In recent years, special purpose acquisition companies (SPACs) have emerged as an attractive alternative strategy to initial public offerings (IPOs). Sidley has been at the forefront of this burgeoning market since its inception, representing investors and business owners in complex, multi-billion dollar SPAC transactions across a variety of industries. Our lawyers apply effective strategies to help clients achieve a competitive edge in successfully structuring and executing on their SPACs. We do so by providing coordinated advice utilizing a multidisciplinary team of practices, including global finance, private equity, M&A, capital markets, and securities litigation, and numerous industry-specific regulatory practices, throughout the entire life cycle of a SPAC transaction.
Special Purpose Acquisition Companies (SPACs)
Our lawyers provide value in the following ways:
- Diverse client base: Key players in SPAC deals depend on our lawyers for guidance, including private equity firms, hedge funds, private companies and investor groups, target companies, and lenders. With robust experience advising parties on all sides of a SPAC deal, we have access to the divergent perspectives of multiple constituencies, as well as a deep understanding of both the opportunities and challenges presented by the SPAC structure.
- Private equity focus: As SPACs have become a more mainstream and economically attractive vehicle for realizing shareholder exit value and accessing the public markets, we have seen a significant increase in private equity interest in this sector and counseled numerous private equity funds and their portfolio companies regarding the unique liquidity and exit scenarios afforded by the SPAC structure. We also advise private equity funds and their portfolio companies and hedge fund clients regarding the securities and tax aspects of various SPAC structuring and investment matters.
- Deep sector experience: Our work includes helping clients navigate all aspects of SPAC formation, promotion, and fundraising, SPAC IPOs, and the SPAC business combination (or “de-SPACing”) M&A process, including the back-end listing of the combined public operating company and the related SEC filings and review processes. We also help client address common NASDAQ and NYSE issues that arise with SPACs, as well as structure complex debt and equity financing arrangements to facilitate the closing of SPAC business combinations, such as common and preferred equity PIPE (private investment in public equity) investments and committed backstop financings (to backstop redemptions from the SPAC trust account).
Our recent SPAC work includes representing:
- Horizon Acquisition Corporation II in its proposed US$3.1 billion business combination with Epic Aero, Inc., a subscription-based private aviation company operating Flexjet and other brands.
- Bridger Aerospace Group Holdings, LLC in its business combination with SPAC Jack Creek Investment Corp., valuing Bridger at an implied US$869 million pro forma enterprise value.
- Bullpen Parlay Acquisition Company (NASDAQ: BPACU), a SPAC newly incorporated in the Cayman Islands, in its US$230 million IPO.
- Blue Ocean Acquisition Corp (NASDAQ: BOCNU) as issuer’s counsel in its US$165 million IPO.
- Grove Collaborative in its business combination with SPAC Virgin Group Acquisition Corp. II in a transaction with an implied pro forma equity value of US$1.5 billion.
- The underwriters in the US$200 million IPO of Focus Impact Acquisition Corp. (NASDAQ: FIACU), an ESG-focused SPAC.
- The underwriters in the US$230 million IPO of Crixus BH3 Acquisition Company, a Nasdaq-listed SPAC sponsored by founding partners of BH3 Management.
- TradeUP Global Corporation, a publicly traded SPAC, in its pending business combination with SAITECH Limited, a Eurasia-based, energy-saving, bitcoin-mining operator that engages in the hosting of bitcoin mining machines for its clients. The transaction values SAITECH at a US$228 million equity.
- The placement agents for a US$200 million PIPE offering by InterPrivate III Financial Partners Inc., a SPAC that announced a planned merger with Aspiration Partners, Inc.
- Hagerty in its business combination with Aldel Financial Inc. (NYSE: ADF), a SPAC. The deal values Hagerty at a pro forma enterprise value of US$3.13 billion and includes a US$704 million fully committed PIPE.
- Brand Velocity Partners and its portfolio company BBQGuys in connection with the pending merger of BBQGuys with Velocity Acquisition Corp. (NASDAQ: VELO), a SPAC. The transaction has a pro forma equity value of US$963 million.
- Hennessy Capital Investment Corp. V, a publicly traded SPAC, in its pending business combination with Plus (formerly Plus.ai), a global provider of self-driving truck technology. The transaction has an implied pro forma equity value of US$3.3 billion.
