McMillen Brings Big Names To New Venture

Mercator Partners Plans IPO

Fortress America isn't the only special purpose acquisition company in the Washington area looking to raise money in the public markets. Mercator Partners Acquisition Corp. is planning a $51.7 million IPO. Reston-based Mercator plans to use the money to buy companies in communications industries such as local and long-distance telephone, broadband, satellite, cable, and digital radio.

Officials at Mercator declined to comment.

H. Brian Thompson , 65, a veteran telecommunications industry executive in the Washington area, is Mercator's chairman and chief executive. Rhodric C. Hackman , 57, is president; Lior Samuelson , 55, is executive vice president; and David Ballarini, 41, is chief financial officer. All three are partners at Mercator Capital , a privately owned Reston investment bank specializing in mergers and acquisitions of telecommunications, defense and information technology companies.

The organizers and Mercator Capital put up $247,500 to buy about 5 million stock warrants for 5 cents a share. The warrants entitle the organizers to buy common stock at $5 a share.

Mercator, like Fortress, is offering units in its IPO that include both common stock and warrants.

Morgan E. O'Brien , vice chairman of Nextel Communications Inc. , and Alex Mandl , former chief executive of Teligent , are special advisers to Mercator Partners Acquisition Corp.

The Fortress America and Mercator deals have some elements in common. None of the executives of either company will make a salary until a merger is done, though in each case the companies are renting office space (at no more than $7,500 a month) from their organizers.

For Mercator, the IPO proceeds must be returned to investors if the company doesn't accomplish a merger or sign a letter of intent within a year. For Fortress America, the money will be returned if a deal is not signed within 18 months.

Terence O'Hara's e-mail address isoharat@washpost.com.

C. Thomas McMillen founded Fortress America Acquisition Corp., which has registered with the SEC to raise $42 million.