After stepping down as chief executive at Global Secure, McMillen became chairman of a company called Global Defense Corp., an Arlington company that, like Fortress America, is a homeland security "consolidator," according to SEC documents.
McMillen could not be reached for comment, and the other organizers of Fortress America did not return phone calls and e-mails about the new venture. Information about the company was drawn from its SEC registration statement and additional reporting.
C. Thomas McMillen founded Fortress America Acquisition Corp., which has registered with the SEC to raise $42 million.
(John Duricka -- AP)
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The company's plan is to become, in effect, a publicly traded corporate buyout fund, known in the investment trade as a special purpose acquisition company, or SPAC.
When you invest in a SPAC you're buying the experience and merger-and-acquisition acumen of the executives involved, and you're betting on their ability to put together a real company with your investment.
SPACs are part of a broader category designated under Delaware law as "blank check" companies. Critics have said it's an apt name: In the 1980s, before the SEC toughened the rules for blank check companies, they were a favorite of penny stock promoters and were often associated with investment scams.
For all the risk, blank check companies can result in a substantial payoff for early investors -- if the companies invest well.
"They are for institutional, sophisticated investors," said Tim Halter of Halter Financial Group Inc., a New York firm that works with blank check companies.
Nationally, about a dozen SPACs are in registration or have sold stock in IPOs in the past year, according to a review of SEC filings. Most are raising capital for acquisitions of private companies in targeted industries -- health care, technology, industrial products, media and entertainment -- using both cash and their publicly traded stock as currency.
Fortress America's chief executive is Harvey L. Weiss. For two years until August, Weiss was chief executive of New York security software firm System Detection Inc. He has spent most of the past 35 years in executive roles at prominent information technology and network security firms.
Hutchinson is a former congressman who until recently ran the Homeland Security Department's border patrol and transportation security operations. An Arkansas Republican, he has announced he will run for governor of that state in 2006. Nickles, 56, retired from the Senate last year after 24 years and is now a Washington lobbyist. Fortress America's other outside director is David J. Mitchell, 43, who is a partner with McMillen in a "leveraged fund" called M&M Advisors.
