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Cohen-led blank-check company targets fintech deals after $153M IPO

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Cohen-led blank-check company targets fintech deals after $153M IPO

A second blank-check company linked to longtime financial services industry executive Daniel Cohen is seeking to build on the success of the first.

FinTech Acquisition Corp. II on Jan. 20 announced the pricing of an initial public offering of 15.3 million units at $10 apiece, raising gross proceeds of $153 million. The Nasdaq-listed units, which consist of one share of the company's common stock and one-half of one warrant to purchase common stock, began trading the same day under the symbol FNTEU.

The company will seek to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other type of business combination, according to its IPO registration statement. It intends to concentrate those efforts on businesses that provide technological services to the financial services industry, particularly in the areas of data processing, storage and transmission services, databases and payment processing services.

Financial technology investments have "gone through a metamorphosis in recent years," FinTech Acquisition Corp. II said in the registration statement. The company cited data that showed a 67% year-over-year increase in global fintech investments during the first quarter of 2016.

"The industry, which was once focused solely on back-office and middle-office functions, process improvement, and providing cost efficiencies, has expanded to include front-office functions, where the focus is on providing a convenient internet-enabled interface between a financial institution and its customers through which the customers can access financial services and products offered by the institution and manage their financial affairs, for example, in integrated bill-paying services in reloadable pre-paid cards," FinTech Acquisition Corp. II said in the filing. "The industry also offers financial institutions ways to expand their customer acquisition and permits the creation of new financial services platforms, such as person to person lending."

A previous vehicle led by Cohen, the former CEO and current chairman of The Bancorp Inc., the vice chairman and head of Europe at Institutional Financial Markets Inc. and former CEO of RAIT Financial Trust and Taberna Realty Finance Trust, raised gross proceeds of $100 million in a February 2015 IPO. Just more than one year later, FinTech Acquisition Corp. and the parent of CardConnect LLC announced a definitive merger agreement that SNL Financial, an offering of S&P Global Market Intelligence, valued at $362 million. CardConnect is a provider of payment processing and technology solutions.

Upon completion of the transaction in July 2016, FinTech Acquisition Corp. became known as CardConnect Corp., and the company's shares now trade on the Nasdaq under the symbol CCN.

"We believe that potential sellers of target businesses will view the fact that our management team has successfully closed a business combination with a vehicle similar to our company as a positive factor in considering whether or not to enter into a business combination with us," FinTech Acquisition Corp. II said in its registration statement.

In addition to Daniel Cohen, Betsy Cohen, a former CEO of Bancorp Inc. and a longtime veteran of the banking business, is FinTech Acquisition Corp. II's chairman. James McEntee III, a former CEO of Alesco Financial Inc. and a former COO of Cohen & Co., is the company's president and CFO. Daniel Cohen, Betsy Cohen and McEntee each served in executive capacities at FinTech Acquisition Corp.

FinTech Acquisition Corp. II said it is not required to complete its initial business combination with a fintech company, but it must consummate such a transaction within 24 months of the IPO's completion. If it fails to do so, the company said it would redeem the publicly issued shares. The company cautioned in the filing that its management's background and track record do not guarantee a successful initial business combination.

Cantor Fitzgerald & Co. served as sole book-running manager of the IPO. Northland Capital Markets co-managed the transaction.