NRDC Ups Buying Power With IPO

NRDC Equity Partners, parent of Lord & Taylor, has formed NRDC Acquisition Corp. to raise $360 million for the possible purchase of one or more operating...

To bolster L&T's exclusive offerings and forge separate wholesale and retail opportunities, NRDC recently took stakes in Cynthia Steffe; recruited Charles Nolan as creative director for L&T's Kate Hill bridge label; tapped Bryan Bradley as creative director for the Bryan by Bryan Bradley contemporary line exclusive at L&T, and enlisted Joseph Abboud to oversee men's private label design and serve as creative director of L&T's men's business.

NRDC Equity is close to disclosing that an executive to manage its growing stable of talent has been hired. Sources said Susan Davidson, former group president at Liz Claiborne who's been on the sidelines since June, is likely to be named head of what NRDC calls Creative Design Studios. "She's got experience in wholesale, retail, opening stores and developing offshoot businesses, like accessories," said one source. At Claiborne, Davidson oversaw nonapparel categories and had oversight of Kate Spade for a few months. Earlier, she held management posts at Dana Buchman and Henri Bendel.

NAQ.U is considered a "blank check company," otherwise known as a SPAC, or special purpose acquisition company. The idea is to sell stock to the public to raise money before the SPAC actually owns or conducts any business. SPACs enable retail investors to invest in areas sought by private equity firms and make it faster for the acquired business to go public. They represent an alternative when other financing options dry up.

Investors put a lot of faith in the management behind the SPAC and their operational and deal-making ability.

According to the rules of the SPAC, management has two years to make an acquisition, which must be approved by the majority of shareholders. If no deal is made within the allotted time, the SPAC must return the money, with interest to the investors, but investors could get less due to the costs of orchestrating the IPO. NRDC estimates a public stockholder would receive about $9.88 a share in the event the SPAC liquidates. The prospectus raises the possibility it may not be able to consummate a deal "because of our limited resources and the significant competition from business combination opportunities...including venture capital funds, leveraged buyout funds, operating businesses and other entities and individuals, both foreign and domestic."

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