If your organization is looking for alternative funding or if you’ve tried to go public but, for whatever reason, were unable to do so, Special Purpose Acquisition Corporations (SPACs) might be right for your company. Simply put, SPACs are an investment vehicle that allows public investors to invest in areas typically sought by private equity firms.
SPACs are constructed as a blank-shell company with no operations and are usually guided by a knowledgeable management team with Mergers & Acquisitions experience. SPACs are required to either merge with or acquire a company with the proceeds from their IPO within 12 to 18 months—as defined in their letter of intent.
Experienced With SPACs
Since their revival in 2003, SPACs have been gaining popularity throughout many industries including: technology, healthcare, consumer goods, energy, construction, services, and emerging markets such as China and India. This reemergence of SPACs occurred when entrepreneurs needed an alternative means of securing equity capital and growth financing.
Similar to a reverse merger, SPACs differ slightly as they are a shell company that has a clean financial slate, improved economics for management, and are more transparent than private equity since they are subject to SEC regulation. GBH is knowledgeable about the accounting and reporting issues faced by SPACs. These issues include deferred offering costs, deferred acquisition costs and common stock subject to redemption. We also have significant experience with development stage companies and reverse mergers.