A seemingly unlikely pairing of a hockey fanatic and a women’s magazine editor has just raised $250 million.
Northern Star Acquisition Corp., led by New York Islanders owner Jon Ledecky and former Cosmopolitan editor Joanna Coles, closed its initial public offering last night, raising $250 million. The special purpose acquisition company will begin trading this morning on the New York Stock Exchange under the ticker STIC.U, a unit that includes one share and one-third of a warrant.
The SPAC is seeking to buy a venture in “the beauty, wellness, self-care, fashion, e-commerce, subscription and digital-media space,” according to its prospectus.
The executive team pairing isn’t as odd as it appears at first glance. Northern Star CEO and chairperson Coles is best known for leading content efforts at Hearst, a diversified media business with more than $11 billion in annual sales. She left Hearst after being passed over for the publisher’s top spot in 2018. While there, Coles gained widespread notice for moving women’s magazine Cosmopolitan into more substantive editorial topics, including women’s issues and politics, while she was its editor.
Ledecky, who became majority owner of the Isles in 2016, is a long-time private equity investor who has brought more than $20 billion of deals to fruition, including the launch of Mail Boxes Etc., now part of UPS. More recently, another of his SPACs, Pivotal Investment II, is bringing truck electrification outfit XL Fleet to market in a pending merger.
Northern Star is one of almost three dozen SPACs with capital of more than $14 billion associated with the sports business and sports leaders.
While SPACs have been one of the stock market’s biggest stories in 2020, the Northern Star pricing hints investors may be getting their fill. Northern Star originally filed to raise $300 million, making its IPO about 17% smaller than desired. It’s not the only SPAC to reduce its fundraising between filing and executing its IPO in recent weeks, and underwriter Citigroup retains a 45-day option to purchase another $37.5 million’s worth of units, which would boost the capital available to Northern Star. Units were priced at $10, while each full warrant will be executable at a price of $11.50 or higher, both standard prices for SPAC IPOs.
