In this episode, Karim Anani and Alex Zuluaga, EY Global SPAC Practice Co-Leaders, explore why SPACs attract PE investors and advise how they should manage SPAC transactions.
Contact Karim: [email protected]
Contact Alex: [email protected]
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Special Purpose Acquisition Companies (SPACs) are rapidly evolving from an interesting option to a desired path of taking a company public. This malleable vehicle is becoming better understood, more widely accepted and is proving to be a highly adaptable way to meet the needs of both operating companies and investors. A key factor in this flexibility is because a SPAC transaction is a merger, not an IPO.
Unlike a traditional PE fund vehicle in which a fund invests in multiple companies, a SPAC will instead effectuate a single transaction. As a result, a PE fund’s investment philosophy, strategy and approach for a SPAC differs from its traditional investment model.
A SPAC appeals to private equity (PE) investors for several reasons:
PE funds interested in utilizing a SPAC as an exit vehicle should consider the following recommendations:
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