SPACs: A hot topic for investors, acquirers and sellers
SPACs have become mainstream vehicles for raising capital alongside initial public offerings. Although the market has cooled from Q1’21 when 301 new SPACs raised $83.2 billion, 2021 is on pace to surpass last year’s record haul of $94.4 billion from 319 SPAC launches.1 The coming of age of these “blank check” entities—which exist solely to acquire other companies—provides another option for sellers, as well as an efficient way for private companies to tap public equity markets.
SPAC mergers aren’t simple, however, and understanding all their intricacies can be daunting. Most importantly, a company going public via a SPAC must meet the same extensive regulatory requirements as those taking an IPO path—only in a matter of a few months, not the year or two that a typical IPO can take. Selling to a SPAC can offer a quick and lucrative transaction for unlisted sellers, but requires a gaggle of complex challenges: vetting of potential SPAC suitors, tax structuring, public company readiness, sophisticated business forecasting and, often, systems upgrades. The more a company peels away at a SPAC merger, the more it’s likely to find “unknown unknowns.” This complexity is why KPMG has created the SPAC Intel Hub.
Whether you’re a privately held firm that wants to consider a sale to a SPAC or an investor in a SPAC, you’ll find the KPMG SPAC Intel Hub a valuable resource that you will want to visit often.