Timeline and Wrinkles of the SPAC Public Offering Process, and Factors to Weigh When Pursuing Target Companies for Acquisition (Part Two of Two)

In their rapid ascent to the top of headlines in 2020, special purpose acquisition companies (SPACs) – also known as “blank check companies” – have piqued interest in the private funds industry as a way for PE sponsors to raise capital to purchase private companies. There is another notable angle to SPACs, however, which is their use as vehicles to which PE sponsors can sell their existing portfolio companies. As those transactions happen much more rapidly than IPOs and allow a sponsor to retain a stake in the company, it can be an appealing option that warrants real consideration going forward. To assist sponsors with weighing the nuances of SPACs, Weil recently hosted a webinar featuring partners Alexander D. Lynch, Heather L. Emmel and Jackie Cohen. This second article in a two-part series outlines the timing and marketing issues of SPAC offerings as elements of acquisitions performed by SPAC vehicles, particularly in comparison to IPOs. The first article detailed the SPAC vehicle formation, capitalization and offering process, including how common shares and warrants in the vehicle are structured. For additional insights from Weil, see our two-part series: “Why and How Fund‑Level Preferred Equity Can Be Used As Rescue Capital” (Jul. 14, 2020); and “Potential Risks and Future Trends of Adoption of Fund‑Level Preferred Equity” (Jul. 21, 2020).

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