Special purpose acquisition companies commonly called spacs have emerged as a popular alternative acquisition vehicle. The company is sponsored by riverside management group rmg and the management team of james carpenter, robert mancini and philip kassin. Because spac are publicly held, we have been able to gather data on the. Although the tsx adopted spac rules in 2008, the first canadian spac offering was only completed in april 2015. A spac is an investment vehicle allowing the public to invest in companies or industry sectors normally sought by private equity firms. Jul 06, 2018 special purpose acquisition companies spacs are companies formed to raise capital in an initial public offering ipo with the purpose of using the proceeds to acquire one or more unspecified businesses or assets to be identified after the ipo. Finras rules relating to equity ipos, on spinning and withholding and ipo allocations, which came into effect following the dotcom bust, were recently. Special purpose acquisition companies financial definition of. Special purpose acquisition companies spacs jd supra.
In the first quarter of 2016, two energyfocused, specialpurpose acquisition companies spacs made their nasdaq market debuts, including 2016s largest u. The mechanics of a special purpose acquisition company part iv of iv march 12, 2017. A special purpose acquisition company spac is a corporation formed by private individuals to facilitate investment through an initial public offering ipo. New spacs signal rebirth of alternative funding model.
U is a special purpose acquisition company formed for the purpose of effecting a merger, stock purchase or similar business combination with one or more businesses. Marcum special purpose acquisition company database spac. Spacs are shell or blankcheck companies that have no operations but go public with the intention of merging with or acquiring a company with the proceeds of the spacs initial public offering ipo. May 18, 2015 a special purpose acquisition company or spac is a corporation formed by private individuals to facilitate investment through an initial public offering. The mechanics of a special purpose acquisition company part iii of iv february 8, 2017. An explanation of the purpose, structure and current issues affecting special purpose acquisition companies august 10, 2005 special purpose acquisition companies, commonly known as spacs, have recently surged in popularity as an alternative to traditional acquisition vehicles, due to their ability to. Aug 17, 2015 the idea is to keep investors up to speed on special purpose acquisition corps, also known as spacs, on a weekly basis.
Hicks, announced today that it has signed a definitive agreement pursuant to which graham packaging holdings company graham packaging or the company will go public through a transaction. A spac is a corporation formed to fund the acquisition of and provide capital to an existing operating company or. Spac must be held in trust until the company makes. The resurgence of special purpose acquisition companies ogier. Spac is a company which has no operations or income generating business at the point of initial public offering ipo but undertakes an ipo with the intention of acquiring operating companiesbusinesses with the proceeds raised form the ipo. Understanding the basics of a special purpose acquisition company. Institutional changes of specified purpose acquisition companies spacs. Special purpose acquisition companies mark bonenfant, esq. Gores holdings iii, a special purpose acquisition company, has completed the acquisition of platinum equity portfolio company, pae, the company announced on monday.
Spac research is the premier resource for information on special purpose acquisition companies. Sep 28, 2015 johannesburg capital appreciation jse. The most important benefit of a spac is that the ipo process for a special purpose acquisition company is almost always a lot simpler than it would be for an operating business. Spac research gives investors and asset managers access to our special purpose acquisition company database. This article is sponsored by securities commission malaysia, under its investsmart initiative. Weekly list of special purpose acquisition company ipo. The history of the form, from penny stocks and blank check offerings part ii of iv november, 2016. At its most basic level, a special purpose acquisition company spac is nothing more than a set of filings with securities regulators. A downloadable weekly list of all spac special purpose acquisition company ipo transactions. Feb 26, 2020 a special purpose acquisition company spac is a company with no commercial operations that is formed strictly to raise capital through an initial public offering for the purpose of acquiring an. This includes a profile on each listed spac, as well as our calendar of upcoming shareholders meetings and important events. Special purpose acquisition company spac definition. The special purpose acquisition corporation spac program offers an alternative vehicle for listing on tsx. Aug, 20 a special purpose acquisition company raises money through an i.
