  We present new observations of the late-stage merger galaxy NGC 7727,
including HST/WFPC2 images and long-slit spectra obtained with the Clay
telescope. NGC 7727 is relatively luminous ($M_V = -21.7$) and features two
unequal tidal tails, various bluish arcs and star clusters, and two bright
nuclei 480 pc apart in projection. These two nuclei have nearly identical
redshifts, yet are strikingly different. The primary nucleus, hereafter
Nucleus_1, fits smoothly into the central luminosity profile of the galaxy and
appears--at various wavelengths--"red and dead." In contrast, Nucleus_2 is very
compact, has a tidal radius of 103 pc, and exhibits three signs of recent
activity: a post-starburst spectrum, an [O III]_5007 emission line, and a
central X-ray point source. Its emission-line ratios place it among Seyfert
nuclei. A comparison of Nucleus_2 ($M_V = -15.5$) with ultracompact dwarf
galaxies (UCDs) suggests that it may be the best case yet for a massive UCD
having formed through tidal stripping of a gas-rich disk galaxy. Evidence for
this comes from its extended star-formation history, long blue tidal stream,
and elevated dynamical-to-stellar-mass ratio. While the majority of its stars
formed $\gtrsim 10$ Gyr ago, about 1/3 by mass formed during starbursts in the
past 2 Gyr. Its weak AGN activity is likely driven by a black hole of mass
$3\times 10^6 - 3\times 10^8 M_\odot$. We estimate that the former companion's
initial mass was less than half that of then-NGC 7727, implying a minor, but
significant, merger. By now this former companion has been largely shredded,
leaving behind Nucleus_2 as a freshly minted UCD that probably moves on a
highly eccentric orbit.
