Martin Franklin: The blank check vehicle is a bet by a veteran dealmaker

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serial negotiator martin franklin it’s back. The veteran of buyout vehicles listed his latest blank check company, Admiral Acquisition, in London on Wednesday, raising $550m (£440m).

It’s a bold move. The tide has turned against special purpose acquisition companies. These took off in the US in 2020 and the trend spread to Europe. but many spaces have been liquidated after failing to find acquisition targets. This fate has befallen even some of the largerincluding Pegasus Europe, backed by LVMH founder Bernard Arnault.

Investors put money into a blank check company if they believe in the talent of its founders. Franklin’s resume is extensive. Spac’s previous successes include his investment in burger king, along with billionaire hedge fund manager Bill Ackman. He also turned a $120 million jar maker into US consumer products giant Jarden which in 2016 combined with rival Newell Rubbermaid into a $16 billion deal.

Franklin’s Admiral Acquisition shares are priced at $10 each. Franklin and his fellow founders pledged a total of $100 million.

Will you succeed if others are failing? Admiral tweaked Spac’s formula: founders won’t get free shares at the close of an acquisition. They will also have to engage in acquisitions rather than redeem shares. Both changes should instill greater confidence in other shareholders and target companies.

Admiral will also test new rules for UK Spacs introduced in 2021, including an end to the practice of suspending shares when a takeover is identified.

Like all blank check companies, there are risks. Shareholders do not know what they are buying. Admiral has yet to give any hint as to which sectors and geographies it will target.

There’s an argument that blank check companies offer a valued alternative to private equity funds, and it’s also not always clear how investors’ money will be put to work.

In reality, success or failure largely depends on the skill of the sponsor. On that front, Franklin has a decent track record.