Inveterate investor Sam Zell is orchestrating another major investment hunt with the formation of Equity Distribution Acquisition Corp., which has the sole purpose of acquiring companies that specialize in distribution technology.
On Friday the investment vehicle created by Zell's Equity Group filed for an initial public offering with the Securities and Exchange Commission. The target of the IPO is to raise as much as $300M.
"Although we may pursue targets in any industry, we intend to initially focus on identifying a prospective target business in North America in the industrial sector with an enterprise valuation in the range of $1B to $1.5B," the SEC filing explains.
"More specifically, we intend to target companies providing technology-enabled solutions in industrial and industrial distribution markets," it continues.
"We believe the rapid pace of change, accelerated by increasing proliferation of technology, will drive a wave of consolidation within the industry ... We intend to focus on companies that have the ability to competitively differentiate themselves based on a combination of service, technology, innovation and/or market position."
The filing also points out that at this time, the "blank-check company" Equity Distribution Acquisition Corp. hasn't identified a specific acquisition target, or even started any discussions with anyone about such a deal.
Zell is chairman of the new entity. Its CEO is Bill Galvin, who until recently was president of Anixter International, originally a maker of wire and cable products previously chaired by Zell. In January, Clayton Dubilier & Rice bought the company for $4.5B and took it private.
Anixter was no stranger to distribution tech, offering products in the industrial sector (and other end markets) designed to lower the cost, risk and complexity of supply chains.
For a time earlier this year, Zell paused his investments. "There's very little opportunity to do anything," he told Bloomberg TV in May. "We're just sitting here watching, and not seeing anything happening."
In July, during a New York University Schack Institute of Real Estate webinar, Zell predicted a U-shaped recovery. "We've basically improved somewhat, I think we're going to have kind of a slow period improving toward the end of the year," he said.
In August, Zell stressed the impact recent events and fundamental changes in consumer buying habits have had on the retail market.
"There's little question in my mind that retail is a falling knife," he told CNBC. "And we are for sure not at the bottom."
