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:
- 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.