Merging with a SPAC
How do I Merge my Company With the Right SPAC?
With more than 400 US SPACs seeking target companies for acquisition and merger, having more than $133 billion cash ready on their trust accounts, there has never been a better time to go public through a SPAC merger.
The uprise of SPACs made them well-known to thousands of companies around the world that would like to raise capital through a merger with a SPAC. Pitching your company in the right way to potentially matching SPACs is the key to enter into fruitful negotiations. How do I pitch my company to the right SPACs?
A Matter of Size
SPACs are typically combining with a target company that is 2 to 3 or more times the size of the IPO proceeds in their trust account.
Considering that SPAC IPOs are usually starting from $100 million, possible target companies need to have a fair market value of at least $200 to $300 million.
Smaller companies will hardly find a SPAC to merge with.
Getting Ready for the Pitch
Before you approach any SPAC to pitch your company for a merger, your company and you need to be well prepared and ready for this important step.
You need to have your professional teaser (short!) and your detailed presentation ready, telling about you and why your company is that big opportunity for the SPAC that you will be talking to. Slightly amend your teaser and presentation for each SPAC that you will be talking to.
You need to have your company’s accounts updated to the last possible dated, preferably compliant with IFRS and/or GAAP. If you have a recent valuation of your company prepared by well reputed auditors, you will safe a lot of time and support your pitch with substance.
By the way, do you have a business plan?
Your should have your answers ready for typical questions that will come up during the pitch.
The Art of Selecting the Right SPAC
Yes, that is an art. You do not want to go around hawking your precious company.
What do you expect from the SPAC board? Are you looking for synergies and business contribution, along with the funds you wish to raise through your merger with a SPAC?
Did you analyse the shareholder and investor structure of the SPAC that you plan to approach? Can they be considered as long-term investors, or are they eying quick redemption?
You May Wish to Consider Professional Support
If you seriously want to get acquired by and merge with a SPAC, and not only dream of big funds, then there is a lot of details to be taken into account when preparing for a pitch and how to select the right SPAC for you and your company.
If you plan to merge your company with a SPAC and to benefit from our “SPAC matchmaking” services, we will be happy to arrange an initial complementary Zoom conference to get acquainted, to further elaborate on merging with a SPAC and to discuss how you get ready for a successful pitch. Contact us now.
SPAC Consultants is not offering and/or providing investment advisory services in the sense of regulated investment advisory services as per respective EU Directives and their implementation into national law of EU Member States. Instead, SPAC Consultants offers SPAC Project Management services and consults regarding the general principles of US SPACs and their business structuring. Any investment, legal and financial advice that may become necessary for possible sponsors and investors at advanced stages will be provided by the network partners of SPAC Consultants.
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