Dec 09, 2015 the wave of special purpose acquisition corporation spac offerings was arguably the biggest development in canadas capital markets in 2015. Before investing in a company, there are many things to consider such as the companys profit track record, its business model, annual earnings, growth projections and its pe rat. On june 29, 2017, cision went public via its reverse merger with special purpose acquisition company capitol acquisition corporation iii. The spac, like its blank check predecessor, conducts no business, has no revenue, and controls no assets. Founders of spacs are attracted to the significant upside and flexible investment strategies that spacs offer. But the promoters often make bad choices, earning almost no returns for investors. Special purpose acquisition companies spacs are companies formed to raise capital in an initial public offering ipo with the purpose of using the proceeds to acquire one or more unspecified businesses or assets to be identified after the ipo. Special purpose acquisition corporation spac tmx tsx. The combined amount raised by the two spacs matched the total amounts raised by the blank check ipo vehicles during the. The proceeds are used to buy one or more existing companies. Gores holdings iii completes acquisition of pae to continue. Cta will commence a private placement offering process to qualifying and invited investors on monday, with the intention of listing as a special purpose acquisition company spac in the specialty finance sector on the main board of the securities exchange operated by the jse.
Toh hicks acquisition, a dallasbased special purpose acquisition company spac founded and headed by thomas o. A thriving financial product, despite a record of failure. Analysis includes total gross proceeds, announcement deadline date and number of months left until deadline, % held in trust, and list of symbols for all trading securities included in the unit. A thriving financial product, despite a record of failure the new york times. A special purpose acquisition company spac, sometimes called a blank check company or an empty shell company, uses an initial public offering ipo to raise money it will use to purchase or merge with an existing company. Blank check company rule 419 imposes various onerous requirements on blank check companies, including prohibition on trading of its common equity until an acquisition occurs while not required, spac offerings generally follow the spirit of rule 419 offerings with a few significant differences.
It is a backdoor route to taking a private company public while enriching the teams that execute on completing a deal. In many cases, the advantages of a spac outweigh the downside risks. The transactions indicate a growing interest by investors in the obscure, but reviving investment vehicle. What is a special purpose acquisition company spac. The surge of offerings in special purpose acquisition companies spacs lays bare a troubling harbinger due to the vehicles challenged. Withums team has been involved with over 50 special purpose acquisition company spac transactions, with most attorneys and underwriters in the niche. Capital appreciation to list on jse as a spac fin24. Dallas, july 2, 2008 hicks acquisition company i, inc. Demystifying specialpurpose acquisition companies market. Apr 10, 2020 spac research gives investors and asset managers access to our special purpose acquisition company database. Special purpose acquisition companies or spacs have dramatically increased in use as a viable method for taking companies public over the last decade. Sep 19, 2017 for earnouts payable to target company shareholders, need to consider the effect of future acquisitions, as the objective of some spac deals is to help target company have public equity for future acquisitions need to be wary of relatedparty transactions at the target company that may be acceptable for a private. Special purpose acquisition company database spac research.
A spac is a blank check company created for the purpose of acquiring a private company. The mechanics of a special purpose acquisition company. Having been writtenoff by some market commentators following the financial crisis, equity capital markets on either side of the atlantic are seeing a resurgence in the numbers and size of special purpose acquisition companies spacs coming to market in order to facilitate the participation of investors principally institutional investors and hedge funds in private equity investment. Special purpose acquisition companies spacs spac search using several different criteria, you can find and analyze transactions that meet your requirements. Gorkana offered monitoring, journalist database and analysis services. May 21, 2006 special purpose acquisition companies spacs. A special purpose acquisition company spac is a type of investment fund that allows public stock market investors to invest in private equity type transactions, particularly leveraged buyouts. A special purpose acquisition company spac is a company with no commercial operations that is formed strictly to raise capital through an initial public offering for the purpose of acquiring. Special purpose acquisition companies spacs are a relatively new and rapidly growing financial vehicle used for raising capital and going public for private companies. Special purpose acquisition companies are shell companies that raise funds via a public offering whereby the proceeds are managed by a preselected team of industryspecific executives who receive an equity stake in the shell and are charged with acquiring an existing private company or in some cases, several private companies and roll those.
Special purpose acquisition companies spacs privateraise. Because these pools of capital are publicly traded, when they acquire an operating company, that company becomes publicly traded. Special purpose acquisition companies spac withums client goes from spac to goto brand for government cloud software mar 4, 2019 special purpose acquisition companies spac withum leads the pack as the ipo market heats up for spacs aug 17, 2018. These special purpose acquisition companies are looking to enter. These were special purpose acquisition companies, or spacs, also. Special purpose acquisition corporation spac offerings. Special purpose acquisition companies spacs are publicly traded pools of capital that have been raised for the sole purpose of merging with an operating company berger, 2008. Blank check, or special purpose acquisition corporations spacs, are.
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