Now that the Covid-19 crisis has seemingly eased and the reopening of the economy has begun, markets seem to have bottomed out and recovered. The recovery may be slow, but it has been enough to unfreeze the IPO market for SPACs (special purpose acquisition companies). SPACs are essentially blank check companies with the intention of raising capital to acquire an existing company and have been around for decades.
In the first quarter, for instance, of the almost two dozen IPOs that priced, more than half were SPACs, and we continue to see private equity firms help bring companies to the public markets via SPACs. Will this trend continue as the economy rebounds from the pandemic and companies seek alternative routes to the public market? In a time of depressed valuations, what are the challenges that surround these transactions? How are these transactions different from typical M&A transactions, and what nuances do investors and companies need to be aware of?
- Avi Katz (Founding Managing Partner, Chairman and CEO, GigCapital Inc.)
- Ed Kovary (Managing Director, Equity Capital Markets, EarlyBirdCapital)
- E. Ramey Layne (Partner, Capital Markets and Mergers & Acquisitions, Vinson & Elkins)
- Larry Paulson (CEO, Novus Capital Corp.)
- Steve Gelsi (Senior Reporter, The Deal)