Special Purpose Acquisition Companies (SPACs – newly formed shell companies that raise capital in an IPO to fund the merger or acquisition of a target private company) provide an alternate path to liquidity for businesses that avoid lengthy IPO procedures.
They offer investors a path to interesting investments outside a formal IPO or funding series and more assurance of capital return. If a SPAC does not identify a target company within a period between 18 and 24 months, then investors are entitled to a return of their investment.
SPACs have quickly gained popularity in the IPO market in recent years, appealing to a number of different types of investors. Singapore, in particular, looks set to become a new hub for SPAC IPOs, thanks to recent regulatory change and a local boom in tech start-ups.
In the Singapore Exchange (SGX), around 75% of total listings and 98% of total capital raised during January of this year were made up of SPACs or blank-check companies. During the first four weeks of 2022, three SPAC IPOs:
raised $520 million and were subscribed seven to 36 times, reflecting strong demand in the market.
Although the use of a SPAC is a quicker and more economical way for a company to go public, it is also time-consuming and potentially very complicated process. SPACs are required to announce their combination with a target company within 24 months of an IPO listing, with the transaction having to be completed within 36 months. Every SPAC is unique, requiring a tailored approach to be applied to various parallel workstreams.
We can alleviate the stress and strain of a SPAC listing by providing a full range of corporate services. As a management-owned boutique firm we act swiftly and independently, providing a personalized and proactive approach throughout every phase of our SPAC services.
Our expert global team can help you briskly conduct a SPAC transaction and assist with the initial IPO and lifespan of the SPAC. From acting as your corporate secretary and relieving you of burdensome regulatory and administrative details, to quarterly reporting and preparation of accounts, we take care of every detail so that you can focus on the big picture when it comes to your IPO.