Special Purpose Acquisition Companies - SPACs

Investment companies backed by promoters to raise capital from the public in an initial public offering (“IPO”).

The objectives of these entities are generally to:

  • use the proceeds in order to buy targets identified after an IPO
  • and to eventually list the targeted companies 

 

The process of forming a SPAC consists in a sponsor providing capital to establish the company which will undertake an IPO in the near future.

 

The board of directors of the SPAC is usually experience in the sector or the domain in which the SPAC is supposed to invest or acquire a target company.

 

The proceeds of the IPO are usually held in a trust account while the sponsor is looking for potential acquisition transaction(s) and then use these proceeds to purchase the target.

 

Once the approval from the shareholders for the acquisition transaction has been received, the SPAC will acquire the target business and sometimes both companies will be merge into the same publicly traded operating company or the SPAC would simply keep the target company and remain a holding entity.

 

The SPACs, therefore, provide investors with:

  • an access to a future deal based on the past experience of the management team
  • or an option to withdraw from a future deal if the investors disproved the transaction contemplated by the SPAC

 

The SPACs also offer the targeted companies a simple alternative means to be listed and therefore making their shares available to retail investors.

 

 

Creatrust Services:

  • Set up and incorporation of the acquisition company (Sàrl, SA, investment Fund, private equity SPV,…)

  • Central administration, domiciliation & accounting for such entities

  • Advisory on Listing and note or share issuances

  • Listing of Shares/Notes on Stock Exchange

  • Tax advisory and reporting

 

 

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