SPACs Face Growing Scrutiny
Special Purpose Acquisition Companies (SPACs)
SPACs are an increasingly popular alternative to traditional IPOs. For many they serve as an accelerated strategy to raise capital. However, they are not without their own unique risks & challenges.
Surging to a record $170 billion this year, SPACs have been called Wall Street’s biggest gold rush in recent years. However, the flood of new activity has triggered additional skepticism among investors and increased scrutiny by the SEC. More than ever, success in the SPACs market hinges on experience and expertise navigating the unique market challenges and regulatory complexities of the SPAC life-cycle:
- Pre-IPO: SPAC Planning & Formation
- IPO: Go-Public Execution & Reporting
- Pre-Merger: Planning and Integration
- Post-Merger: Transition Management
Private equity companies that were planning an IPO or other significant M&A deal before the COVID-19 pandemic will want to weigh the real-world advantages and disadvantages of a SPACs option. As with all transactions significant, intensive planning, vetting, due diligence and other considerations must be undertaken.
MGO’s Private Equity practice has experience with IPOs, RTOs, M&A deals and the unique characteristics of SPAC acquisitions. To understand your options, and the path ahead, please feel free to reach out to us for a consultation.