Special Purpose Acquisition Companies: Structuring IPOs to Facilitate Future Mergers and Acquisitions

Navigating SEC and Stock Exchange Requirements, Warrants, Trust Accounts, Valuation and Business Combination Issues

A live 90-minute premium CLE webinar with interactive Q&A


Thursday, November 5, 2020

1:00pm-2:30pm EST, 10:00am-11:30am PST

Early Registration Discount Deadline, Friday, October 9, 2020

or call 1-800-926-7926

This CLE webinar will examine IPO requirements and operational matters associated with special purpose acquisition companies (SPACs), as well as issues to consider in connection with a SPAC's initial business combination. The panel will discuss the typical pricing of securities (and the components of SPAC securities), trust account requirements, time constraints, valuation requirements and conflicts issues in connection with any target acquisition, and how to unwind the SPAC if an acquisition does not occur. Topics will be discussed from the points of view of issuers’ counsel and of underwriters’ counsel. Written materials and forms used in the SPAC IPO process are included in the materials.

Description

SPACs allow sponsors to raise capital through an IPO of securities in a new corporation, and to identify and acquire or merge with an existing company. They offer investors the opportunity to own publicly traded shares in a company with the flexibility of a private equity fund. But, there are structural, operational, and regulatory concerns that counsel must consider in advising a SPAC.

SPACs enjoy a streamlined IPO process, but specific SEC registration and disclosure requirements apply. To avoid Blue Sky law complications and to gain aftermarket trading support, SPACs must meet listing standards relating to market cap, number of shares sold, and number of holders, and FINRA must review the offering issue a "no objection" letter. The sponsor must avoid any contacts with potential target businesses before and during the IPO.

Proceeds of the IPO must be placed into a trust account administered by a third-party trustee. Proceeds may not be released from the trust account unless a business combination is completed within a specified timeframe, after which shares must be redeemed and funds returned to the investors. The target company must have a fair market value that is equal to at least 80 percent of the SPAC's trust assets.

Listen as our authoritative panel discusses the disclosure and operational requirements particular to SPACs, the timing and valuation parameters relating to SPAC target acquisitions, and issues that may arise in a SPAC's initial business combination. The panel will also discuss the typical pricing of SPAC securities and trust accounts.

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Outline

  1. Strategic advantages of SPAC; advantages over private equity
  2. IPO process: registration and disclosure requirements
  3. Listing on the exchange; continued listing requirements and FINRA review
  4. Capital and pricing structure: shares and warrants
  5. Trust account requirements
  6. Issues to consider during business combination negotiations, including board seats, indemnification, and related escrow provisions
  7. Deadline for completing an acquisition
  8. Follow-up filings after IPO and upon acquisition
  9. Unwinding if an acquisition is not completed

Benefits

The panel will review these and other key issues:

  • When is a SPAC an appropriate vehicle for facilitating business combinations with existing companies?
  • What are the securities offered to the public in a SPAC IPO?
  • What are the registration and listing requirements for SPACs?
  • Who are sponsors in a SPAC IPO and what is in it for sponsors?
  • What happens to trust funds and the SPAC if a business combination is or is not consummated by the required deadline?
  • How is the de-SPAC process effected?

Faculty

Brecher, Dan
Dan Brecher

Counsel
Scarinci Hollenbeck

Mr. Brecher’s experience ranges from serving as general counsel of New York Stock Exchange and NASD/FINRA member...  |  Read More

Nussbaum, Mitchell
Mitchell S. Nussbaum

Vice Chair; Co-Chair, Capital Markets and Corporate Department
Loeb & Loeb

Mr. Nussbaum’s practice focuses on representing emerging growth companies and investment banks in initial public...  |  Read More

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