A SPAC (Special Purpose Acquisition Company) is an alternative way of raising capital through an initial public offering (IPO), before acquiring an operating target company. SPAC management teams usually target a broader industry or sector rather than a specific company. Once the SPAC goes public, it has a set timeframe – typically 24 months – to use the funds that it has raised to acquire a target. If it does not make an acquisition (“de-SPAC”), it will return its funds to the investors.
SPAC activity has undergone a significant uptick recently. A SPAC not only poses an attractive opportunity for investors, it also offers companies greater control over their valuation and share price – unlike a traditional IPO with its inherent market volatility risks.
Houthoff’s ECM team was the first in the Netherlands to assist with the launch of a Dutch SPAC, using an anti-takeover construction (European Healthcare Acquisition & Growth BV).