- CA Healthcare Acquisition Corp., a SPAC focused on investing in a growth-oriented healthcare company, in its pending business combination with LumiraDx Limited, a next-generation point of care diagnostics testing company. The transaction has an implied pro forma equity value of US$3 billion.
- Apex Clearing Holdings LLC in its proposed business combination with Northern Star Investment Corp. II (NYSE: NSTB), a publicly traded SPAC, in a transaction with an enterprise value of approximately US$4.7 billion.
- The underwriters in the US$345 million IPO of Social Leverage Acquisition Corp I, a NYSE-listed SPAC sponsored by a founding partner of Social Leverage.
- The underwriters in the US$230 million IPO of Group Nine Acquisition Corp. (NASDAQ: GNACU), a SPAC sponsored by an entity affiliated with Group Nine Media, Inc.
- Oyster Enterprises Acquisition Corp. (NASDAQ: OSTRU) as issuer’s counsel in its US$200 million IPO. Oyster Enterprises is a SPAC sponsored by an affiliate of Alden Global Capital LLC, the New York-based investment advisory firm.
- Porch Group, Inc. in its acquisition of Homeowners of America for US$100 million. The acquisition will result in Porch becoming one of the nation’s largest insurtech companies.
- GIC as investor’s counsel in connection with a US$200 million investment in CF Finance Acquisition Corp. II, a SPAC that has agreed to acquire View, Inc. GIC’s investment increases the fully committed PIPE investment from up to US$300 million to US$500 million.
- Vivo Capital in its agreement to invest US$150 million in New Frontier Corporation (NYSE: NFC), a SPAC, in connection with its initial business combination transaction to acquire United Family Healthcare.
- Gaming & Hospitality Acquisition Corp. as issuer’s counsel in its US $200 million IPO, a NASDAQ-listed SPAC focused on the gaming sector.
- Faraday Future in its pending business combination with Property Solutions Acquisition Corp. (NASDAQ: PSAC), a special purpose acquisition company, in a transaction with an implied pro forma equity value of US$3.4 billion.
- Cloudbreak Health, LLC in its pending business combination with GigCapital2 (NYSE: GIX), a special acquisition company, and GigCapital2’s concurrent business combination with UpHealth Holdings, Inc., in a transaction with an implied pro forma equity value of US$1.35 billion.
- Hennessy Capital Acquisition Corp. IV (NASDAQ: HCAC), a SPAC, in its merger with Canoo Holdings Ltd. in a transaction with an implied pro forma equity value of US$2.4 billion.
- MP Materials in its business combination with Fortress Value Acquisition Corp. (NYSE: FVAC), a special purpose acquisition company sponsored by an affiliate of Fortress Investment Group LLC, in a transaction with an implied pro forma equity value of US$1.55 billion.
- The underwriters in connection with the US$225 million IPO by Lefteris Acquisition Corp., a NASDAQ-listed SPAC focused on the FinTech sector.
- The underwriters in connection with the US$230 million IPO by Lionheart Acquisition Corporation II, a NASDAQ-listed SPAC focused on the real estate technology or “proptech” sector.
- The underwriters in connection with the US$172.5 million IPO by NewHold Investment Corp., a NASDAQ-listed SPAC focused on the industrial technology sector.
- Porch.com in its business combination with PropTech Acquisition Corporation (NASDAQ: PTAC), a special purpose acquisition company, in a transaction with an implied pro forma equity value of US$728 million.
- The underwriters in connection with the US$200 million IPO by GigCapital3, Inc., a NYSE-listed SPAC focused on the technology, media and telecommunications (TMT) sector.
- A Neuberger Berman private investment fund as sponsor investor in the US$414 million IPO of CC Neuberger Principal Holdings I, a NYSE-listed SPAC focused on the financial, technology and business services sectors and in the US$828 million IPO of CC Neuberger Principal Holdings II, a NYSE-listed SPAC.
- Hennessy Capital Acquisition Corp. III, a SPAC, in its acquisition of environmental and waste management services provider NRC Group, a portfolio company of the J.F. Lehman private equity firm, in a cash/stock deal valuing NRC Group at over US$750 million and launch of NRC Group as a public company (NYSE: NRCG). In connection with the acquisition, we also represented the SPAC in its convertible preferred and common equity PIPE and backstop financing transactions.