Dish Network founder and chairman Charlie Ergen is the latest telecom executive to throw his hat into the special purpose acquisition company ring, launching CONX to raise $1 billion to buy companies in the TMT space.
CONX, according to documents filed with the Securities and Exchange Commission, proposes to sell 100 million stock units at $10 per share, raising a total of $1 billion. Each unit consists of one share of common stock and one-fourth of a warrant, exercisable at $11.50. At the proposed deal size, CONX would have a market value of $1.25 billion.
CONX, which plans to trade on the NASDAQ under the symbol “CONXU,” also counts Dish Network treasurer and VP of investor relations Jason Kiser as its CEO, has 24 months to find a suitable target. Deutsche Bank is the sole bookrunner on the deal.
Ergen is the current chairman of Dish and will remain in that role in addition to being chairman of CONX. Kiser, who has 30 years of experience working for Ergen, will also keep his positions at the satellite TV company.
SPACs are the latest trend in raising money, with more than 100 launched this year alone raising nearly $44 billion. Also known as “blank check” companies, investors are betting that a seasoned management team will find a private company target in a specific area that is undervalued. For the targets, SPACs offer a quicker path to raising money without the hassle of an IPO.
In the media space, CuriosityStream is the latest company to go public through a SPAC. Playboy agreed to be purchased by a SPAC (Mountain Crest Acquisition Corp.) in a deal that values the publisher at about $415 million.
Ergen founded Dish Network in 1980 and has grown it into the fourth largest pay TV service provider with about 9 million customers and a market capitalization of $18.7 billion. The company is in the process of building out a nationwide wireless network and earlier this year purchased T-Mobile’s prepaid wireless business Boost, with about 9 million customers for $1.4 billion.
According to SEC documents, CONX plans to find a purchase target in the telecom, media and technology space, and seeks a company that has “significant potential for future value creation.” That includes established companies with strong track records, but also start-ups with a path toward long-term profitability, the documents stated.
