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ExecutiveBiz: What can you tell us about what you are doing, your future plans and how you got to where you are today?
Brian Thompson:
Well, I have a number of things going on. First, I am Chairman of Comsat International, a company several of us bought from Lockheed Martin a couple of years ago, now very successfully--and profitably-- providing telecom services at an enterprise level throughout Latin America. Secondly, I have started a new company called iTown, focused on building --through public/private partnerships--100mb/s public access networks in mostly rural communities employing fiber-to-the-premise and wireless broadband technology. Third, and a very interesting effort given today's capital markets, I have become Chairman and CEO of Mercator Partners Acquisition Corp. (MPAC).
One of the Potomac Officers Club fellows, Rod Hackman, and his partners have a small investment banking firm here in Reston called Mercator Capital. They came to me last fall and we discussed the changes taking place in the financial markets. They told me about an "acquisition company" they had put together ten years ago and their conviction that the markets had returned to a situation not dissimilar to then. By January, we had established MPAC, a "blank check" company, established for the purpose of doing an attractive transaction over the course of the next year. The important thing to me was that it's a public vehicle rather than a private equity approach, something which I think puts a very different notion on a "deal."
ExecutiveBiz: So when did you get up and running, in terms of looking for companies?
Brian Thompson:
We closed on April 17, when around $53 million raised in the IPO, went into a trust. We have the cash in hand to do any transaction we wish to do provided that the shareholders believe in the value of the transaction--it is obviously subject to a shareholder vote in that MPAC is a public company. In the unlikely event that they disapprove the transaction, we will return that money.
ExecutiveBiz: You're in a telecom space?
Brian Thompson:
We said that telecom is the primary space that MPAC is looking at. Most of the team involved in MPAC are "insiders" in telecoms including our Mercator team and Alex Mandl and Morgan O'Brien, two very well known telecom executives, are advisors as well. Clearly telecom is a fundamental focus.
ExecutiveBiz: Do you have any idea of how many deals you might do?
Brian Thompson:
Well, our efforts will likely result in a single transaction, given the time and complexity of doing something in the $150-250million range which this vehicle allows. We could do other combinations or mergers in conjunction with the transaction, but that clearly complicates the process a bit.
ExecutiveBiz: How is this different from your previous lines in the telecom industry?
Brian Thompson:
As a CEO, running major enterprises, our acquisition focus was normally on doing strategic acquisitions that enhance shareholder value by broadening lines of business or taking advantage of some synergistic opportunities that lower costs or strengthen market positions. In this case, more as a financial investor, we have to look at inherent values and opportunities to bring to the public an attractive transaction that promises real market growth, unique positioning, real financial performance and a management approach that suggests real upside in the package.
ExecutiveBiz: Is there anything else you'd like add or let people know about?
Brian Thompson:
Since MPAC is already publicly traded, including warrants that are part of the structure, we have a great opportunity to bring to an existing enterprise access to public markets, management strength, not to mention cash and future cash from warrant exercise that many companies likely covet at this time. And perhaps most importantly we can do it in a very transparent way--all subject to public scrutiny before a transaction is done. In this period of Sarbanes-Oxley etc. this is quite unique. Finally, management of MPAC gets no financial benefit--unlike other similar special purpose company structures--until the warrantholders are "in the money" which means the equity invested initially is already well rewarded. This is what caused me to agree to join MPAC--it is real-fair-and very public! Wish us luck.
For more information about
Mercator Partners Acquisition Corp., visit
www.washingtonpost.com/wp-dyn/articles/A57897-2005Apr15.html.
Interview with Brian Thompson conducted by JD Kathuria.
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