Capstar Special Purpose Acquisition Corp. Files for $200M IPO

Capstar Special Purpose Acquisition Corp. (CPSR.U), filed for a $200 million IPO this morning, and while Capstar Partners, a PE firm based in Austin Texas is the sponsor, PIMCO, the global investment management firm is part of the sponsor group as well. Additionally, Capstar Special Purpose Acquisition Corp., will be led by R. Steven Hicks, as Chairman, CEO & CFO.

Mr. Hicks founded Capstar Partners, a private investment firm focusing on small and middle market buyouts, real estate development, and public investing in the media and broadcasting, healthcare services and e-commerce industries.  However, prior to forming the PE fund, in 1996, Mr. Hicks founded Capstar Broadcasting Corporation, which became the nation’s largest radio station holding company by 1998 with 350 radio stations. Mr. Hicks will be joined by Rodrigo de la Torre, as Lead Director, having previously been the Head of Finance and Strategy for Taco Bell Global since April 2019 and previously served as Global Director of Finance and Head of M&A at Pizza Hut International from March 2016 to April 2019.

As for PIMCO, they will have a Director’s seat with Jamie Weinstein, who is currently managing director, portfolio manager and head of special situations at PIMCO, focusing on PIMCO’s opportunistic and alternative strategies within corporate credit. Furthermore, PIMCO’s Dan Degtyar, will be a Special Advisor to CPSR.U, and is currently an Executive Vice President, portfolio manager and senior analyst for PIMCO’s Global Credit Opportunity Strategy, where he focuses on credit relative value opportunities and special situations.

Having the PIMCO name on board is a nice bonus for this SPAC and will surely help with marketing. However, the terms shouldn’t give them much trouble anyway. It’s a nice fit for a first time team at 100% in trust, 24 months, and 1/2 warrant. Interestingly, they didn’t try for 1/3 warrant, especially given the PIMCO name and quality of underwriters aboard (Citigroup, UBS, BTIG).  But a 1/2 warrant makes more sense and means this deal should generate a good amount of demand.

Look for this SPAC to price ahead of the July 4th holiday week.