Billionaire Richard Branson wants to raise $460 million for a new SPAC

Virgin Atlantic Airways and Virgin Group founder, Sir Richard Branson.

Craig Barritt

LONDON – Virgin founder Richard Branson is looking to raise $460 million to create a new special purpose acquisition company, or SPAC, becoming the latest in a line of wealthy investors to do so. 

In a filing with the Securities and Exchange Commission on Wednesday, the company said it intended to sell 46 million units at $10 apiece.

Branson is named as the founder of VG Acquisition, which is registered on the Cayman Islands. In the filing, the company said it plans to use the money raised through the initial public offering to acquire a business that is already in operation.

SPACs, also known as blank check companies, are set up for the sole purpose of acquiring another company and listing it on the stock market, usually within a couple of years. More than 50 SPAC offerings have taken place so far this year, raising over $20 billion, Goldman Sachs said August. The investment bank said SPAC offerings were up 145% on the same period a year ago.

The SEC-filing for VG Acquisition states that the pandemic has brought about “a rare opportunity to invest in fundamentally strong target businesses at attractive valuations.”

The company said it had not yet decided which business it wants to buy. However, over the next two years, it will look for a company that operates in one of the Virgin Group’s core sectors such as travel, financial services, health, technology, music, media, mobile and renewables.

Branson’s finances have been stretched by the Covid-19 pandemic and in April he suggested he may need to mortgage his home in the British Virgin Islands.

In a filing in May, it was revealed that Branson was preparing to sell up to $504.5 million of his stake in Virgin Galactic. 

“Virgin intends to use any proceeds to support its portfolio of global leisure, holiday and travel businesses that have been affected by the unprecedented impact of Covid-19,” the company said in a press release.

There have been a number of high-profile SPACs created in recent months, with billionaire Bill Ackman raising $4 billion for his in an initial public offering in July.

Meanwhile, Acquisition firm Apollo Global Management filed Wednesday to raise $750 million through a blank-check company called Apollo Strategic Growth.

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