Prior to the IPO, the founders of the SPAC invest a small amount of initial capital to form the SPAC and hold all of the pre-IPO equity. Here is how to get from an idea to a succesful acquisition.
There are special structural characteristics in a SPAC, but it offers private equity sponsors a number of serious advantages in terms of transaction objectives, structure and return on investment. The SPAC IPO market has recently experienced considerable demand and continues to prosper. All this has further encouraged private equity sponsors to take advantage of SPAC’s benefits. We will give you an insight into the different phases of a Special-Purpose Acquisition Company from the idea to a winning transaction.
If a SPAC fails to complete a business combination within the specified time frame, founder shares and private placement warrants will become worthless. This builds an immense financial pressure for a Sponsor to get a deal done.
Third Party Escrow
100% + of cash held in trust
Target Enterprise Value must be 80% of net assets
Ensures that only targets of a minimum size are proposed
Shareholder Approval/Tender offer
Only well-received transactions get approved
Management Ownership and Concurrent Investment
Incentivizes management to find and close a deal
Escrow of Insider’s Shares
Insiders do not participate in a liquidating distribution for interests held prior to IPO
Limits the time of capital investment
We are presenting you an overview on recent and upcoming transactions.
Here is a selection of SPAC projects where we are involved.