NYSE Euronext wants in on the growing special purpose acquisition company craze. Last year, SPACs, or blank-check companies, accounted for 26% of the total IPO market versus 1% in 2004, according to America's Growth Capital. Additionally, SPACs account for seven of 2008's 11 IPOs to date, and now have $18 billion to spend, notes ACG. With such a large pool of capital at hand, this once financial backwater relegated to the American Stock Exchange is attracting attention from much of Wall Street.
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For starters, NYSE Euronext recently informed the Securities and Exchange Commission of its plans to allow SPACs to trade on the NYSE for the first time. NYSE would join Nasdaq Stock Market Inc., which informed the SEC of a similar change two weeks ago.
Meanwhile, SPACs are becoming ripe opportunities for buyout firms to exit their investments -- one of the few out there right now. Last month, buyout firm Kohlberg & Co. exited Critical Homecare Solutions Holdings Inc. through a $420 million sale to MBF Healthcare Acquisition Corp. Additionally, SPACs have attracted some well known Wall Street names like Nelson Peltz, Ron Perelman and Tom Hicks. Plus, they've attracted the talent of some surprising names like baseball legend Hank Aaron, politicos Mario Cuomo and Jack Kemp, who have banded together to raise a SPAC to purchase sports franchises.
With all this attention on this reach-for-a-dream concept, can the end be far off? - Matthew Wurtzel
See story about NYSE changes from Financial News
See story about Nasdaq changes from TheDeal.com
See related story about SPACs from Deal Journal
See story about Aaron's SPAC from MLive.com
See story about Hicks from TheDeal.com
See story about MBF from TheDeal.com
See story about IDS offering from TheDeal.com
See column about SPACs from TheDeal.com
