Ex-Brigade Partner Hawks Is Said to Plan Distressed-Focused SPAC

(Bloomberg) -- Former Brigade Capital Management partner Carney Hawks is planning to raise money for a blank-check firm that will target distressed companies, according to people with knowledge of the matter.

Hawks will be chief executive officer and chairman of the special purpose acquisition company, which is seeking to raise $150 million and $200 million to invest in troubled companies, said the people, who asked not to be identified because the plans are private.

The SPAC will target businesses that are emerging from or going through reorganizations or are otherwise disrupted by the pandemic, the people said. Targets may also include heavily-indebted companies that could cut obligations by merging.

Plans for the vehicle could be announced as soon as this month, with a public filing coming in the first half of the year, the people said. Hawks declined to comment on plans for the SPAC.

Blank-check companies raise capital and go public with the goal of acquiring private companies. Last year they raised a record $79.2 billion in the U.S., according to data compiled by Bloomberg. The influx of cash has made combining with a SPAC an increasingly popular way for closely held companies to begin trading on exchanges.

Read more: No end in sight for blank-check firms after year of the SPAC

Hawks helped found Brigade in 2007 and served as head of special situations at the credit manager, overseeing corporate restructurings until 2019. Earlier, he was a managing director in Mackay Shields’ high-yield group. He sits on the board of paper products company Cenveo Worldwide Ltd., which Brigade invested in before and during its bankruptcy, and was recently selected for the board of bankrupt Extraction Oil & Gas Inc.

Proposed board members for Hawks’ SPAC include Eugene Davis, founder and chief executive officer of Pirinate Consulting Group LLC, which specializes in crisis and turnaround management. He’s served on dozens of boards of reorganized entities including Titan Energy LLC and Destination Maternity Corp.

Marc Heimowitz, founder and managing member of Coda Advisory Group LLC and former portfolio manager for Claren Road Asset Management, is also set to join the board, along with Soren Reynertson, managing director and co-founder of investment bank GLC Advisors & Co., and Daniel Golden, a former partner in Akin Gump Strauss Hauer & Feld’s restructuring practice.

Members for the proposed board didn’t immediately respond to requests for comment.

SPACs focused on troubled companies have emerged as investors seek ways to capitalize on disruption caused by the Covid-19 pandemic. Last year, Seaport Global Holdings LLC started a SPAC focused on distressed businesses with enterprise values of $400 million to $1 billion.

Mudrick Capital Management, a distressed investment firm founded by chief investment officer Jason Mudrick, raised $275 million in December for a second SPAC targeting troubled issuers. The firm’s first vehicle, Mudrick Capital Acquisition Corp., acquired gold and silver producer Hycroft Mining Corp. to form Hycroft Mining Holding Corp.

Also last year, billionaire Michael Klein’s SPAC Churchill Capital Corp. II agreed to acquire and combine two distressed tech companies -- Skillsoft Ltd. and Global Knowledge Training LLC -- in a transaction valued at around $1.5 billion.