent company, The Gores Group, is a global private equity firm specializing in acquiring and partnering with mature and growing businesses.

Notable holdings for the company include a majority stake in Hostess Brands, Inc. (NASDAQ: TWNK) for roughly $725 million.

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Gores Holdings II has been identified as a "Special Purpose Acquisition Company," also known as a blank check company. A blank check company is defined as a collective investment structure that allows investors to invest in private equity type transactions, particularly leveraged buyouts.

Blank Check Companies

In other words, blank check companies have no operations but go public with the intention of merging or acquiring companies from the proceeds it raises in its IPO. Blank check company IPO’s have seen a resurgent interest starting in 2014, when over $5 billion in capital was raised.

Gores Holdings II is a Beverly Hills-based company founded in 2016 and filed confidentially on September 1, 2016. Deutsche Bank AG (USA) (NYSE: DB) heads the IPO. The company will trade under the ticker GSHTU.

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