The SPAC formed by Islanders owner Jon Ledecky and former Hearst editor Joanna Coles has found its target: dog gift box service BarkBox.
Northern Star Acquisition Company is buying BarkBox in a deal valuing the business at $1.6 billion, including debt, according to a release issued by the company this morning.
The Wall Street Journal was first to report the deal overnight. Sportico was first to report the duo formed the SPAC in September. The company raised $250 million at its IPO after initially seeking $300 million.
Ledecky, who has previously brought public one of the U.S.’s largest clothing makers, American Apparel, and Coles, who is best known for expanding editorial at fashion-centric Cosmopolitan into politics, will join the board of BarkBox, which offers themed gift boxes for dogs like “The Muttcracker,” consisting two toys, two bags of treats and a chew. BarkBox projects sales of $365 million in its current fiscal year with gross margins of 60%.
Ledecky and Coles have secured additional $200 million in capital to fund the deal from four institutional investors, including Fidelity Investments and affiliates of Santo Domingo Group, a Colombian, family-owned conglomerate with interests in beer and publishing, among other businesses.
The SPAC – a special purpose acquisition company – completed its IPO just five weeks ago, showing Ledecky and Coles to be much swifter at executing deals than other blank check companies, which can take up to two years to close an acquisition. Northern Star is one of some three dozen SPACs formed this year by sports executives like Ledecky or those focused on entering some aspect of the sports business.
The price of a Northern Star unit – which consists of a share and one third of a right to warrant – jumped 25% to $13.05 after Thursday’s opening bell after closing at $10.45 yesterday. Acquisitions by SPACs need to be approved by unitholders who can demand their initial capital of $10 back if they’re displeased.